Perceived influence – challenges during Phase 1 of “T”’s internationalization process process

From one side, the descriptions above show that during Phase 1 of “T”’s internationalization, the issue of how to achieve influence in the first international projects was rather connected with the idea of establishing the first footprints abroad in close co-operation with the Norwegian authorities and local authorities. The involvement of the authorities gave a kind of protection and safety. The form of JV seemed to be right for the company, unexperienced in international co-operation, from a small country.

The consultative role of the BoD and the idea of helping and developing the emerging markets gave support to JV ownership. The role of the “passionate ambassadors” also supported the idea of best competence in a local market, resulting in positive “pilot projects” abroad. The ethical standards of doing business abroad, based on the established practice from the state-owned company and advice and courses presented by the Norwegian authorities, gave the behavioral ethical framework for “T”’s employees working abroad on the first international projects.

At the same time, the empirical evidence shows that “T”’s managers started to reflect upon matters of influence and control, especially regarding important challenges facing the projects and subsidiaries abroad in the early 1990s. As one manager explained,

“T” did not have enough international experience and competence, didn’t have an international team, a clear strategy for international expansion, ideas about the BoD composition in the projects abroad or how to follow up the projects. The work on the framework of the BoD was considered as transferring knowledge and supporting the local top managers, who were members of the BoD as the local owners; the members of the BoD did not focus on the challenges of the situation if there were some business misunderstandings, they tried to work out the challenges. The institute of expatriates did not exist. The consultants were sent abroad to support the local

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management. “T” had no common corporate rules that could be applied abroad, so that topic was not an issue during the first international investments. Common practice based on some unwritten rules for SOEs regulated behavior abroad. I experienced that the more we were involved in international projects the more we needed to discuss how we would go further. We had a simple business model – to survive, not to lose, to establish good relationships with local partners and to learn how to work internationally. (Conversation with a former senior manager, responsible for the first international projects in “T” from 1991, 2016)

One of the first “passionate ambassadors” in the 1990s stated “T” did not have sufficient control and influence in the first projects, but “T” had another intention.

We trusted our partners and co-operated well. The question of influence or control was not on our agenda. We supported the local partners in building up modern telecommunication; we invested in trust and good relationships, based on respect.

That helped us further. (Interview, 2018)

At the same time, another respondent said that, in his opinion,

“T” had the influence and control that was needed by new beginners in the first projects abroad, in order not to lose money and not to be cheated, but actually it was not a target to have business control, while the size of the investments was low; the primary target was to learn to work internationally, to build good relationships with the local partners, to understand the culture and the way to do business internationally (Interview with a Director, who worked internationally in the 1990s, 2018).

We learned a lot and saw the benefits of that in other Russian projects later. Maybe we did not make money, but we had a feeling that we managed. To be true, maybe we did not understand everything, especially the costs in marketing that could be overestimated. But what we learned from the projects gave us much more. When we decided to continue to go internationally, we took the experience from our first projects and started to think about what we needed to do in JV in order to secure

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investments when they would be larger. (Interview with a manager, who worked in international projects in the 1990s and later, 2018)

To conclude, the results of the first international projects of “T” were positive, in terms of the fact that the first footprints abroad were established and the results of these pilot projects were as expected:

to pay back the investments (as an example, about 40 million NOK were invested in Kola Telekom (Murmansk), and the investments were almost payed back); the depreciated equipment was delivered to Arkhangelsk, and installed; the relationship with the local partners was developed in St. Petersburg, Murmansk, Arkhangelsk and Karelia; “T” started to be known among Russian authorities; and the knowledge of how to work internationally was accumulated in the organization. However, the perceived influence during Phase 1 in internationalization was actually a matter of very limited influence, and the effect of control mechanisms was low. The respondents underlined that the topics of influence and control were not on the agenda. The positive experience from the first projects taught

“T” international experience, built relationships with the local partners and gave the necessary knowledge in internationalization, in order to go further with the international expansion. If “T”

decided to go further in its international development, it needed to develop an international strategy, based on business targets, and configurate the system of control mechanisms, in order to achieve influence.

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Chapter 5: Phase 2 of internationalization 1996-2001. Planting the flags – the “Viking strategy”

In this period, company “T” began its active international expansion into the emerging markets, using knowledge and experience from the first stage of internationalization.