Russian business styles and working practices

Structure and hierarchy in Russian companies

Working relationships in Russia

How to penetrate successful business in Russia

Russian business strategies

20 Oktober 2008

BIFRÖST UNIVERSITY

Are you doing business in Russia ?

An understanding of Russian social and business culture is key to your success.

To Order Call: 00 354 849 41 50 Page 2

Table of Contents

Introduction to Russian Business Culture……………………………………….………..3

Working practices in Russia……………………………………………………………….………4

Business practices in Russia………………………………………………………….………….5

Structure and hierarchy in Russian companies……………………….....……………5

Meetings and Negotiating…………………………….........................………………………..6

Meeting and Greeting…………………………………………………….......……………………….7

Entertaining…………………………………………………………………..……………………………..8

Fuelling demand for new products and services…………………………….………..8

Russian business etiquette (Do’s and Don’ts)…………………………….…………….9

Introduction to Russian business culture

The people of Russia have

seen dramatic changes to

their country over the past

century. They have gone

from living in an empire

ruled by Tsars to a Com-

munist Superpower to be-

ing one of the worlds new-

est republics. But despite

these changes, life for some Russians is the same as it ever was. Russia

is the largest country in the world, almost double the size of the Unit-

ed states of America, and its so big that it covers over eleven time

zones and has a border to eleven countries, therefore Russia has a rich

cultural identity that has been shaped and moulded by its distinguished

history and vast geography.

The cultural background of the Russian is quite different from

the western countries. They have different styles of doing things than

westerners are used to. Westerners who like to have a successful

business relationship with Russia, need to study the Russian culture and

learn how to do business the Russian way. Simple things like saying

hello and goodbye are different from what westerners are used to.

Westerners who try to do business in Russia the western way, hit a

brick wall. They need vital information to establish a good and long

lasting trust between the two parties.

To help people understanding some of these differences, we

have now printed this little catalogue, to supply people with some vital

information they need to know, before doing business in Russia.

Sindri Mar Jónsson

Gizur Sigurðsson

To Order Call: 00 354 849 41 50 Page 4

Working practices 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.

Nice business cards are important in Russia, just ensure that one side is printed in Russian.

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 recognising the

hierarchical structure is vital for

establishing and maintaining

strong business relationships.

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.

Generally, when beginning a meeting, the head of the

organization will open the discussion and introductions should

then be made in order of importance. Business practices in

Russia.

BIFROST UNIVERSITY—Russian Business strategies Page 5

To Order Call: 00 354 849 41 50 Page 6

Meetings and Negotiating Always be punctual when doing business in Russia. However do

not take offense if your Russian counterpart is not. It is not

unknown for Russian business people to turn up hours late. A

good indication of how serious a meeting is taken is how

punctual they are.

Initial meetings are usually approached as a formality. It is at this

stage that your credibility will be assessed. The best strategy is

to appear very firm and dignified, while maintaining an air of

warmth and approachability.

Pitches or presentations should be simple and straightforward.

Generally Russians are not impressed by foreigners doing

business in Russia who use special visuals, flashy PowerPoint

presentations and the like. These do not sway decisions. The

most critical element is demonstrating your knowledge,

professionalism and expertise.

Many Russian business personnel speak good English so

presenting in the language is not a problem. If it could be then

hire a Russian interpreter. It is however that you make the

effort to present anything written in Russian.

Negotiations are an interesting affair for anyone doing business

in Russia. They are tough and like to indulge in a fair amount of

theatre if necessary. Their main aim is to gain concessions so

there will be a lengthy process of grinding you down. Caving in

too early is a sign of weakness so stand your ground. If you do

feel the need to concede ask for the gesture to be reciprocated

in some way. Generally speaking, Russians view compromise as a

sign of weakness. Don't be surprised by loss of tempers,

walkouts, threats to end the deal, and similar incidents. It's all

part of the fun.

Meeting and Greeting

The typical greeting is often a (very) firm handshake with the

appropriate greeting for the time of day - dobraye utra (good

morning), dobryy den (good afternoon) or dobryy vecher (good

evening).

Even though it may sound a bit stiff it is commonplace when

doing business in Russia to introduce yourself using only your

surname. Before meeting your Russian counterpart ensure you

find out if there are any titles they use as these are extremely

important and should be used. If you are visiting Russia it is

appropriate to refer to your counterpart by either "gaspodin" (a

courtesy title similar to "Mr.") or "gaspazhah" (similar to "Mrs."

or "Miss") plus his or her surname.

On the whole Russians have three names. The first name is the

given name while the last name is the father's family name. The

middle name is a version of the father's first name, known as a

patronymic; for a man, it ends with the suffixes "vich" or "ovich"

meaning 'son of.' For a woman, the patronymic is also the

father's first name but with suffixes "a" or "ova" added, which

means 'daughter of.'

When doing business in Russia make sure you take a business

card. It is always a good idea if you plan to maintain contacts in

Russia to have one side translated into Russian. If you do so

make sure you add your title and

any degrees or qualifications you

have.

BIFROST UNIVERSITY Page 7

To Order Call: 00 354 849 41 50 Page 8

Entertaining

Doing business, conducting meetings, making decisions, negotiating and

getting to know each other is increasingly being done at dinner. If your

Russian counterpart decides to invite you out do not refuse the

request as it would be rude.

At the table centre seats are

used by the most senior

attendees. As a guest you

should be sat in the middle

opposite your immediate

counterpart

Fuelling demand for new products and services

As a fast developing market, Russia presents opportunities for

many products and services. An emerging middle class with

disposable income is fuelling demand for automotive products,

household goods, financial services, retail products and a healthcare

system; a major construction boom is

creating a need for equipment and

materials; franchise businesses are

growing in both the food and non-food

sectors; opportunities for services and

equipment for infrastructure upgrades in

power generation and

telecommunications are growing; and high

energy prices are driving demand for oil

and gas field equipment and services.

BIFROST UNIVERSITY Page 9

Russian business etiquette (Do's and Don'ts)

DO shake hands firmly when greeting and leaving your Russian

partners and make direct eye contact.

DO partake in small talk, which normally involves talk of family

and personal matters, before dealing with business.

DO take a gift that symbolizes the stature of your company and

the importance of the impending business deal, preferably an

item characteristic of your local area or one that displays the

company logo.

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.

Phone: 00 354 849 41 50

Fax: 00 354 561 76 00

E-mail: sindri.mar.jonsson@bifrost.is

Students: Gizur Sigurðsson & Sindri Mar Jónsson

Bjarkarhraun 6,

311 Borgarnes

ICELAND

Bifröst University