Capturing the Managerial Gap between Multinational and Domestic Companies in Russia

Abstract

This chapter examines the possibilities of economic growth in Russia from the perspective of the development of organizational capability, namely through the study of best managerial practices of multinational companies (MNCs) doing business in Russia, and their use by Russian companies. With tightening competition, companies are forced to focus on the development of organizational capabilities. Our large-scale empirical research into the managerial capabilities and management practices of MNCs and Russian companies employs a comprehensive sample of 1,530 companies and 1,245 companies in 2016 and 2017, respectively, covering the 10 main sectors of economic activity in Moscow and the Moscow region. The analysis was performed across five managerial capabilities: communication, leadership, problem-solving and decision-making, conflict resolution, and motivation, each subdivided into five management practices. Using statistical methods, we identified the major statistically significant differences in and between the managerial practices of MNCs and Russian companies operating in the Russian market, and their dynamics from 2016 to 2017. Taking MNCs operating in the Russian market as a benchmark, we discover that Russian companies need to close the gap in 17 out of the 25 managerial practices in order to maintain competitiveness in the Russian market and be able to influence their economic growth in Russia.