How to do Business in Russia

A Concise Guide

COURSE Author:

ISM13 Cross-cultural Communication Banda, Arian 89-11- 3 Blum!, Anna 9"-"#-11 Collu, $iulia 8%-"%-11

&!ach!r: *+un)(,:

Micha!l R'(!r) March- "1.

Table of content

Introduction

In 1939 Wiston Churchill described Russia as a riddle, wrapped in a mystery, inside an enigma. (Richmond, 2009: xxii) This quote probably still mirrors the feeling of disorientation that many Western businessmen and managers experience when conducting business with Russians. Nonetheless, despite the effects of the global economic crisis and the recent uncertainties due to the conflict with Ukraine, the Russian market may still represents a strategic, long-term market potential for European and Western investors and companies that intend to expand their market. Therefore, being able to crack its enigma and gaining a deeper understanding of the Russian way is imperative for those who want to strive in a unique and challenging business environment. Based on papers, articles and books written by businessmen, researchers and experts in Russian panorama, this guide aims to help readers develop a cultural awareness of Russia. There will be presented the background reasons that make Russia look so different, its cultural values and their influences on business practices, and the steps you need to take to build up successful and profitable business relationships with Russians.

Russia: basic facts and economics

Russia is the largest country in the world in terms of area and represents the 11th large economy by the nominal value. (webinar) With a population of almost 143 million people (cia.gov), of which around 80% of ethnic Russian, Russia is the ninth consumer market in the world. Russians rising populations purchasing power and an expanding middle class have attracted investors from all over the world. After the slowdown of the GDP growth rate from 3.4% in 2012 to 1.8% in 2013, the World Bank forecasts a more positive growth in 2014, around 3.1%. (worldbank.com) The main driver of Russian economic growth is currently the gas and oil sector, and advanced engineering, financial services, creative industry (Asefeso, 2013), heavy industry, consumer goods and infrastructure are estimated to carry the highest potential for future growth. (ey.com) Russian rapid economic development was due in large part to the dramatic changes it undergone by moving from a centrally planned economy from a more market based and globally integrated economy. Privatizations in 1990s formally freed industries from governmental yoke, with the sole exception of energy and defense. Nonetheless, in reality the protection of property rights still needs to be developed and the private sector remains subject to very heavy government interference. (webinar) The main constraints for foreign partners remain in the political and administrative areas, especially for what concerns high corruption as well as confusion and conflict in the legislative system. (ey.com)

Russian History and Culture

Cross-cultural competence is a hot topic in an era characterized by globalization and internationalization of business relations. A basic factor to have success in international businesses is related to the ability to understand that people from different cultures have different ways of conducting business. Cultural norms, expectations, work process and ethic need therefore to be taken into account in planning business meetings inside and 3

outside the office time. In the case of Russia this is especially important since Western cultures perceive the Russian business environment as complex not only for political and economic limitations but because of deep cultural differences. (Bollinger, 1994; Ledeneva, 2001 in Balykina 2013). The attitudes, customs and behaviors displayed by Russia in the business sphere are, as in any other country, the reflection of values and norms that takes root in the national culture. This is, in turn, deeply influenced by the geography, history and in general, by the development processes of the country. Therefore, before digging into Russian business culture and etiquette, it is noteworthy to comprehend the national cultural values and those processes that have shaped nowadays Russia. Two geographical factors have contributed to the formation of Russian values and core belief: the huge extension and position of the country, and the harshness of its climate. (Lewis, 2006) Russian territory comprehends a distance of six thousand miles from west to east. (Richmond, 2009) A great part of its territory was characterized by boundless, often indefensible steppes that made early Russian experience a deep sense of remoteness and vulnerability. (Lewis, 2006) In addition, the harsh climate meant that for most part of the year they were unable to cultivate, and they had to struggle to plough, sow and harvest during the short summer. (Lewis, 2006) To ensure their biological, economic and social survival in such a hostile environment, small groups of peasants in the middle age started gathering together in extended family communes called mir. (Balykina, 2013) The land was not privately owned but belonged to the entire mir which supervised the cultivation and allocate fractions of the land to each family. (Balykina, 2013) To function properly these clans where based on cohesion and discipline, the disputes were resolved by consensus instead of voting and the decisions were binding for the entire community. (Balykina, 2013) The Russian value of Sobornost,- communal spirit, togetherness- raised from this time is one of the most striking characteristic that still distinguish Russian from Westerners, which hold in higher regard individualism and competitiveness instead. Moreover, Russian concept of equality is different from the Western: Russia values an equality of outcomes- the material gap among the members of a society should not be too greatinstead of western equality of opportunities (Richmond 2009), according to which class distinction are more tolerated as the reflection of peoples different talents and efforts. Russian tendencies toward communalism and egalitarianism are therefore not an invention of communists but rather characteristics that have their roots in the culture of mir and that were exploited by soviets. These values survived through the centuries because for most of Russian history, peasants represented almost 90% of the population (ibid.) and even when they moved to cities they recreated workers cooperative molded on the mir (Balykina, 2013). Even if today the great majority live in urban areas, most of them are only one, two or three generations away from their village past. (Richmond, 2009) Reasoning along Hofstedes cultural dimensions, Russia appears therefore to be a a collectivist country. Russians highly value the affiliation with the members of the same group to which they turn to for protection rather than for achieving collectivistic goals (Naumov & Petrovskaja, 2008, p. 6). Therefore, Russian collectivism does not imply that the individuals must sacrifice their own interests and goals for those of the group, but nonetheless they consider important to be accepted by the group and are prone to comply with the norms of group behavior (ibid.) .

The vastness of the country and the remoteness of the social groups contributed also to the insurgence of what Hofstedes define as high power distance. During the centuries, oppressive governances such as the Orthodox Church, the Czars and the Soviets took advantage of a mainly uneducated, isolated population lacking of resources (Lewis, 2006) to establish central authority and rigid hierarchies. (Richmond, 2009) Compared to Western countries such US or France, where pressure for change have originated from below, changes in Russia have historically been imposed from above and Russians have generally tended to resist change because they associated it with hardship and misfortune. (Richmond, 2009: xx) The presence of secret police is not only a feature of KBG times, but it was an institution already existing in the 16th century under the rule of Ivan the Terrible. The adversities Russian people had to endure over the centuries lead them accompany their traditional pessimism and stoicism in hard times with characteristics such as pervasive suspicion, secretiveness in public, apparent passivity, readiness to practice petty corruption, disrespect for laws. (Lewis, 2006: 373) The very nature of commerce contributes to make people acquire the art of comprise and the search for a common ground. Russian remoteness has historically reduced the opportunity of trade and commerce with other countries and had made it rely mainly on its internal resources. (webinar) Russian lengthy borders not defended by natural barriers have led the country to solve issues with neighboring countries mainly through military intervention. These dynamics still influence Russia today: they see compromise as a sign of weakness- a retreat from a correct and morally justified position (Katz, 2007 : 314) -, have an obsession with security, and treat the foreigners with mistrust, Western ones in particular. (Richmond 2009) Russian distrust of West originated from the religious schism and in the centuries Russia did not experience the major social cultural movements that shaped todays Europe such as for instance the Reformation and the consequent pluralism of religious and secular thought, the development of modern agriculture and trade, the scientific revolution, the economic liberalism, the affirmation of political liberty and individual rights. This pluralism was seen by Russia as chaotic, a cacophony of voices without harmony, a disunity of thought and purpose. (ibid.: 7) Their need for security and predictability, their resistance to change, and their preference for what is traditional and time-tested (Richmond 2009) help to explain Russias high score on Hofstedes uncertainty avoidance dimension. (geerthofstede.com) For what concerns the other two Hofstedes cultural dimension, Russia seems to be a mainly feminine country (geert-hofstede.com) and displays low doses of long-term orientation. The first characteristic indicates that social norms such as cooperation, mutual understanding and interpersonal relations are traditional values of Russia. (Balykina 2013) They were probably reinforced by the Communist party policies which aimed to take care of citizens, and especially of children, and to offer access to education and full employment. The reasons for a lack of long-term orientation in Russia have roots in traditional Russian pessimism which was alimented by weather conditions, wars, violence and oppressive rules. Nonetheless, new generations appear to be more optimistic and to perceive more control over their future. (Richmond 2009)

Corporate Culture

National values are the starting point to enquire how Russian characteristics are reflected in the business environment. %

Russians high power distance and its intersection with the other cultural dimensions have several consequences in Russian business culture. First, companies tend to have centralized, strict hierarchies (Balykina 2013) and give enormous power to the CEO. The central power figure will usually take strategic decision with little or no consultation, or in some cases just with a team of close, highly trusted advisors. (webinar) On the other side, Russian employees display a need for a powerful charismatic leader and look at their boss as a superior being who has unique rights and, by definition, deserves compliance. (Fey 2010: 2) The collectivistic aspect of their culture leads Russian to see the boss as the main source of ethical norm and avoid criticizing or contradicting them even if in disagreement. In turn, managers display a paternalistic attitude toward their subordinates. (Balykina, 2013) During meetings, you will see Russian speak with one voice, that reflects the point of view of the person(s) in authority. When doing business with Russians involves trade or joint venture, you should make sure to respect the hierarchy structure and understand who the decision-makers are. Approaching lower level members of the company will just turn out to be a waste of time and resource. Middle managers have usually very little power over strategic decisions, and the only ones that you should address are those who can provide you an entry to the top managers. Keep in mind that the advice go straight to the top probably apply to Russia more than to any other country. (webinar) On the other side, if you occupy a leadership position with Russian, be aware that their attitudes and expectations are slightly different. The formal position of power does not immediately guarantee that Russians will show you the same level of respect and compliance. You must therefore first build up your authority by demonstrating higher knowledge and competences as well as by providing visible control and tangible results. An authoritative (but not authoritarian) leadership style is probably the most appropriate. (Fey, 2010) Russian reverence to the leader and expectation of clear instructions make many western managers complain about a lack of initiative from the Russian staff, while the latter perceive often managers guidelines as unclear and ambiguous. (www.worldbusinessculture.com) Therefore in order to tap the best qualities of Russian employees- namely creativity, endurance and hard-working- you should try to communicate a clear, persuasive vision of the future, and involve employees in setting it. High power distance and collectivist values find also expression in the lack of the concept of free competition in Russian business culture. The militaristic nature of the Russian states, its society based on force rather than law, and the supreme power of the State influenced Russian business values in the way that Russian competition has historically found its expression in attracting the attention of the supreme power through gifts, bribes and network of important acquaintances. (Liuhto, 2005: 296) Many Russians justify bribery as the only way to survive; they do not see it as morally wrong because everybody is doing that. (webinar) Russian higher power distance combined with higher uncertainty avoidance leads to contrasting outcomes about their ways to deal with ambiguity. If on one side, Russians feel the need to set a lot of rules and regulation as an emotional reaction to uncertainties, they will stick to these rules usually only when they think they are checked or controlled. This tendency is reflected in the business field, where a huge amount of paperwork, stamps and signatures are required. Nonetheless, your Russian business partners are likely to try to circumvent policies and procedures when they consider them /

meaningless or when they are sure they are not going to be caught by authorities. The good news is that in uncertain and rapidly changing situations, many Russian businessmen are likely to tackle well the challenge by displaying quick reactions, multi-scenario thinking, networking and sharing risks. (Balykina, 2013: 9) Russian shortage of long-term orientation is visible in their traditional avoidance to safe and collects material resources because they perceive they could be easily lost as well as in their attitude to not consider the business as eternal. They do not engage in long-term planning (webinar) and tend to see business as an opportunity to gain quick profits and hide them from the state. (Kirsanov A., 2013 in Balykina 2013) Russian view of profit is probably much different from yours. Due to its history, profit is an alien concept for Russian, a concept that they are just starting to grasp now. In 1930s laws passed declaring that the practice to buy from the State and selling at a higher price was considered speculation and therefore, it was perceived as immoral profiteering. Still today, there is a sort of suspicious toward those who make business in the distributional channel. On the same token, Russian are new to the concept of investing to reap profits as well as the time value of money. In fact, during the communist era, businesses received money from the government when they were available or needed and all the revenues were given back to the State. If you plan to invest in Russia, make certain of stating and explaining clearly financial consideration, cost accounting requirements and the importance of precise and timely reports. (Katz, 2007) Furthermore, the lower interest Russian show for profits compared to Western countries also impacts their job motivation, they can be highly performing, as long as they see some higher spiritual or personal reasons behind their job. Keep in mind that also the saying time is money does not work in Russian culture. (Richmond, 2009) Be ready to be patient to their being late at meeting and to engage in lengthy rituals and discussions, but also to see them working around the hour to get the job done. Finally, the country tendency toward femininity makes Russian business environment extremely relation-oriented. One of your first and highest priorities should be create, nurture and maintain long-term relationships with your Russian counterpart. (Balykina, 2013) This will take time since Russians do not feel comfortable with fast-paced western approach and they look with suspicious people who are all business and do not show their personal side. (Katz, 2007)

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5"1

Business ti!uette
Communication

As 0! ha1! l!arn!d, Russian cultur! is di22!r!nt to th! 3!st!rn on! and so ar! th! rul!s and (!ha1iors in communication4 3h!n m!!tin) a Russian a handsha5! is al0a,s a66ro6riat! (oth 2or )r!!tin) and l!a1in), (ut not n!c!ssar, 7!di6lomat4com84 9urth!rmor!, it is im6ortant that ,ou 5!!6 !,!-contact durin) th! handsha5! and littl! 2acial !:6r!ssions4 ;!!6 in mind to n!1!r sha5! th!ir hands across a thr!shold< Russians (!li!1! this (rin)s (ad luc5 (!caus! in th!ir traditional 2ol5lor!, th! door0a, is th! r!sid!nc! o2 =hous! s6irits>4 7Richmond,

""9: 38 Also m!n do not sha5! hands 0ith 0om!n unl!ss th!, do th! a66roach4 3om!n ar! mostl, 5iss!d on th! hand, (ut it is not a si)n o2 6h,sical attraction4 7ibid.8 A crucial 2act is that man, nam!s in Russia ar! common and similar, 0hich m!ans ,ou should also stud, th!ir dat! o2 (irth 0hich is in som! cas!s th! onl, 0a, to !nsur! ,ou ar! tal5in) to th! ri)ht 6!rson4 7?ohst, "1 8 A r!lati1!l, (i) di22!r!nc! is (!t0!!n th! En)lish 2ormal addr!ssin) =Mr4> and =Ms4> and th! Russian Gospodin and Gospozha, (ut th!s! addr!ssin) ar! consid!r!d r!licts o2 th! 6r!r!1olutionar, 6ast and ar! not commonl, us!d4 7Richmond, ""98 9urth!rmor!, th!, us! t0o 2orms o2 ,ou, th! mor! 2ormal vy is us!d in m!!tin)s and (!t0!!n un2amiliar 6!o6l! or addr!ssin) a 6!rson o2 a hi)h!r 6osition4 Also l!arnin) th!ir titl!s is im6ortant to Russians4 &h! addr!ssin) ty is in2ormal li5! =du> in $!rman and us!d (!t0!!n 2ri!nds, 2amil, m!m(!rs and childr!n4 At a (!)innin) o2 th! 2ri!ndshi6 sta)!, ,ou should addr!ss to ,our Russian 6artn!rs usin) th!ir 2irst nam! and 6atron,mic, 2ath!r@s nam! 6lus an a22i:4 9or !:am6l!, a man nam!d Boris, 0hos! 2ath!r is nam!d Ai5olai, is addr!ss!d Boris Ai5ola,evich 7Boris, son o2 Aicholas84 &h! sam! counts 2or 0om!n (ut 0ith th! 2!minin! !ndin) -ovna4 I2 ,ou ar! unsur! o2 th! 0hat r!lationshi6 l!1!l ,ou ha1! r!ach!d, l!t th! Russians d!cid! 0hich 2orm to us! and 2ollo0 th!ir l!ad4 7ibid.8 Both in th! ar!a o2 1!r(al and non-1!r(al communication ,ou should (! a0ar! o2 Russians attitud!s and (!ha1iors4 A 6!culiarit, o2 Russian ,ou should (! a0ar! o2 is th! so call!d Russkaya dusha 7Russian soul84 It can (! d!2in!d as =a romantic !thos>, an a66!al to =2!!lin) rath!r than 2act, s!ntim!nt o1!r c!rtaint,, su22!rin) inst!ad o2 satis2action, and nostal)ia 2or th! 6ast as o66os!d to th! r!alit, o2 th! 6r!s!nt>4 7Richmond, ""9: ."8 Russian soul can mani2!st its!l2 at th! most un!:6!ct!d 6lac!s, !1!n durin) a m!!tin), and disa66!ars as 2ast as it cam! in4 &h!ir con1!rsation (!com! 0!i)ht, and l!n)th,, (as!d on 2!!lin)s and traditional 1alu!s: in this cas! ,our rational and 6ra)matic (as!d on 2acts and num(!rs is unli5!l, to 0or54 7ibid.) Mor!o1!r, Russians t!nd usuall, to )i1! lon) ans0!rs 0ith hidd!n m!anin)s (!t0!!n th! lin!s4 At th! sam! tim!, th!, !:6!ct ,ou to us! strai)ht2or0ard tal5 !1!n i2 this l!ads to disa)r!!m!nt4 In this cas!, Russians 6r!2!r ,ou to (! hon!st rath!r than tr,in) to hid! th! con2lict, so tr, to !:6r!ss ,ours!l2 cl!arl, in ord!r to !nsur! mutual und!rstandin)4 I2 Russians )!t too o1!r!motional in th!ir r!actions, sta, r!la:!d and 0ait 2or th!ir 2!!lin)s to calm do0n (, th!ms!l1!s4 7ibid.8 Russians us! hands and 2acial !:6r!ssions to con1!, id!as and !motions and in )!n!ral th!, ha1! a short distanc! in 6!rsonal s6ac!, 0hich 2inds !:6r!ssion in 6u(lic 6h,sical contacts and d!monstrati1! (!ha1iors4 7!di6lomat4com8 I2 Russian touch!s ,ou, 2or !:am6l! (, 6lacin) a hand on ,our arm or !m(racin) ,ou, ,ou can (! sur! that ,our r!lationshi6 is )oin) 0!ll4 7Richmond, ""98 As 2or )r!!tin), Russians start a con1!rsation 0ith a )rim 2ac!, (ut i2 th!, smil! it indicat!s r!la:ation and a 6ro)r!ss to0ards a )ood r!lationshi64 &o !m6athiB! 0ith Russian, tal5 a(out th! 6ositi1! chan)!s ta5in) 6lac! in Russia and 2ocus on th! charact!ristics that Russians and 3!st!rn ha1! in common: !4)4 com6assion in Ital,, s!ntim!ntalit, in $!rman,, attachm!nt to tradition in Britain4 7*!0is ""/8 S6ort and 8

hol,da,s ar! sa2! to6ics (ut a1oid tal5in) a(out 33II or oth!r 0ars- most Russians consid!r th!m as d!2!nsi1! 0ar a)ainst a))r!ssi1! n!i)h(ors4 Oth!r ta(oo to6ics ar! corru6tion, contract 5illin)s or oth!r coll!cti1! crim!s as 0!ll as criticism and com6arisons 0ith oth!r countr,4 A1oid th!s! to6ics, !1!n i2 Russians a66roach th!m 2irst4 7!conomist4com8 3hil! in (usin!ss cont!:t Russians ar! r!luctant in sharin) in2ormation 0ith oth!rs 0ho ar! not at th! sam! l!1!l in hi!rarch,, as it is s!!n as )i1in) a0a, 6o0!r, 7Carn!r et al., "1"8 th!, ar! !a)!r to shar! 6!rsonal in2ormation4 ;!!6 in mind that th!ir 6rioriti!s in (usin!ss discussion ar! 14 D!rsonal r!lationshi6, 4 9orm and a66!aranc!, 34 9inancial )ain, - in this ord!r4 7*!0is ""/8 &h!r!2or!, tal5 to th!m a(out ,our 2amil, and childr!n- !1!n sho0 th!m 6ictur!s-, sho0 r!s6!ct 2or th! !ld!rs (, und!rl,in) ,our 2amil, ti!s, and unclos! ,our +o,s and sorro0s to th!m4 &h!, 0ill start loo5in) at ,ou as a 0arm 6!rson and not th! t,6ical cold 3!st!rn!r4 Mor!o1!r, (! 6r!6ar!d to ans0!r Eu!stion that ,ou ma, 2ind 0!ird or !m(arrassin) such as ,our salar,, th! 6ric! o2 ,our hous! or ho0 man, room it has4 Russian as5 th!s! Eu!stions +ust (!caus! th!, ar! curious a(out th! li2!st,l! o2 6!o6l! in similar 6osition and occu6ation4 7Richmond, ""98

5"2

#ender Roles

In Russian moth!rland, so-call!d Rodina, 0om!n t!nd to (! stron), nurturin), hard0or5in), =th! tu! h!ro!s> o2 th! nation4 7Richmond ""9: .%8 E1!n i2 (, la0 0om!n and m!n ha1! (!!n )uarant!!d !Eual ri)hts and o66ortuniti!s, in 6ractic! 0om!n in (usin!ss, !s6!ciall, 2rom outsid! Russia, t!nd initiall, to !:6!ri!nc! 6atroniBin) attitud!s (, th! Russian count!r6art4 To overcome skepticism over their professional qualifications, you have to display the same characteristics Russians highly regard in man: a professional appearance, strength of character, authority, as well as a high cultural level and expertize. Moreover, an expensive business card with your title and name-dropping, such a presentation letter sent in advance by a prominent person in the company will help you to gain recognition. (Richmond 2009) Furthermore, do not be scared to take advantage of your feminine side: allow men to open the door for you or light your cigarette. Sometimes, being a foreign woman can be beneficial for you. Russians always want to appear as a gentleman and will let you get away with requests that would not be accepted from men at the same hierarchical level such as questions for a favor or another meeting. (ediplomat.com, Bal,5ina, "138

5"3

Clot$in%

You never get a second chance to make a good first impression: this common saying is of dramatic importance when you are doing business in Russia. (Johst, 2012) Dress appropriately, conservatively and if you can afford it, brands such as Versace, Gucci, Calvin Klein and Hugo Boss will be an advantage. Men should wear suits, ties and smart shirts in the office, during meetings or at restaurants. According to their dress9

code, the appropriate colors for the office range from dark (Katz, 2007) to lighter color tones. Furthermore you should avoid wearing the same clothes every day and keep in mind that wearing black suits with white shirts is only for special occasions. Women should wear suits, pantsuits, dresses or skirts that at least cover the knee with a blouse. The color should not be flashy or bright but preferably dark (Katz, 2007). It is important in winter to dress warm to not freeze outside when going to a meeting. Additionally, shoes for both sexes must always be good polished and in winter remember to take with you a spear pair of shoes so to change them when you enter the meeting. (Johst, 2012)

5"4

&eetin% 'ettin%s

Russian business meeting etiquette is highly formal: their appreciation for structure and rules shapes the way business is done in Moscow and throughout Russia. Here are some Russian business etiquette tips to help you appropriately interact with your partners: Location. The location of the meeting should be representative and show that you are guided by serious purposes in doing business with them. The placement around the table should be made by rank. A large part of the initial meeting will be devoted to getting to know each other (ediplomat.com). Avoid high-pressure talk. Patience and time appreciation is very valuable for the Russians. They do not like when you force a decision with high-pressure talk because they consider that as rude and you incapable of professional business interaction. Be on time to all meetings. It is very common for Russian businessmen to be late to an appointment or a business meeting. But they expect you to arrive in time. Also do not expect the Russians to apologize for their tardiness, as their behavior may be a test to your patience. Bring technical experts. If it is necessary and if the meeting will be focusing on technical topics then bring an expert. Russians often want a thorough presentation of your topic and if the topic is a technical matter then an expert will be much appreciated and it will establish credibility. Include a Russian translation on your business cards. Most Russians that you do business with will probably know English, but including a Russian translation indicates your enthusiasm for doing business with them. It also shows that you are very dedicated and thorough and willing to go the extra mile to do business with your Russian colleagues (foreigntranslations.com).

5"5

(e%otiation

If you have followed our rules and the previous meetings have been successful, now it is time for negotiation. In order to come to a profitable agreement with Russians you need to know how their negotiation tactics looks like. Russians ar! tou)h and disci6lin!d in n!)otiation, !1!n i2 th!, li5! to indul)! in a 2air amount o2 th!atricalit,4 A!)otiation t!ams ar! o2t!n mad! u6 (, !:6!rts and 1!t!rans and th!ir t!nd to n!)otiat! =li5! th!, 6la, ch!ss>, that is th!, 6lan s!1!ral mo1!s ah!ad4

1"

7*!0is, ""/: 3#% 8 &h!, 0ill 6ro(a(l, as5 ,ou to s6!a5 2irst so that th!, can r!2l!ct on ,our 6osition4 7ibid.) Even if Russia is a developing country, certain features of their negotiation tactics reflect the style of approaching to meetings for over 70 years. Russian negotiation displays therefore traditional peasant traits of caution, tenacity and reticence, plus a depth experience derived from thorough training and cunning organization. (Varner, 2010) Their main tactic is to take advantage of your impatience and grind you down in order to gain concessions from you. Beware to not fall into their trap: if you show greater firmness, it is likely that they will abandon their sit it out tactic. ( ibid. 376) Their general tendency is to push hard when you appear to be in a weak position, and to pull back when you show steadiness and willpower. Moreover, it is especially at this stage that your ability in having built up strong personal relationships will be ace in the hole: it can make miracles in case of official deadlock. Nonetheless, keep in mind that compromise is seen as a sign of weakness and that giving concession too early and too easily will make them suspicious. (ibid.) To increase trust and respect from your counterpart, a small business gift in the beginning of a meeting will ease your negotiations. Negotiations often pull out in time because of the extend of people involved in the decision-making. With Russians it is hard to be sure if the negotiation has finished, they tend to renegotiate a number of times before a final decision, and even written contracts can be reviewed. Because of this, contracts are long and elaborate, with a lot of details: ask for the advice of a lawyer that knows the Russian market (business-sweden.se). Russian negotiators may have a personal agenda beside the official one. They may aim to promotion or other personal advantage for them or their families and also the personal prestige that a successful negotiation will bring them. So try to uncover their personal motivators and turn them into your advantage. (Richmond, 2009) Another very important thing to know about is the Russian protokol. The protokol is a joint statement of understanding of what has been said and discussed at the business meeting and is signed by both parties. Many people ask why they should sign something when an agreement hasnt been settled yet but the protokol is the Russian way, and it is almost impossible to avoid. Agree to sign it to show your partners that you want to negotiate in good faith and that you trust your Russian colleagues. (ibid.)

5")

*oes and *on+ts

Russia is a countr, 0ith a lar)! histor, and is a 1!r, 6roud countr, 0ith 1!r, 6roud 6!o6l!4 9or this r!ason, h!r! is a list a(out oth!r thin)s ,ou should 5!!6 in mind and (! conscious a(out: Fo!s I2 a Russian 2ri!nd as5s ,ou o1!r al0a,s (rin) a )i2t, it can (! chocolat!s or 2lo0!r, (ut i2 ,ou (rin) 2lo0!r (! sur! to (rin) an odd num(!r (!caus! an !1!n num(!r is traditionall, r!s!r1!d 2or d!ad 6!o6l!44 &a5! o22 ,our sho!s o22 0h!n !nt!rin) som!(odi!s hom!4 Russians ar! !ss!ntiall, cons!r1ati1!s4 Introduc! n!0 id!as slo0l, and 5!!6 th!m lo0 5!, at 2irst4

11

Russians ar! 1!r, 6roud o2 th!ir cultur! and !n+o, o66ortuniti!s to tal5 a(out th!ir music, art, lit!ratur! and danc!4 B! 6r!6ar!d on th!s! to6ics4 Frin5in) 1od5a and doin) toasts ar! s!rious matt!rs in Russia4 Dr!6ar! a short s6!!ch< also 2!0 6hras!s in En)lish 0ill d!li)ht ,our n!0 Russian 6artn!rs4 Gou can drin5 to an, =h!art-0armin)> )oal such int!rnational 2ri!ndshi6, th! succ!ss o2 th!ir !nt!r6ris!, a (!tt!r 0orld as a r!sult o2 coo6!ration4 Fo not (! a2raid to !:a))!rat!4 &h! s!cond toast o2 th! !1!nin) is usuall, d!dicat!d to 0om!n: Za zhenzhinH 7!conomist4com, Richmond ""98 *!arn RussianH *!arnin) th! lan)ua)! is o2 incalcula(l! 1alu!, and is th! (!st 0a, to 0in 2ri!nds 2or ,ours!l2, ,our com6an, and ,our countr,4 Russians )r!atl, a66r!ciat! an, att!m6t (, 2or!i)n!rs to s6!a5 th!ir lan)ua)! 70004!di6lomat4com84 A!1!r r!2!r to a Russian as IComrad!4I Fo not !:6!ct to 2ind smo5!-2r!! ar!as an,0h!r!4 A standard +o5! amon) 2or!i)n (usin!ss6!o6l! in Russia is that Russian (uildin)s ha1! t0o s!ctions: Ismo5in)I and Ichain-smo5in)4I As a )!n!ral rul!, do not )i1! it!ms that ar! no0 !asil, o(taina(l! in Russia 70004!di6lomat4com84 Fo not 0histl! indoors, it is (!li!1!d to (rin) 6o1!rt,47Richmond ""98 Mor!o1!r, in Russian su6!rstition4 i2 ,ou sit at th! corn!r o2 a ta(l! ,ou 0ill n!1!r marr, A1oid discussin) 6ast 2ailur!s, causin) loss o2 2ac!, (ad mann!rs and !:c!ssi1! 6ush, (!ha1ior 7*!0is, ""/8 Fon@t tr, to sol1! Russian contradictions, Russians acc!6t th!m4 Russians ha1! a =)loom-and-doom m!ntalit,> 7Richmond ""9: 3/8, don not tr, to instill o6timism into th!m- +ust sho0 und!rstandin) and s,m6ath, Standin) 0ith hands in ,our 6oc5!t, crossin) l!)s 0h!n s!at!d so as to sho0 th! sol! o2 th! sho! or dra6in) an arm o1!r th! (ac5 o2 a chair, or !1!n loun)in) ar! aconsid!r!d nyekulturno, that is uncultur!d,or 1ul)ar4 7ibid.)

Fon@ts

References
Articles & Books: Asefeso A. (2013), CEO Guide to Doing Business in Russia, lulu.com Balykina, G. (2013), Cultural Dimensions and Modern Russian Business, Russian Presidential Academy of National Economy and Public Administration (RANEPA), working paper series eDiplomat (2014), Russia, retrieved 2014-03-17 from http://www.ediplomat.com/np/cultural_etiquette/ce_ru.htm Ernst & Young (2013), Ernst & Youngs attractiveness survey Russia 2013.Shaping Russias future 1

Fey, C.F. (2010), The key commandments for doing business in Russia, Foreign translations (2014). Russian business etiquette tips. retrieved 2014-03-17 from http://www.foreigntranslations.com/languages/russian-translation/russian-businessetiquette/ Johst H., (2012) Closing the Culture Gap. A guide to Russian business etiquette and culture. Whenever I hear the word culture, I reach for my revolver. Schlageter, act 1 scene 1, unknowen publisher, accessed in slideshare Katz, L. (2007), Negotiating International Business: The Negotiators Reference Guide to 50 Countries around the World, Charleston BookSurge Publishing, 2nd edition Kwintessential (2013), Doing business in Russia. Retrieved 2014-03-17 from http://www.kwintessential.co.uk/etiquette/doing-business-russia.html Lewis, R.D. (2006), When cultures collide. Leading across Cultures, Nicholas Breally International, 3rd edition Liuhto K. & Vincze S. (2005), Wider Europe, Esa Print Oy Richmond Y. (2009), From Nyet To Da: Understanding the new Russia, Intercultural Press, 4th edition The Swedish trade and invest council, (2013), Affrskultur I Ryssland, Retrieved 201403-17 from http://www.businesssweden.se/Export/Marknader/Europa/Ryssland/Affarskultur/ Varner I., Beamer L. (2010), From Intercultural Communication in the Global Workplace, McGraw-Hill/Irwin, 5th edition Varner, I (2010), Intercultural Communication in the Global Workplace, McGraw-Hill higher Education Websites: http://www.chamber.co.nz/International/News/Doing-Business-in-Russia.aspx [14 March 2014] http://www.ediplomat.com/np/cultural_etiquette/ce_ru.htm [13 March 2014] https://www.cia.gov/library/publications/the-world-factbook/fields/2116.html [13 March 2014] http://www.worldbank.org/en/country/russia/overview [13 March 2014] http://vimeo.com/39042081 (2013) Doujak Corporate Development- Russian Business Culture Webinar [17 March 2014] www.worldbusinessculture.com/Russian-Management-Style.html [17 March 2014] 13

http://geert-hofstede.com/russia.html [12 March 2014]

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