Thursday, June 3, 2010

Russian business ethics

I am a student (business school to be more precise, based in Paris) and I am working on an oral presentation. The real topic is "How to do business with Russian people". Your blog helped me to know some of the habits that you have in this country. But I was just wondering if you could give me a hand on "the do's and dont's" with Russian people, especially in an business context.

And if you are aware about what a foreigner has to do before enter the country, I will be very grateful!


Asked by Naima, Paris


Dear Naima, I had to do a big research to answer your question...and am sure there is a lot to mention. So to meet the expectation of a business school student, I'll try to be short (PowerPoint presentation style?))
Some practical advice is given below although the majority would be applicable for many other countries (!). However, the expectation to see the Western model working in Russia like in other European countries could bring nothing but troubles.

  • Be patient. It's known that “time is money”. As a result, Western businessmen are often impatient. They love to check the cost of time. In Russia, this, to a certain extent, is an unlimited resource. Patience is the major Russian virtue so Russians are accustomed to waiting for what they want. Foreigners, who expect a quick conclusion of a transaction can be really disappointed.
  • Be ready to meet Russian managers who often have dual ethics. It is necessary to understand the difference between “ours” and “theirs”. Some studies in this area explain: “As a rule, managers have the highest ethical standards in the circle of their personal connections (“our”), but at the same time the same people can easily violate all ethical standards with respect to “theirs” (be dishonest, violate obligations, break agreements)."
  • Respect is everything. Avoid impersonal messages. After obtaining a proposal on paper Russians can put it on hold ( “to mature”) and wait for personal contact. They assume that those who have no time to drop by obviously don't take the offer seriously.

  • Build personal relationships. Russians entrust personal relations more than contracts. Remember commercial laws and contracts do not mean as much in Russia as in the West. Some consultants working with Russians specify that detailed contracts often follow an oral agreement concluded during an informal meeting. (Is is really typical just for Russians?)
  • Use local consultants. Many business rules have changed since the early 1990s when the first businessmen put their foot on this "terre inconnue". Knowledge of the Russian language and experience in the local environment play an important role. Consequently, it is better to have a local consultant than an expat.


Remember, business ethics are different. For example, "offers" considered by Americans as presents, in Russia are considered as the means for building relationship. Although explicit bribes are illegal in foreign firms, symbolic gifts are usually legal. Such symbols as a rule, are more important than monetary “gifts”, although a certain “tariff” can be necessary for bureaucrats to advance paperwork.



  • Emphasize exclusiveness. Russians prefer exceptional relationship. Foreigners frequently share financial information with competitors hoping to conclude more successful transaction. Russians, however, rarely do so.
Expectations of Russians


  • Russians can overestimate the interest of an investor in the Russian market, while foreigners are really only examining potential possibilities.
Time management
Your Russian partners can have overloaded and badly planned agendas, which simply reflect the real state of affairs concerning time management in Russia.

Advantages


Russians can expect both organizational and personal advantages from negotiations. This means that those who lead negotiations can look for some personal benefits. (Will my personal financial and official situations change? Will there be any trips and other perks for me?)

Negotiations


Thoroughly select your delegation. Age and status are very important as well as gender, by the way. Women and young managers have a harder time gain the trust of Russian managers. Naturally, Russians prefer to deal with those who occupy important positions. Negotiations with junior representatives are received, at best as temporary and impersonal, and, at worst, they can be considered insulting.


Cultural
Even if many Russian businessmen have studied abroad and traveled around the world, people can still underestimate international cultural differences.
And last but not least. Be ready to drink ))). It is common in Russia spend long hours at working dinners (But I guess, you read about this Russian tradition before from other sources))))

P.S. To answer your last question, I have to invite you to read my introduction note )))))
Do a little bit of home work, please Google Russian entry visa information!


3 comments:

  1. Hey.. I am Russian myself studying business in New York. I am doing the power point presentation about doing business with Russians, more specifically about negotiations. Can you help me answer the question about humor with Russian business partners.. Does the toast "Na zdorov'e" sound stupid? (when you in Russia and not in US) Also, what is the best way to meet Russian partners here in US?
    Thank you!

    ReplyDelete
  2. Hello,

    Amazing post in this blog. Hope more people reaching your blog because you are sharing a good information.

    Russia education

    ReplyDelete