Managing challenges in an unfamiliar business environment: A study of Scandinavian companies in Russia

Catja Nilsson & Maria Katarina Nilsson

Student thesis: Master thesis


Saturated markets in the western world compel companies to seek new opportunities. For Scandinavian companies operating within the business-to-consumer segment, Russia constitutes great potential, foremost due to its increasing affluent middle class who has a fondness for western-branded goods. However, it is evident that Scandinavian companies face challenges when operating in the Russian market. The aim of the research project was therefore to investigate why Scandinavian companies, operating within the business-toconsumer segment, face operational challenges in Russia, and how the Scandinavian companies should manage these challenges. In order to answer the research questions, a qualitative study was conducted, which included interviews with respondents from Scandinavian companies and experts within the subject field. The collection of data was partly executed through a field trip to Moscow. Based on the findings, it is evident that the operational challenges have to be understood by taking on a wider context-specific perspective. The development of the ISC framework hereby resulted from the analysis. According to the ISC framework, the formal and informal rules in the Russian business environment influence the corporate behaviour of Russian stakeholders. In turn, the unfamiliar behaviour of Russian stakeholders creates challenges for the Scandinavian companies, since Russian corporate behaviour differs from Scandinavian corporate behaviour. Managerial implications on how to handle the challenges where identified on three levels: the individual, the company and the country level. On the individual level it is crucial for Scandinavian companies to find a balance between the number of expatriates and local staff members employed, as well as to create appropriate compensation for them. On a company level it is essential to take on a stakeholder approach in order to understand how the Russian stakeholders may impact the operations of the Scandinavian companies. On a country level, the findings emphasise a thorough investigation of the Russian business environment and long-term investments, whereas Scandinavian companies may ultimately influence the norms and rules regulating economic exchange. It is argued that the findings from the research project are significant for Scandinavian companies wanting to operate on the Russian market. Hereby, it is fair to state that a deeper understanding of the findings is crucial, whereas the research project is deemed essential.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
Publication date2010
Number of pages127