russian business culture

RUSSIAN BUSINESS CULTURE

Navigating Russian Business Culture2

Area total: 17,075,200 sq km, 1.8 times the size of US Population: 141,702,094 (July 2008 est.) Ethnic Groups:

Russian 81.5%, Tatar 3.8%, Ukrainian 2%, others 12.7%. Government type: federation GDP: purchasing power parity - $2.088 trillion (2007 est.) GDP composition: agriculture: 7%; industry: 37%; services:

56% (2007 est.) GDP growth rate: 8.1% (2007) GDP - per capita (PPP):

$14,700 (2007 est.) US – approx. $45,000 Russian rubles per US dollar – 23.65 (2008, june), 25.659

(2007), 28.284 (2005), 30.692 (2003) Energy Superpower

Navigating Russian Business Culture3

GDP growth in Russia in the last ten years (1999-2008)

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Navigating Russian Business Culture4

Before 1991 Russia was a communist centrally planned economy

In December 1991, the Soviet Union ceased to exist, and the Russian Federation was born, communism “abolished”

1992- 1999: radical market reform under Boris Yeltsin, state assets privatized, foreign trade opened up, economy tanked

2000-2008: oil boom and ruble devaluation of 1998 fuel economic recovery; President Vladimir Putin, 55, leads “stabilization” effort, renationalizes some companies, takes away some freedoms

March 2008 – now: Putin’s protégé Dmitri Medvedev, 42, is elected president, Putin becomes prime minister

Navigating Russian Business Culture 5

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Navigating Russian Business Culture8

Moscow – financial capitalSt. Petersburg – transportation and industrial

hubSochi – 2012 Olympics, $15-20B of federal

investmentWestern Siberia – oil, gas, timberSouthern Siberia – metals, timber,

construction, infrastructureFar East – timber, oil, pipelines, fishing –

Japan, China around the corner

With strong ruble, foreign exchange reserves of $500 billion (US less than $100B) and National Reserve Fund of $125B Russia feels much more confident on the global economic arena. In his recent speech President Medvedev said that the United States has overestimated its ability to regulate the world economy

Russia, which is becoming a world center of economic influence, is ready to correct the situation. For now, the idea will be implemented as a “world financial center” in Moscow, and Russia’s specific proposals for the world will be delivered by the president at the G8 summit in Japan.

9

Collectivism

Dusha (soul)

Paperwork and putting pen to paper

First Name or Title?

Very intimate friends or relations - refer to one another by the first name.

Ensure that you learn the titles of everyone you plan to encounter

Russians have three names: the first name is a given name, the last name is the father's family name, the middle name is a version of the father's first name.

DO shake hands firmly when greeting and leaving your partners and make direct eye contact.

DO partake in small talk that involves talk of family and personal matters, before dealing with business.

DO make a gift that symbolizes the stature of your company, preferably an item characteristic of your local area or one that displays the company logo.

Knock before entering an office Close the door behind you, when leaving an office Supply beverages and snacks during business

meetings Go out and have a drink with your counterparts, it is

a good way to break the ice. Bring small gifts for the children of a home you visit

DON'T be afraid to show some emotion, the Russians won't!

DON'T as the Russian proverb states 'hurry to reply', but 'hurry to listen'.

DON'T praise or reward anyone in public as it may be viewed with suspicion or cause envy and jealousy. Remember the collective rules over the individual.

Wear lavish clothing or jewelry. Use a restaurant as a place for doing business--

it's for celebration

• Fierce competition to gain control over rich resources

• Selection of the Russian partner (especially in the region)

• Normally long-term projects worthy of development

• Building trust with Russian staff is critical• Special marketing strategy

• It is considered good luck to shake hands over the threshold of the doorstep.

• When taking flowers as a gift you must only take an odd number.

• If you leave something behind in Russia it means you're coming back.

• In business negotiations Russians view compromise as a sign of weakness.

• In Russia, the 'OK' symbol with the thumb and forefinger touching in a circle means 'everything is fine'.

• False. It is considered bad luck to shake hands over a threshold and should be done either inside or outside.

• True. Even numbers of flowers are only given at funerals and are a sign of bad luck.

• True. A Russian superstition that is still present today.

• True. • False. The Western sign for 'OK' is considered

rude in Russia.