With the country in a state of total flux, Russian attitudes to business can vary widely from sector to sector and from region to region. Are you dealing with a new-style entrepreneur or an old-school Soviet bureaucrat?
Law-breaking and rule avoidance have been promoted to an art-form in a country where the state has, for centuries, been seen as the enemy.
In a country where the rule of law has all but broken down, the only thing that can be relied upon in a business context is the strength of the relationships upon which the business is based. Do not underestimate the importance of relationship building – or the time taken in the process.
Contracts are only as valid as a combination of your ability to enforce the law and the importance placed upon the relationship. Trying to enforce an unpopular clause in a contract could prove virtually impossible.
Russian companies are often driven and directed by one strong, central character. Without the approval of this individual, very few decisions will be taken and any that are would probably prove invalid.
Don’t waste time trying to get decisions out of middle and junior managers – go straight to the top if possible.
Companies tend to take a short-term view of any given business opportunity. In a country as volatile and uncertain as Russia, who knows what lies around the corner?
Managers are expected to manage and this means giving precise and detailed instructions to subordinates. Inclusive, caring management styles might be viewed as weak.
Meetings tend to be used to disseminate information or to give direct instruction – do not expect a great deal of open debate or disagreements in front of senior managers.
Smaller, more informal meetings often occur behind closed doors where senior management might canvas opinion or seek other opinions.
Formal meetings are serious occasions and should not be treated lightly. Any overly informal behaviour could be construed as lack of respect for senior management, the company or even the country.
Once teams have been established and the internal relationships seem to be working well, it is important to keep the team together if possible. Russians can be wary of strangers and the relationship-building process can be long.
Do not assume a good level of fluency in foreign languages in any cities other than possibly Moscow and St Petersburg. Always try to ascertain language levels before a meeting.
People have a tendency to believe what they have heard over what they have read – so say it as well as putting it in writing.
Body language is minimal in meetings (unless being overly theatrical during an impasse in a negotiation situation) which can lead to mistaken impressions of disinterest.
Russians like to think in silence before answering a question. Do not be embarrassed by the silence. Allow sufficient time for the response to be formulated before breaking the pause.
Women play little part in business at the senior levels (although this might be starting to change) and on the whole Russian businessmen are more comfortable dealing with other men.
It is important to dress smartly and to try to look important. If you do not appear to be a decision-maker people will quickly lose interest.
Many senior Russian businessmen have backgrounds in academia and have only entered the world of commerce since the collapse of the Soviet system.
Do not underestimate the importance of entertaining in the business world. A good meal will help cement relationships and, although, reports of the amount of drinking involved in a trip to Russia may be exaggerated, a few vodkas will also help things along.
Written and Produced by Keith Warburton
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: