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SPECIFICS OF RUSSIA'S CORPORATE CULTURE AND GOVERNANCE DEVELOPMENT
E. I. Kuzmina, M.A. Bondarev, 3-rdyear students Financial University under the Government of the Russian Federation, Moscow, Russia E-mail: [email protected]^[email protected] Scientific adviser: N.P. Staroverova, Associate Professor Financial University under the Government of the Russian Federation, Moscow, Russia
E-mail: [email protected]
Abstract. The aim of this paper is to explore the specifics of Russian corporate culture and corporate governance through an examination of information about selected domestic companies, particularly Russian banks. The study identifies weaknesses and challenges in corporate governance and culture that are typical of Russian businesses at the current stage of development. The authors analyze the cases of the two largest Russian banks - Alfa-Bank and Sberbank - as examples, highlighting the distinctive features of their corporate cultures and management styles. Based on this analysis, they propose ways to address these challenges and discuss the prospects for future development of corporate governance and corporate culture in Russian organizations. The research methods employed included a theoretical analysis of relevant literature on corporate culture in Russia, an examination of corporate documents from Sberbank and Alfa Bank, and the analysis and synthesis of information obtained. As a result of these efforts, the paper draws conclusions regarding the current state of corporate culture development in Russian organizations, which is characterized by the blending of diverse practices and the emergence of a singular and distinctive concept of corporate culture and governance.
Keywords: corporate governance, corporate culture, Russian enterprises, domestic companies, business process management
ОСОБЕННОСТИ ФОРМИРОВАНИЯ КОРПОРАТИВНОМ КУЛЬТУРЫ И КОРПОРАТИВНОГО УПРАВЛЕНИЯ В РОССИИ
Кузьмина Е.И., Бондарев М.А., студенты 3 курса Финансовый университет при Правительстве Российской Федерации, Москва, Россия E-mail: [email protected]^[email protected] Научный руководитель: Староверова Н.П., доцент Финансовый университет при Правительстве Российской Федерации, Москва, Россия
E-mail: [email protected]
Аннотация. Целью данной статьи является изучение особенностей российской корпоративной культуры и корпоративного управления на основе анализа информации об отдельных отечественных компаниях, в частности, российских банков. В исследовании выявляются недостатки и проблемы в корпоративном управлении и культуре, характерных для российских предприятий на текущем этапе развития. Авторы изучают и анализируют кейсы крупнейших российских банков, Альфа-Банка и Сбербанка, в качестве примера, выделяют отличительные черты их корпоративной культуры и управления. На основе этого анализа в статье предлагаются пути решения этих проблем и обсуждаются перспективы дальнейшего развития корпоративного управления и культуры в отечественных организациях. В качестве методов исследования использовались теоретический анализ литературы по теме корпоративной культуры в России, изучение корпоративной документации Сбербанка и Альфа-банка, анализ и синтез полученной информации. Как результат, в статье даются выводы о текущем этапе развития корпоративной культуры в российский организациях: смешении различных практик и формирование на их основе единой уникальной концепции корпоративной культуры и управления.
Ключевые слова: корпоративное управление, корпоративная культура, российские предприятия, управление бизнес -процессами.
1. INTRODUCTION
In today's global business landscape, corporate culture and effective corporate governance appear to be crucial for the
success of organizations. In Russia, where historical, cultural, and economic factors play a significant role, these aspects take on unique characteristics. This article will
explore the key features of corporate culture and management practices in Russian business, as well as suggest measures for improvement and development.
The aim of the paper is to investigate the characteristics of Russian corporate culture and management through the analysis of selected domestic companies. To achieve this goal, the following objectives were set:
1. to study the development of corporate relations in Russia.;
2. to identify the shortcomings and challenges of corporate governance and corporate culture in Russian companies, and to formulate solutions and strategies to address them;
3. to analyze the experiences of leading companies such as Sberbank and Alfa-Bank;
4. to draw conclusions about general trends in Russian corporate governance and business culture.
2. MATERIALS AND METHODS
The works of Vinokurov N. D. [10], Zerkina N. N. [11], Christopher O. A. [3] and Evchenko O. S. [5] were taken as a theoretical basis for the study of corporate culture and management at Russian enterprises. The Codes of Corporate Governance and Ethics of the two major Russian companies, Alfa-Bank and Sberbank, have also been studied and analyzed with a view to draw specific conclusions about the direction of corporate culture and management development in Russia [2, 6-8].
3. RESULTS AND DISCUSSION
The peculiarities of the domestic corporate culture system are based on the fact that Russia much later embarked on the path of developing a market economy, which determined the Russian specifics of corporate governance. As a result, the
Russian corporate culture has revealed a kind of symbiosis of domestic and Western trends, where the directive management style is adjacent to the democratic, and often with the liberal.
The concentration of ownership and management functions in one hand clearly distinguishes Russian corporate governance from other management models. This is due to the fact that previously the institute of management in Russia was poorly developed and the owners of enterprises did not want to transfer management functions to unqualified managers. However, now the situation is changing, more and more educated and experienced management specialists are appearing in the country, and owners prefer to transfer business process management at the enterprise to them, focusing on the global experience of effective corporate governance.
The main features of corporate governance in Russia include: concentration of ownership; opacity of business activities of Russian enterprises (lack of access to key information about the company); weak differentiation of ownership and management functions. In Russian corporate governance, there is often a situation where the shares of a company are concentrated in the hands of 2-3 dominant shareholders. This is especially true for enterprises in the oil and gas, forestry and metallurgical industries.
Corporate culture in Russian businesses has several unique characteristics that have been shaped by historical, economic, and social influences. These include a strong sense of collective identity, flexibility and adaptability, a focus on achieving results, as well as a hierarchical and formal approach,
which can lead to bureaucratic processes and procedures.
It is also common for Russian organizations to prioritize the norms and provisions of current legislation over recommendation standards. In this case, an important solution is to improve the regulatory framework, taking into account the international experience of effective corporate governance, and eliminate existing gaps in it.
There are other trends in Russian corporate governance that are currently actively developing. These trends include: development and implementation of mechanisms to protect the interests of minority shareholders; focus on increasing the investment attractiveness of companies; dissemination of the principle of publicity; development of companies' own corporate governance codes.
The disadvantages of corporate governance in Russia concern the mechanism for implementing innovative projects, its poor development, in particular. However, now this area is actively supported by the state both financially and legislatively, which is enshrined in the fundamental strategic document "The Concept of technological development until 2030". The demerits of Russian corporate culture also refer to a low development of communication in companies, inadequate development of employee initiative, the lack of efforts to cultivate corporate culture, as well as the re-assignment of HR strategy development and problematic formation of a common concept. Finally, the main problem hindering the development of corporate culture in modern Russian organizations is the presence of some contradictions between traditions and innovation, since the presence
and active implementation of traditions in the practice of enterprises leads to the rejection of innovation.
Thus, all the issues of corporate governance and culture in Russian enterprises can be addressed to the management level for improving the system for managing employees and business processes, developing an internal communication system, providing specialized training and workshops, and introducing mechanisms for assessing the quality of work and outcomes.
A prominent example of a company with a well-established corporate culture is AlfaBank. This bank utilizes various corporate governance practices [2,8]. In terms of the physical environment, Alfa-
Bank has clearly defined the design
of its office premises (consistent design, use of corporate colors), and the appearance of its employees (clothing styles,
dress codes). All workspaces are decorated and technologically equipped. All management processes in this bank are regulated. Internal policies, work
quality guidelines, and corporate values are established. Employees adhere to behavioral standards with customers and in conflict situations. Additionally, the bank implements a system for employee motivation and observes standards of manageability.
Generally, it can be said that Alfa-Bank is actively developing its corporate culture and adjusting to modern business realities. This is evident, for example, in the implementation of digital events and online training for employees. Surveys indicate that Alfa-Bank staff feel involved in the organization and see a successful future with it.
Another example of a well-developed corporate culture in Russia is SBER. This organization has its own code of corporate ethics and business conduct [6-7]. The code reflects the rules and standards of behavior adopted by the savings bank, based on the values and principles of the bank. The code is intended for: all employees of SBER, members of the supervisory board, companies of Sber group, regardless of the direction, size, and territory of operations.
The research elicited the following features characteristic of the corporate culture of SBER:
1. caring for society: SBER supports the systematic development of socially significant initiatives and environmental projects;
2. commitment to ethical business practices: SBER condemns unethical business behavior in all its manifestations;
3. disclosure of information: confidentiality of information;
4. ensuring the transparency of its operations by openly interacting with all stakeholders;
5. sustainable development: SBER is a responsible banking institution that bases its strategy on creating long-term value.
The article by A.R. Davletshin, D.E. Mityurnikov examines the features of the corporate culture of Sberbank and the Korean bank Woori Bank. The research focused on issues such as politics, staff turnover, planning, and the type of corporate culture. It has been revealed that Sberbank, in contrast to the Korean bank, is characterized by the rejection of hierarchy within the team, the presence of a coach instead of a manager, high staff turnover, frequent replacement of employees, and a progressive company culture [1].
All the above mentioned issues demonstrate the stability and well-organized corporate governance and culture of Sberbank.
4. CONCLUSION
Thus, the national Russian corporate culture gradually goes from the domination of the quantitate indexes to being implemented as a total sum of the four kinds of practices. They are as follows: rationalization of the intracompanies processes based on the corporate education; intereconomic relations and cooperation with the formation of net constructions; coping the experience of market development in the West-East interaction system; understanding its own historic economic management experience.
As a result, it is reasonable to state that Russian organizations have a distinctive approach to developing corporate culture and management. While this approach has its challenges and difficulties, these can be addressed and overcome. Domestic enterprises, through efficient management and effective regulation, can enhance the entire system of corporate relationships.
5. REFERENCES
[1] A.R. Davletshina, D.E. Mityurnikova Comparison of Corporate Culture of the Two Largest Banks in Russia and South Korea. Chronoeconomics No. 2(44). April 2024, pp.34-37
[2] Alfa-Bank Corporate Governance Code [Electronic resource] // URL: https://kazbank.org/kalfabank.pdf
[3] Christopher, O. A. Organizational Culture and Corporate Performance: A Review / O. A. Christopher, A. Edwinah // Global Academic Journal of Economics and Business. - 2022. - Vol. 4, No. 5. - P. 152162.
[4] Decree of the Government of the Russian Federation dated May 20, 2023 No. 1315-r "Concept of technological
development for the period up to 2030" // URL:
https://rospatent.gov.ru/content/uploadfiles/ technological-2023.pdf
[5] Evchenko, O. S. Peculiarities of the influence of national culture on corporate culture in Russia / O. S. Shevchenko // National Health. - 2023. - No. 1. - pp. 98102.
[6] Sberbank Code of Corporate Ethics [Electronic resource] // URL: https://www.sberbank.com/ru/about/ethics
[7] Sberbank Corporate Governance Code [Electronic resource] // URL: https://www.sberbank.com/ru/about/ethics
[8] The Code of Corporate Ethics of Alfa-bank [Electronic resource] // URL: https://alfabank.ru/about/codex/
[9] The role of corporate culture in business success // International Journal of Early Childhood Special Education. - 2023.
[10] Vinokurov, N. D. Main features of corporate culture in IT companies / N. D. Vinokurov, Y. V. Zhukova // Trends in the development of science and education. -2022. - No. 85-7. - P. 99-101.
[11] Zerkina, N. N. Corporate culture & working place communication : practicum / N. N. Zerkina, N. N. Kostina. Magnitogorsk : Magnitogorsk State Technical University named after G.I. Nosov, 2023. - 31 p.
