Management of South Korean Family Companies' Subsidiaries in Russia: Predicaments and Potential for Development

This study aims to expand understanding of the family business and the theory of internationalization in Russia, the consequences for subsidiaries of Korean family companies from entering and operating in the Russian market. For this purpose, a bibliometric analysis of authors and titles of empirical studies, basic theories and conceptual frameworks published in the period from 1976 to 2020 was carried out. Family-owned firms represent a significant share of the global economy and deviate from standard economic assumptions about the behavior of firms. This article discusses the behavior of Korean family-owned subsidiaries in Russia based on case study, secondary data analysis and interviews with senior executives of leading South Korean subsidiaries Samsung Electronics and LG Electronics in Russia. While the analysis of domestic and foreign articles will provide a solid background in understanding the problem, multiple case study and interviews will give a more accurate look at the practical component of the process, provide understanding, highlight patterns in the behavior of such companies and compare them with the theoretical factual side that exists today. Based on the data obtained, recommendations will be developed that can be supplemented in the future by other researchers and used in practice by South Korean family companies in Russia. Researchers still have limited vision of this topic despite the fact there has been an increase in the exploration of family business brands. Nevertheless, it is appropriate to examine and understand the nature of family firms, encounter with its risks and barriers in Russia, entry mode choice, present complex recommendations for Korean family companies subsidiaries. This research is significant due to the fact that current research vector is seeking for scientific aspects in family business in greater depth. Another reason is the analysis relevance of the market entry and development of Korean family firms in Russia taking into account specific nature of Asian management. In other words, the question is: “What specific actions do Korean family companies take in the course of their development in Russia?” The objective of this research is to examine which solutions the chosen Korean family companies’ subsidiaries apply to overcome predicaments on Russian market. The objects of the research are specific Korean family companies’ subsidiaries acting on Russian market. The subject of the research is range of solutions Korean family companies subsidiaries apply to overcome predicaments on Russian market. Research question is “How do Korean family businesses overcome predicaments in Russia?” One of the main limitations of the research is the fact that phenomenon is assessed by the small number of works on intergenerational succession in the families of entrepreneurs; a rather high degree of “closure” of a large family business. The range of respondents from South Korean family companies who agreed to answer the survey, assumption of honesty and truthful responses are other limitations that can effect on obtaining answers to the most sensitive questions. The research implies using collected data within a single year's timeframe, although other studies could adopt a longer span to see whether variations could become more complex and nuanced over time. The novelty of this study is due to the expansion of the theory of family entrepreneurship, in particular with regard to South Korean subsidiaries of family companies on a practical example of two companies in the field of production and retail of electronic equipment. In this paper, the criterion of novelty has both theoretical and practical significance, since the concepts and principles identified in the work were not known and not fixed in the literature at the moment. The work has developed recommendations that can be put into practice by other South Korean family companies.