LESSONS FROM THE ‘WILD EAST’ 295climate of Russia has certainly contributed to this ‘ being ’ orientation:
when people feel that they have little control over nature, they are not
as inclined to take action.
Moreover, Russians demonstrate a greater preoccupation with the
past than is the case in other cultures. In contrast to Americans, for
example, they are more concerned with seeing things in a historical
context — Russians place a high value on the continuation of tradition.
They readily acknowledge — in spite of the attempts during the time of
communism to reconstruct history — that their present and future are
infl uenced by their past. This orientation affects their attitude toward
change. Change is perceived with apprehension because it threatens
long - established traditions. The result is an ‘ if it ain ’ t broke, don ’ t fi x it ’
mentality.
Russia’s transition: from cooperatives to capitalism
In 1987 Mikhail Gorbachev, then General Secretary of the Communist
Party, dealt a mortal blow to the communist system and the centrally
planned economy, when the Soviet Parliament approved the so - called
Law on Co - operative Movement, authorizing the creation of co -
operatives. The co - operatives were to be private enterprises, owned by
at least three people. That law unleashed the pent - up entrepreneurial
energy of the Russian people, and led to a dramatic transformation in
Russia in the years that followed. The early cooperatives were hothouses
for young Russians fascinated by the idea of a free - market economy.
S ome of t he m we r e t o b e c ome f ut u r e bi l l ion a i r e s — among them, Mikhail
Khodorkovsky (now in a prison cell at the Chinese border) and Mikhail
Friedman — and hundreds of thousands were to become millionaires.
Millions of Russians became entrepreneurs. The co - operatives also fos-
tered the creation of industries new to Russia, such as investment
banking and cellular telephony. By 2003, only 15 years after the Law
on Co - operative Movement went into effect, the private sector repre-
sented 70% of the Russian economy ( Handbook of Russian Statistics ,
2003 ).
One can hardly overestimate the importance of private entrepre-
neurs ’ contribution to the recent history of Russia. Today, however, as
their businesses grow and mature, these entrepreneurs face new chal-
lenges in transforming loosely structured start - ups into large - scale, effi -
cient organizations (Kets de Vries, 2000 ; Puffer and McCarthy, 2001 ;
Kets de Vries, Korotov, and Shekshnia, 2008). These challenges are to