Changing Strategies for Russian Companies in the Conditions of Economic Crisis: The Experience of a Monographic Study

Liudmila Ruzhanskaya,Elena Yakimova

doi:10.5901/mjss.2015.v6n3s3p365

Abstract

This article covers stable patterns of economic behavior of Russian enterprises within the frames of the two previous economic crises of 1998-1999 and 2008-2009, as well as anti-crisis actions in the modern conditions. The empirical bases of this research were depth interviews with persons responsible for strategic decisions making at three enterprises operating within the Ural region and Russia. Interview materials of the experts are supplemented with the data about management and financial accounting of the companies, and with the reviews of the companies’ major products markets. DOI: 10.5901/mjss.2015.v6n3s3p365

Highlights

Economic crises in Russia are frequently induced by two factors – falling oil prices and the necessity to pay foreign debts
Duration of the current recession will be determined by the speed of oil price recovery
The drop of the Russian sovereign rating into the “garbage” zone will be definitely followed by similar downshifting of Russian companies

Summary

Introduction

Economic crises in Russia are frequently induced by two factors – falling oil prices and the necessity to pay foreign debts. The Central Bank and the Government entered the crisis of 2008 with a substantial monetary buffer, in the process of the “scheduled devaluation”, corporations and banks received the most of such reserves in the form of exchange market interventions. The UBS Bank forecasts that the combination of soft demand and excessive supply can extend prices recovery for a period of up to 60 months. Overloading of the Russian banks and corporations being primarily under state control with the foreign debt combined with the sanctions caused the unprecedented ruble’s collapse – even against the background of other “commodity” and “non-commodity” minor currencies. The drop of the Russian sovereign rating into the “garbage” zone will be definitely followed by similar downshifting of Russian companies

Methods

Results

Conclusion