Organisational structures in emerging markets : cases from multinational telecommunication firms in Russia

As many parts of the world markets are becoming saturated, it is becoming increasingly important for companies to seek new unexploited markets. Many emerging markets are currently undergoing significant economic growth, which makes them suitable targets for these companies. However, for a multinational company (MNC) venturing into an emerging market is seldom a straightforward task, as these countries often have little similarities to the home markets of the companies. Consequently, following a decision on a suitable way to enter the emerging market, the MNC has to adapt the organisational structure as well as its operations to suit the local characteristics. The purpose of this thesis is to get a deeper understanding of how companies adapt their organisational structure to suit emerging markets. The focus is on the desired degree of control the company wants over its operations in the emerging market, the types of organisational structure it uses, and finally, the factors influencing the choice of organisational structure used. In order to reach this purpose, interviews were conducted for case- studies in two Swedish companies in the telecommunications industry. The most significant finding of the study is the fact that there is no ultimate organisational structure for companies operating in emerging markets. Other main findings reveal that the organisational structure adopted to a high degree, depends on the mode of entry used, which is closely related to the desired degree of control the company wants over its operations in the emerging market. MNCs operating in emerging markets are generally complex in their nature, which can be related to the companies’ size and geographical spreading. In addition, companies that choose to enter the emerging markets in close cooperation with a local firm will have to adopt more of the characteristics of a firm originating in an emerging market. Finally, the study also shows that the local environment is the factor most heavily influencing the organisational structure. This is a significant factor to consider since the environment in many emerging markets is dynamic and influences companies’ operations to a high degree.Validerat; 20101217 (root