The Impact of Corruption on Swedish Firms Operating in Russia

Abstract: This study informs on the ways in which Swedish multinational companies (MNCs) operating in Russia perceive and respond to the corruption they face whilst operating there, coming from a home country with a low level of corruption, Sweden, in relation to Russia, a country with a high level of corruption. The study uses a qualitative research method, conducting semi-structured interviews with six senior executives from Swedish MNCs that have, or are currently working in Russia for the Swedish firm. The study informs on the forms and processes of corruption in Russia, and informs on not only how this impacts the operations of Swedish firms operating there, but also the measures they take to respond to this. The results indicate that corruption is widespread in Russia. Swedish MNCs saw bribery, state sector operations, and subcontractors as some of the areas where corruption was particularly prevalent. Swedish MNCs perceive corruption in Russia as inevitable and a liability of foreignness, permeating many aspects of operations in Russia. An overarching theme throughout the interviews and analysis was the notion of Swedish firms in Russia trying to find a mid-ground by balancing the demands of the HQ with the demands of the Russian business environment. Additionally, Swedish MNCs saw education, personnel policy, regulations and networking as some of the key areas for responding to corruption. The study contributes to existing knowledge of corruption, and specifically corruption in Russia, and contributes not only knowledge of Swedish firms operating in Russia, but of firms originating from countries with a low level of corruption operating in countries with a high level of corruption in general.