Western multinationals’ Russian dilemmas

Doing business with an autocracy is always tricky. Doing business with a brutal warmongering one like Russia confronts bosses with unusually stark moral quandaries. They must juggle responsibility for their Russian employees and the well-being of Russian civilians, who may depend on Western-made basic goods, with their fiduciary duty to shareholders and the undesirability of funding Vladimir Putin’s war in Ukraine, to which any tax payments in Russia can be funnelled..When Russia invaded its neighbour two years ago Western companies’ handling of this delicate balance was closely scrutinised. Global companies for which Russia was a marginal market, such as McDonald’s and Starbucks, packed their bags quickly. Others with more exposure, such as Henkel, a German maker of detergents, and Mercedes-Benz, a German carmaker, dragged their feet but quit when their reputations took a hit. Yet by the start of this year only 356, or 10% of all foreign companies in Russia, had completely severed their ties with the country, according to the Kyiv School of Economics. Nearly 1,800 have curtailed operations and investments, but remain. Almost 1,600 continue to operate much as before.