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Advantages And Disadvantages Of Doing Business In Russia

1147 Words5 Pages

DISADVANTAGES OF DOING BUSINESS IN RUSSIA
The paper wants to analyse the Disadvantages of doing business in Russia. The analysis starts with an introduction, which provides a general economic overview about the macroeconomic situation in Russia. The research focuses the attention on the five institutional complementarities according to Hall and Soskice in Russia. The last part wants to sum up the main disadvantages that a Business can face when operating in Russia.
Russia is the biggest country in the world with a land extension 17,098,242 sq km with 11 different time zones and huge natural contrast among the different regions.
According to the World Bank database in 2014 there were 143,499,861 people in the Russian Federation with positive …show more content…

The three criteria used are abuse of power, secret dealings and briberies: the low scores shows an nation where corruption is widely used in both political and business contexts.
In the following paragraphs, we try to highlight the main disadvantages of doing business in Russia analysing the institutional complementarities.
INDUSTRIAL RELATIONS
Industrial Relations is one of the five Institutional Complementarities and it refers to the relations between employers and employees, so in general about the labour market.
In 2013 according to the Russian Federal Statistic Agency 67.785.000 people were employed in the Russian economy of which the 60% in the private sector while the 28.4% in state or municipal entities while in 1992 (after the collapse of the Soviet Union) it was almost the opposite, 69.1% in state or municipal entities and 19.3% in private companies. This means that the labour market has changed a lot, from a planned economy to a more open society where people mainly work in private companies.
The Labour Code of the Russian Federation released in 2001 regulates the labour market in Russia. Furthermore, “…Russian labour legislation also governs the types of employments and conditions of their conclusions, amendments and …show more content…

That is a system based on “social partnership to regulate and balancing the interests of employees and employers such as: negotiation of collective agreement; Mutual consultation on employment issues; participation of employees in the management of the company and participation of parties in pre-court negotiations.”
Moreover, the Labour code recognizes the role of the Trade Unions which in Russia “are more typically formed at company level than industry level”.
The main Trade Union in Russia is the Federation of Indipendendent Trade Unions (FITU) which is “the largest union of workers of Russia and unites 46 trade unions nationwide…with 22 million members about the 95% of all union members in Russia.”
It is also important to look at the trend of the average monthly wage, because it can affect the business of a company. Considering the last 10 years the average monthly wage has increased from 5.000 roubles in 2004 to 33.563 roubles per month in September

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