Doing Business in Russia

So you want to do business in Russia? Consider this…

  • When managing Russian employees, maintain clear, concise communication. Do not make suggestions, but be authoritative. They respect leadership.
  • Russians are innovators, capable of finding creative solutions to problems when there is a shortage in funds or equipment.
  • Connections and influence are very important in Russia; little is done without using “blat.” Blat is an exchange of favors; when you do something for someone, they will be expected to do something for you in exchange.

After the collapse of the Soviet Union, Russia languished through several years of chaos and unrest. It has now emerged as an economic and political powerhouse, a powerhouse full of opportunity for foreign investors and companies.

However, do not attempt to do business in Russia unprepared. Socially, culturally, and economically, there are many crucial differences between the U.S. and Russia. If you ignore them, you do so at your peril…

Important tips

  • Date and Time
    • Dates are displayed as Date/Month/Year: 4.12.11 is December 4, 2011.
    • Russians use military time: When suggesting a 6:00 p.m. meeting, you should say “at eighteen o’clock” rather than “at six o’clock.”
    • Moscow is eight hours ahead of U.S. EST. Russia spans eleven time zones overall.
  • Russians show their affection in public only when greeting one another. Friends and family embrace and kiss on the cheeks; strangers shake hands and exchange names.
  • Russian middle names are derived from the father’s first name: Fyodor Nikolaievich Medvedev’s first name is Fyodor and his middle name means “son of Nikolai.”
    • Women add “a” to the end of their last name: Mr. Medvedev’s wife is Mrs. Medvedeva.
  • Some gestures that are positive in an American context can be considered rude in Russia: The American sign for “okay” is derogatory in Russia; whistling during a concert means you do not like the performance.
  • Use credit and debit cards cautiously in Russia; there are many underemployed computer experts, some of whom engage in criminal activity such as capturing credit card numbers.

Appointments

  • When meeting with prospective clients in Russia, expect to be on time, but expect them to run fifteen to thirty minutes late. Patience is more highly considered than punctuality.
  • Meetings often last longer than originally scheduled, so be flexible.
  • Getting an appointment is challenging, so don’t cancel.
  • Avoid the first week of May when setting up business meetings, as many public holidays fall then.

Negotiations

  • Russians respect hierarchy: a senior level executive will negotiate on a company’s behalf and will expect to conduct negotiations with an equally senior level executive from the company they are doing business with.
  • Russians view compromise as a weakness and might expect more concessions from the other side.
  • Before conducting a negotiation, team members should be in agreement on all processes and deals that will be offered. Unity is highly valued when conducting business with Russians.
  • Russians will not renegotiate once a formal agreement has been signed.
  • Russians may request that funds be paid in cash directly to them or to their foreign bank account; you can suggest different options.

Entertaining

  • When conducting a meeting with Russians, be sure to have an abundant supply of sodas, tea, coffee, and snacks at the table. You will find the same at their table if they are the hosts.
  • Russians are confident in their ability to drink heavily and still make clear decisions; they may prefer to conduct business while you are intoxicated.
  • It is considered poor manners to wear your heavy coat and boots into a public building such as a theater. Make sure to check them at the garderob (cloakroom).
  • If you loiter with your hands in your pockets in a public building, people will perceive you to be uncultured.

Morrison, Terri, and Wayne A. Conaway (2006). Kiss, Bow, or Shake Hands, 2nd edition. Massachusetts: Adams Media Corporation.



 
 

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