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Санкт-Петербургский Государственный университет

Выпускная квалификационная работа

GR-СТРАТЕГИИ ТРАНСНАЦИОНАЛЬНЫХ КОМПАНИЙ (НА ПРИМЕРЕ ПИВОВАРЕННЫХ КОМПАНИЙ В РОССИИ)

Направление 41.04.04 “Политология”

Основная образовательная программа магистратуры

“Политическое управление и публичная политика (на английском языке)”

Научный руководитель:

Д-р полит.наук, проф.

Александр Васильевич ПАВРОЗ

Екатерина Ивановна ДЕВИЦЫНА

Рецензент:

д-р филос. наук, проф.

Григорий Львович ТУЛЬЧИНСКИЙ

Санкт-Петербург 2018



Abstract

In the work "GR-strategies of transnational companies in Russia (case of brewing industries)", the author examines GR strategies of three international brewing companies. In the modern world the large corporation is a recognized participant of political processes as it conducts activities to influence political decision-making and formulate a policy. The brewing industry in Russia is one of the most transparent. Nevertheless, it is rigidly regulated, new restrictions are constantly introduced: increase in an excise in a geometrical progression, equating of beer with strong alcohol and distributing it to the 171 Federal Law, banning the production of beer in a plastic bottles over 1.5 liters and others. This paper analyzes how brewing companies react to these constraints, what tools to influence the state authorities use, what the GR strategy consists of and what role in the GR of transnational companies is played by the business association. Units of analysis are 3 transnational companies that control more than 80% of the Russian brewing market. It is AbInBev, Heineken, Carlsberg group. The theoretical and methodological basis of the research is pluralism, neo-corporatism and network approach. The key methods of research are the case study and the interview method. Based on the conducted research, the author draws conclusions about how transnational brewing companies build GR activities in Russia, what is their GR-strategy and how successfully it is implemented.



Contents

• Introduction
• 1. Theoretical aspects of Government Relations
• 1.1 Government relations as a new form of interaction between business and government
• 1.2 Theoretical approaches to government relations analysis
• 1.3 Lobbyism as technology government relations
• 1.4 The role of business associations in government relations
• 1.5 Features of the Russian government relations
• 2. Analysis of the GR-strategy of the brewing industry in Russia
• 2.1 The brewing industry in Russia and its role in Russian politics
• 2.2 Lobbying of the brewing industry on excises
• 2.3 Government relations of the brewing industry in the context of regulation
• 2.4 Opposition to licensing of the brewing industry
• 2.5 Government relations of the brewing industry regarding a plastic bottle
• 2.6 Government relations of the brewing industry on the issue of advertising
• 2.7 The reaction of the brewing industry to the introduction of the state automated information system
• 2.8 Features GR strategy of the brewing industry (according to research interviews)
• Conclusion
• Bibliography
• Application



Introduction

business association brewing industry

Relevance. In the modern world, a large corporation is an acknowledged participant in political processes, an influential socio-political institution that in some cases is comparable with the state. We are talking about transnational corporations that pretend to stand on a level with national states, and their influence on the political life of countries and regions becomes the object of research on political science.

At the heart of the relationship between the state and transnational companies lies the principle of interdependence. Companies pay budget-forming taxes, create jobs, engage in social policy. The state provides companies with "rules of the game", creating laws and monitoring their implementation. GR-departments of multinational companies engaged in the alignment of such a relationship, try to influence the political background and political decision-making. In government relations (GR) of transnational companies an important place is occupied by business unions and associations, which open a large field for research. Building the participants of the brewing industry of effective communications with authorities is one of the most complex and ambiguous directions of the modern Russian GR. The brewing industry is represented by 80% foreign capital. In the current geopolitical trend, sanctions and also the program for fight against alcoholism, it is increasingly difficult to lobby the interests of brewers effectively. Western companies very tightly regulate the costs of GR-activities. These companies have internal codes and extensive experience of lobbying practices around the world. In addition, Russian legislation strictly controls the activities of non-residents. Therefore, the brewing industry has exemplary GR, which are transparent and exclude corruption and shadow practices.

Before the economic crisis of 2008-2009, the Russian corporate GR was mostly of an "individual" nature, GR-coalitions and business associations rarely acted as its participants. After 2009, the business associations took on a special niche in GR, became prominent players in GR-strategies of corporations.

The brewing industry faced serious problems in 2011, when amendments to the 171 Federal Law equated beer to strong alcohol. Since then, the industry has become severely regulated, the government has introduced many restrictions that hinder the consistent economic development of brewing companies. The state implements the anti-alcohol program, so it increasingly limits the brewing industry. For example, the state banned the release of products in plastic containers of more than 1.5 liters, in geometric progression increases excises, limited advertising, introduced a unified state automated information system for the production and sale of beer, and much more. In these conditions, large brewing companies began to optimize their business and unite. GR-departments began actively resisting the imposed restrictions.

Research work on GR-strategy of the brewing industry in Russia is not much, although this is one of the most transparent industries in terms of financial costs for lobbying. The author of this work decided to study the case of the brewers, to find out which GR strategy is most effective, to find the agenda, to find out what resources the companies use to successfully interact with state authorities in the conditions of economic instability, sanctions, business combination.

The above indicates that the topic of research is relevant and in demand both in the theoretical sense and in the practical activities of transnational corporations and public authorities. In order to make scientific recommendations for improving the effectiveness of GR mechanisms, it is necessary to analyze the behavior of transnational companies in the context of the Russian political system, analyze the role of non-profit organizations in the interaction of brewing companies and the state, analyze the GR strategy and the factors determining it.

Analysis of the literature. From the beginning of the 20th century, political scientists began to study the representation of interests. A. Bentley и D. Truman proposed to view politics as a sphere of rivalry between interest groups. Bentley considered the political process as a bilateral pressure of groups in the struggle for state power.

Throughout the century, many brilliant theoretical and empirical studies were published concerning the formation of interest groups in the US and Europe, the interaction of the state and business. (Bentley A., Parsons T., Truman D., Olson M., Libman A., Schmitter P., Dahl R., Heywood A).

The study of the interaction between business and government is connected with the theory of lobbyism (J. Berry, F. Baumgartner, B. Leech, J. Birnbaum, D. DeKiefer, L. Milbrath, D. Kimball, M. Hojnacki).

A special place is occupied by works studying the theory of functional representation of interests, within which three basic approaches to research are distinguished: pluralism (R. Dahl, C. Lindblom, М. Olsen, D. Truman, E. Fraenkel), corporatism (A.Cawson, Lembruch J., С. Перегудов, Schimitter P.), political networks (Wasserman S., Faust K., Scott J., Borgatti S.).

In Russia, the problems of the relationship between business and government, as well as the influence of business on the political process, began to be actively studied since the 90s of the twentieth century. Russian studies of Government Relations have different orientations. The relationship between business and government is seen in the context of the dynamics of the relationship between the ruling elites (Gelman V., Gaman-Golutvina O.V., Kryshtanovskaya O.). Another direction analyzes the interaction of companies and leaders at the level of public authorities (Libman A., Lyubimov A., Nelson L., Kuzes I., Peregudov S., Lapina N., Semenenko I., Tolstyh P.). Part of the research refers to the concept of "Russian oligarchy" (Frye T., Zudin A., Peregudov S.).

Some authors approach the conceptualization of the system of representation of interests from the theoretical side, they try to identify models of representation reflecting the specifics of Russian reality (Pavroz A., Zolotareva E., Lapina N.).

Despite the fact that there are many works on Russian government relations and lobbying; studies analyzing the behavior of transnational companies in the Russian market and their interaction with authorities do not exist. Small analytical publications make the media or agencies under private orders.

Research Question that is posed in this paper: how do transnational brewing companies build GR activities in Russia, what is their main GR-strategy and how well is it implemented?

To answer the research question, we will perform a number of tasks:

- Analyze theories and approaches to the study of government relations;

- To consider the peculiarities of the brewing industry in Russia and determine its role in the political process;

- Analyze the lobbying of excises by the brewing industry;

- To consider the government relations of the brewing industry in relation to 171 Federal Laws;

- Analyze the government relations of the brewing industry on licensing issues;

- Consider the government relations of the brewing industry regarding the banning of a plastic bottle of more than 1.5 liters;

- To study the government relations of the brewing industry in relation to advertising;

- Analyze the government relations of the brewing industry in relation to the state information system;

- Analyze the features of GR-strategy based on interviews with representatives of brewing companies.

Object of study: relations between the state and business in Russia.

Subject of study: GR-activity of transnational brewing companies in Russia.

Operationalization of the main terms of the study. The central place is occupied by the concept of government relations (GR). GR is seen as the use of communicative technologies to influence government decisions. GR is an activity for building relations between different social groups and state power. This activity includes the collection and processing of information on the activities of the government, the preparation and dissemination of information on the positions of interest groups, the impact on political decision-making (lobbying).

Another important concept for this research is the GR-strategy. GR strategy is a set of mechanisms and technologies, combined in a strategy for building relations with public authorities.

GR campaign is a system of events united for building relations with public authorities within the framework of a specific GR strategy.

GR mechanisms and tools are various methods used in the activities of companies in interaction with public authorities, with the aim of influencing political decision-making and policy-making.

Hypothesis of this study: the brewing industry in Russia is one of the most transparent in interaction with the state; the brewing industry companies carry out open GR-activity.

Theoretical and methodological basis for this study is theories of pluralism, neocorporativism and the network approach.

Within the framework of the theory of pluralism, stakeholders are independent, compete with each other and are not controlled by the state. The adoption of political decisions reflects the balance between groups of interests within society.

The neo-corporatist approach puts forward the formalities in the interaction of business and the state. The main actors on the business side are associations and unions.

The network approach connects all participants to the general political and administrative network. The influence of actors increases with the proximity of their location to the nodes of networks.

It seems that these theories are best suited to describe the interaction of transnational brewing companies and state authorities in Russia.

The key method of research is the case-study method. We consider the cases of GR transnational companies of the brewing industry in Russia in six main areas: excise taxes, separate regulation, licensing, state information system, plastic packaging, advertising. Units of analysis are three transnational companies that control more than 80% of the Russian brewing market. This is AB InBev Efes Group, Heineken, the Baltic (Carlsberg group). In addition, to collect information, the author used the method of interview. This allowed to obtain unique information directly from the developers of GR-strategy and to do a deeper analysis.

The author of this research uses primary and secondary empirical material, and on its basis conducts research that identifies the opportunities and problems of studying GR transnational corporations in Russia using the example of the brewing industry.

The theoretical significance of the study is due to a systematic study of the concept of government relations in the context of its impact on the adoption of government decisions. The main provisions of the work and conclusions contribute to the study of existing in Russia GR-strategies, mechanisms and prospects for the development of interaction between government and business.

The practical significance of the research is the possibility of using the presented materials and the results of the research in further research work. The results of this study can be used in the activities of companies, public authorities, business associations to optimize the existing GR system. On the basis of this study, practical recommendations can be developed on how to build relations between international companies and state authorities.

Structure of the study. The goal and objectives of the study determined the structure of the study, which consists of an introduction, two chapters, a conclusion, a list of literature and applications. In the first chapter the main theoretical and methodological approaches to GR are analyzed. The main GR classifications and models, tools and mechanisms were studied. A special attention was paid to the study of the concept of lobbyism. The analysis of relations between government and business in modern Russia concludes the chapter. The second chapter gives a description of the brewing industry, analyzed the problems in GR, which faced the brewing industry and their solutions, namely the increase of excises, the ban on advertising, separate regulation, the prohibition of plastic packaging, the attempt to license and the introduction of the state information system. In addition, an analysis of interviews with leading GR specialists from Russian offices of companies AB InBev Efes Group, Heineken, Carlsberg group is offered. In conclusion, the main conclusions of the research on the current situation in the GR brewing industry are formulated, its most important results are summarized, the topical aspects of the problem posed that require further study are highlighted. In the application three interviews mentioned above are documented.



1. Theoretical aspects of Government Relations

1.1 Government relations as a new form of interaction between business and government

The Russian studies of Government Relations have different focuses. Several researchers consider the relationship between business and power in the context of the dynamics of the ruling elites. Other direction of researches analyzes interaction of the companies and the government at the level of public authorities. Part of the research refers to a review of the features of the concept of "Russian oligarchy". These researches of the different directions do not show the full picture GR in the country.

GR is considered as use of communicative technologies for influence on government decisions. GR is an activity to build relationships between various social groups and state power. This activity includes the collection and processing of information on the activities of the government, the preparation and dissemination of information on the positions of interest groups, the impact on political decision-making (lobbying).

GR is an additional tool for traditional representative democracy. It facilitates the involvement of public interest groups in the political decision-making process, which ensures the formation of a balanced state policy.

The main objective of GR is "prevention of probable threats from activity of political stakeholders and realization of potential opportunities of the company by means of its participation in political actions", and the purpose of GR -- "forming of long-term, comfortable, predictable system of the relations with political stakeholders". Besides, tasks of GR are an improvement of the relations with the staff of government agencies; observation of work of the government; influence on formation of the legislation; participation of business in work of the government at all levels; explanation to representatives of government agencies of interests and activity of business.

Subjects of GR are the actors who are purposefully establishing the relations with public authorities. The subjects of GR are corporations, GR departments, non-profit organizations, business associations, GR agencies and consultants.

Russian researchers identify two types of subjects: basic and technological subjects. The basic subjects of GR are initiators of GR-activities of the commercial and non-commercial sector. Technological subjects are GR-departments of organizations and professional GR companies.

GR involves activities at several levels - municipal, regional, federal and international, depending on the level of the authorities.

GR in Russia today is implemented in several ways. One of them is when the first persons of the company independently carry out all interactions with the authorities. PR departments perform sometimes GR functions. Special departments of GR exist in large companies. Small companies delegate GR functions to industry associations.

GR carries out a set of function: tracking and analysis of initiatives of executive bodies of the government; monitoring and complex analysis of legal acts; coordination of forming of the relations of the company with public authorities; maintenance of initiatives of the company in the state sphere (questions of licensing, lobbying of bills, participation in the state tenders or target programs); correction of the state initiatives for the benefit of the company, GR campaigns; support of economic activity of the company in foreign markets; minimization of financial expenses of the company, due to reduction of taxes, tariffs; receipt of state co-financing.

As for the possibility of conflicts, according to T. Parsons, some individuals take obligations that are not appropriate or contrary to their own interests. However, obligations in collective are considered as binding. Interaction of business and the power is based on mutual expectations and trust. The overestimated expectations and different interests provoke the conflicts.

Bentley believed that the political process consists of the pressure of social groups on each other in order to influence the state power. Bentley claimed that any benefit leads to the creation of interest groups, and the interaction of these groups is the hallmark of democracy.

D. Truman has defined political process as race for power over distribution of resources, and society -- as the groups interacting among themselves. He understood "group of interests" as group, which has common interests and making demands to other groups for establishment, maintenance, or strengthening of standards of behavior that are defined by this group. According to Truman, the groups of interests acting through government structures are political. The researcher believed that in process of complication of public processes the number of groups will grow.

M. Olson argued that the basis of the political process is large economic groups that work for their economic interest.

E. Yasin offers a model of interaction between business and the state in three separate zones: white, black and gray. This concept is considered in the framework of the predominance in Russia of the processes of "deforming rules".

Several researchers suggest the existence of competition in the institutional market between formal and informal institutions, when the business community chooses the rules of the game. Other researchers consider direct interaction of business with public authorities less effective than interaction of associations and branch business associations.

1.2 Theoretical approaches to government relations analysis

Different theoretical approaches use for the research of interaction of business and authorities: elitism, new institutionalism, group and network approaches.

The elitism assumes hierarchical access to elite. The distance exists between business groups and the center of decision-making and redistribution of resources. The level of the decision and influences corresponds to each problem. The model of clientelism explains hierarchy of formulation, statement and solution of problems and the principle of distribution of resources. All the leaders of big business are included in one of the groupings close to the elite and have different kinds of "roofs". The decision depends on the patron's ability to cope with the client's problem within the framework of the elite interaction. Such a model characterizes Russia in the 1990s, after the collapse of the USSR. Regional business solves its problems with regional authorities; large business interacts with the federal government and solves issues at the level of regulation of the industry as a whole.

Supporters of new institutional approach see the political and economic organizations as participants who have contract relations. Interaction takes place within the institutional environment that leads to decrease in transaction expenses, leveling of opportunistic behavior, increase in transparency of decision-making processes and rationality of subjects of these decisions.

Adherents of network approach describe participants as a part of the general political and administrative network. Access to knots increases the weight of the participant. Supporters of network approach give a special role to personal qualities of participants of political and administrative networks, their ability to an intensification of interaction and forming of alliances.

In modern political system, two models of interaction of business and the state are most popular: pluralistic and neo corporatism where the defining factor is the role of the state.

The pluralistic model is "a system of interest intermediation in which constituent units are organized in a limited number of special categories, obligatory and non-competitive, ordered hierarchically and functionally, each granted a representative monopoly in the category in exchange for control over the selection of leaders and the articulation of support and demands". The individualism is the cornerstone of social and economic behavior of most of the population. The competition is a driving force of economic development, an indicator of its success. The state is not an economic agent. The state distributes limited resources according to the decisions reflecting balance between groups of pressure in society. The pluralistic model is considered effective for formation of policy in democratic regime.

The concept of neo-pluralism was developed by Robert Dahl , С. Lindblom and J. Galbraith. Its main idea is that modern states are less sensitive to pressure from society than in classical pluralism. The most influential social group is business, so it enjoys privileges from government structures. According to the concept of "pluralistic democracy” R. Dahl, modern pluralistic societies of the West created favorable conditions for free competition of groups of interests. Non-profit organizations and business associations are also full participants of process of adoption of the state decisions.

In the corporatist model, the state is an important economic agent ensuring the development and observance of the rules of the game, and also has social obligations to society. Interest groups are organized in a hierarchical system with a dominant organization, and the ways of aggregating interests are reduced to "bargaining" of groups with the state bureaucracy. This model emerged in the 90s in Russia, when specific interest groups had a great influence on the adoption of political decisions in exchange for loyalty to the current government.

The neo-corporatist approach that developed in the 60-70s of the 20th century suggests a formalized organization of access to decision-making centers, stability and successful development of the national economy. The actors of interaction are professional and social organizations, for example, associations, unions. They agree and formulate a general request for political decision-making or state policy making. The state reveals the position of all interested parties and, in case of rejection, negotiates with a specially authorized organization of coordinated interest. The interaction of corporate associations with the state is voluntary, although they are "embedded" in state structures. Neo-corporatism reflects the model of interaction between business structures and public authorities in the subjects of the Russian Federation.

Interaction of transnational corporations with state authorities of a particular country is a separate field for studying. Transnational corporations face a number of difficulties in interacting with authorities. Grosse explores it using institutional theory in three ways. The behavior of the company in a foreign market is a reflection of social norms and traditions. The pressure and interaction of participants in the international market are studied in detail in the framework of behavioral theory. Transnational companies in the institutional economy face transactional costs. There are three problems - information vulnerability, limited rationality and opportunistic behavior. The third line of the institutional theory emphasizes hierarchy of the relations from the government to the companies. This direction helps to investigate negotiations of the governments of the different countries and the companies, the company's compliance with labor requirements and environmental protection in a particular country.

In capitalist economies, institutions and relationships between firms and government bodies are different. Countries are divided into two categories according to the US-UK model (liberal), or the German-Scandinavian (coordinated) model. The countries of the first category use the markets (contracts) for the solution of social problems. Weak cooperation takes place between companies and the government. The countries of the second category (coordinated) use intergroup cooperation between firms and the companies for the solution of these problems. These countries have stronger forms of cooperation between the companies and the government.

Between the national governments and multinational firms nobody takes the leading position in modern concepts of relationship. These concepts help to study a context of the relations between the states and international firms.

The system of interaction of business structures and public authorities in the different countries functions differently. These distinctions are defined by historically developed character of the relations between society and the state, traditions of permission of the business conflicts, the prevailing types of economic behavior of the population, level of political culture, distribution of resources between various institutes.



1.3 Lobbyism as technology government relations

GR and lobbyism are concepts with similar meanings; however, they are conceptually different. GR is an integral part of general management, and the tasks facing it are much broader than the challenges facing lobbying. Lobbyism is a technology for promoting the interests of the company in government.

Lobbying is part of democracy. Expression of views on politics and influence on it is a derivative of freedom of speech. Lobbying influences the quality of decision-making by providing channels for involvement experts. According to a poll of 600 European parliamentarians and officials in 2013, 89 percent believe that “ethical and transparent lobbying helps the development of politics”.

Lobbying is an interaction with the state officials for influence on adoption of political decisions. Lobbying is information channel for state policy. It also influences political climate that is the cornerstone of state policy and the legislation.

Lobby activities depend on what type of representation of interests, pluralism or corporatism prevails in society. In pluralism, groups that have not received representation in decision-making bodies are carrying out their political activities through lobbying. In corporatism, lobbying fades into the background, since almost every sphere of public life has its own legitimate monopoly representative, which interacts with the state through official channels.

American political scientists G. Almond and G. Powell identify anemic and institutional interest groups. Anemic are spontaneous and short-lived associations for the solution of a specific task, disintegrating after the achievement of the goals. Institutional groups are long-term, have clearly formulated interests and act based on certain rules. Based on the nature of intra-group relations, interest groups are divided into associative and non-associative. Associative groups are voluntary organizations that specialize in articulating interests, for example, trade unions and ethnic associations. Non-associative interest groups are informal, with no clear organized structure.

In Russia the level of organization of the group is not an indicator of its influence. Russian political scientists distinguish groups of subjects of lobbyism: branch, regional and client. The most widespread and effective in Russia is the lobbying of the executive authorities. Since the government and the president play a more prominent role in shaping the agenda than the Federal Assembly.

Specialists distinguish three forms of lobbyism: "direct", "indirect" and "internal". "Direct" lobbyism implies direct contacts between representatives of the company and representatives of state authorities. These are personal meetings with legislators, the establishment of client-client and corruption ties. "Indirect" lobbying involves influencing the decision-making process by mobilizing public opinion in favor of the lobbied problem. "Internal" lobbyism assumes that those who have access to public authorities are engaged in relations with the state. Current or former politicians influence peddling. In Russia, this type of lobbyism is very common.

Lobbyism implies a variety of technologies:

· Participation in discussion of bills with parliamentary bodies;

· Personal meetings with politicians, officials;

· Participation in expert or advisory groups established by government bodies;

· Participation in round tables, special partnerships, which regularly discuss laws and policies with government officials;

· The organization of "grassroots" campaigns, when people are encouraged to turn to civil servants;

· Research projects aimed at influencing the views of public officials.

Researchers have identified three categories of lobbyists. These lobbyists are independent experts who are hired by clients to lobby on their behalf. The second type is internal lobbyists. These people lobby to support the organization of their employer, for example, a non-profit organization. The third type is “casual” lobbyists.

The negative side of lobbyism is its abuse. "Trade in influence" or bribery is payments to government officials or their employees to influence government decisions. Another way is to try to challenge scientific or expert data that undermines the lobbyist's position. The astroturfing technology means confidential financing of groups of citizens and campaigns for lobbying of decisions that bring benefit to private interests. The set of scandals is connected with the offer to politicians in the future of work in the organization that depends on their decisions today. Another way is that the company's personnel are arranged for temporary work in state bodies (“revolving doors”).

In Europe and America, large companies try to be open and ethical when interacting with the state. Responsible lobbying means responsibility, respect by professional lobbyists of ethical standards and laws.

The universal principles of lobbying are stated in Universal Declaration of Human Rights , The United Nations Global Compact, United Nations Convention against Corruption. OECD member countries adopted Recommendation with Principles for Transparency and Integrity in Lobbying, where has registered the basic principles of effective lobbying. Various organizations associated with lobbying have their own code and norms of political behavior. Special organizations, for instance, AccountAbility, SustainAbility and Transparency International develop recommendations and guidelines for responsible lobbying. The Russian GR-League has developed its own GR code, taking into account national circumstances.

Transparency International identified three basic principles for responsible lobbying: transparency, equity of access and integrity. The most common principles are legitimacy, transparency, consistency, accountability, opportunity.

European researchers identify three factors in the effectiveness of lobbying regulation: transparency of interaction; clear and enforced rules of ethical conduct; equality of access.

We consider the situation in the field of lobbying in the European Union. The work of the government and lobbyists to create open and ethical lobbying was fragmented and ineffective. Only seven countries have regulatory acts that regulate lobbying. At the national level, there is a system of sectoral representation and institutionalized partnerships with the government. Two years ago the new trend when large corporate actors depart from services of business associations has arisen, and lobbying is taken in hand.

The financial scale of lobbyist activity is unknown due to the lack of obligatory mechanisms of the reporting in Europe. According to the Register of transparency of the EU since 2012 in Europe 40 million euros only in the pharmaceutical sector are annually spent for lobbying.

According to Burson Marsteller poll in 2013, 79% of professional lobbyists consider that the transparency of lobbying will help to reduce influence problems.

Formally, there is no lobbying in Russia. This concept is not fixed in laws, and activity is not regulated in any way. Separate lobbying technologies are round tables, expert advice. It is fixed in the normative documents. For a long time, personal lobbying is considered the most effective in Russia. Often the CEO or his deputy carries out GR and lobbyist activity. On the second place on efficiency there are known large business associations.

Customers of GR-services are large business, foreign companies or industry associations. This is especially true for industries where import substitution is actively pursued. Most experts in GR are in the staff of large companies. Companies use the services of professional lobbyists in outsourcing.

According to Oleg Rumyantsev, in Russia there is a trend for lobbying in the government and the presidential administration, rather than in parliament. The State Duma was a prominent player in the sphere of lobbyism until the middle of the 2000s. M. Bashirov believes that most laws are frameworks, and their filling takes place in the government. One of the most successful ways to conduct a bill is to make it through the presidential administration.



1.4 The role of business associations in government relations

The impact on the authorities of Russian companies is not carried out alone, but by creating coalitions with other interested companies. Multiplication of participants' resources drives competing companies to unite. Such coalitions are most often represented by business associations, leagues, industry associations, unions.

The influence of coalitions is determined by the personality of the leader, his "political weight," ties and regional representation.

Schmitter and Streeck outline the principles of the formation of business associations: territory (national, regional and local), industry or products, the scale of business, the form of ownership, the purpose of the activity, religion, political loyalty, age.

The relevant principles of combination of business structures are the size, branch, existence of common goals, self-realization of the head, the territory. The incentive for membership are: the productive and effective activity of the business association, the presence in the association of experienced professionals who can lead; the level of overall development of company management; the ability of the association to enter power, as well as the ability to uphold the systemic interests of the business community as a whole or a particular industry; the availability of access to the draft documents discussed; the protection of the interests of the company in the event of problems; belonging to the "club of entrepreneurs"; assistance in acquiring new contacts; access to various useful information. Associations can act as a business platform for information exchange, industrial intelligence, industrial safety.

The Russian reality shows that many companies try to lobby their interests, covering it with an association, giving out their corporate interest for industry or public interest. Officials are easier to act in response to the appeal of the association, because it is not a corporate business.

Most of the business associations in Russia are experiencing significant difficulties. For example, imperfection of the current legislation, which regulates their activity and the order of creation. Employees of associations do not always understand the decision-making process, how to make an association influential. There is a problem with the staff. It is difficult to find a leader who could effectively work, effectively represent the interests of the association in government bodies. Often, business associations are created for a specific person, so it does not always represent the interests of its members. The advancement of the leader becomes his goal. In addition, there is an insufficient funding problem.

The problem is that the government is preoccupied with the tasks of building a state and most often does not hear business, whereas it is possible to speak about the effectiveness of interaction between government and business only on the condition that constructive dialogue between them takes place.

The structure of the mechanism of GR activity in Russia is made by the organizations of two types. First, it is non-profit organizations which initial purpose was no political representation of interests. These organizations include various business associations, unions, associations, business support funds. At the moment, the most active corporate business associations are the Russian Union of Industrialists and Entrepreneurs and the Chamber of Commerce and Industry of the Russian Federation. The branch organizations of businessmen, for example the Union of petroleum producers and the Russian gas society are active. Such associations of businessmen declare protection of interests of small and medium business, but in practice the interests of the small enterprises often aren't taken into account.

Practice of the leading foreign and Russian companies shows that any successful company relies in the activity on the corporate social responsibility (CSR). The CSR programs are strategic investments into development of the long-term successful relations of the company with key groups of influence.

There are three strategies for interaction between business and government within the framework of the CSR:

- Shareholder theory;

- Stake holder theory;

- Enlightened self-interest theory.

Shareholder theory is relevant for the USA, but not for Russia. The founder of the theory M. Friedman assumed that for acquisition of loyalty of consumers and maintaining reputation business will cooperate with society. Social activity is the right of the management of the company and isn't regulated by the national legislation.

In stake holder theory each organization possesses the circle of interested parties which exert impact on activity of the company. The concept is popular in Western Europe and Japan.

The communication aspect of CSR concerns public responsibility and public relations. Tulchinsky structured CSR technologies and divided them into traditional (funding of funds, scholarship programs) and communication-public relations and public responsibility, social audit, international CSR standards, etc.

The regional authorities interact with business associations as it allows to simplify process of coordination of interests, obtaining information on problems, and controlling the interaction space. Attention to federal level associations is more than regional ones, which opens an additional communication channel with the federal center of both regional authorities and business.

Factors of interest of public authorities in business associations are formed proceeding from influence of association, existence of formal cooperation agreements, and the interest of the head of authority.

The most important form of participation of business associations in GR is the creation of public-state advisory, consultative, coordinating and expert bodies. The tendency to form an advisory system comes from above, but its actual content and the role of business in the decision-making process depend on the interest of the agency and the activity of business associations. Authorities are afraid to apply for expertise, because it can fail if business associations do not have relevant experts, clear criteria for selection to the expert council. In addition, there is no procedure by which the authority should clearly substantiate the reason for the deviation of the business position on the issues under consideration. In addition, there is no procedure by which the authority should clearly substantiate the reason for the deviation of the business position on the issues under consideration.

The lobbying firm has more motivation than the association. The lobbying firm will receive a bonus on the outcome of the company, and the association lives on membership fees.

Business associations try to participate in discussion of the normative legal acts infringing on the interests of businessmen. In case of adoption of the documents worsening conditions of development of business, associations use the efforts for their delay or cancellation. The success of these processes substantially depends on the functional level, influence of business association and professionalism of their leaders.

Business associations are an effective form of self-organization of the business community and can successfully represent the interests of their members, acting as intermediaries in the dialogue between business and government. It is especially relevant for the Russian Federation where the economy is transitional in which traditions of active participation of citizens in formation of the civilized market relations are in a formation stage. Business associations are one of the most real ways of influence on decision-making for the purpose of creation favorable conditions for business development. Business associations are mechanisms of formation of the corresponding institutional bases of government relations.

The real model of interaction of business and the state which has developed in Russia was offered by Yasin. It includes rather isolated zones: white, black and gray. "Gray" zone refers to relations that have been withdrawn from the control of official bodies. The "Grey" zone covers informal practicing of requisitions from business and the informal bargaining with the authority concerning the conditions of the operation of a particular business.

"White" zone covers formal practices of relations between government and business, for example, administrative and economic regulation of business. "White" zone is based on the creation of uniform rules of the game for all entrepreneurs and on their compulsion by the state to implement these rules.

"Black" zone covers criminal practices, corruption. "Black" and "gray" zones are based on business investments in "good relations" with the authorities. The fundamental difference between the "black" and "gray" zones is the purpose and set of tools for creating preferential regimes.

This model is considered within the framework of prevalence in Russia of the processes of "deforming rules". According to V. Radaev, “deforming rules” is understood as “the transformation of institutions, where formal rules are replaced by informal ones”.

The determining factors in the formation of interaction between business structures and government are the existence of the objectives of interaction, free dialogue and readiness of business structures and public authorities to implement the declared goals, legislatively designed rules of the game, as well as public benefits and economic expediency.

Researchers distinguish several types of models of interaction between business and the state:

· on the role of the state: order state, punish state, rescue state;

· on the role of business: suppression and coercion, patronage, non-interference of power, partnerships, domination, ignoring, competition, confrontation, privatization of power;

· by the degree of conflict of interest: functional, partner, model of state patronage, symbiotic and conflict;

· by combination of parameters “strong/weak power” and “strong/weak business”: the state “predator”, the policy of non-interference, mutual hostages, the search for rent and “occupation of the state”.

The above models can be present both at the federal and regional levels. At the federal level more centralized issues are resolved, the federal authority is more inclined to interact with business associations. At the regional level, the interaction between government and business is exacerbated by the uneven development of regions and the heterogeneity of entrepreneurship and its weak institutionalization.

Business and power can be communicated through a public open discussion at forums and conferences. Successful examples are the Russian Business Week, the St. Petersburg Economic Forum, the International Investment Forum in Sochi. An alternative to business associations, forums, business clubs, can be a political party that expresses the interests of business. In the early 1990s, "business parties" were created, where commercial structures were the core of the party. They combined the functions of the party and the pressure group. Nevertheless, political struggle can turn into fight of the capitals, but it has to be based on some ideology to attract the population and to enter into Parliament.

1.5 Features of the Russian government relations

In Russia, the interaction of power and business elites in the regions occurs according to several models: patronage model, partnerships, suppression (“the struggle of all against all”) and “privatization of power”. Business is the subject of social policy.

Gaman-Golutvina describes a personal factor in GR and business elite. Zudin by means of approach of path dependence investigated process of evolution of interaction of business and the power.

There are several models of interaction of business and the state. The ideal GR model assumes that subjects of business pay taxes and agree about rules of the game which are controlled by the state. The state guarantees to business creation of the favorable environment and production of public benefits.

I. Iwasaki allocates three types of models of interaction of the state and business. In the “order state” business structures are under strict centralized control, privatization has never been carried out. Belarus, Turkmenistan and Uzbekistan can be examples. The “punish state” supports market institutions and does not interfere with corporate governance mechanisms, nor does it take measures to prevent bankruptcy, which is typical for the Baltic countries. The “rescue state” gives economic entities the opportunity to make their own decisions, but in certain situations can interfere and prevent bankruptcy of the enterprises. Intervention of the state is not limited to clear norms and institutions; therefore there is a risk for corruption and lobbyism.

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