Engro fertilizer company[1]


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Engro fertilizer company[1]

  1. 1. Company IntroductionEngro Fertilizers Limited, a wholly owned Engro subsidiary, is a premier fertilizermanufacturing and marketing company with products that focus on balanced crop nutrition andincreased yield. The company markets primary and secondary fertilizers.Organizational CultureEngro is about the people who are a part of us. Our culture is dynamic and energetic, withemphasis on our core values and loyalty of our employees. Our work environment promotesleadership, integrity, teamwork, diversity and excellence.Products and Brands of Engro FertilizerEngro UREAEngro is the first company to have setup urea production facility in Pakistan, a landmark event inagricultural sector of the country. This together with the fact that urea is the most widely usedfertilizer in the country, gives Engro Urea a special standing in the domestic fertilizer market.Engro DAPFor a healthy growth the plant requires three major nutrients namely Nitrogen, Phosphorus andPotassium. Di-Ammonium Phosphate (DAP), which contains 46% Phosphorus, is the mostwidely used source of Phosphorus for the plant. DAP strengthens the roots of the plant andimproves nutrient uptake. DAP was imported in Pakistan by the fertilizer import department until1994 and since then the private sector has been responsible for all imports.Engro Fertilizers has been importing and marketing DAP in the country since 1996. EngroFertilizers is the most trusted and one of the largest importer of DAP in the country.ZorawarFor a healthy growth the plant requires three major nutrients namely Nitrogen, Phosphorus andPotassium. Engro Zorawar is a specialist product which provides the plant with Phosphoruscontent for its growth. Zorawar was introduced in 2003 and is the highest Phosphate contentproduct available in the market. It has 52% Phosphorus content which is higher than DAP (whichhas 46%). 1
  2. 2. Engro NPNP formulations that contain Nitrogen and Phosphorus in almost equal quantity have beenespecially important to Pakistani farmers, given the peculiar deficiency of both components inmost of the Pakistani soils. This category serves the needs of a particular niche of farmingcommunity in the country; where application of nitrogen and phosphorus is required in almostequal proportions.Engro ZarkhezPlants require three major nutrients (i.e. Nitrogen, Phosphorus and Potassium) for quality higheryield. Zarkhez, introduced in 2002, is the only branded fertilizer in Pakistan which contains allthree nutrients. Presence of all the macro nutrients results in synergistic plant nutrient uptake.The resultant yield is of high quality; sucrose content of sugar cane increases, quality and size ofpotato improves, fruit and vegetables appear and taste better. Zarkhez is a high quality fertilizercontaining correct proportions of the three nutrients in each of its granule. This helps ensureuniform and balanced nutrient application across the crop field.ZingroZinc is a micronutrient, it is a nutrient which the crop requires in small dosages and itcompliments functions of major nutrients. Over the years zinc deficiency has been wellestablished on a variety of crops and in rice specifically. Zingro brings to the market the trust ofEngro and high quality standard which has made it distinct from all the competition.Why Russia?Climatic and geographic factors limit Russias agricultural activity to about 10 percent of thecountrys total land area. Of that amount, about 60 percent is used for crops, the remainder forpasture and meadow. In the European part of Russia, the most productive land is in the CentralChernozem Economic Region and the Volga Economic Region, which occupy the grasslandsbetween Ukraine and Kazakstan. More than 65 percent of the land in those regions is devoted toagriculture. In Siberia and the Far East, the most productive areas are the southernmost regions.Fodder crops dominate in the colder regions, and intensity of cultivation generally is higher inEuropean Russia.CropsGrains are among Russias most important crops, occupying more than 50 percent of cropland. 2
  3. 3. Potatoes, a vital crop for food and for the production of vodka, are grown in colder regionsSugar beet production has expanded in recent years; the beets are grown mainly in the rich black-earth districts of European Russia.Flax, also a plant tolerant of cold and poor soils, is Russias most important raw material for textilesFlax also yields linseed oil, which together with sunflowers (in the North Caucasus) and soybeans (in the Far East) is an important source of vegetable oil.Production of fruits and vegetables increased as private farms began to expand around 1990. In the mid-1990s, the largest yields in that category were in cabbages, apples, tomatoes, and carrots.Agricultural PolicySoviet PolicyA number of factors made the Soviet collectivized system inefficient throughout its history.Because farmers were paid the same wages regardless of productivity, there was no incentive towork harder and more efficiently. Administrators who were unaware of the needs andcapabilities of the individual farms decided input allocation and output levels, and the highdegree of subsidization eliminated incentives to adopt more efficient production methods.The Gorbachev ReformsThe Gorbachev agricultural reform program aimed to improve production incentives. Gorbachevsought to increase agricultural labor productivity by forming contract brigades consisting of tento thirty farm workers who managed a piece of land leased from a state or collective farm. Thebrigades were responsible for the yield of the land, which in turn determined their remunerationAlthough Gorbachevs reforms increased output in the agricultural sector in 1986, they failed toaddress fundamental problems of the system, such as the governments continued control overthe prices of agricultural commodities, the distribution of agricultural inputs, and production andinvestment decisions. In the contract brigade system, farmers still had no real vested interest inthe farms on which they worked, and production suffered accordingly. In the 1980s, the SovietUnion went from being self-sufficient in food production to becoming a net food importer.Yeltsins Agricultural PoliciesIn December 1990, the Congress of Peoples Deputies of the Russian Republic enacted a numberof laws that were designed to restructure the agricultural sector and make it more commerciallyviable. The Law on Peasant Farms legalized private farms and allowed them to operate alongsidestate and collective farms, to hire labor, and to sell produce without state supervision. The samesession of the congress passed the Law on Land Reform, which permitted land to be bequeathed 3
  4. 4. as an inheritance from one generation to the next, but not to be bought or sold. The governmentalso established the State Committee for Agrarian Reform, whose responsibility was to overseethe transfer of available land to private farming.The decree required that farmers choose either to reorganize into joint-stock companies,cooperatives, or individual private farms, or to maintain their existing structure. Under the firsttwo arrangements, workers would hold shares in the farms and be responsible for managing theenterprises. An individual farmer could later decide to break from the larger unit and establishprivate ownership of his or her share of the land, as determined by an established procedure.As of 1996, individual private farming had not assumed the significance in Russian agriculturethat reformers and Western supporters had envisioned. Although the number of private farmsincreased considerably following the reforms of 1990, by the early 1990s the growth of farmshad stalled, and by the mid-1990s the number of private farms actually may have dropped assome individuals opted to return to a form of cooperative enterprise or left farming entirely. Bythe end of 1995, Russias 280,000 private farms accounted for only 5 percent of the arable land inRussia.A number of factors have contributed to the slow progress of agricultural reform. Until the mid-1990s, the state government continued to act as the chief marketing agent for the food sector byestablishing fixed orders for goods, thus guaranteeing farmers a market. The government alsosubsidized farms through guaranteed prices, which reduced the incentive of farmers to becomeefficient producers.Perhaps most important, effective land reform has not been accomplished in Russia. The originalland reform law and subsequent decrees did not provide a clear definition of private property,and they did not prescribe landholders rights and protections.In addition, the fiscal position of the federal government has forced it to reduce subsidies tomany sectors of the economy, including agriculture. Subsidies are among the targets of majorbudget cuts to comply with the standards of the IMF and other Western lenders and achievemacroeconomic stabilization.Constraints to fertilizer use in RussiaStructure of agriculture: the lack of small and medium size enterprises• Low farm gate prices for agricultural commodities• Inadequate use of modern agricultural technologies + predominance of extensive farming 4
  5. 5. • Inadequate fertilizer distribution system• Slow recovery of advisory and soil analysis system• Slow technology transfer from research institutions to farmsNational program on “Development of agriculture” 2008-2012The program focused on animal husbandry, stimulation of private farm production up to 30% ofagricultural output through subsidies for bank interests, establishment of farm’s cooperatives,land mortgages, and house building for young agricultural specialists.The government implemented guaranteed minimal price for such cereals as wheat, barley, ryeand maize. If market price falls below this fixed minimal price the government starts buying theexcess of grain at a minimal price. For 2009 the minimal price for wheat is fixed at the levelUSD 145-180 per ton depending on protein content in grain.The government abolished income tax for agricultural producers until the 1st of January of 2013and VAT has been reduced to 10% (for the rest it is 17%).Government compensates producer’s rates for credit used to buy machinery, fertilizers and seedsand gives direct subsidies to compensate fertilizer cost.And finally the government will support agricultural sector to survive during the globe financialcrisis of2008- 2009 giving additional subsidies for agricultural producers in amount of 30 billion USDInternational plant nutrition Institute has developed software that will forecast fertilizer needs ofthe land, the name of the software agristats by using past 10 year data. By using this softwareIPNI has forecasted that fertilizer needs have will increase in Russia. The nutrition requirementof the land is nitrogen, phosphorus and potassiumBy above policies the market for chemicals had largely recovered and reached pre-crisis levels inRussia by the end of 2010 and the prospects for the future look good in most branches. TheInternational Fertilizer Association forecasts that by 2014 the volume of demand for mineralfertilizers should grow by almost 12%6 as a result both of population growth worldwide and thereducing amount of fertile farmland. Owing to the wildfires which plagued Russia during thesummer and caused significant damage to the harvest, demand for fertilizing chemicals remainshigh. The nitric fertilizer industry appears to be stagnating somewhat but the demand forphosphorous- and potassium-based fertilizers is forecast to grow strongly. 5
  6. 6. In addition WTO membership for Russia – Should Russia finally be accepted into the WTOin 2011, solving the current problems with the organization on issues such as protectionism, stateenterprises, the cost of oil/gas and intellectual property rights, this will mean amongst otherthings that Russia will provide for improved market access for foreign firms and a muchhealthier competitive environment domestically. Through commitment to WTO rules and norms,trade with, investment in and expansion onto the Russian market will become much morepredictable for foreign firms, thus reducing the ―risk cost‖ of the entry ticket onto the market.The most recent reports suggest that Russia could be looking at an April 2011 accession to theorganizationEntry strategy for marketAlliance and Joint VentureEntering into a JV with a Russian partner will derive certain benefits, such as Facilitating the start of the foreign investor’s business operation by taking advantage of the Russian partner’s relationships with, and experience of, the Russian authorities, suppliers and consumers; Reducing the risk of the Russian partner competing; and Enabling (e.g. for tax purposes) a transfer of the Russian partner’s assets to some sort of control by the foreign investor without having to finance an acquisition of Russian assets.More over Russia exports its fertilizer products, as there is established market for exportingfertilizer products Engro fertilizer can take benefit of that market by jointly working with partnerFind the Right Russian PartnerThe right business partner is the single, most important factor to a company’s successful entryinto the Russian marketplace. Again, give serious consideration to working with qualifiedoutside consultants to locate potential Russian partners and to conduct comprehensive duediligence investigations. The task of finding the right Russian partner should not be left to a staffmember who does not have knowledge of and experience in the Russian market. 6
  7. 7. Negotiating With RussiansAlthough Russians are inexperienced in western business practice, they are often very skilled andshrewd negotiators. In many, many instances, a stubborn Russian negotiator gets the best of anbusinessman who is in a rush to close a deal.For newcomers, negotiating with Russians can be a trying experience. The delays, the fibs, thecontinual need to consult with higher authority, and the stubbornness have sent many businessdelegations home in anger. However, those who live in Russia and get used to Russiantechniques often find negotiating Russian style to be an intricate, formalized game of powerpolitics. To negotiate with Russians successfully, you must be thick-skinned, bull-headed, andwarm-hearted, and always remember: the Russians are the worlds greatest chess players.The Outrageous Initial PositionThe first phase in Russian negotiation is the outrageous initial position. This position is putforward as a test of your character. Regrettably, Americans, anxious to please, sometimes agreeto the initial demands with only minor changes. This then teaches the Russian that he can makefurther outrageous demands. Sometimes, the initial position is used as a way to get thebusinessman angry or off-balance. Don’t take initial Russian positions too seriously. Often, it isbest to counter with your own equally outrageous initial position.The CriticSometimes, a Russian manager enters a negotiation with a burst of criticism. The Russian thenrequests concessions as a way to mend the relationship. When the businessman resists, theRussian repeats the litany, and the demands, often with greater emotion. Hear the Russian out --you may learn something. Then, consider attack him for his sins against you; or, if all else fails,apologize. Frequently, the honest exchange of emotions puts your relationship on firmer ground.The SaviorOther times, a Russian manager may tell of a tale of woe -- unpaid workers, lost orders, abankrupt factory with no prospects. Despite his poverty, because he is a good host, he spends hislast ruble on food, drink, and gifts for his guest. He calls upon the good-hearted businessman tohelp him in his troubles. (Most of the time, the factorys troubles are all too true; though,sometimes, the troubled factory manager has a new Mercedes parked outside.) Many 7
  8. 8. businessmen find themselves transformed from business managers into social workers trying tosave a troubled Russian factory. Try to avoid this. Try to enter and maintain a businessrelationship between equals. The "factory savior" approach to business in Russia usually endsbadly for both sides.Delay as a Negotiating TacticRussians are skilled at using delay as a negotiating tactic. When Russians know you are anxiousto move quickly (usually the case), they will use this anxiety against you. They will delay onsetting a date for a meeting, delay on fixing a time and place, delay on reaching an agreement,and delay on implementing. The Russian may be using delay as a way to extract furtherconcessions from you (or, the Russian may have better things to do.) Sometimes, businessdelegations arriving Sunday are kept stewing Monday and Tuesday just so the Russians canestablish a position of initial advantage during the Wednesday meetings. Don’t be in a rush. Usethis free time to your advantage by meeting with the Russian’s competitors, or at least, seeing theKremlin or hermitage, and, of course, consulting with us&fcs commercial officers.ConcealmentYour Russian counterpart will not tell you everything. Make sure you dont tell him everything.Concealment -- of assets, of rivals, of tactics, of legal arguments, of technologies --is tried andtrue strength of Russian negotiators. Don’t fire all your ammunition in the first engagement. Avaluable Russian saying: "dont hurry to reply, but hurry to listen.""I Do Not Have The Authority."Russians use this phrase (and variations) as a polite way of saying "no." Sometimes, its true --other times, it just means no. Feel free to use this tactic yourself; it’s works."I Get Half - You Get Half"Russians place great stake in reciprocity. If you give me this, I will give you that. I get half; youget half. You can use this national desire for reciprocity as a tool to reaching agreement --eventually. 8
  9. 9. Legal IssuesRussia is therefore often perceived as a country that is struggling to observe the rule of law.Russia has a civil, as opposed to a common, law system. Between 1994 and 2002, Russiaadopted an entirely new civil code which covers most areas of business law.As well as being new, the Russian legal system is also in a state of almost constant flux, as raftsof new laws come into effect to replace the old and to fill in gaps in legislation. The inevitableuncertainty this creates is exacerbated by the fact that there is little guidance in doctrine and nodeveloped system of jurisprudence from which to draw benefit: precedent cases are difficult toaccess, and are published mainly in the form of guidance notes by the supreme commercial courtor the supreme court of common jurisdiction. This makes it very difficult to opine on theinterpretation that a court may give to a specific provision of Russian law.If an international treaty or agreement ratified by the Russian Federation establishes rules otherthan those established by domestic law, the rules of the international agreement applySo it is advisable to hire a consultant which has years of experience about Russian law in doingbusiness with Russians.Political riskPolitical stability has been achieved but it is young and widely criticized and its political stabilityrests largely on the authority of one man, Prime Minister. Bureaucracy is another problem inRussia, Corruption, the rule of law, questions as to the independence of the judiciary, red tapeand customs formalities are just some of the problems which can be located under the broadumbrella of bureaucracy. Corrupt practices are usually widespread in Russia, and are considerednormal.Practices corrupt by western standards run through the fabric of Russian society, from schoolteachers taking cash from parents to give students better grades, to federal ministers andparliamentary deputies running private business empires. Some estimates put the size of Russia’s―corruption economy‖ at 10–15% of GDP—a conservative estimate since it only reflectstraditional cash bribes, not more sophisticated practices such as using a government job topromote private business interestsThese come in many forms including: 9
  10. 10. • Voluntary contributions to special projects or the funds of regional and local administrations orgovernment departments (police, emergency services, etc.)• Traditional bribes and more complex schemes to influence courts and prosecutors• Extortion demands from power ministries (police, secret services, etc.)• Bribes in return for necessary approvals from various agencies (e.g., fire inspection, buildingsafety inspection) or to obtain licenses (e.g., telecom frequency licenses).• Commissions to high-level officials in the case of high-profile deals requiring theirauthorization• Petty bribes to traffic inspectors, doctors, teachers, etc.Culture – Key Concepts and ValuesWork PracticesA strong organizational culture with clear sustainable organizational practices that are used toachieve specific goals has a positive correlation with high-performance in Russia. In the decadesof communism most Russian organizations were dull places to work because they provided littlemeaning or opportunity for the majority of their members. Office politics, double ethicalstandards, murky procedures, and unclear goals reigned. Companies that emerged during the firstdecade of Russian capitalism often suffered from the same diseases of non-transparency andarbitrary rule. As a result, the efforts of some Western companies to build strong and transparentorganizational cultures at their Russian subsidiaries have created a very positive response frommost Russian employees. This type of environment emulates the famous words from the filmField of Dreams: ―Build it and they will come.‖Russia’s work ethic is increasingly influenced by western culture, but the Russians also have aunique set of values and attitudes and a different approach to communication, negotiation anddecision-making which could affect anyone doing business in Russia.Structure and Culture of CompaniesThe new wave of Russian capitalism confirms this tradition: regardless of a successful Russianentrepreneur’s competencies and management style, he or she invariably has enormous power 10
  11. 11. within the organization. Followers look to the leader as a superior being who has unique rightsand, by definition, deserves compliance. Russians have a need for powerful charismatic leadersand tend to create them often irrespective of the leaders’ intentions. Russians’ expectations offoreigners in leadership positions, however, are more complex. The formal title of CEO does notguarantee its holder the same level of compliance from Russian subordinates when a Russiandoes not hold that position. Respect and conformity will come only if the foreign leaderdemonstrates superior competence and delivers tangible results. Many foreign executives suggestthat creating an empowered organization in Russia is their largest management challenge. Yetthose who have made significant progress down the road to empowerment emphasize thepositive impact that it can have on employees’ motivation and performance if implementedcorrectly, at a reasonable speed, and to the right extent considering employee readiness. Firstand foremost, firms that have been successful with empowering their employees recognize thatempowerment should be a process, not an event. It cannot be implemented overnight andrequires continuous step by step efforts. At the same time, empowerment should produce somevisible results quickly to excite employees. Two elements are especially critical here – toleranceof mistakes and refusal to make decisions that has been delegated to an empowered employee.While empowerment is a challenge in many countries, in Russia it is particularly challenging andimportant because of Russia’s tradition of limited empowerment and severe punishment ofmistakes. This tradition leads to reluctance to make decisions even when management hasdelegated such power. In some instances when one tries to empower employees in Russia, theactions are met with some resistance. For example, one manager at Gillette commented thatseveral times after he had delegated a decision he would find employees returning to him askinghim to make the decision.Culture should not be considered as a side dish by foreign organisations in Russia. Focusingsolely on the bottom line and market shares may be a very short-term tactics but in no way asustainable strategy to enter the Russian market. 11
  12. 12. Geert Hofstede Cultural DimensionsCOUNTRIES PDI IDV MAS UAI LTOPakistan 55 14 50 70 0Russia 93 39 36 95 - Pdi Power distance index IDV Individualism MAS Masculinity UAI Uncertainty Avoidance Index LTO Long-Term Orientation 12
  13. 13. However when compared to Pakistan, Hofstede dimensions clearly prove that Russia andPakistan are quite different to each other in terms of cultural dimensions. So this means we haveto be aware about Russian culture before making entry in this market.Russia’s highest Hofstede Dimension is Uncertainty Avoidance (UAI) is 95, indicating thesociety’s low level of tolerance for uncertainty. As a result of this high Uncertainty Avoidancecharacteristic, the society does not readily accept change and is very risk averse In an effort tominimize or reduce this level of uncertainty, strict rules, regulations, laws, and policies areadopted and implemented. The ultimate goal would be to control everything in order to eliminateor avoid the unexpected. Therefore, Engro fertilizer has to be extremely careful with this. As theRussian culture depicts that they believe in facts and figure and they believe in power oflegitimacy, so we have to provide them authenticated facts and figures and persuade them aboutfuture prospect. Everything should be mentioned during meeting and agreement and there shouldbe no hidden clause, to reduce their uncertainty avoidance level.Power distance index PDI is around 93, indicating that Russian obeys orders of theirsuperiors, companies follow centralized decision making and tall organization structures (manylevels of management). Russians prefer autocratic or majority rule decision making and arereluctant to trust one another. On other side in Pakistan (Power distance index) PDI is 55,indicating moderate structure it varies from organization to organization, some follow centralizedecisions or vice versa. Therefore, Engro Fertilizer has to give authority to their partners inRussia and deal with the top management.Masculinity culture dimension index of both countries indicates that they give moreimportance on value tradition, belonging and family. This shows that Russian are concerned withothers, they have strong feelings and empathy towards others, where as Pakistan is in betweenthe scale. Therefore Engro Fertilizer management has to give importance to both the dimensionsand not to just earning, advancement and wealth. For their success, Engro Fertilizer has to bemaking strong long term relationships with their counter parts along with the societal andeconomic development.Individualism score in Russia is around 39 which shows that Russian give salaries andpromotions on the basis of seniority. People of Russia value group, cooperation and satisfaction,which is further higher in Pakistan as individualism score is 14. Results showed a surprisinglevel of individualism in the respondents from CEE; those from Hungary, Czechoslovakia,Poland, Bulgaria, Romania and Russia all scoring in the top quartile for individualism. Russian isa collectivism society, where promotions, advancement and earnings are based on seniority andpeople look after each other in return of loyalty. So, the Engro Fertilizer has to considered this inthe HR policy and the procedures has to be formed on the basis of this ,objectives and targets 13
  14. 14. should be formulated in such a manner that individual should meet their targets along with theconsiderations of other needs.Trompenaaar:Specific versus Diffuse: Managers from specific cultures such as Denmark are much moreprone to criticize subordinates directly and openly without regarding their criticism as a personalmatter. Russia is more tuned towards diffuse culture which suggests that individuals areprotective regarding their public spaces. Russian have a diffuse culture, individualism are muchmore protected about their public spaces. Engro Fertilizer has to look carefully for this things andindividual should be given equal respect everywhere and protect the individual public space.Universalism vs. Particularism: Russians often modify legal contracts and change theway deals are executed which suggest they are more towards particularism and decisions aremostly made according to the situation rather than predefined methods of decisions. Russianexecute their operation in accordance with the local responsiveness, therefore Engro Fertilizerwill not face many difficulties in their operations because Russians are flexible to moldthemselves.Neutral vs. Emotional Cultures: Russians’ culture is more towards emotional cultures.People of Russia love to smile, talk loudly and express their feelings with enthusiasm but theyare conservative to strangers. It can also be extracted from their buying patterns as Russians arepatriotic while buying products and they don’t accept any foreigner to talk against their country.Engro Fertilizer has to be extremely cautious, because Russians are emotional and patriotic. Wehave to keep these factors in mind. All the documents, agreements, packaging and promotionscampaigns should be associated with Russian culture and history, in order to build strongbonding between Engro Fertilizer and Russians. Russian language should be used in allpromotional activities and packaging. So Engro Fertilizer manager should be careful in dealingwith Russians and don’t talk about any negative aspect of Russian individual, culture and history.Achievement vs. Ascription: Russians give importance to what or who the person is, tothem a person who is a friend will be more important and they would love to give time to thosewho are known to them. Therefore Engro Fertilizer has to nurture the strong relationshipbetween employees.Use of time: People of Russia are mostly following synchronous i.e. they don’t mind getting alittle late but want others to be on time. Synchronous time is used; they don’t have any pre- 14
  15. 15. determined schedule and can alter their schedules due to personal engagement. Russians do morethan one task at one time. Russians can be late themselves but they want others to be punctual.So Engro Fertilizer has to put this thing in consideration while having meeting with Russianscounterpart.CommunicationLanguage: The official language of the RF is Russian. It is also widely used in formerRepublics of the USSR. Foreign languages studied in Russia are primarily English and German,and at many schools English is an obligatory subject.Verbal communicationRussia is a high-context culture. They tend to be indirect in their communications and theirunderstanding of a situation is typically based on a whole host of factors, rather than theimmediate threat alone.The language itself is high-context - Russias defining feature is its contradictory nature. So,even though it is generally high-context, you will often encounter very low-context Russianbehavior. Probably the best example is a person youve maybe met once approaching you,suggesting a time and place to meet, and saying "agreed?‖ This sort of blunt exchange, strippedof all contexts (i.e., i dont even know you), will surprise even the most low-context of people.In sum, Russians are high-context in general but be aware that they can sometimes switch tolow-context behavior without warning.Russians will tend to wait and think before responding to a point made to them - do not beimpatient. Allow the Russians the time and space needed to take part fully in the conversationand remember that they are probably struggling with foreign language as well.In practice, the use of nicknames (or diminutives), inside jokes or corporate traditions are themost visible features. The newcomer needs to be initiated to belong to the group.Nonverbal communicationThere tends to be very little visual or verbal feedback during meetings in Russia. People listensilently and with little obvious body language being displayed. This does not, however, meanthat the listener is disinterested or does not understand - it is merely a cultural characteristicwhich Russians share with. 15
  16. 16. For example many people in Russia consider smiling at strangers in public to be unusual andeven suspicious behavior. Yet many Americans smile freely at strangers in public places(although this is less common in big cities). Some Russians believe that Americans smile in thewrong places; some Americans believe that Russians dont smile enough.As we got to know from the research the Russia is at a midpoint between Japan and U.S, soEngro Fertilizer has to deal very delicately in communicating with Russians because they tend tobe more direct and straight forward in some situations and in certain situation they tend to beimplicit and try to express themselves with gestures, body language therefore Engro Fertilizermanagement has to Be careful in distinguish the different context and understanding the meaningbehind the words and gestures. For example in understand the consumer behavior and theirattitude it will be difficult to understand the behavior of high context cultural followers, so it willbe beneficial to appoint local researchers to conduct research and better understand the implicitfactors.HR policy should be designed in considering both the culture and understanding the employsbehaviors and attitudes in order to satisfy and motivate them, Procedures and policies also beaccording to them.Tips for Doing Business in RussiaThe following tips will help you ensure make the most of your experience doing business inRussia: Since personal and informal contact is crucial when doing business in Russia, be ready to spend some time establishing rapport before discussing business. Getting past the initial formality and silence you may experience with your Russian colleagues might take time but it will result in stronger relationships and improved business interactions. Russians are very patriotic. Avoid criticizing any aspects of Russian history, culture or politics. Good neutral discussion topics are sports (especially winter sports) and family. In meetings, Russians prefer a direct approach. You should be well prepared and your presentations should be straightforward and comprehensible. Russians are very status conscious and prefer to have meetings with those of equal status. Decisions tend to be made by the most senior person. Avoid praising or rewarding anyone in public as this may be viewed with suspicion and can cause envy and jealousy. Any praise or criticism will be much better received in private. The typical greeting is often a (very) firm handshake with the appropriate greeting for the time of day like good morning, good afternoon or good evening. 16
  17. 17. On the whole Russians have three names. The first name is the given name while the last name is the fathers family name. The middle name is a version of the fathers first name, known as a patronymic; for a man, it ends with the suffixes "vich" or "ovich" meaning son of. For a woman, the patronymic is also the fathers first name but with suffixes "a" or "ova" added, which means daughter of. When doing business in Russia make sure you take a business card. It is always a good idea if you plan to maintain contacts in Russia to have one side translated into Russian. If you do so make sure you add your title and any degrees or qualifications you have. Always be punctual when doing business in Russia. However do not take offense if your Russian counterpart is not. It is not unknown for Russian business people to turn up hours late. A good indication of how serious a meeting is taken is how punctual they are. Initial meetings are usually approached as a formality. It is at this stage that your credibility will be assessed. The best strategy is to appear very firm and dignified, while maintaining an air of warmth and approachability. Pitches or presentations should be simple and straightforward. Generally Russians are not impressed by foreigners doing business in Russia who use special visuals, flashy PowerPoint presentations and the like. These do not sway decisions. The most critical element is demonstrating your knowledge, professionalism and expertise. Many Russian business personnel speak good English so presenting in the language is not a problem. If it could be then hire a Russian interpreter. It is however that you make the effort to present anything written in Russian. Negotiations are an interesting affair for anyone doing business in Russia. They are tough and like to indulge in a fair amount of theatre if necessary. Their main aim is to gain concessions so there will be a lengthy process of grinding you down. Caving in too early is a sign of weakness so stand your ground. If you do feel the need to concede ask for the gesture to be reciprocated in some way. Generally speaking, Russians view compromise as a sign of weakness. Dont be surprised by loss of tempers, walkouts, threats to end the deal, and similar incidents. Its all part of the fun.ConclusionRussia is considered as riskiest place to do business but if one can understand its cultural values,communication styles, their negotiation techniques and their rules and regulations can get goodprofits. Certainly there is big difference in Pakistani cultural and other dimension from Russiaone need to understand and apply those things that are mentioned above, to successfully run theirbusiness in Russia. 17
  18. 18. Bibliographyhttp://www.scribd.com/doc/35808378/Trompenaars-Cultural-Dimensionshttp://www.country-studies.com/russia/agriculture.htmlhttp://www.east-x-net.dk/oest-mag/artikler/working_with_partners.htmDoing Business in Russia - Industry Overview (www.consultvm.com) 18