The past, the present, and the foreseeable future of Russian manufacturing subsidiaries of Western multinational corporations

Abstract

This article retraces the development of Russian manufacturing subsidiaries of Western multinational corporations from the late 1980s until 2019. Using secondary sources and a unique handcrafted database on significant extensions of manufacturing facilities of Western multinational corporations in Russia during 2012–2018, we present the position of Russian manufacturing subsidiaries of Western multinational corporations before and after the beginning of sanctions. We also indicate the major strategic challenges that they currently face, including the necessity to maintain dual loyalty (to home country and host country authorities), manage the deteriorating quality of business regulations in Russia, and overcome the increasing shortage of qualified personnel at all levels. The data on the opening of new facilities in 2017–2018 reveal that such issues impede but cannot stop the quantitative development of foreign-owned Russian manufacturing facilities. At the same time, saving on managerial expenses and low “investments in non-current assets” of the established manufacturing subsidiaries may break down “the innovation engine” assembled in many Russian manufacturing subsidiaries of Western multinational corporations and bring them into the periphery of their corporate parents, where the attention and resources from the corporate center are lacking.

Organizational communication strategies in response to major disruptions: the case of the worsening situation in the Russia-Ukraine conflict

“…The second database is composed of a list of foreign MNEs' industrial subsidiaries established recently or that have seriously expanded their production facilities (2012)(2013)(2014)(2015)(2016)(2017)(2018)(2019)(2020). It is an updated version of the database of the industrial subsidiaries of foreign MNEs established recently or that have seriously expanded their production facilities (2012-2018; see Gurkov and Saidov, 2021) that includes 305 companies total. Some of the companies from the second database are also included in the first database if they had already made announcements about the effective changes of the character in their Russian operations.…”

Total expenses for managerial remuneration in foreign manufacturing subsidiaries during the COVID-19 pandemic: a pilot exploration of applied policies

“…We decided to collect primary data on the amount of managerial remuneration in the Russian subsidiaries of foreign companies for 2019 and 2020. We used the database of companies opened in 2012-2018 (see Gurkov and Saidov, 2021) and collected the complete sets of annual financial reports (balance sheets and income statements) for the years 2019 and 2020. In many cases, the selected companies presented "Explanations to the balance sheet and the income statement", which contained the data on the "wages and bonuses of managers" in total managerial expenses (which may also include rent, other office expenses, etc.).…”