Globalization has made the world a smaller and better connected therefore we believe that there is nearly no place that may be regarded as the “wild west” basically saying that people do as the they please and rule of law is a mere suggestion if any. A Latin American looking to expand into Russia needs to do some homework about all factors that govern business. This would be to list a few; formal and informal institutions, competition and their code of conduct, and other rules of engagement. I is not enough to just believe to make a decision based on hear-say.
One issue that has been barrier to firms entering Russia is the widespread corruption that in conjunction with the cumbersome bureaucracy associated with dispute resolution and administrative problems. Therefore it is vital for a foreign firm to have someone with the local knowledge and connections as they both play a major role in a successful entry into the market (Transparency Internal, 2014). The same may be said about the Latin America market as the ranked in the same region on corruption perceptions index therefore this firm would begetting to much of a shock in the way things are done.
It is also vital for this firm to be make sure what exactly is consider as corruption, Kenneth Rapoza of Forbes wrote that the definition changes from place thus; “
officials, civil servants and police are viewed as the most corrupt, according to Transparency
International. In Russia, elected officials and the police are corrupt. In the US, the Democrats
in Russia, elected
and Republicans are considered corrupt”. (Forbes, contributor 2013)
Usual the perception of corruption is fueled by surveys and studies conducted by outsider
therefore not providing the accurate conditions on the ground. (Andreil Shleifer, A normal
country: Russia after communism) There have been studies that have called into question
the accuracy of such studies therefore instead of relying solely on the these surveys the firm