Managing relationships with public officials - A case of foreign MNCs in Russia

Relationships between business firms and public sector actors are raising an increasing scholarly interest, and they play a critical role for business in the emerging markets. Public officials, as executors of state laws and regulations, are important public actors, but we know little about firms' interaction with them. This study examines how foreign MNCs with an established position in Russia deal with public officials in practice. Public-private net is developed as an analytic tool and applied in an empirical investigation of two Finnish MNCs with operations in Russia. The study focuses on daily activities of managers when interacting with Russian public officials. It reveals a complex structure of public-private nets: on-going interaction relationships involve several MNC units and various Russian public officials. Firms maintain several simultaneous relationships with public officials. Furthermore, they also rely on intermediaries and may build indirect relationships to create some distance to public officials. The results show that relationships with public officials carry an important supportive role in business, and the relationships are mainly used for mutual information exchange.