Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why IKEA Is Fed Up with Russia

businessweek.com

Post reply on HN
Print view View original

61–70 of 82 posts

Re: Why IKEA Is Fed Up with Russia

#61

Post by ilyak »

dchest wrote: post #41
ilyak wrote: post #23

Earlier quoted context omitted.

Well, did the article provide any data on how much are they expected to bribe, in $, and how good their mall building is? No, instead we've seen some bashing. It's okay to bash, it's okay for me to troll. Face with it: IKEA drains money from the country (is that called investments) and also their offerings are crap. Maybe it's just my experience; Тёмочка praises them. However, my experience is that you should only go…

"Today we order $50m of furniture here from Russian factories. In the future want to buy at least ten times that amount," said Dahlgren." -- http://news.bbc.co.uk/2/hi/business/1836004.stm (2002) There are over 30 Russian factories working for IKEA. How does this correlate with your theory of IKEA killing local factories?

That's actually a good point. Didn't know that. I wonder if it's better than it was when it was chinese, tho.

Anyway, a valid point.

Re: Why IKEA Is Fed Up with Russia

#62

Post by presto10 »

ilyak wrote: post #54
presto10 wrote: post #46

Earlier quoted context omitted.

Do you see the title of the original article: it includes the expression "fed up". It implies they have been fighting corruption issues before, but until now managed to stomach it. Now, however, they are fed up with it, resorting to going public. See?

How did they "fight" exactly?

By refusing to pay them?

Re: Why IKEA Is Fed Up with Russia

#63

Post by presto10 »

ilyak wrote: post #56
presto10 wrote: post #44

Earlier quoted context omitted.

Ikea would interest us as a company trying to do business without paying bribes in Russia. No matter what the quality of its products, it does not deserve to be extorted by corrupt authorities. So don't mix up the quality of its products with the corruption issue.

If you can have a huge successful business without paying any bribes, that sounds like a pretty managed level of corruption.

Sounds like you think the world is Russia. If you ever get a chance, try exploring the corporate culture in another country, say, Sweden. You will be amazed at how many things you assumed to be universal actually are characteristics of Russian corporate and government culture. This includes rampant corruption in large corporations and government.

What bothers me with the attitude of neo-patriotic Russians under Putin (which you seem to represent well) is that it considers the logic of "everyone cheats, therefore we can too, even so bad that it goes off the charts" valid.

Re: Why IKEA Is Fed Up with Russia

#64

Post by berntb »

ilyak wrote: post #53
berntb wrote: post #45

Earlier quoted context omitted.

You might like IKEA, or not. There is an easy argument to make that they are a net destroyer of taste and destroy culture. I am not certain, personally. But as a business, IKEA is as serious as a heart attack and is a competitor that seems unbeatable; an inspiration for all. IKEA builds and manage an incredible amount of stores everywhere -- without any serious security problem. I've never read any article that IKEA…

I don't think it would have any noticeable consequences for anyone except IKEA itself.

Point was, if IKEA had as little reason to complain in Russia as most everywhere else, it would be really good for Russia.

Let us just hope that the Kamprad family (which owns IKEA) aren't Polonium poisoned, like Litvinenko.

(The last few months, I've seen quite a few people like you on discussion forums that defend Iran, Putin, etc. Strange.)

Re: Why IKEA Is Fed Up with Russia

#65

Post by radu_floricica »

Confusion wrote: post #18
ilyak wrote: post #17

Earlier quoted context omitted.

Well, you know why they still do business here? The answer is M O N E Y. So, they bribe to make it happen, thus feeding the corruption loop, and don't see any problem with that! Until they do. Then, they brag the "ikea generation" crap in newspapers.

If you need to pay bribes, you need to raise your prices to still make a profit. Your customers, i.e. you , need to pay more. Corruption hurts the population of a country, as every cent comes directly out of their pockets. That is partly why people in properly democratic countries have, and keep , a higher standard of living.

It's much worse. The cost of bribes is bigger then the actual sum, and incomparable for the economy as a whole.

A bribe-based economy has very high barriers of entry, especially when the main client in your industry is the state. Which means low competition which means... lots of bad things.

Re: Why IKEA Is Fed Up with Russia

#66

Post by presto10 »

ilyak wrote: post #55
presto10 wrote: post #43

Earlier quoted context omitted.

Are you implying Ikea would want anything else than normal, civilized treatment from local authorities? If not, why on earth would Ikea need to slander the local government for anything? I'm sure this is not the kind of publicity either one wants.

Maybe they want normal, civilized treatment. However, they do some serious bashing in process of acquiring that, so I did some bashing too. And! I didn't want anything besides normal, civilized treatment, too! Makes it an interesting social experiment.

The question is: Is their "bashing" of the local government justified? Is your "bashing" of Ikea justified?

To me it seems Ikea is not in this for any political games: it wants to make business, within moral codes it has set up for itself, that should be reasonable to everyone, even you. You on the other hand seem to be in this out of hurt national pride. That is not an argument as compelling as the first.

It is not difficult to understand that Russians do have a hurt national pride, looking at recent history. But don't take it out on Ikea - they're not the one at fault here. Take it out on the corrupt local government. That would be more constructive, and even build up some credit with Russia's current skeptics.

Re: Why IKEA Is Fed Up with Russia

#68

Post by laut »

steveblgh wrote: post #60
Retric wrote: post #58

Earlier quoted context omitted.

In theory, trade only happens when it benefits both parties. I might hate the local Exxon selling soda for 2$ a bottle, but I can still buy it at other stores. The only reason you complain is they are charging you for the amount of effort they save you and not their costs. So, opening a store is a net gain, as is investing 4 billion in the economy. In theory.

Of course state protectionism might help local furniture manufacturers to catch up and grow their own business and that might actually benefit the Russian economy even more. Perhaps the legal, administrative burdens are there with a purpose, or maybe I'm reading too much into it...

Protectionism is bad. It doesn't benefit an economy. It can benefit the protected industries short term as well as the people they bribe to get the protection. But overall it is bad.

See http://en.wikipedia.org/wiki/Comparative_advantage for instance.

Re: Why IKEA Is Fed Up with Russia

#69

Post by asdflkj »

Confusion wrote: post #13

There was an article in one of our national newspapers this weekend that shows how deep the corruption goes. A huge investment company, with 4 billion in assets, was unwilling to pay up and was driven out of business. Several government officials committed fraud to the extent of 290 million dollars (seizing taxes the company paid to the Russian government) and despite sending different parts of the government piles o…

"These days" as opposed to which days? Yeltsin days? If this is what you meant, then this is sneaky of you (perhaps unintentionally so), because you are offering political opinion, which is wrong, and which I may not refute on this site because of its political nature.

Corruption is a fact of life in Russia--almost a natural law--and has always been. If you find this distasteful, then don't do business there. Ikea has known this from day one. Everyone who has ever dealt with Russia since the Iron Curtain was bound to find out on day one. This article is a move in a chess game, and both sides (in fact there is probably a handful of sides in this one) are on exactly the same ethical ground.

Interesting if you're interested in minutiae of Russian politics, but otherwise business as usual.

Re: Why IKEA Is Fed Up with Russia

#70

Post by laut »

ilyak wrote: post #32
sho wrote: post #30

Earlier quoted context omitted.

"Face it: IKEA drains money from the country" This is a common misconception and almost certainly wrong; you may need to brush up on your knowledge of economic theory if you harbour such fallacies. Perhaps start with comparative advantage: http://en.wikipedia.org/wiki/Comparative_advantage

The problem with comparative advantage is: For what products do Russia have comparative advantage? Besides oil, because being an Oil banana republic suck, and also all kinds of banana republics gravitate towards corruption and despoty. If we'll find that we don't have comparative advantage over China in all manufacturing, we have two choices: - Ruin all the country manufacturing and hope for economical tooth fairy to…

A comparative advantage is not the same as an absolute advantage.

Have you read this: http://en.wikipedia.org/wiki/Comparative_advantage ?

Post reply on HN