Russia Culture of Business

By | July 24, 2022

Subchapters:

  • Introduction
  • Addressing
  • Business Meeting
  • Communication
  • Recommendations
  • Public Holidays

Introduction

For negotiations in Russia, it is important to keep in mind that, although our paths went in the same direction until 1989, a lot has changed in the last thirty years, and in some areas the Czechia and Russia are in great opposition (development of the market economy, privatization, entry into the EU, support of renewable energy sources, focus on SMEs, innovations, etc.). Therefore, contacts with Russian partners are sometimes a combination of both approaches – emphasizing understanding and Slavic reciprocity in the case of the older generation and tough business negotiations without sentiment in the case of the younger generation. It is also good to know that many Russians have visited the Czech Republic repeatedly, and even if they do not know many things about it, they often have a solid overview and therefore there is no need to waste time explaining how things work in our country. In general, it can be said that Russians have a better overview of the Czech Republic than Czechs about Russia.

Addressing

Even if you speak Russian, we recommend that you contact a local verified and trusted representative. Their connection with customers often has a background other than purely commercial, and as a foreigner you would have a hard time breaking into that system of connections.

The Club of Czech Entrepreneurs organizes presentations of Czech and Russian companies and regions of the Czech Republic and RF, enabling Czech entrepreneurs to obtain up-to-date information on the business environment and investment plans in individual regions, including establishing direct working contacts with representatives of the executive and business circles of these regions. In rare cases, it is possible to make such a presentation at the embassy, ​​but this is an exceptional event.

Export support agency PaulTrade provides, based on the specific requirements of companies, assistance services, consultations in the field of business and establishment of a company, or they carry out marketing market research. They can also search for suitable business partners and possibly verify their interest in the offered product. PaulTrade also focuses, among other things, on economic presentation with state support at selected exhibition events not included in the category of official participation.

In 2015, the Ministry of Foreign Affairs of the Czech Republic also launched the Export Client Center and prepared a catalog of export services that it provides to Czech companies in all areas of jurisdiction of Czech embassies. Individual Czech companies can therefore contact the embassy with questions regarding, for example, initial export consultation and preparation of negotiations in the given country, evaluation of the current economic situation in the given territory, or help in mediating contacts or obtaining information from local state or regional authorities and institutions and assistance when dealing with them.

Business meeting

Business in Russia is built to a large extent on personal relationships, therefore personal contact with potential partners is very important, which is always good to establish and maintain with the highest representatives of the given company. A directive style of management prevails in Russian companies and state institutions.

The culture of business dealings, especially in the regions, is still a mixture of the Russian-bureaucratic approach and, in some localities, even the Muslim-Oriental approach. Negotiations, which are often complicated by various requirements and restrictions (there is no need to understand these restrictions as the reluctance of the Russian partner to act), usually take place in a complex manner, requiring patience and determination.

The possibility of concluding an agreement at the very first meeting can be considered unlikely. A much greater pragmatism can be seen in the new generation of businessmen, which is also reflected in the way they conduct business negotiations.

The head of the delegation from the Russian side has high formal authority. Members of the entourage of the head of the Russian party usually only participate in the discussion at his direct request. For this reason, it is not very appropriate to address subordinates directly. Respecting the hierarchy of the Russian counterparts contributes to a large extent to the successful course of negotiations. The composition of the delegation is usually governed by the principle of parity (equality) in the number of delegation members. This must be agreed in advance. There are no restrictions regarding gender and age, however, it will not be entirely appropriate if the participants of one party are representatives of the older generation, and on the other only young people. Since the Russians have a clear hierarchy in the team, foreign partners should also make it clear who is the leader in their team.

During business meetings, it is not recommended to put pressure on your partner, but to give him time. Agreements are usually captured in writing, oral agreements do not have the same weight. Expressions of disagreement are usually expressed directly with an appropriate explanation, or an apology. During negotiations, it is possible to encounter loud and emotional speech or even threats, including arrogance and harsh words. Russian partners also like to use the so-called “sugar and whip” tactics, where on the one hand they are able to resort to threats (e.g. termination of all negotiations) and on the other hand they can include the partner with all kinds of promises. It is therefore always good to focus on the guarantees of such promises (quality, price, delivery time).

Today, the management of large corporations and companies speak fluent English. However, if possible, it is always better to speak Russian with Russian partners. When communicating with state authorities (outside of departments designated for contact with foreign countries) and in smaller and medium-sized companies, Russian is practically a necessity.

Good practice includes the exchange of gifts (especially during the first meeting with top company representatives). Their value and careful selection is, in the eyes of the partners, a sure proof of the effort to deepen the relationship. A gift should always be prepared, and it should definitely not be just a company ballpoint pen or a lighter.

In the case of Russia, certain territorial differences are manifested in trade negotiations, which are based on different ethnic origins. Caucasian and southern peoples strongly show love for their culture and can talk a lot about it. They have an even stronger hierarchy than the Russians and also a strong respect for elders.

In principle, business can be done in the Russian Federation throughout the year, with the exception of the end of the year and the first half of January, when Russians combine holidays with public holidays. At the end of December, it should therefore be expected that the next business meeting will be possible only in the second half of January. It is also necessary to expect a slowdown in all activities in the first decade of May (from May 1 to about May 10).

Verbal and non-verbal communication
In Russia (and in Russian-speaking countries in general) the topic is gradually approached and the “flowery style” of speech is preferred. Russians (especially the older generation) like pathos, are usually very cordial, polite (lots of compliments), tend to exaggerate, embellish, admire, praise. However, this does not mean at all that there must be a positive outcome of the negotiations. They expect similar behavior from their partner. Negotiations with them therefore take longer – they like to discuss and argue, sometimes they even like to show off. However, this does not apply to the top management of large Russian companies, which, on the contrary, requires a very matter-of-fact and concrete approach in negotiations and a concise manner of expression.

Communication often takes place during working lunches or dinners. Although current Russian businessmen no longer drink as much vodka as they used to, the drink is still part of their culture. The consumption is complemented by a number of toasts (so-called toasts), which are rarely brief. It is more about speaking exercises that lead to establishing trust and establishing personal contact. Toasts must be prepared in advance. In addition to the usual toasts to the success of the intended business, it is desirable to highlight the personal qualities of the partner and do not forget to toast the health of the ladies present. Over-the-top Slavic relationships are usually well thought out and should not be avoided. Gallantry towards the women present is manifested not only in compliments during toasts, but also in the fact that the men toast in their honor while standing.

It should always be remembered that patriotism and a sense of national pride is an important part of the thinking of almost every Russian. Care must be taken when discussing sensitive topics such as politics or history. Visit Aparentingblog for more information about Russia culture and traditions.

Addressing by surname, especially when dealing with a foreigner, is completely appropriate, however, Russians prefer to be addressed by first name and otchestvo (father’s name), which they consider less official.

The rather more benevolent attitude of Russians to time is manifested not only in personal (ir)punctuality, but also in official situations, such as working hours, office hours or even the timetable. In business negotiations, a certain delay is not an exception. A common reason is traffic problems, especially in big cities. However, punctuality is expected from European partners. When planning a meeting in big cities, it is therefore necessary to allow for time.

A few useful tips to keep in mind when dealing with Russian partners:
– Russians prefer a flowery style of expression and only a gradual transition to their own subject. They like to exaggerate, give compliments, discuss and argue.
– They are reputed to be good negotiators.
– In the role of a buyer, they are not very willing to make concessions.
– They use various delay tactics as well as limited authority tactics.
– They make additional requests and last-minute amendments.
– They use the so-called “sugar and whip” tactic, where on the one hand they are able to resort to threats and on the other hand they can include the partner with all kinds of promises.
– They consider compromise a weakness.
– They are not afraid of conflicts.
– A directive management style prevails in most companies. So the most important person is the main superior.
– A supervisor’s opinion carries much more weight than a subordinate’s.

Communication

Russia is a country of two continents, Europe and Asia. There is something of both in the Russian approach to negotiations. From Europe, practicality, a focus on the technical side of things, from the Asian one, on the other hand, freer use of time and respect for hierarchy. It is common for a partner to go silent for a long period of time, only to call back and demand delivery “immediately”.

When negotiating outside the European part of Russia, it is good to know the religion and ethnicity of the partner, but they are not an obstacle to negotiations. Local business people often confide what acquaintances and connections they have with important people for their business. This is often a key piece of information, as proximity to important people with decision-making powers can be decisive for the success of your negotiations.

When negotiating, you need to be prepared for jumping between different points, often without finishing the discussed topic, which is suddenly replaced by another, sometimes not very related to the original one. The high formality of the first contacts is common, which gradually transitions into a more relaxed atmosphere. This process can sometimes be considered unnecessarily long by our companies, but it is necessary to persevere and not push the Russian partner into greater familiarity than he is currently ready for. It is advisable to have business cards in Russian, especially if your company is serious about doing business in Russia. It is also a good idea to get a phone with a Russian number – partners will think that connecting with you is therefore easier. If the partner does not have his mobile number on the business card and writes it by hand during the meeting, it is an expression of the trust that the Russian partner has built in you.

The meeting is led by the highest official, his subordinates get to speak only if the leader agrees or invites them to do so himself. Russian businessmen are characterized by a willingness to take risks and venture into big things, without too much attention to detail. Russians speak directly to the point, they have no problem openly criticizing something, often too harshly for our habits.

It is common that after the first, very promising meeting, he stops communicating and responding to questions. After a long pause, he will speak up and may feel hurt that you are not ready to attend to his request immediately. The solution is patience and readiness for such flexible use of time.

Russian businessmen use a tough negotiation style, sometimes too harsh for our companies at first impression. You need to prepare for this and make it clear that you stand up for yourself and can politely but forcefully contradict your partner. In Russians, this approach inspires respect for partners, they value those who fight with them during negotiations.

Russians like to see things happening, so it’s good to demonstrate readiness for quick response and flexibility. Russians start negotiations coldly, often without a smile, so as not to create the impression of friendliness and a close relationship with suppliers. During further negotiations, they often manage to express great emotions, shouting and pressure with the threat of not closing the deal is no exception. It is important to keep calm, some Russians sometimes exert this emotional pressure on purpose in order to see your reaction and get to know you better.

The address mr/mrs (phonetically ‘gaspadin / gaspaža’) is most often used in Russia. It is customary to address middle-aged and older people and those in a higher position by their first and patronymic names, while addressing them (‘Ivan Petrovič, Vy…’). The younger generation usually has no problem switching very quickly to being called by their first name and ticking. Russians practically always expect people from Central and Eastern Europe to speak Russian. If you do not speak Russian, it is a good idea to hire a Czech-Russian interpreter, without the involvement of English.

It is a widespread misconception that alcohol cannot be dispensed with in Russia; over the past ten years, alcohol consumption per capita has halved. During meetings in restaurants, in addition to beer, hard alcohol is also commonly consumed with food. When negotiating in a company, it is possible to close a successful negotiation at the end, if the partner suggests it.

There are several sensitive topics in communication with Russians. It is not good to remind that after liberation by the Red Army in the 2nd World War, communism came to many European countries, which most people associate with the Soviet Union. It is also not recommended to open the international relations of Russia and the rest of the world, there is a risk that you will not have up-to-date data. The person of President Putin is also a sensitive topic, because despite some domestic criticism that some Russians express towards him, he is the undisputed leader of contemporary Russia. The issue of the military is also sensitive – for many Russians, its strength and technical equipment is a source of national pride.

Distrust is one of the main features of the Russian character, which often becomes the reason for lengthy handling of official or other official matters.

In business correspondence, Russians use relatively long, dry and formal text, often even when the idea can be expressed concisely and clearly.

The meeting is most often led by the director or someone authorized by him and with him representatives for the individual areas under discussion, who comment only on them. It’s a good idea to show your partners how the company works in the Czech Republic, so they can make sure of your seriousness.

Recommendation

  • Keep in mind that Russians have a different perception of time and space – yesterday was late but there is enough time until tomorrow has its own logic in some cases.
  • Don’t be afraid to say No – respect is earned with a direct look, a firm handshake and the ability to say you disagree with something.
  • Sometimes you don’t know everything – Russians sometimes don’t like to express their thoughts and opinions, some people are not used to expressing their opinion.
  • Negotiations are emotions – be prepared that a normal conversation can turn into a heated argument or hug and merriment in a second.
  • Don’t make yourself better – many Russians themselves know what’s wrong with them and don’t need foreigners to draw attention to it and pour salt in their wounds.
  • Think about your own Russian company – many things can become easier if you appear in Russia as a Russian company with Czech capital rather than just an importer of goods from the Czech Republic.
  • For Russians, you are Czechs, not Europeans – the vast majority of Russians do not know the details of the functioning of the EU and see foreign relations only through relations between states and nations.

Public Holidays

If the date of a public holiday falls on a weekend, the work day off is usually moved to Friday or Monday. If a public holiday falls, for example, on a Tuesday, Monday is also set as a day off, but this day must be replaced by, for example, the following working Saturday. The Russian government always announces these shifts of free days a whole year in advance. In general, it is necessary to take into account that from the end of December to the first half of January and the first two weeks of May, when the so-called “May holidays” take place, work and business activities are subdued due to holidays and taking vacations.

The specific dates of the holidays associated with the work leave are
– New Year celebrations (January 1 – 6)
– Orthodox Christmas (January 7)
– Defender of the Fatherland Day or Men’s Day (February 23)
– International Women’s Day (March 8)
– Labor/Spring Day (May 1)
– Victory Day (May 9)
– Russia Day (June 12)
– National Unity Day (November 4).

For believers, the Orthodox Easter or “Pascha”, which is movable and falls on a Sunday, is significant. So-called professional holidays such as Agricultural Workers’ Day, Builders’ Day, Customs Day, Diplomats’ Day etc. are very popular in Russia.

Russia Culture of Business