“Understanding the Resilience of Russian Entrepreneurs: Local and Foreign SMEs in Times of Turbulence ”
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INTRODUCTION 4
CHAPTER 1: THEORETICAL PART 6
1.1. Literature review 6
1.2. Theoretical background 9
CHAPTER 2: RESEARCH METHODOLOGY 14
2.1. Data collection 14
2.2. Research sample description 16
2.3. Data analysis 17
CHAPTER 3: EMPIRICAL PART 21
3.1. The results of analysis 21
3.1.1. Russian entrepreneurs with businesses in Russia 21
3.1.2. Russian entrepreneurs with businesses abroad 29
3.2. Discussion of the results 36
3.2.1. The comparison of resilience determinants 36
3.2.2. The evaluation of the effect of determinants on resilience 38
3.3. Theoretical contributions 43
3.4. Practical implications 44
3.5. Limitations of the research 45
3.6. Future research directions 46
CONCLUSION 47
REFERENCES 51
APPENDIX 55
CHAPTER 1: THEORETICAL PART 6
1.1. Literature review 6
1.2. Theoretical background 9
CHAPTER 2: RESEARCH METHODOLOGY 14
2.1. Data collection 14
2.2. Research sample description 16
2.3. Data analysis 17
CHAPTER 3: EMPIRICAL PART 21
3.1. The results of analysis 21
3.1.1. Russian entrepreneurs with businesses in Russia 21
3.1.2. Russian entrepreneurs with businesses abroad 29
3.2. Discussion of the results 36
3.2.1. The comparison of resilience determinants 36
3.2.2. The evaluation of the effect of determinants on resilience 38
3.3. Theoretical contributions 43
3.4. Practical implications 44
3.5. Limitations of the research 45
3.6. Future research directions 46
CONCLUSION 47
REFERENCES 51
APPENDIX 55
The recent years have brought critical events that in more or less degree affected the whole world. The most recent of such events is the emergence of geopolitical tensions and imposition of sanctions, which has thrown significant challenges at the global business landscape. In spite of aforementioned events, resilience of business is the topic that is becoming a more and more relevant concern. Organizations of all sizes are seeking answers to how to prepare for harsh external events which are beyond their control and how to withstand and survive during such turbulent times filled with uncertainty. Researchers respond to the demand by studying the concept of resilience more closely and deeply. However, a significant portion of existing studies’ focus is on MNEs, and there is lack of empirical evidence on how SMEs achieve degrees of resilience (Alberti et al., 2018). This lack of knowledge extends beyond just the concept of resilience itself, as SMEs are often underrepresented in management studies in general (Arikan & Shenkar, 2021). Despite SMEs being the key drivers of many countries’ economies, they remain underexplored from a resilience angle (Alberti et al., 2018). To add to that, resilience of SMEs in developing countries especially is one more overlooked research topic (Saad et al., 2021). Following that, this study considers small and medium enterprises located in Russia and abroad and managed by Russian entrepreneurs as an object; and the determinants of resilience of these SMEs as a subject of research. Both subject and object are affected by turbulent environment. Therefore, this study aims to make a contribution in closing the gap and takes upon answering the following research question: What are the resilience determinants of SMEs of Russian entrepreneurs in Russia and abroad?
In order to answer the posed research question, this work sets a particular goal - to examine and compare the determinants of resilience of domestic and international SMEs, founded or managed by Russian entrepreneurs and affected by a turbulent environment. In this study, two groups of entrepreneurs - with businesses located in Russia and in a foreign country - will be examined separately at first in terms of resilience determinants and then compared to each other, searching for possible similarities and differences, and, presumably, other interesting findings.
Consequently, to reach the goal of the study, a number of objectives are set. These objectives are followed throughout the study, outlining planned steps to achieve the goal:
• To analyze the previous literature studying the concept of resilience of SMEs
• To explore the theoretical concepts explaining the resilience in previous research and select the most suitable for this study
• To conduct in-depth interviews with entrepreneurs - owners of Russian and foreign SMEs
• To analyze the interviews in terms of resources and capabilities on individual and
organizational level using the coding method
• To identify the determinants of resilience for Russian and foreign SMEs
• To compare the identified resources of resilience, finding potential differences and
similarities amongst two groups of entrepreneurs with SMEs in Russia and abroad
• To evaluate the determinants by the impact on resilience
The study uses a qualitative method of research in order to obtain valuable insights directly from the entrepreneurs. The most suitable for that purpose is chosen to be semi-structured in-depth interviews with current owners of the company (around 1-1.5 hour, conducted in an online format, recorded and transcribed with the consent of interviewees).
This bachelor thesis follows a classical structure. Firstly, in the theoretical part of the study the literature on the topic of resilience as a term and its relation to SMEs, existing theories, entrepreneurs, and internationality is explored to set the grounds for the study. Then, the theories used for this study are described and a theoretical framework is outlined. The thesis mainly appeals to a resource-based view. After that, in the research methodology part, it is described how the data is collected and what is the strategy for the further analysis. Along with that, the sample of this study - entrepreneurs are briefly described in this part. The empirical part of the study consists of the results of the analysis and their discussion, followed by concluding chapters - theoretical contributions and practical implications, as well as limitations of this work and proposals for the future research. In the end of the study, an overall conclusion is provided.
In order to answer the posed research question, this work sets a particular goal - to examine and compare the determinants of resilience of domestic and international SMEs, founded or managed by Russian entrepreneurs and affected by a turbulent environment. In this study, two groups of entrepreneurs - with businesses located in Russia and in a foreign country - will be examined separately at first in terms of resilience determinants and then compared to each other, searching for possible similarities and differences, and, presumably, other interesting findings.
Consequently, to reach the goal of the study, a number of objectives are set. These objectives are followed throughout the study, outlining planned steps to achieve the goal:
• To analyze the previous literature studying the concept of resilience of SMEs
• To explore the theoretical concepts explaining the resilience in previous research and select the most suitable for this study
• To conduct in-depth interviews with entrepreneurs - owners of Russian and foreign SMEs
• To analyze the interviews in terms of resources and capabilities on individual and
organizational level using the coding method
• To identify the determinants of resilience for Russian and foreign SMEs
• To compare the identified resources of resilience, finding potential differences and
similarities amongst two groups of entrepreneurs with SMEs in Russia and abroad
• To evaluate the determinants by the impact on resilience
The study uses a qualitative method of research in order to obtain valuable insights directly from the entrepreneurs. The most suitable for that purpose is chosen to be semi-structured in-depth interviews with current owners of the company (around 1-1.5 hour, conducted in an online format, recorded and transcribed with the consent of interviewees).
This bachelor thesis follows a classical structure. Firstly, in the theoretical part of the study the literature on the topic of resilience as a term and its relation to SMEs, existing theories, entrepreneurs, and internationality is explored to set the grounds for the study. Then, the theories used for this study are described and a theoretical framework is outlined. The thesis mainly appeals to a resource-based view. After that, in the research methodology part, it is described how the data is collected and what is the strategy for the further analysis. Along with that, the sample of this study - entrepreneurs are briefly described in this part. The empirical part of the study consists of the results of the analysis and their discussion, followed by concluding chapters - theoretical contributions and practical implications, as well as limitations of this work and proposals for the future research. In the end of the study, an overall conclusion is provided.
Times of turbulence and uncertainty are always faced by businesses of all kinds. In response to external events entrepreneurs must find ways to stay resilient despite the circumstances. This study is made with the intention and in attempt to understand how entrepreneurs manage to survive through turbulence, to take a theoretical outlook on their real-life actions, to categorize, systematize and compare the factors which impact their resilience and to provide the results as a guidance for other entrepreneurs and researchers. This work consists of three elements, which are Russian entrepreneurs, SMEs located in Russia and abroad, and resilience of business.
In the beginning of this study, it was necessary to understand the concept of resilience within businesses. Resilience overall exists in many spheres, not limited to economics and management. In this bachelor thesis, the previously established definitions of resilience were explored during the first stage - literature review. It became apparent that resilience is a multidimensional term, and researchers’ opinions are divided on many aspects of resilience. Some argue that resilience is static and some view it as a dynamic concept. Some developed a processual view on resilience, some consider it in a domain of capacity. Overall, resilience was defined as an ability of a firm to withstand and survive through turbulence, and building on that definition, this study moved further with the review of literature related to resilience and the elements comprising this thesis. Resilience of SMEs, entrepreneurs, international resilience topics were considered. In preparation for the next part of the study, theories that were used before in research of resilience were also overviewed.
As resource-based view was one of the mostly used and suitable theories in research of resilience, it was also applied in this work. To overcome the limitations of RBV, that were mentioned in literature review, it was decided to not only analyze businesses on organizational level, but also on individual level, taking a closer look on entrepreneurs themselves and their personal traits. Additionally, on this stage of work entrepreneurial specific resources as resources in possession of entrepreneur specifically and exclusively were considered. Consequently, a theoretical framework for categorizing the resilience determinants consisting of three types of resources - tangible, intangible and human - as well as dynamic capabilities on organizational level; and entrepreneurial specific resources as well as individual traits of entrepreneur on individual level was created.
Afterwards, it was needed to set criteria for interviewees. As it was previously stated, the interviewees were divided into two groups: having businesses in Russia and having businesses abroad. However, both groups of interviewees were Russian entrepreneurs operating small to medium enterprises. Interviewees were chosen with the use of purposeful selection. As for the interviews, they were semi-structured and in-depths, conducted in online-format and lasted around 1 to 1.5 hours. There was a questionnaire constructed (which is present in Appendix), however, additional questions were often asked in order to gain better understanding. The final research sample consisted of 11 entrepreneurs from different field of business, some of which relocated, and some initially started businesses abroad.
The analysis of primary data obtained from interviews began with coding citations of interviewees according to color codes set for each criterion beforehand. Firstly, each individual interview was color-coded, followed by grouping the citations by their meaning. Then, these common groups were once again merged throughout all the interviews within each one group of interviewees - separately for entrepreneurs with businesses in Russia and entrepreneurs with businesses abroad. After that, the final code groups as determinants of resilience were compared between two groups, exploring the similarities and differences among them. The resilience determinants were also evaluated by their impact on resilience individually and withing categories they belong to. In the course of analysis, it was decided to conduct a second round of coding, redistributing the determinants in entrepreneurial specific resources category. This decision was made due to the fact that during interview conduction and further analysis it became clear that the resources of entrepreneurs were tightly connected to the resources of organization. They were widely used in organization and did not belong only to entrepreneur anymore. It was hard to distinguish these resources from organizational, also because this category of resources was not exhaustive, unlike the other categories.
In the result, there remained five categories of resources within which code groups - resilience determinants were identified both for SMEs operating in Russia and abroad. There were three determinants which were highly impactful on resilience as well as similar among two groups: effective approach to financial management, close-knit and loyal team and rapid decision making in the face of uncertainty. Other similarities included financial resources obtained from outside, high-quality product or service, which is always upgrading, and entrepreneurial traits such as searching for opportunities even in turbulent times, expertise in the field, faith in own business and responsibility for business and employees. As for the differences, it was identified that entrepreneurs abroad rely more on sources of finances from outside of the company whereas entrepreneurs in Russia rely more on self-financing. The former group is less attached to their businesses compared to the latter, entrepreneurs with businesses in Russia. Entrepreneurs have different marketing approach between two groups, whereas foreign businesses focus more on attracting traffic and looking for ways to cut costs and improve the funnel, businesses located in Russia in general expressed that their main marketing tool is the quality of the product itself. Finally, the entrepreneurs from abroad emphasized personal connections as an important determinant in times of uncertainty, whereas for local businesses the built reputation is of larger matter. Overall, the determinants obtained from “foreign” group were more proactive in nature than those extracted from “local” group of entrepreneurs. There were more similarities and less differences in resilience determinants among these groups that it was previously expected.
...
In the beginning of this study, it was necessary to understand the concept of resilience within businesses. Resilience overall exists in many spheres, not limited to economics and management. In this bachelor thesis, the previously established definitions of resilience were explored during the first stage - literature review. It became apparent that resilience is a multidimensional term, and researchers’ opinions are divided on many aspects of resilience. Some argue that resilience is static and some view it as a dynamic concept. Some developed a processual view on resilience, some consider it in a domain of capacity. Overall, resilience was defined as an ability of a firm to withstand and survive through turbulence, and building on that definition, this study moved further with the review of literature related to resilience and the elements comprising this thesis. Resilience of SMEs, entrepreneurs, international resilience topics were considered. In preparation for the next part of the study, theories that were used before in research of resilience were also overviewed.
As resource-based view was one of the mostly used and suitable theories in research of resilience, it was also applied in this work. To overcome the limitations of RBV, that were mentioned in literature review, it was decided to not only analyze businesses on organizational level, but also on individual level, taking a closer look on entrepreneurs themselves and their personal traits. Additionally, on this stage of work entrepreneurial specific resources as resources in possession of entrepreneur specifically and exclusively were considered. Consequently, a theoretical framework for categorizing the resilience determinants consisting of three types of resources - tangible, intangible and human - as well as dynamic capabilities on organizational level; and entrepreneurial specific resources as well as individual traits of entrepreneur on individual level was created.
Afterwards, it was needed to set criteria for interviewees. As it was previously stated, the interviewees were divided into two groups: having businesses in Russia and having businesses abroad. However, both groups of interviewees were Russian entrepreneurs operating small to medium enterprises. Interviewees were chosen with the use of purposeful selection. As for the interviews, they were semi-structured and in-depths, conducted in online-format and lasted around 1 to 1.5 hours. There was a questionnaire constructed (which is present in Appendix), however, additional questions were often asked in order to gain better understanding. The final research sample consisted of 11 entrepreneurs from different field of business, some of which relocated, and some initially started businesses abroad.
The analysis of primary data obtained from interviews began with coding citations of interviewees according to color codes set for each criterion beforehand. Firstly, each individual interview was color-coded, followed by grouping the citations by their meaning. Then, these common groups were once again merged throughout all the interviews within each one group of interviewees - separately for entrepreneurs with businesses in Russia and entrepreneurs with businesses abroad. After that, the final code groups as determinants of resilience were compared between two groups, exploring the similarities and differences among them. The resilience determinants were also evaluated by their impact on resilience individually and withing categories they belong to. In the course of analysis, it was decided to conduct a second round of coding, redistributing the determinants in entrepreneurial specific resources category. This decision was made due to the fact that during interview conduction and further analysis it became clear that the resources of entrepreneurs were tightly connected to the resources of organization. They were widely used in organization and did not belong only to entrepreneur anymore. It was hard to distinguish these resources from organizational, also because this category of resources was not exhaustive, unlike the other categories.
In the result, there remained five categories of resources within which code groups - resilience determinants were identified both for SMEs operating in Russia and abroad. There were three determinants which were highly impactful on resilience as well as similar among two groups: effective approach to financial management, close-knit and loyal team and rapid decision making in the face of uncertainty. Other similarities included financial resources obtained from outside, high-quality product or service, which is always upgrading, and entrepreneurial traits such as searching for opportunities even in turbulent times, expertise in the field, faith in own business and responsibility for business and employees. As for the differences, it was identified that entrepreneurs abroad rely more on sources of finances from outside of the company whereas entrepreneurs in Russia rely more on self-financing. The former group is less attached to their businesses compared to the latter, entrepreneurs with businesses in Russia. Entrepreneurs have different marketing approach between two groups, whereas foreign businesses focus more on attracting traffic and looking for ways to cut costs and improve the funnel, businesses located in Russia in general expressed that their main marketing tool is the quality of the product itself. Finally, the entrepreneurs from abroad emphasized personal connections as an important determinant in times of uncertainty, whereas for local businesses the built reputation is of larger matter. Overall, the determinants obtained from “foreign” group were more proactive in nature than those extracted from “local” group of entrepreneurs. There were more similarities and less differences in resilience determinants among these groups that it was previously expected.
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