Mne Challenges in Emerging Markets
International business and global innovation
Individual report 1. Please discuss MNEs challenges in emerging markets? How can MNEs solve these?
First of all, I would like to mention that It would be hard to describe challenges in emerging markets of the whole world, because question either can be roughly generalized or otherwise requires deep and wide research which is not the case right now. That’s why in my discussion I would like to stop on one country – Russia.
The Russian economy is growing by 7.7 per cent per year, supported by the soaring price of oil. But with stories about government corruption and mobsters, how attractive is the country for the more entrepreneurial-sized business? I would like to discuss some of the challenges most companies face while entering this emerging market.
I would like not to talk in details about common problems and stereotypes which are often mentioned about Russia, amongst those I already noticed are high level of corruption, gangsters and seemed political instability.
And one thing I would like to mention first is a labor problem. Management in Russia is faced presently with two major issues in the labor force: the battle for highly qualified specialists and the cost-to-productivity ratio.
The battle for top specialists has become extremely rough in the recent time. Recruiting companies are very busy these days with headhunting. Professionals already receiving top salaries at multinational corporations are being stolen away, often by Russian majors, attracted by dramatic salary increases. It used to be that the professional would look at these offers with skepticism, questioning the reputation or stability of most Russian companies. Nowadays, these people do not worry as much and instead look at the cost-of-living, which is also rising dramatically, especially in major cities among which are Moscow, Saint Petersburg, Yekaterinburg and many others. The situation has gotten so bad that many companies are afraid to
Individual report 1. Please discuss MNEs challenges in emerging markets? How can MNEs solve these?
First of all, I would like to mention that It would be hard to describe challenges in emerging markets of the whole world, because question either can be roughly generalized or otherwise requires deep and wide research which is not the case right now. That’s why in my discussion I would like to stop on one country – Russia.
The Russian economy is growing by 7.7 per cent per year, supported by the soaring price of oil. But with stories about government corruption and mobsters, how attractive is the country for the more entrepreneurial-sized business? I would like to discuss some of the challenges most companies face while entering this emerging market.
I would like not to talk in details about common problems and stereotypes which are often mentioned about Russia, amongst those I already noticed are high level of corruption, gangsters and seemed political instability.
And one thing I would like to mention first is a labor problem. Management in Russia is faced presently with two major issues in the labor force: the battle for highly qualified specialists and the cost-to-productivity ratio.
The battle for top specialists has become extremely rough in the recent time. Recruiting companies are very busy these days with headhunting. Professionals already receiving top salaries at multinational corporations are being stolen away, often by Russian majors, attracted by dramatic salary increases. It used to be that the professional would look at these offers with skepticism, questioning the reputation or stability of most Russian companies. Nowadays, these people do not worry as much and instead look at the cost-of-living, which is also rising dramatically, especially in major cities among which are Moscow, Saint Petersburg, Yekaterinburg and many others. The situation has gotten so bad that many companies are afraid to