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Business culture

The Fundamental Principles of Business Culture

Russian business culture has undergone a tremendous change since the fall of communism; however, traditional standards and values still linger. Russian professionals are known as tough negotiators. While honest in their approach, Russians can also be pretty unforgiving. Despite the ongoing transformation and generational differences, business culture is characterised by the following traits: caution, persistence and modesty. Patience and perseverance are also key to closing a deal.

The Soviet mentality persists in most firms regarding their managerial approach. Decisions are made from the top down and subordinates rarely take initiative or ‘deviate’ from the position of their company. In fact, most Russian professionals speak with one voice, reaffirming a single position. Decision-making usually takes long time and is sometimes extended on purpose to test the foreign side’s willingness to compromise. Nevertheless, once a decision is made, the Russian side may also want to sign a deal very quickly and engage in business almost immediately.

Personal relationships are key to signing a good deal with Russian professionals. Close ties are built on the basis of trust and honesty, and can sometimes be the only motivator that helps achieve progress during deadlocks in negotiations. Relationship building usually takes time as Russians would want to believe you are authentic and understand your personal goals and ambitions rather than your personal objectives. Business entertaining (drinking in particular) is a fast and efficient way to build relationships.

First Contact

It is difficult to do business in Russia without the help of a local connection. Older people who grew up with communism may also be more suspicious of foreigners and people they do not know whereas the younger generation is getting used to engage in business with foreign associates. Appointments should be made well in advance and reconfirmed several days prior to the actual date of meeting. It should not come too much as a surprise if they are cancelled on short notice. Russians are often not very proficient in English, and it is safer to check with your Russian counterparts whether an interpreter will be necessary.

Time Management

Punctuality is highly regarded in Russia and foreigners are always expected to arrive on time. Nevertheless, Russian professionals may not always be on time and can even be late just to test the patience of their foreign counterparts. Meetings do not always have a set agenda and senior Russian executives may determine the course of the meeting. Meetings are most likely to run over time and be followed by a lunch or dinner that will allow Russian associates to get to know their foreign counterparts.

Greetings and Titles

When meeting someone, a light handshake is appropriate. Handshakes are on the firm side and it is important to maintain direct eye while shaking hands. A slight nod of acknowledgment may also suffice.

Gift Policy

Exchanging gifts during an initial meeting is common in Russia. Small gifts with your company logo or representative of your country are appropriate for the first meeting. If invited to a Russian home, it is always a good idea to bring gifts, ideally flowers, fine chocolate/sweets or wine/liquor.

Dress Code

The dress code is formal both for men and women. Russians value being well dressed and nicely groomed. Men are expected to wear dark coloured suits with shirt and tie and stylish and conservative business suits, dresses and or trousers are appropriate for women. Business casual or an informal attire are not considered appropriate.

Business Cards

Business cards are widely exchanged in Russia. While there is no specific protocol surrounding the exchange of cards, it is recommended to have one side of the business card translated into Russian. Putting any advance degrees on the business card is also a good idea as they are likely to impress Russian associates.

Meetings Management

The first meeting usually serves the purpose of establishing credibility and determining if a relationship is worth forging. Meetings, especially the first ones, are likely to have a formal atmosphere and follow a very strict procedure. Russian professionals may ask to sign off on a “protokol” at the end of a meeting, which is similar to minutes.

When introducing an offer, it is important to provide a long and detailed presentation that refers to precedent cases on the subject. As Russians are generally less flexible and adaptable, new ideas should be introduced gently and directions as personal recommendations rather than official requirements. These ideas may also cause discomfort and put Russian professionals in an awkward position, as they cannot commit before they have sought approval from higher up. On the other hand, flexibility and willingness to compromise can be seen as a sign of weakness. If negotiations come to a deadlock, Russians usually prefer to patiently wait it out unless the other side is especially firm in their position. This is a tactic to push foreign counterparts to grant more concessions out of impatience. Despite their willingness to engage in business, Russians may also walk away from the deal and cancel meetings at last minute to test the flexibility of their foreign counterparts.

During meetings, it is important to talk to Russian counterparts as equals and not to come across as condescending. As Russians are usually quite status-conscious, it is recommended to ensure your team matches the Russian team in terms of number and rank. This status consciousness also makes procedural details such as seating arrangements and speaking orders quite important. It is recommended not to single out a Russian from the group to speak out, as this may be considered as a form of dissidence. Russians tend to display emotions in meetings and negotiations may include heightened tempers. Some Russian professionals may even storm out of the meeting room; therefore, it is important to hold your ground. Interruptions during meetings are common as participants follow different discussions. It is recommended to maintain direct eye contact while speaking and not to show the soles of your shoes as this is considered rude.

Business entertaining is an important part of the working culture, especially drinking and toasting. An invitation to go out for a drink shows a sign of interest in strengthening the relationship. Business dinners at the home of the Russian associate are also quite common. When invited for a business entertaining event, it is very important to follow the host (i.e. when to start eating, when to get up, when to start talking about business).

Sources for Further Information

Expatica - Russian Business Culture

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