Russian Business Practices

By: Cameron Schweikert

Flag of Russia

Map of Russia

Demographics of Russia

Population- 141,377,752 Birth Rate- 10.92 births/1,000 population

(2007 est.) Median Ages for the population are:

total: 38.2 years male: 35 years female: 41.3 years (2007 est.)

Educational Levels of Russia

Literacy Rate- Total Pop. is 99.4% Males is 99.7% Females is 99.2%

http://en.wikipedia.org/wiki/List_of_universities_in_Russia school accreditation is directly overseen by

the Education Ministry of Russia

Total Literacy Rates

Russia- 99.4% Germany- 99% Australia- 99% China- 90.9% Mexico- 91% United States- 99%

Business Traditions in Russia

Business is conducted in quite a professional manner

Polite to be on time, five minutes late is okay

If coming for a meeting or conference considered polite for company to give you guide to show you the city

Doing Business in Russia (chap005)1. Build personal relationships with partners. When there

are contract disputes, there is little protection for the aggrieved party because of the time and effort needed to legally enforce the agreement.

2. Use local consultants. Because the rules of business have changed so much in recent years, it pays to have a local Russian consultant working with the company.

3. Ethical behavior in the United States is not always the same as in Russia. For example, it is traditional in Russia to give gifts to those with whom one wants to transact business.

4. Be patient. In order to get something done in Russia, it often takes months of waiting.

Doing Business in Russia (chap005)5. Russians like exclusive arrangements and often negotiate

with just one firm at a time.

6. Russians like to do business face-to-face. So when they receive letters or faxes, they often put them on their desk but do not respond to them.

7. Keep financial information personal. Russians wait until they know their partner well enough to feel comfortable before sharing financial data.

8. Research the company. In dealing effectively with Russian partners, it is helpful to get information about this company, its management hierarchy, and how it typically does business.

Doing Business in Russia (chap005)

9. Stress mutual gain. The Western idea of “win–win” in negotiations also works well in Russia.

10. Clarify terminology. The language of business is just getting transplanted in Russia so double-check and make sure that the other party clearly understands the proposal, knows what is expected and when, and is agreeable to the deal.

11. Be careful about compromising or settling things too quickly because this is often seen as a sign of weakness.

12. Russians view contracts as binding only if they continue to be mutually beneficial, so continually show them the benefits associated with sticking to the deal.

U.S. Commercial ServiceRussia (not mine)

Oil and Gas Economy:Oil and Gas Economy: Moscow awash with money; record oil/gas

prices driving economy. Trickling down to regions.

Russia will continue to be major player in the global energy market:

World’s largest natural gas reserves.

Neck-in-neck with Saudi Arabia for oil production; 2nd biggest oil exporter.

World’s 3rd largest energy consumer.

Russian Laws Fined $5- 30 U.S Dollars for not having visa Stealing- $600 fine up to two years in prison Drug Possession is illegal- punishment varies

on amount No relieving yourself on the street $3 fine

Russian Currency

The official Russian currency is Rubles (rub`li). One rouble ( o`din rubl') consists of 100 kopeek (1 kopeika - od`na (one) ko`peika). The exchange rate is 28 roubles to 1 US dollar, 35 Rubles to 1 Euro, and about 50 Rubles to 1 pound sterling.

Money Conversion Sites

http://www.xe.net/pca/ (pop-up converter) http://www.xe.com/ucc/ (online version) http://www.oanda.com

Appearance Expectations in Russia

wear suits dark ,well tailored good dress shoes. don’t take off their jackets in negotiations. no hands in pockets Women dress rather conservatively, wear skirts Women cover heads entering a Russian Orthodox

Church dinner in citizen’s home casual dress is appropriate

Business Expectations Behavior

Patience is key Don’t expect late Russian to apologize it is

probably a test of your patience Some Russians will refuse to back down Final offers not end of negotiations Can usually get better deal if you hold out YOU should always be on time

Greeting Expectations in Russia

Russians say “privet” in a informal situation then they kiss on the cheek

Russians say “zdravstvuyte” in formal situations then they shake hands

www.bisnis.doc.gov www.bisnis-eurasia.org BISNIS Presentation

Conditions Affecting U.S. Exports to Russia

What Stimulates U.S. Exports to Russia

New unique technologies unknown in Russia Similarity of climate and geographical conditions in Russia and the U.S. High quality and reliability of products and good reputation of U.S. manufacturers Lower price due to weak dollar New projects in Russia with U.S. companies’ participation

What Hinders U.S. Exports to Russia

U.S. companies not well represented Marketing and after-sale service required U.S. focus on China, Afghanistan and Iraq distracts resources from other regions Different metrics can be an issue U.S. visa is difficult to obtain, expensive travel Western Europe is close Historical ties with European firms (plans use their technology/equipment) Active European investment and government support (Germany largest investor) Low purchasing power in Russia (Chinese/Indian, Korean manufacturers gain

advantage)

Russian Money

◄Front 500 Rubles Back►

Russian Money

Religion of Russia

Russian Orthodox Church professed by about 75% of people there

Main Language

Russian but there is about 100 smaller minority languages spoken in different regions

Interesting Info

The legal age to purchase alcohol in Russia is 18

Lunch is the heaviest meal That is salad, soup, second dish, compote,

tea or coffee. Eye Contact is important Respect Authority Dancing is O.K.

Source Page 1

http://en.wikipedia.org/wiki/List_of_universities_in_Russia

https://www.cia.gov/library/publications/the-world-factbook/geos/rs.html

http://en.wikipedia.org/wiki/Education_in_Russia http://www.waytorussia.net/Practicalities/Tradition

s.html http://www.cyborlink.com/besite/russia.htm http://www.swyaa.org/Handbook/Russia.htm

Source Page 2 (PowerPoint's)

russian.arizona.edu/courses/business04/yegorov.ppt

www.cob.sjsu.edu/mckenna_m/chap005.ppt www.buyusa.gov/greatlakes/

presentationrussia.ppt www.jyu.fi/economics/opiskelu/kurssimat/

YJOCL78Inr

Source Page 3

http://atheism.about.com/library/world/KZ/bl_RussiaIndex.htm

http://www.ask.com http://www.google.com