Doing Business in Russia: Lessons for Management Accounting

Proceedings of the 1st REDETE Conference, University of Banja Luka, Bosnia and Herzegovina, pp. 81-89, 2011

11 Pages Posted: 26 Feb 2012

See all articles by Ksenia Keplinger

Ksenia Keplinger

Johannes Kepler University of Linz

Birgit Feldbauer-Durstmüller

Johannes Kepler University Linz

Christine Mitter

Fachhochschule Salzburg (FHS) University of Applied Sciences

Date Written: February, 22 2012

Abstract

Since the collapse of the Soviet Union, Russia is on the transition from a command economy to a market system. Having undergone fundamental political and economic changes in the last 20 years, Russia is considered to be a significant player in the world economy and an attractive location for foreign direct investments. As a result, Russia is also an important trading partner for Austrian companies that often maintain a Russian sales office, branch or subsidiary.

It is widely acknowledged and empirically tested that leadership and management theories developed in one culture cannot be easily exported to other cultures. This applies also to management accounting that contributes to the achievement of the company’s objectives and thus takes on an important role in managing the organization. Since people react to situations and interpret information differently depending on the norms of their native culture, cultural differences impact management accounting activities. Despite the growing interest in management accounting in transition economies in general and in Russia in particular, there is still a significant lack of research concerning the influence of cultural factors on management accounting.

Drawing on interviews with Austrian companies operating on the Russian market, this paper investigates the influence of cultural differences between Austria and Russia on management accounting. Our study does not only aim to enhance the understanding of the needs and particularities of doing business in Russia but also places a particular focus on the context of management accounting by exploring how cultural differences impact management accounting functions such as information supply, planning and control.

Our results reveal that the access to management accounting information as well as the readiness to provide data is significantly lower in Russia than in Austria. Moreover, Austrian employees participate more actively in the planning process, develop more detailed and precise plans and are able to accept objective criticism to a greater extent than their Russian counterparts. Consequently, the study provides evidence that culture differences have a considerable effect on management accounting. This implies that companies entering or already serving the Russian market have to consider these differences in order to design an effective management accounting system.

Keywords: Management accounting, cultural differences, Russia, Austria, information supply, planning, control

Suggested Citation

Keplinger, Ksenia and Feldbauer-Durstmüller, Birgit and Mitter, Christine, Doing Business in Russia: Lessons for Management Accounting (February, 22 2012). Proceedings of the 1st REDETE Conference, University of Banja Luka, Bosnia and Herzegovina, pp. 81-89, 2011, Available at SSRN: https://ssrn.com/abstract=2009607 or http://dx.doi.org/10.2139/ssrn.2009607

Ksenia Keplinger (Contact Author)

Johannes Kepler University of Linz ( email )

Altenbergerstr. 69
A-4040 Linz, Uper Austria 4040
Austria

Birgit Feldbauer-Durstmüller

Johannes Kepler University Linz ( email )

Altenbergerstr. 69
A-4040 Linz, Uper Austria 4040
Austria

Christine Mitter

Fachhochschule Salzburg (FHS) University of Applied Sciences ( email )

Urstein Süd 1
Puch, Salzburg 5412
Austria

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