Doing Business in Russia pg3

One aspect of Russian culture which has remained the same for centuries is corruption.  It has been estimated that Russian citizens pay at least $ 2.8billion each year in bribes.  There is a story of a soft drinks manufacturer who could not begin production as the factory did not comply with fire regulations.  Production was allowed to commence following a voluntary contribution to build a new fire station in the proximity of the unit.

Similarly ‘compromat’, a system of collecting and using compromising information about business competitors, has become a common currency in Russia.  It can be used for blackmail, disabling opponents or simply as a bargaining tool in negotiations.

Abiding by clear-cut Western rules and laws is also not necessarily the way business is conducted in Russia.  Rules and regulations can cause frustration, so people have learned to ‘do things their own way’.   In this respect, it is important to keep contracts simple.  Complexity will make the opportunity for someone to find a way to breach them easier.   Don’t rely on verbal promises even in a long-term, proven relationship.

Russia is a complex and unique nation and it represents huge economic potential to many organisations.  However, the importance of understanding the cultural nuances of this country of contradictions for business success cannot be underestimated. 

In this article I have merely touched on a few points of reference which might help the business executive however, there are many more to be understood.  Farnham Castle International Briefing Centre specialises in cross cultural management development programmes and international assignment briefings for every country in the world and such briefings can go into far more depth than an article.  For further information about courses visit www.farnhamcastle.com or call:  01252 721194.