Who cut the ribbon? A quantitative analysis of formal opening ceremonies of new plants of multinational corporations in Russia

Abstract

This paper reports on a study of formal opening ceremonies of new plants of multinational corporations in Russia. We argue that such ceremonies have profound symbolic meanings, namely managing anxiety and signaling commitment, as well as practical importance, particularly when top executives of corporate parents meet with top officials from the host countries at such ceremonies. The database embraces the entire population of public opening ceremonies of new plants of western multinational corporations (MNCs) in Russia from 2012 to 2016. The analysis revealed that in 2016, the unwillingness of both corporate CEOs and local governors to participate in plant opening ceremonies began to increase. More than one-third of plant opening ceremonies in 2016 were low-profile ceremonies ignored by top officials from corporate parents and local authorities from the host country. The growing absence of local governors is attributed to the smaller size of newly opened plants and the impact of sanctions imposed on Russia by the United States and European Union following the inclusion of Crimea into Russia in 2014. This paper also indicates a promising direction for further studies – a replication study that should embrace public opening ceremonies of new plants of foreign MNCs in China, India, and Brazil.

Keywords:

• Multinational corporations
• manufacturing
• new plants
• Russia
• formal opening ceremonies

Acknowledgments

The authors wish to thank an anonymous reviewer and Prof. Ralph Clem for very valuable suggestions on the manuscript.

Notes

1. The italics are ours.

2. Turkey was a special case because the country did not participate in initial and subsequent sanctions from western nations, but was seriously hit by Russia’s retaliation measures starting at the end of November 2015 and lasting until the end of 2016.

3. Our data for 2014–2015 slightly differs from that presented in Gurkov (2016a) because a few cases recorded in Gurkov (2016a) as “new plants” were indeed extensions of existing plants.