Rituals of opening ceremonies of overseas manufacturing facilities of multinational corporations in Russia

• Author: Alexandra Kokorina,Olga Balaeva,Igor Gurkov,Zokirzhon Saidov
• Date: 01 March 2021
• Published date: 01 March 2021
• DOI: http://doi.org/10.1002/tie.22110

VIEW FROM PRACTICE

Rituals of opening ceremonies of overseas manufacturing

facilities of multinational corporations in Russia

Igor Gurkov

1

| Alexandra Kokorina

2

| Zokirzhon Saidov

1

| Olga Balaeva

1

1

Department of General and Strategic

Management, National Research University

Higher School of Economics, Moscow, Russia

2

Department of Innovation Management,

National Research University Higher School of

Economics, Moscow, Russia

Correspondence

Igor Gurkov, Department of General and

Strategic Management, National Research

University Higher School of Economics,

Mysnistskaya 20, Moscow 101000, Russia.

Email: gurkov@hse.ru

Abstract

We explore the meaning of rituals of public plant-opening ceremonies, which are

popular in many countries and mandatory in Russia for greenfield investment

projects implemented by multinational corporations. The study is based on the

analysis of videos from the public opening ceremonies supplemented with the

analysis of financial data on the studied industrial projects. We argue that in a

country with underdeveloped physical infrastructure and volatile business regu-

lations, opening ceremonies for new industrial projects have three implications:

(a) such events are festivities which are centered on an exchange of gratitude

between foreign investors and the local authorities for their non-opportunistic

behavior; (b) such events serve as “the rite of passage”of a newly built facility

into the local business and social infrastructure; and (c) assurances in speeches

during opening ceremonies about the long-term nature of industrial projects are

taken seriously as obligations and serve as an additional barrier to exit from

industrial assets.

KEYWORDS

divestment theory, foreign direct investments, manufacturing, multinational corporations,

organizational rituals, Russia

1|A COMMON BUT NEGLECTD

PHENOMENON OF THE FOREIGN DIRECT

INVESTMENT PROCESS

The rituals of formalopening ceremonies of new foreign manufacturing

facilities of multinational corporations(MNCs) are a particular phenom-

enon that is common in international business,but largely neglected by

academic researchers. In this study, we seek to demonstrate that prop-

erly describingand revealing the meanings of such organizational rituals

can enrich our understanding of MNCs' management practices, espe-

cially with respect to the relationship between foreign investors and

host country authorities. Thus, we have designed our article as an

exploratory studyequipped with extended empiricalevidence obtained

through video analysis of plant-opening ceremonies in Russia, where

such ceremonies are almo st mandatory for new plants and a rich tra-

dition of such ceremoni es exists. In addition, this study includes the

collection and examin ation of information on p articipants of such

ceremonies, the propert ies of the specific inves tments, and the

further destiny of the recently opened plants.

2|ASSEMBLING THE RESEARCH

FRAMEWORK FOR THE STUDY

To the best of our knowledge, to date, only three published articles

have dealt directlywith rituals of plant-opening ceremonies.Konopacki

(1992) called attention to the importance of plant-opening ceremonies

as part of the launch and longer-term smooth operation of overseas

manufacturingplants using an example from anemerging economy set-

ting. More recently, Gurkov and Kokorina (2017) tallied all plant-

opening ceremonies of MNCs occurring in Russia from 2012 to 2016,

presented a typology of the formal ceremonies on the basis of the

DOI: 10.1002/tie.22110

Thunderbird Int. Bus. Rev. 2021;63:145–157. wileyonlinelibrary.com/journal/tie © 2019 Wiley Periodicals, Inc. 145