Articles containing the keyword 'contracting'
Category : Research article
Finnish wood harvesting contractors have been working in Russia since the 1990s and new entrepreneurs are still interested in starting operations there, even though Russia is not an easy business environment. This study identifies the most significant risks in contracting in Russia. Risks were identified through expert evaluation and a risk analysis was conducted by using a risk matrix. Possible preventative measures were assessed for the identified risks. Some risks were found to be common in Russia and Finland, for example a limited number of clients, dependency on a few clients, and weak negotiating positions. A stable amount of work, i.e. the availability of stands for harvesting, was also a challenge on the both sides of border. Typical problems in Russia were breaches of contract, especially disagreements on wood measurement and payment delays, potentially causing serious economic losses. Specific to Russia were problems related to machine service and spare parts, as well as security issues. The professional skills of machine operators, as well as changing work motivation were risks in Russia. Cultural differences lead to more challenging supervision and management of staff. Among the external factors, the most challenging in Russia were unhealthy competition in the marketplace and non-transparent and the unpredictable procedures of the authorities. In Russia problems caused by seasonality are amplified by the sparse road network and longer downtime. The revealed specific features of the Russian business environment can help Finnish wood harvesting companies to plan a risk management process for operations in Russia.
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Karvinen,
Natural Resources Institute Finland (Luke), Economics and society, P.O. Box 68, FI-80101 Joensuu, Finland
E-mail:
sari.karvinen@luke.fi
- Nummelin, Natural Resources Institute Finland (Luke), Green technology, P.O. Box 18, FI-01301 Vantaa, Finland E-mail: tuomas.nummelin@luke.fi
