Overview & Business Culture.

One Minute History of Russia

 Before 1991 - Russia was a communist centrally planned economy.

 In December 1991 - The Soviet Union ceased to exist, and the Russian
Federation was born, communism was abolished.
 1992- 1999 - Radical market reform under Boris Yeltsin, state assets were
privatized, foreign trade opened up, economy tanked.
 2000-2008 - Oil boom and Ruble devaluation of 1998 fuel economic
recovery, President Vladimir Putin lead stabilization effort, renationalized
some companies, took away some freedoms.
 March 2008 – Now - Putin’s protégé Dmitri Medvedev, is elected as the new
President, Putin becomes prime minister.

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 Key facts about Russia

 Area - 17 million sq km,1.8 times the size of US.

 Capital – Moscow.
 Population - 140.3 million.
 Major language - Russian
 Life expectancy - 62 years (men), 74 years (women)
 Ethnic Groups: Russian, Tatar, Ukrainian.
 Purchasing Power Parity (PPP) - $2.088 trillion.
 GDP composition – Agriculture 7%, Industry 37%, Services: 56%.
 GDP growth rate - 8.1% p.a .
 GNI per capita: US $9,370.

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 Russian GDP Growth

GDP growth in Russia in the last ten years (1999-

2008)
12,0
10,0
8,0
Annual growth, %

6,0
4,0
% change
2,0
-
(2,0) 1 2 3 4 5 6 7 8 9 10
(4,0)
(6,0)

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Rubles vs. Dollars

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 Russian Booming Regions
 Moscow – Financial Capital
 St. Petersburg – Transportation and Industrial hub
 Sochi – 2012 Olympics, $15-20 Billion of Federal
Investment
 Western Siberia – Oil, Gas, Timber
 Southern Siberia – Metals, Timber, Construction,
Infrastructure
 Far East – Timber, Oil, Pipelines, Fishing

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RUSSIAN BUSINESS
CULTURE
 Doing business in Russia? YES, but
neither simple, nor easy

Fierce competition to gain control over rich

resources
Selection of the Russian partner (especially
in the region)
Normally long-term projects worthy of
development
Building trust with Russian staff is critical
Special marketing strategy
 First Name or Title?

 Very intimate friends or relations - refer to

one another by the first name.
 Ensure that you learn the titles of everyone
you plan to encounter
 Russians have three names: the first name
is a given name, the last name is the father's
family name, the middle name is a version
of the father's first name.
 GENDER ASPECTS

 Women usually do not hold high positions in the

Russian Business culture.
 There are more women in business education
then in business.
 Foreign businesswomen sometimes face
adversity from the male-dominated Russian
business culture.
 MEALS AND BUSINESS ETIQUETTE
 The business breakfast is not a part of Russian
business culture.
 Business dining is getting more and more popular -is
generally taken as a time for “sealing” a deal.
 The center seats are reserved for the most senior
officials.
 Begin eating only after somebody says a toast.
Toasting is a very important part of dining.
 Russians use the continental style of holding
utensils.
 SOME GENERAL FEATURES
 The handshake is common.
 Eye contact is very important, must be maintained
as long as the individual is addressing you.
 Smoking in public places is still a common
occurrence, although some restrictions are slowly
imposed.
 Wearing your coat and/or winter boots in theatres,
office buildings, universities or similar public
spaces is considered unacceptable.
 ATTITUDE TOWARDS FOREIGN
PARTNERS
 The first meeting is usually just a formality-a time to
assess the credibility of you and your company.
 Russians can sometimes place a great deal of
confidence in your professional competence and
experience; very high expectations and demands.
 Russian business people are open-minded to new
ideas, especially from western business culture
 Russian negotiators could make minor concessions
and ask for major ones in return.
 BUSINESS DRESS CODE
 Old Russian proverb--“One meets you depending
on how you're dressed and say’s good bye
depending on how wise you seem to be”
 Russian businesspeople pay a lot of attention to
how they are dressed. Russian people in general
probably spend more money from their family
budget on clothing then any other nation in the
world.
 Structure and hierarchy in
Russian companies
 The hierarchical structure in Russian
business practices means that the
decision makers higher up have
authority over their subordinates.
However, the nature of the collective
good often encourages a flexible and
democratic work ethos.
 Showing respect for seniority and
recognizing the hierarchical structure
is vital for establishing and
maintaining strong business
relationships.
 Working relationships in Russia
 Personal and informal contact is a
central part in doing business in Russia.
 Physical contact during business
meetings (a simple hand on the arm or
even embracing) is a positive sign. The
notion of social space is close in
Russia.
 In situations of conflict - to avoid
taking an official stance and remember
that Russians are 'people orientated' and
will respond to a more personal
approach.
 Working in Russia
 The Russians attitude to time means that a few
minutes delay on their part is of little importance.
However, they will expect you to be punctual.
 Faxes and emails are the best way to communicate in
Russia, as the post can often be unreliable. It is
customary before making a trip to Russia to inform the
prospective company of your intended business
proposals and objectives.
 Paperwork and putting pen to paper is an essential
part of all working practices in Russia. In general, they
have little faith in unsigned documents.
 Business practices in
Russia
 Business cards are essential. If possible,
ensure that one side is printed in Russian and
one side in English.
 Presentations should be straightforward and
comprehensible.
 Although many principal concerns are
discussed in an informal environment, final
negotiations will be conducted in the office.
 Making appointments
 Persistence and patience are essential. Once your
appointment is scheduled, do everything you can to
avoid cancellation.
 Don't schedule your trip to Russia near the end of
July or during the month of August- this is the time
of year many people take their vacations.
 The Russian day begins early, but it can be difficult
to foresee when all other daily activities will begin
and end. Schedules are constantly subject to change,
often at the last minute.
 Allow plenty of time for each appointment.
 Business day is usually 9:00 am to 6:00 pm Monday
through Friday and some Saturday mornings.
 Conversation
 Visitors should try to speak in a calm, moderate, tone of
voice at all times.
 Your Russian colleagues will be delighted if you make
the effort to speak even a few sentences of their
language.
 Russians are sometimes very careful about what they
say, speaking metaphorically, symbolically, and perhaps
even cryptically.
 Bringing up the subject of Russian culture and history is
appreciated.
 Compliments - with caution, they may cause a feeling of
misplaced obligation. (admiring a decorative object,
your hosts may insist that you take it).
 GIFTS
 Russians take pleasure in giving and receiving
gifts . Russians spend a lot of money on gifts .
 Gifts for children are usually opened in private,
gifts for adults are generally opened in the
presence of others.
 Gifts are expected for social events, especially as
“thank-you’s”
 Bringing a bouquet of flowers for women.
SOME Do's and Don'ts
 DO‘s
 DO shake hands firmly when greeting and leaving your
partners and make direct eye contact.
 DO partake in small talk that involves talk of family and
personal matters, before dealing with business.
 DO make a gift that symbolizes the stature of your
company, preferably an item characteristic of your local
area or one that displays the company logo.
 Knock before entering an office
 Close the door behind you, when leaving an office
 Supply beverages and snacks during business meetings
 Go out and have a drink with your counterparts, it is a good
way to break the ice.
 Bring small gifts for the children of a home you visit
 Don'ts
 DON'T be afraid to show some emotion, the
Russians won't!
 DON'T as the Russian proverb states 'hurry to
reply', but 'hurry to listen'.
 DON'T praise or reward anyone in public as it
may be viewed with suspicion or cause envy and
jealousy. Remember the collective rules over the
individual.
 Wear lavish clothing or jewelry.
 Use a restaurant as a place for doing business--it's
for celebration