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September 23, 2017

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Landing in Moscow: The Rules in Russian Business

Russia’s shift to a market economy and its 140 million strong market makes it an attractive country to do business with. However, as with any country, knowing local rules and etiquette is a must for success. Understanding Russia’s unique challenges as a business environment is also crucial.

Business meetings

Foreigners are expected to be punctual, so turn up on time for your business meetings. If you’re meeting someone more senior, they might keep you waiting for a while before they arrive. Local officials might keep you waiting as well, so allow for more time than planned.  

Confirm the meeting by phone beforehand. If you’re considered a special guest, your Russian hosts might offer you food and drink during the meeting. It’s best to accept everything offered to you or decline tactfully if you must. General meeting etiquette includes firm handshakes, direct eye contact, and removing gloves before handshaking. Dress formally, in conservative business attire.

Bring business cards to hand out, and make sure you have your details in Russian on at least one side of the card. Bring a small gift if you’re meeting at a family home, and be ready for drinking and toasting if you’re dining out with your hosts.

Addressing Russians

Avoid using first names unless they ask you to do so. Use “Gospodin” or “Gospozha” for men and women, respectively, followed by their surname. If you know their full name, use their first name and patronymic.

Body language and gestures

Along with maintaining direct eye contact, make sure you never show the soles of your shoes or have them come into contact with a seat. Avoid sitting with your legs apart or with an ankle on the knee, and avoid standing with hands in pockets. Never beckon with your forefinger to someone. If you’re asking someone to approach, turn your hand so your palm faces downward and beckon with all four fingers at the same time.

Making conversation

If you make an attempt to learn conversational Russian, your Russian business contacts will appreciate your interest in their language. Most Russians, however, speak English as it’s taught in school. Suitable topics for small talk include changes taking place in Russia, the country’s culture and history, and your family and children if you have any. Russians, like many other cultures, are affectionate and interested in children.

Avoid complaining about the country, and don’t talk about possible controversial topics such as the Holocaust, Czarism, monarchy, Russia compared to other developing countries, and conflicts with ethnic minorities.

Understanding social hierarchy

Understanding social hierarchy is vital when partnering with Russian businesses. Russian culture has a strict hierarchical structure, and this is reflected in business practices. The boss is seen as a powerful, distant figure, and his or her higher status can be demonstrated obviously. Upon promotion, staff might be given larger offices, cars, and other privileges. Junior staff members are required to act quickly on requests made by their boss.

As you do business with Russian organisations, it might be common to witness employers and managers openly criticising staff members. Similarly, organisations might reward and praise staff openly. What the hierarchical structure means is you should always find out who are the real decision-makers and work directly with them.

Networking and relationships

It’s usually vital to have a local connection in Russia if you want to do business there. Whether you’re aiming to deal with a modern entrepreneur or a bureaucrat, having a local to guide you on the ground can help you succeed. Make small gifts to your local contacts to show your appreciation.

You might find yourself dealing with a bureaucrat at some stage. Keep in mind Russia’s network-based system of informal governance, and find out how both the official and unofficial systems work to successfully work with bureaucrats.

Negotiations, discussions, and disagreement

When networking and negotiation, avoid hard selling, confrontation, and any sort of conflict. Give the other side time to take things in. Negotiations in Russian can be slow as Russians like to take time to deliberate. They might not make an immediate decision after the meeting, so be prepared to wait to find out about the outcome.  

Understanding the unique challenges

Security can be an issue in Russia, so make sure you take measures to address the loss of property, theft, and personal security. Conduct background checks on your local agents and employees. Act cautiously, as corruption and theft are common. The legal system offers few options when it comes remedies and recovery for damages, so it’s always better to avoid the loss before it happens. Keep in mind intellectual property laws are underdeveloped.

Russia, with its large population and untapped market potential, could offer you and your business numerous opportunities. By understanding the unique challenges and risks, and staying aware of local business rules and etiquette, you’ll have a better chance of success.

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Posted on Aug 18, 2017 | Tags: Blog

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