RUSSIAN BUSINESS

CULTURE
  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

2 Navigating Russian Business Culture

 GDP growth in Russia in the last ten years (1999-
2008)
12,0
10,0
8,0
Annual growth, %

6,0
4,0
% change
2,0
-
(2,0) 1 2 3 4 5 6 7 8 9 10
(4,0)
(6,0)

3 Navigating Russian Business Culture

4 Navigating Russian Business Culture
 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

Navigating Russian Business Culture 6
Navigating Russian Business Culture 7
 Moscow – financial capital
St. Petersburg – transportation and industrial hub
Sochi – 2012 Olympics, $15-20B of federal investment
Western Siberia – oil, gas, timber
Southern Siberia – metals, timber, construction,
infrastructure
Far East – timber, oil, pipelines, fishing – Japan, China
around the corner

8 Navigating Russian Business Culture

 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.