Doing Business in Russia / 2005 г.
Introduction
The Russian people and their culture are significantly different to North Americans and North American culture. We have very different histories that have shaped who and what we are. Since the collapse of the Soviet Union, Russia continues to go through difficult times as it tries to change to a capitalist type society. This has resulted in a few people becoming very wealthy (particularly in Moscow), but the vast majority, especially outside the major urban centers is struggling just to earn a living and get by.
There is a natural tendency to regards one’s own culture as superior to others. The reality is however, that neither any one people nor their culture is better than any other. They are merely different. The most important thing to remember when doing business with people from another culture is to use common sense and exhibit tolerance.
The following notes were compiled from the cross-cultural training given by *** from *** on Oct 28th, 2003.
Health
1. As a precaution, do not drink tap water or use ice made from tap water. Bottled water is readily available. However, check that the seal is intact. It is not uncommon for someone to try to pass off a used bottle filled with tap water as a new one.
2. Wash your hands at every opportunity. Hygiene is not to the standard you are used to in North America.
3. Do not drink Russian milk; most likely it has not been properly pasteurized. Properly pasteurized milk from other European countries is available in the stores.
4. Do not ever buy food from street vendors. It may be unhygienic. Do not buy food from farmers markets; it may be contaminated.
5. Most prescription drugs that can be obtained in North America can be obtained in Moscow at special pharmacies with a doctor’s prescription. Outside of Moscow drugs are limited.
6. Be aware that MDR TB (Multi Drug Resistant Tuberculosis) is common in Russia. Avoid people that appear to be sick or coughing.
7. If possible avoid the Metro or other crowded places during the flu season (winter).
8. There are a couple of hospitals in Moscow that are to Western standards. Be sure to use them in the event of a medical emergency.
Crime, Safety and Security
9. Crime can happen at any time and any place. Be aware of con artists; they are everywhere. Street crime is extremely common. Even gypsy children should be avoided as they have a reputation for swarming and robbing foreigners.
10. The Metro is generally a good means of transportation; however, be aware of pickpockets due to the crowded environment and avoid using it after 9.00 PM due to safety issues.
11. It is not uncommon for industrial espionage or for spies to monitor you. The phones may be bugged and the Internet may be monitored. The office may also be bugged. Any truly sensitive communication should be made face to face in a safe location.
12. Outside of Moscow, do not expect to be able to use credit cards. In Moscow, AMEX has limited use. MasterCard and Visa are more widely accepted.
13. The use of ATM bank machines for cash should be avoided if possible. For security, you are better off using a bank. However, if it cannot be avoided, make sure the account connected to it only has the minimum amount of money in it necessary. Feed this account from your primary account to protect the bulk of your money from fraud. Also be aware of being a target for mugging after using an ATM.
14. UE or y.e. is a non-existent currency that came into use in Russia when it became illegal to price anything in US dollars or Euros. It overcomes the problem of pricing something in Rubles that was purchased by the vendor in US dollars or Euros and having the exchange rate between the two currencies changing and eroding the profit. Essentially, it is a means of guaranteeing the number of US dollars that will be paid for goods or services. You may see this on your bills or receipts.
Business
15. Russians like to deal directly with the top boss. Theirs is a vertically integrated hierarchy. It is important to understand that in their culture, agreements over even minor issues cannot be made without the top man. There is very little delegation of authority.
16. Everything takes much longer to accomplish in Russia. Be very patient and do not expect any quick decisions.
17. Do not be surprised if your e-mails or faxes etc are not answered for a long time or even not answered at all.
18. Russians hate surprises when dealing with foreigners. They like to have full agenda and even a copy of the presentation before the actual presentation takes place so they can be prepared.
19. A lot is riding on the success of the program for the boss at a personal level. They have a more serious outlook on failure.
20. When making presentations, make sure you know whom the boss is and talk to him/her directly.
21. Russians love paper trails. If possible leave copies of presentations in both languages.
22. Dress conservatively. Dark business suits and ties are always acceptable. Avoid expensive jewelry or watches.
23. Too much smiling is considered a weakness and will result in lost credibility. During business, you should only smile with your business partners. Let them take the lead. When a presentation or discussion is underway smiling is generally inappropriate.
24. Expect people to be very different in their own homes compared to at work. They are much more relaxed.
25. Relationships are number 1. They tend to do business with you personally, not your company. The value of a good relationship cannot be overstressed.
26. Older bosses are more respected than “young” bosses.
27. It is always important to make it clear who is the boss/leader and why. It is helpful to establish the credentials of a younger person.
28. When a new idea is brought to the table, it is best to introduce it as a delegation with the boss doing the talking. This gives the impression that it has benefited from your collective brainpower and therefore shows greater respect.
29. Do not use metaphors (e.g. “that is in the ball park”) to get your message across, as they will not be understood. Keep the language simple and get to the point as clearly as possible.
30. Expect long discussions over issues. Russians are not like North Americans and do not expect quick decisions. They like to look at all the angles at length to make sure the resulting decision is an intelligent one.
31. Do not be upset with long periods of silence during a discussion. This is the Russian way. They are just taking time out to think things through. They do not find it necessary to keep up a constant conversation.
32. It is common to approach issues in what may seem like an illogical order to North Americans. Do not be put off by this.
33. The written contract is viewed as a guide. Russians do not place the same degree of reliance on it as we do in North America. Expect changes to be made at any time. There may be an attempt to renegotiate costs (in their favour) along with the changes.
34. Always have copies of any important documents or electronic files on hand. You may need them for reference to prove your argument.
35. Be flexible. As North Americans, typically we are much more able to be flexible than Russians are. Expect to do things “the Russian way”. If you force the issue, chances are you are going to wait a long time. It is very helpful to get the Russian boss on your side.
36. Do not expect to get straight answers to a direct question. It is common to explain the process required to arrive at an answer but not actually give you the answer you are looking for. Russians are always proud of this process and you should let them explain it.
37. You need to constantly check on progress and discuss the issues to make sure that things are moving forward. Make sure that you actually see evidence of progress. This cannot be overemphasized!
38. Russians tend to use personal relationships and contacts to achieve results as well as going through the normal channels.
39. In business, greet Russian men and women in the usual way with a handshake.
40. Your translator should behave exactly as you require, emotionally as well as exact translation of the language. Tell him/her how to behave beforehand and have a debriefing afterwards to see what his/her observations were.
41. Stick to your own and your company ethics. There may be attempts to corrupt them.
42. Ignore any attempts to garner business bribes from you.
43. Keep in mind that some Russians may pretend that they do not understand English when in fact they do. This may well be because they are not comfortable speaking it and find it easier to say they do not have that ability. When having private conversations assume that anyone nearby does understand English.
44. Unless things agreed are written down and signed by all parties, then they do not exist.
45 Be aware of the “improperly translated” ploy. Sometimes used to change what you think you have agreed. It is wise to always have your own independent translation.
46. When dealing with Russians: be Patient, Persistent and Persevere.
47. If possible, try to get information from multiple sources to compare to arrive at a conclusion.
48. It is quite normal for Russians to have a hidden agenda. They will expect you to have one as well. Things are not usually as simple as they may appear. Look deeper than what you are used to and don’t be surprised by unexpected problems.
49. Try to get personnel that you are dealing with out of earshot of their boss. That way you will be able to have a more honest, frank and productive conversation.
50. If hosting a dinner, organize the seating so the bosses are together etc.
51. Pay attention to the public relations aspect of the project. If things are not going so well, Russians will typically make sure that your company’s failures get into the press.
Russian Culture and Characteristics
52. Russians have a lot of Asian cultural influences due to their history. It is very important to “give them face” and allow them to “save face”.
53. Age commands respect.
54. Always allow people time to talk without interrupting. No hard sell. Take your time and exhibit patience and respect.
55. North Americans are considered uncultured. Russians have great respect for art, classical music and old classical authors etc.
56. Russians understand national pride. They are very proud people and consider themselves unique.
57. Make sure you advertise the fact you are Canadian and not American. The average person on the street will think you are American. You will be considered “filthy rich Americans”.
58. Between 1917 and 1991, it is estimated that 70 million Russians have been killed. 20 million in WWII alone.
59. Talking about the war is considered a safe topic. Russians are very proud of their role in the war.
60. The Russian people have lived through 70 years of communism. Consequently, they have a mindset shaped by that.
61. Many Russians live in denial that they are no longer a “Super Power” and that their satellite countries have moved on without them.
62. Communism is still very popular, especially outside of Moscow. Some people consider that time as “the good old days”.
63. Past President Mikhail Gorbachev is not popular in Russia. Many view him as having ruined the country. Avoid any discussion about him.
64. Racism and anti-Semitism is very common in Russia.
65. Avoid making jokes at any time. They do not generally translate very well.
66. Don’t assume “Russians” are actually Russian. They may be from the Ukraine etc.
67. Being invited to a Russians house is a very special point in a relationship. To refuse such an offer would be very insulting.
68. Do not ever go to such an invitation empty handed. Flowers are nice for ladies (must be given in an uneven number and note that red is only for lovers). Candy is good for children. Never ever give corporate gifts at any time. For a man alcohol is acceptable, e.g. Canadian Scotch.
69. Personal gifts are even better than alcohol and will go a very long way to building a strong relationship.
70. Always ask if shoes should be removed when visiting someone’s house. Slippers may be offered to you. Use them.
71. Green or black tea is generally drunk more than coffee. It is considered more cultured.
72. It is strongly advisable to carry your passport and visa (or copy) at all times. Carrying business cards at all times is also advisable.
73. Russians do not accept change very readily. Always expect to have to do things “the Russian way”.
74. It is common for a Russian to directly ask you how much money you make. However, it would be considered rude for you to do likewise.
75. Never refuse a drink of alcohol unless it is for religious grounds. This would be considered insulting and weak. Just sip it if necessary.
76. Never call a Russian by his/her given name until invited to, even if they use yours.
77. A Patronimic name or otchestvo is a variation of a person’s father’s first name. Russians use it as their middle name. For a man, “jevich” or “ovich” added to the end, which means “son of” and for a woman, “jevna” or “ovna” is added, which means “daughter of”. Which particular ending is added depends on the name. The full official name of a Russian includes this patronimic name.
78. A certain amount of over exaggeration is common for Russians. It is an accepted way of life there and not really considered lying. This especially should be taken into account when they are reporting progress on something.
79. If you realize you have somehow offended someone, immediately apologize profusely. It should be realized that things are not so easily forgiven/forgotten in the Russian culture as they are in North America.
80. Expect to make a toast when hosting a dinner. It is normal for the host to start the toasting and for each person at the table to propose their own toast.
81. Do not expect Russians to be punctual for anything. It is not uncommon for them to be an hour late for a dinner engagement.
Holidays
82. Holiday information as follows: Jan 1st New Year celebration is a much greater event than Christmas, which is celebrated according to Gregorian calendar on 7th January. The first two weeks of January are potential holidays. March 8th is Women’s day, when it is customary to honour women (includes buying flowers and gifts for secretaries etc). May 1st is Spring and Labour Day. May 9th is Victory Day. Many people take the first week of May off. Jun 12th is Independence Day. Typical summer holiday time is any time in June, July and August. Nov 7th is Day of Accord and Conciliation. Dec 12th is Constitution Day. Note that it can be quite difficult to get hold of the top men during the summer due to vacations.
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