The task execution is important in Russia, however, Russians tend to value building relationships over task execution.
Background: Russia is a collectivistic culture. In collectivistic cultures your network is your biggest asset: your trusted contacts help you to solve different problems in life both on business and personal level and you rather do business with people you know and trust.
It is recommended to dress according to the status expectations for Russian negotiations. The higher you are in hierarchy the more status symbols you are expected to show. Modest looks and behaviour imply that you are not in a high-status position or a decision maker.
Background: Russian culture is based on a hierarchical system where everybody knows their place and should not cross lines. Superiors are also expected to show their status using different status symbols, like cars, clothing or jewellery.
According to Global Entrepreneurship Monitor Russia and Belarus scored the second-lowest place after Japan in their confidence to start a business.
Background: This can be partly explained by the young history of the country in commercial activities of its citizens after the Soviet Union - there is no entrepreneurial culture.
At the same time, the entrepreneurial environment has improved significantly; Russia has improved its status in the Ease of Doing business ranking of countries (World Bank): from rank 120 in 2010 to 28 in 2020.
While Russian is the official language, many Russians, especially Russian professionals, also speak English as a second language. However, to access the Russians better, it is recommended to speak in their language or to have a translator during business meetings and negotiations.
Background: The official language in the Russian Federation is Russian, however, there are over 100 minority languages and dialects used in the border regions. It is estimated that Russian is the first language for over 80% of Russians. Only 3% of the population speaks English fluently. The Romir research project (2015) found that only 20% can read and translate English using a dictionary.
With the development of privatization in Russia, many sectors have flourished and are open for international players to enter. State-owned companies are predominant in key sectors such as energy and banking and limit modernisation. Restrictive product market regulation reduces competition and innovation.
Background: Private ownership of enterprises and property had essentially remained illegal throughout the Soviet era, with Soviet communism emphasizing national control over all means of production but human labour. Only later, privatization in Russia started taking place and the series of post-Soviet reforms resulted in gradual privatization of Russia's state-owned assets, particularly in the industrial, energy, and financial sectors.
With the improved ranking of Ease of Doing Business Index in Russia, it attracts more international business and companies to enter the market.
Background: According to the Russian Administrative Reform Site (RARS), citizens have become more satisfied with the quality of public services, primarily due to the countrywide introduction of ‘one-stop-shop’ systems. The level of administrative burden on businesses has decreased from the perspective of control.
With more than 55 million online users, Russia is a huge potential market for online businesses or startups.
Background: More than 143.7 million people live in Russia, which makes it the 9th biggest country in the world. Slightly more than 45 percent of all Russian people are between the age of 25 and 54. In early 2014, 59 percent of the adult population (69 million people) had access to the Internet, making Russia Europe’s number one in terms of Internet users.
A serious face is a sign of intelligence and even respect and politeness to the counterpart, too much smiling could mean the opposite.
Background: Foreigners often wonder why Russians are so serious and ‘never smile’. It is often misinterpreted as Russians being impolite, rude or cold. Russians usually don’t smile on formal occasions or at people they don’t know. In Russia smile is not a sign of being polite, but really showing the positive emotion of the person.
Russians are very skilled negotiators and inventive in using argumentation. Negotiation can be lengthy and you need patience and perhaps several trips to come to a conclusion. Do not show your impatience. Prepare yourself for circuitous communication rather than a linear step-by-step agenda or arguments.
Background: In Russia, as a society with a pragmatic orientation, people believe that truth depends very much on the situation, context, and time. They show an ability to adapt to changing conditions, a strong propensity to save and invest, thriftiness and perseverance in achieving results.
It is important to greet the person with the highest position first and to continue in descending order. Remember the importance of status. Lower-level managers/experts in Russia talk only when given permission. Later they will discuss at their level and execute decisions on an operational level. For the first meeting, it is recommended for the boss or CEO to travel to Russia and lead the discussion with the top level on the Russian side.
Background: The appreciation for hierarchical order and top-down decision-making in Russia is shown by an extremely high score of 93 on the cultural dimension of “Power Distance” (PDI). Inequality regarding power, wealth, and status tends to be accepted. It also explains the appreciation and respect shown to older people and to those in higher positions.
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