1. 7 Characteristics of Russian Business Russian Businesses are a MESS Cluttered Physical plants Handwritten financial records Slow adaption of Western standards Still Operate on primitive BARTER SYSTEM Short of working capital
7 Characteristics of Russian Business Production driven system Focus is not on developing business strategies. Track the flow of inputs and outputs, heedless of whether value had been added or subtracted, Money made or lost. Primitive Financial Markets Communist accounting standards- Impossible for Non-Russian to read. Still using RAP and not IFRS. Tax system is such that it allows to falsify the records Lack of transparency- External & Internal
7 Characteristics of Russian Business Questions on OWNERSHIP & CONTROL Companies often do not know the authority or the balance sheet of the entity they are dealing with Corporate insiders can often refuse to recognize transfer of shares or simply steal shares of companies Lack of Legal Institutions Contracts are negotiated agreements of intentions but not hard-core promise.
7 Characteristics of Russian Business Bargain everything in Russia Everything is Bargained in Russia= From stable assets to salaries of skilled employees !
2. The Russian Business Psyche Philosophies of doing business Western Russian Philosophy Philosophy “CLASSIC VENTURE “START big, CAPITAL MAKE it BIGGER APROACH” approach” Start small Grow Big
2 kinds of Russian Businessmen OLD Entrepreneurial guard trader Relationships Bringing westernand egos count goods to Russia more than and distributing Bottom Line them.
3. What can you expect from a Russian Negotiator? Signing Protokols Anchor High/ Refuse to Budge Arms control Negotiation with Characteristics negotiation Emotions Savior Complex Different sense of timing
4. Guidelines for negotiating About system, structure, people & competency. About contextual factors like Travelling In Russia, Hotel facilities Be etc. Realistic About your own expectations About length of time your negotiation will take
4. Guidelines for negotiating Be Match their patience Patient In order to close the deal.
4. Guidelines for negotiating Know about the potential partner. Build relationships Don’t hire a Russian To represent you. and trust Negotiate face to face.