Influence of foreign direct investments on Supply Chain Management: insights from Russian and Ukrainian agri-food business

The recent developments of Russian and Ukrainian economies and rapid growth of food industries have proven to be one of the key motives for international companies to enter these countries and stirred up active investments into the food sector. It is observable that when foreign food retailers and branded food processing companies enter a new country, they take their business models known from their home countries into the newly entered markets. In this context of particular importance are management concepts such as supply chain and chain quality management concepts. Therefore, our aim is to analyze the influence of Foreign Direct Investment (FDI) on the Russian and Ukrainian agri-food business. Our findings indicate that the interactions of foreign food retailers and branded food processing companies with local suppliers and buyers indeed have an impact on the development of supply chain management in Russian and Ukrainian food sectors. There is a tendency that Russian and Ukrainian business partners change their old business approaches formed under the Soviet system by e.g. improving the quality and delivery terms and increasing the diversity of their product range, etc. and copy Western business principles introduced by foreign companies. One can observe the influence of FDI on supply chain management at all stages of the supply chain.