Doing Business in Different Cultures Russia Hannu Toivonen
Doing Business in Different Cultures : Russia Hannu Toivonen 11 April 2004
Doing Business in Russia Practical Suggestions • Build relationships – Business laws and contracts do not mean as much in Russia as they do in the West – Russians tend to trust more in relationships than in contracts • Use local consultations – It is better to have a local Russian than a Russian expatriate as a consult
Doing Business in Russia Practical Suggestions • Consider business ethics – Ethical rules and traditions are different in Russia • Be patient – Russian are very patient and used to wait for what they want
Doing Business in Russia Practical Suggestions • Stress exclusivity – Russians prefer exclusive relationships – All conversation is based on the assumption: ”I have chosen to deal with you because you are the best one to deal with. I am not talking with anyone else”
Doing Business in Russia Practical Suggestions • Respect is everything – It is important to be patient – When receiving an offer on paper, Russians may leave it for a while to ”mature” and wait for personal contact
Doing Business in Russia Practical Suggestions • Financial information is personal – Westerners may spend a great deal of time for investigating and sharing financial data on one another prior to establish a business relationship – Russians prefer to wait until friendship is developed
Doing Business in Russia Negotiations • Russian Expectations – Russians may overestimate for the foreign investor’s interest in the Russian market • Scheduling – Russian counterpart will likely have an overloaded and badly planned weekly and daily schedule, – This makes it difficult to secure a meeting date that works
Doing Business in Russia Negotiations • Cultural Differences – Russians may tend to underestimate the extent of cross-cultural differences • Benefits – Russians may expect both individual and organizational benefits from negotiation
Doing Business in Russia Preparation • Know the negotiator – Try to get more information about your Russian counterpart if possible – Investigate the Russian company’s hierarchy • Obtain references – Ideally you should obtain references from other sources, such as Western firms already doing business in Russia. . .
Doing Business in Russia Preparation • Clarify language – It is essential that business terminology and jargon is clarified and simplified • Use consultants – It is best to find your own interpreter and Russian consultant – You need to be able to trust the interpretation
Doing Business in Russia Preparation • Carefully select the delegation – Choosing the right members of you delegation is crucial – Age, status and gender are very important to Russians • Consider ethics – Westerners must understand very clearly their own ethics and the limits of what is acceptable
Doing Business in Russia Conducting the Negotiation • Build rapport – Pay compliments – Recall that Russians prefer to work with friends and operate from basis of fellowship and trust • Stress exclusivity – Emphasize the exclusive nature of your offer and the significance of your company – Russians prefer to do business with important people representing important corporations
Doing Business in Russia Conducting the Negotiation • Share information – Be willing to divulge something quasiconfidential to the head of the Russian delegation • Build connections – In discussions with your Russian counterpart, stress connections and similarities rather than differences
Doing Business in Russia Conducting the Negotiation • Know your partners – Get to know your counterparts and the company they represent • Stress mutual gain – Take time to explain the mutual benefits of your new relationship • Clarify terminology – It is extremely important to be sure that everybody understand clearly one another’s terminology
Doing Business in Russia Conducting the Negotiation • Prepare to drink – Be ready to drink vodka • Close the deal – Be prepared to fix and reinforce the final agreements with a nice dinner together – Be prepared to invite the Russians to visit your country and see your facilities
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