The Russian Style of Business

To understand the characteristic features of Russian businessmen and officials, it is necessary to consider Russia’s history. For instance, the impact of the old administrative style on Russian industry and trade is still very strong. The consequences of century-old traditions are easily recognized in many aspects of the Russian business culture, the most important of which are below.

Business styles are changing as many Russians gain work experience in other parts of the world or are running their own businesses. However, the further you move away from the big cities such as Moscow and St Petersburg into the regions and the state-owned industries, the more likely you are to find that the older traditions still apply. There also tends to be a difference in business style between the old and the young, as the younger people are able to travel more widely or to receive management and business training.

If you are going to work in the Russian Federation, be prepared to encounter bureaucracy at all levels and all spheres. As in any bureaucracy, a Russian official has the opportunity to influence both the speed and success of certain procedures connected to your business practice. This can lead to bureaucratic procrastination, as a decision to be taken by an official body must pass through several levels of approval, and it can be difficult to track the status of the decision.

The Russian business environment is generally formal. Business questions are rarely discussed over the phone; but are handled during face-to-face meetings. Even a meeting to discuss straightforward business issues can be called ‘negotiations’ (‘peregovory’ in Russian). These meetings are characterized by a whole series of formalities – the ceremonial exchange of business cards, greeting speeches, tea/coffee with biscuits, vodka – and are usually conducted with a very serious and almost ‘ceremonial’ tone.

The other problem with these meetings is that they can be unproductive in a practical sense. Russian businessmen, particularly the older ones, can be skeptical of new or innovative ideas and it can take time to persuade them to accept a new approach. There is also the tradition that Russian businessmen consider negotiations an occasion for intrigue and maneuvering. Contrary to western business practice, where a decision can be made to benefit all parties, the assumption of most Russian businessmen is that one cannot achieve success in negotiations without putting the other party at a disadvantage. The Russians are a proud people and there is therefore a strong desire to avoid any loss of face.

The ‘old boy network’ functions in the Russian Federation just as it does in any other country in Europe. It can be very difficult to do business successfully in the Russian Federation at the present time without good relations with high-ranking officials, upon whose goodwill many issues relating to the business environment continue to depend. Experts will find it helpful to make contacts in the Russian administration at national, regional or local level, depending on what is appropriate to the nature of their project.

From time to time you may become subject to unforeseen extra costs, such as commissions, rush fees, or expenses. This is a sensitive area and, whilst in some instances you will be able to avoid such unofficial charges, in certain cases you will have no choice if you want to obtain what you are looking for. You will have to use your own judgment as to the urgency of the situation.