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How to Do Business in Russia


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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.

For your business document translation needs in Russia, contact McElroy Translation. Visit our website to learn more about how we can help you and your company become successful in your international business ventures.

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




Published - March 2012








Country Profile: Russia




The People

Russia has had a long history of totalitarianism, which has resulted in a rather fatalistic approach to living. The desire to work individually under personal initiative was suppressed by the Czarist and Communist states. With the advent of perestroika (restructuring), the Soviet/Communist value system has been scrapped, but the pace of reform has been slow and many are finding it very difficult to adapt to the Western values of individualism and profit maximization. Older Russians are generally quite pessimistic and don’t have much faith in a better life in the future. Younger urban Russians have adopted a more Western outlook on life.

Meeting and Greeting

  • Initial greetings may come across as cool. Do not expect friendly smiles.
  • A handshake is always appropriate (but not obligatory) when greeting or leaving, regardless of the relationship. Remove your gloves before shaking hands. Don’t shake hands over a threshold (Russian folk belief holds that this action will lead to an argument).

Body Language

  • Russians are a very demonstrative people, and public physical contact is common. Hugs, backslapping, kisses on the cheeks and other expansive gestures are common among friends or acquaintances and between members of the same sex.
  • Russians stand close when talking.
  • Putting your thumb through your index and middle fingers or making the "OK" sign are considered very rude gestures in Russia.

Corporate Culture

  • Russians appreciate punctuality. Business meetings generally begin on time.
  • Under Communism there were no incentives for bureaucrats to perform well or to even be pleasant toward clients; this meant that the usual answer to any question was "No." This practice is still found in Russian society today, but "No" is usually not the final word on an issue. One has to bargain and be persistent to get what he or she wants.
  • Business cards are handed out liberally in Russia and are always exchanged at business meetings. The ceremony of presenting and receiving business cards is important. Don’t treat it lightly.
  • Representatives of the Russian company or government body are usually seated on one side of a table at meetings with guests on the other side.
  • Your company should be represented by a specialized team of experts. Presentations should be thoroughly prepared, detailed, factual and short on "salesmanship."
  • Russians usually negotiate technical issues very competently, directly and clearly but, being newcomers to capitalism, often do not fully understand Western business practices and objectives. You may have to explain the reasoning behind some of your demands.
  • Russians find it difficult to admit mistakes, especially publicly. They also find it difficult to risk offending someone by making requests or assertions.
  • Trying to do business in Russia over the telephone is generally ineffective. The Russian telecommunications system is inadequate, but improving quickly. The telex is widely used.
  • Personal relationships play a crucial role in Russian business.
  • Business negotiations in Russia are lengthy and may test your patience. Plan to be in for the long haul.
  • No agreement is final until a contract has been signed.

Dining and Entertainment

  • When dining in a restaurant, arrive on time.
  • Russians are great hosts and love entertaining guests in their homes. They will often put more food on the table than can be eaten to indicate there is an abundance of food (whether there is or not). Guests who leave food on their plates honor their host. It means they have eaten well.
  • If you’re invited for dinner, don’t make other plans for later in the evening. You are expected to spend time socializing after the meal.
  • An invitation to a Russian dacha (country home) is a great honor.
  • Do not turn down offers of food or drink. Given Russian hospitality, this can be difficult, but to decline such offers is considered rude.
  • At formal functions, guests do not usually start eating until the host has begun. At such functions, no one should leave until the guest of honor has left. If you are the guest of honor, do not stay too late.
  • Know your limits when drinking alcohol in Russia. Drinking is often an all-or-nothing affair -- moderation is not understood.
  • Toasts, which are sometimes lengthy and occasionally humorous, are common. The host starts and the guests reply. Do not drink until the first toast has been offered.
  • After a toast, most Russians like to clink their glasses together. Do not do so if you are drinking something non-alcoholic.

Dress

  • A "serious" businessperson is expected to look formal and conservative. Wearing very light or bright colors might make you appear lazy or unreliable to a Russian.
  • Men should wear suits and ties. Women should wear suits and dresses or pantsuits.

Gifts

  • A small business gift is always appropriate, but its value should correspond to the rank of the Russian businessperson with whom you are meeting.
  • As a general rule, do not give items that are now easily obtainable in Russia.
  • Bring a gift for the hostess when visiting a Russian home. A small gift for a Russian child is always appropriate (and appreciated).

Helpful Hints

  • Russians are very proud of their culture and enjoy opportunities to talk about their music, art, literature and dance. Knowledge about art, music and some Russian history is appreciated.
  • Learn Russian! Learning the language is of incalculable value, and is the best way to win friends for yourself, your company and your country. If that simply isn’t possible, try to learn at least a few phrases in Russian. It doesn’t have to be perfect; Russians greatly appreciate any attempt by foreigners to speak their language.
  • Never refer to a Russian as "Comrade."
  • Do not expect to find smoke-free areas anywhere. A standard joke among foreign businesspeople in Russia is that Russian buildings have two sections: "smoking" and "chain-smoking."

Especially for Women

  • Women are initially regarded with skepticism and may have to prove themselves. Before you visit, have a mutually respected colleague send a letter introducing you. Your business cards should clearly state your title and academic degree. If you establish your position and ability immediately, you will encounter far fewer problems.
  • Be feminine. Allow men to open doors, light cigarettes, etc. Even if you think such customs are antiquated or silly, respect the cultural background of your Russian colleagues.
  • Foreign businesswomen can use their femininity to their advantage. For fear of not appearing a gentleman, many Russian businessmen may allow foreign businesswomen to get away with some things (requests for meetings, favors, etc.) that foreign businessmen aren’t allowed.
  • A woman can invite a Russian businessman to lunch and pay the bill, although it might be interpreted by some men as an invitation to flirt.

    -- Excerpted from the "Put Your Best Foot Forward" series by Mary Murray Bosrock. These publications are available for the U.S., Asia, Mexico/Canada, Russia, Europe and South America.




Mary Bosrock
President
International Education Systems
1814 Hillcrest Avenue, Suite 300
St. Paul, MN 55116
651-227-2052
Visit our web sites at
http://www.ISawGod.com
http://www.internationaleducation.net











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