Personal Networks in Russian Business: Structure, Rules, Trust

Abstract

The phenomenon of personal networks in Russian business received inadequate attention from academics to-date even being historically an important part of Russian cultural and business life.

To break into Russian market strategic opportunities must be examined. Personal networks play a big role in achieving this, more so than institutions in creation of social capital in Russia. Butler and Purchase (2008) confirm that dynamic changes in the Russian political economy during the 1990s led to a unique combination of low levels of social capital at the general (state) level and very high levels of social capital at the interpersonal level; and highlight how critical developing social capital is to ensure long-term continuous business survival in Russia. At the same time being in control of a lot of resources, personal networks that exist in Russian business remain a mystery for Western businesses.

Exploring the phenomenon from inside this descriptive doctoral study is using a chance of accessing hidden from previous researchers’ research data and advance understanding of the phenomenon of Russian personal networks inner life, norms, and rules.

Having defined personal networks existing in Russian business present study confirms more complex structure of relations and different to those offered by Granovetter (1973); defines trust and explains how trust develops and mature; explains the role of emotional attachment which makes Russian networks so different; exploring importance of fulfilment of social norms which defines how networks operate. The findings show that it is not easy to establish relations in Russia but those relations will last longer providing network members with group’s emotional and functional support, and access to different resources. The phenomenon of “shadow” business groups existing in Russian business had been explored and discussed.

Present doctoral study provides deeper understanding of Russian business networks helping foreign practitioners and investors to conduct business more effectively in Russia and particularly specialists in organisational change, strategy, strategic marketing, and HRM.