Russian Business Practices
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Russian Business Practices
By: Cameron Schweikert
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Flag of Russia
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Map of Russia
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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.)
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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
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Total Literacy Rates
Russia- 99.4% Germany- 99% Australia- 99% China- 90.9% Mexico- 91% United States- 99%
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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
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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.
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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.
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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.
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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.
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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
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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.
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Money Conversion Sites
http://www.xe.net/pca/ (pop-up converter) http://www.xe.com/ucc/ (online version) http://www.oanda.com
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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
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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
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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
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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)
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Russian Money
◄Front 500 Rubles Back►
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Russian Money
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Religion of Russia
Russian Orthodox Church professed by about 75% of people there
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Main Language
Russian but there is about 100 smaller minority languages spoken in different regions
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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.
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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
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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
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Source Page 3
http://atheism.about.com/library/world/KZ/bl_RussiaIndex.htm
http://www.ask.com http://www.google.com