Organisational culture and corporate governance in Russia: a study of managerial turnover

Abstract

In this article we investigate the possible impact of ownership structure and corporate performance on managerial turnover using a unique dataset of Russian corporations. We argue that Russia is regarded as a country with a highly authoritarian and collectivism-oriented national culture and this peculiarity is the key to disentangling the puzzle of the statistically weaker relationship between firm performance and CEO renewal in Russian firms. We deal not only with CEO dismissal but also managerial turnover within a company as a whole. By conducting multinomial analysis that incorporates both factors, we found a significant relationship between firm performance and CEO dismissal, while, consistent with most previous studies, a standard logit analysis of CEO turnover revealed no clear relationships. We also found that the presence of a dominant shareholder significantly increased the likelihood of turnover of the whole management team, while foreign ownership tended to cause partial (CEO only) turnover.

Firm-Level Determinants of Board System Choice: Evidence from Russia

“…As many management researchers pointed out, Russia is characterized by a stronger collectivism-oriented organizational culture than not only Western nations but also major Asian countries, including Japan (Abe and Iwasaki, 2010). In a country with such a culture, a top manager who has been internally promoted is considered to have extremely strong connections and a sense of solidarity with the surrounding senior managers, and this environment is likely to enhance the in-house willingness to adopt a collective management system in the form of the combination of a single executive body and a collective executive board.…”