Doing business in Russia

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Russia, also officially known as the Russian Federation, is the world’s biggest country with a vast territory that occupies the east of Europe and the north of Asia. It has 14 land neighbours, the world’s longest land border and a population of 146 million. Russia has 11 time zones, the largest number of contiguous time zones of any country in the world.

The history of Russia and its culture traces back to the ancient times of the Kievan Rus (cultural ancestors). Ancient churches and monasteries have been preserved in many Russian cities, leaving a great heritage of culture, art and literature. Many world famous writers, artists, sportsmen and scientists originated from Russia and have glorified the national culture which Russian people are very proud of.

Russia is heavily dependent on oil and gas exports. With a decline in government revenues from this sector, Western economic sanctions following the annexe of Crimea and a sharp decline in the ruble, the standard of living for most Russians has been negatively impacted.

Business culture in Russia

Russia has gone through a tremendous transformation in the last decade, not least in the way businesses are run. However, in a collectivist culture such as Russia, relationships are still very important. Relationships are built up slowly, founded not just on professional credibility but on a deeper emotional level. Once the relationship is established, it is likely to be long-lasting. Russians are extremely loyal to their friends and are very hospitable. Equally, they respect those who are generous with their hospitality.

‘Global’ Russians are good at creating and maintaining networks of all kinds with government officials, regulatory bodies, customers, suppliers and competitors. These networks add enormous value to them and their business.

Russians tend to work in steep hierarchical structures with status, power and decision-making focussed centrally at the top. Generally, the level of trust in today’s Russian organisations is fairly low and leaders must work at instilling a climate of trust to foster creativity. Approach issues of trust through a relationship focus rather than just on the task. Russians have a natural resistance to change, and managers wanting to engage in a participative debate may find their Russian employees uncomfortable with open discussion. Informal mechanisms with close colleagues/confidants for feedback, information and gaining consensus are preferred.

Expatriate managers in Russia must also demonstrate a high degree of control and authority combined with an employee-centred focus. For many Westerners, the idea of being authoritarian and simultaneously keeping close personal relationships is a difficult balance to achieve. When asked in a recent survey what expatriate managers can do to be more effective, participants commented “be direct and clear in setting business tasks and control regularly at least in the initial phase of the assignment”; “show real interest in the local culture”; “make an attempt to learn basic Russian and take every opportunity to make friends with locals”.

Russians are not renowned for subtlety and respect strength. Like the Dutch and Germans, Russians managers are prone to giving direct negative feedback and straight talking and they may voice their opinions strongly. However, they also have a strong concept of 'face' like Asians do.

They may also appear a bit gloomy or forbidding – smiling is used for personal friends and is not respectful on formal occasions. They listen attentively without interrupting and without outward signs, gestures or disruptions.

Finally, Russians usually have three names. The first is their given name, the last the father's family name. The middle name is a version of the father's given name known as a patronymic – for a man, it ends with the suffixes ‘vich’ or ‘ovich’ meaning ‘son of’. So Vladimir Ivanovich would be Vladimir, son of Ivan. For a woman, the patronymic is also the father's first name but with suffixes ‘a’ or ‘ova’ added, meaning ‘daughter of’. When you become better acquainted with someone, you may be invited to refer to them by their given name and patronymic.