Successful Enterprise in Russia - Essay Example

However, Gorbachev created so-called cooperative enterprises that were allowed by the government. Highly volatility was observed in the institutional environment of the Russia. In many regions, market economy in support of weak institutions, and large variations were found regionally. In other words, the development of the private sector was affected by the corruption, bureaucratic harassment, as well as, racketeering adversely. Furthermore, financial intermediaries that were developed poorly also affected the development of the sector.

"There is a push in Russia to advance the cause of the entrepreneur by providing classes that assist the population in learning how to develop their own business. Reports indicate that other European Universities will see as many as 70% of their higher education centers providing classes on business development". (Lindsay, 2006) Entrepreneurial development was not considered by the inherited ideology of the Russia, which was similar to a number of other centrally planned countries of the world.

In the Soviet, speculators were equated with the period entrepreneurs. Furthermore, profit making by these entrepreneurs was considered as a criminal activity. Independent innovative culture was stifled by the ideology of the Soviet state. On the other hand, development of a punishment-oriented culture was done by the ideologists. In the result, corruption was created by the discretionary power of the officials. Bureaucratic means were used for the running of the economy. Thus, the appetite for risk taking was suppressed by the concentration of reward on plan attainment.

(Ellman, 1994) "Throughout the history of enterprises Russian entrepreneurs did a remarkably good job of seeking out profit opportunities". (Paul, 1987) As a result, informal norms and values were combined with the weakness of formal institution enforcement, and a less-conductive environment was created in the result, which affected the development of new entrepreneurial firms adversely. In this regard, a number of existing barriers to entrepreneurship that are being confronted presently have been pointed out by many authors.

Property rights enforcement has been lack in the Russia, which is one of the examples of these barriers. It has also been pointed out that the government officials have enriched their personal needs by the corrupt behavior that has characterized the grabbing hand model of government intervention, which has been emerging in the present Russia.Although the facilitation of exchange reducing transaction costs has been the one of the objectives behind the designing of the formal rules, different ways can affect the individuals, as well as, groups by them.

"According to --------- As individuals -- and increasingly, collectively in grassroots organizations -- entrepreneurs in Russia are fighting back against the mediocrity and parasitism that is endemic in the country's public and commercial life. They are ideal fighters because entrepreneurs are the first to feel