This work explores the past, present and future of Russian Mafiya from a Business System perspective. It is only an academic work based on research and data from the internet. It demonstrates the use of 5 Bases of Social Power as a powerful framework to explain the growth or decline of an extensive organization in future.

1. Asian Business Systems Final Report
RUSSIAN MAFIYA
Analyzing the World’s Most Powerful
Parallel Business System
Asian Institute of Management Learning Team – 1 A
MBA-2012 | Cohort-7 - Darshak S J
- Madhuranath R
- Tanmoy Dey
- Vincent Bermejo

2. Flow of Analysis
ORIGIN
History, Culture, Uniqueness
BUSINESS SYSTEMS
Illegal & Legal Businesses
BUSINESS COMMERCE
Economic Impact
TRANSFORMATION
New age crimes
FUTURE

3. Madhuranath R
ORIGIN
What are the cultural and historical factors
that make the Russian Mafiya a unique system?

4. Tracing the Roots
TSARs + COMMUNISM + GULAGs  RED MAFIYA
Suppression of people since Tsarist times; serfdoms thrive in Russia
1900s
Gulags create notorious yet loyal thieving brotherhoods – “Vory”
1920-1990
Lenin, Stalin, Khrushchev & Communism make people poorer
Communism & Organized Crime
Vory organize into Bratva; offer protection, arms, drugs, prostitutes
1990 – till now
Mafia spreads globally; bigger; more organized; more businesses

5. Uniqueness
RUSSIAN ITALIAN TRIADS COLUMBIAN
Org. Unit Brotherhood Family Clan Gang
Org. Structure Amorphous Hierarchical Hierarchical Hierarchical
Global Europe / Asia / America South America /
Reach
America Africa / Asia
Size 8,000 Bratva Few 1000s Very large Few 100s
Arms Assassination Assassination Assassination
Assassination Extortion Drugs Arms
Drugs Gambling Extortion Drugs
Extortion Protection Gambling Gambling
Gambling Prostitution Protection Prostitution
Businesses Protection Prostitution
Prostitution Money
Money Laundering
Laundering
Cyber Crime
Centralized yet Centralized Centralized per Centralized per
Control Dissipated Clan Gang

6. Critical Success Factors
Govt. support & military collusion
Loyalty to Brotherhood (Bratva)
Amorphous & Dispensable Bratva
Continuous Innovation in Business
Diversification & Legalization

7. Tanmoy Dey
SYSTEM
What is the underlying business system
framework that the Russian Mafiya operates
in?

8. Core Illegal Businesses • Terrorist organization
• Online & Offline media. funding & Drug cartels.
• Threats, damage to property & • 3 million regular takers,
life. 2.1% of Russian youth
• Celebrities , glam shows & events, population.
sports events. • Prime overseas markets
• UK, West Europe, US
Extortion
• Fake ads, mail order
bride catalogues, casual
acquaintances. • Supply to paramilitary
• Sexual exploitation, groups , terrorist
Human Trafficking Drug Trafficking organizations and
debt bondage, forced
labor. exchange to drug cartels.
• To Middle-East, SEA, • Prime markets- Latin
West Europe Prostitution America, US, East
Europe
Arms Trafficking
• Prime hubs- Israel,
Ukraine, UK, Czech
• 7% of illicit world trade
• $ 3000-5000 on each
• Easy money from fake products.
sale
• Funded to terrorist organizations,
• Cheap service tariffs
triad gangs, mafia hubs.
• Girls cannot escape, Counterfeit • Cohesive global network
blackmailed

9. Business System
Counterfeit Oil & Gas
$ 120 billion
Funds from illegal
businesses used to
fuel stakes and
Human Trafficking interests in legal
Banking
$ 100 billion businesses
Drug Trafficking Automotives
$ 25 billion
Prostitution Electronics
$ 25 billion
Arms Trafficking
$ 20 billion Proceeds from Food &
stakes in legal Agriculture
holdings re-invested
and laundered into
illegal dealings.
Extortion Information
$ 6 billion Technology

10. Vincent Bermejo
COMMERCE
What is the economic size and impact of
the Russian Mafiya?

11. Economic Exposure
The Economic Situation
• 10% Territory (including old Russian States)
• 25% Economy (US$ 450B)
• 40% State-Owned Corporation (influence on policy making & justice system)
• 80% Banks (taken out of the EU’s white list)
• 90% SME’s (protection fees are cheaper compared to paying the government
exorbitant tax rates)
The Economic Impact
• Channeling billions of dollars out of the economy
• Bypassing legal procedures
• stealing tax revenues needed to sustain an economy
• robbing the country of aid
• discouraging foreign investors and domestic businesses from starting up
“If it was not for the mafia there would not be an economy.
They are a major driving force behind what goes on in Russia.”

12. Criminal Syndicate Industry
DISTRIBUTION
LEGAL
Red Mafiya
BUSINESS VENTURES
VALUE – CHAIN
PRODCUTION
ILLEGAL
MARKET REACH
LOCAL GLOBAL

13. Darshak S J
EVOLUTION
How did the Russian Mafiya evolve with
the changing global environment?

14. TRANSFORMATION
2009- FRAGMENTED 2012- ORGANIZED
Digitalization of the Russian Crime
• 2011 saw consolidation of individuals to form 6 potent groups.
• Growth of internal market- C2C services.
• Expansion of cybercrime in the international market.
• Lack of proper cyber laws.
• No jobs for Young IT Engineers.
• Ease of entry and difficult to be caught.
• Doubling of cybercrime in 2011 from 2010.

15. CYBER CRIME in $
$4.7 Billion
Russian Speaking
Cyber Crime
Type Of Crime Revenue % of total
Online Fraud $ 940,000,000 41%
Spam $ 830,000,000 36%
Internal Market C2C $ 230,000,000 10%
DDoS Attacks $ 130,000,000 5.6%
Others $ 168,000,000 7.4% Source: Ib report

16. The Binary Numbers Games’ Distribution
Online
Spam Banking
fraud
Internal Market Consulting
Online Piracy
Brand Attack DDoS
Malware
Fake
Drugs
Fake
SW
Measure of perceived damage to the organization
Low High

17. Madhuranath R
FORECAST
What will be the future trajectory of the
business system of Russian Mafiya?

18. ORGANIZATION
PAKHAN
GODFATHER
SOVIETNIK
COUNCILOR
OBSHCHAK
BOOKMAKER
AVTORIYET
AUTHORITY
BOYEVIK
WARRIOR
KRISHAS TORPEDO BYKI
ROOF/COVER KILLER BULL

19. Bases of Social Power Attraction
Resistance
COERCIVE
POWER
INFORMATION REWARD
POWER POWER
RUSSIAN
MAFIYA
EXPERT LEGITIMATE
POWER POWER
REFERENT
POWER