Russian Business Structures

Autocracy and centralised decision-making are synonymous with the Soviet system in many people’s eyes and this approach can certainly be seen to be manifested within large Russian business organisations.

Russian companies tend to be driven by one strong central figure who will make strategic decisions with little or no consultation with anyone other than a handful of close trusted advisors. (Indeed this centralised decision-making process can be most clearly seen in the approach of recent Russian presidents.)

Therefore, when dealing with potential clients or joint-venture partners in Russia, it is absolutely essential to make sure that the right person is being dealt with. Western companies, who attempt to interface at inappropriate levels within an organisation, waste massive amounts of time and resource. Nowhere is the advice, ‘Go straight to the top’ more pertinent.

The headlong rush from communism to capitalism has made people into entrepreneurs and centralised decision-making enables organisations to grab an opportunity when it arises. Thus, as in most developing economies, companies tend to have a short-term view of business activities and it is imperative that any potential partner can see the short-term benefits of collaboration.

A brief overview of some key concepts to consider when doing business in Russia

Written and Produced by Keith Warburton

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Overview

Russia is the world’s largest energy exporter which should mean that its economy is strong and that its people prosper. However, a combination of oil price volatility and the impact of economic sanctions put in place in response to perceived Russian military aggression have resulted in years of recession. This has left the country’s potential unfulfilled, as well as an infrastructure crying out for massive levels of investment

Russia does undoubtedly have massive potential. It has boundless natural resources, with a highly educated population who are aspirational and consumerist in nature. If Russia can regain its position as a mainstream player on the global political stage, then it is poised for a very bright future.

So, should you be thinking about doing business in Russia? That’s a difficult one to answer but our advice would be that there is a huge potential up-side in Russia but that before venturing into such a complex market it is essential to do considerable research and due diligence. This advice is sound for any new market but it is doubly applicable when doing business in Russia.
One area of business in Russia that needs research is around the cultural norms you will encounter within the Russian business community. They do things differently in Russia and you need to know what to expect. Who you know is vitally important in Russia but how you interact with key contacts is just as important. Don’t spend months cultivating the right people only to alienate them by doing the wrong thing or communicating in an inappropriate manner.

This country profile provides an overview of some of the key aspects of Russian business culture in a concise, easy to follow-format. The document includes information on:

  • Background to business
  • Business Structures
  • Management style
  • Meetings
  • Teamwork
  • Communication
  • Women in business
  • Entertaining
  • Top tips