Abstract
What should other countries take into consideration before having any negotiations with Russian partners? I suggest looking precisely at Russian cultural dimensions and according to the data the following analyzation about Russian way of negotiation or communication will be analyzed according to a research done and personal experience. Moreover, there will also be proposed short-term and long-term plan that includes a face-to-face meeting and a daily communication.
Keywords: negotiations, business communication, culture, trusted environment, Russian negotiation business approach, business ethics.
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Introduction
Nowadays, running a business in Russia is becoming extremally challenging. Not just due to complicated geopolitical reasons and economic sanctions but mostly due to the low mindfulness about “the rules of the game” in Russian business culture. These days Russian businesses have to bargain with stereotypes about Russia, and the “information wars” contribute to that negative picture within the worldwide field. Russia became an independent state in 1991. Most business people and authorities within the nation have small encounter with other societies but for its neighboring nations. Not only does the Russian Distant East incorporate a wide blend of social impacts, but moreover, there are striking contrasts between the western European locale, with St. Petersburg as its most powerful city, and the eastern European portion around Moscow. On the beat of that, the political and financial changes of the past few years brought a wide trade gain.
Due to some cultural and social contrasts, negotiating with Russians is considered to be a very complicated mission. Hence, a lot of examinations have been done to examine the Russian negotiating approach and normally the findings demonstrate conflicting depictions of the communication style. Russians are described as searching for compromise (Vasilenko 2010, 15), as well as regarding willingness to compromise as a sign of weakness (Lewis 2006, 376). Communicating with Russians can be anything from very direct to rather indirect (Kanungo, Mendonca & Aycan 2014, 123). They are even thought to “appear schizophrenic because of the Eastern and Western elements in their makeup” (Lewis 2006, 378).
In order to better understand the Russian business negotiation approach, the following analyzation will be based on the Russian culture and business ethics. The hypothetical framework will focus on cultural dimensions that generally has an impact on the Russian style at different stages of the negotiation process. There will also be proposed plausible scenarios that include both a short-term plan that includes daily communication as well as a long-term plan that includes site visits, face-to-face meetings, negotiation strategies, and other related activities.
Cultural dimensions
Cultural dimensions is a theory framework for cross-cultural communication which was created by Geert Hofstede. In international negotiations, values, beliefs, and background interference are brought to the negotiation table and unconsciously used in both the presentation and interpretation of the data (Hendenon 1996, 2019).
A 'five-dimensional' model of cultural differences between countries has a specific order and consists of 5 parameters, such:
- Power Distance
- Uncertainty Avoidance
- Masculinity - Femininity
- Collectivism - Individualism
- Long-term - Short-Term Orientation
Power Distance Russia, scoring 93, is a country where power holders are exceptionally removed from society. Russia is the largest country in the world which is extremely centralized, 2/3 of all foreign investments go into Moscow where also 80% of all financial potential is concentrated. The behavior has to reflect and depict the status roles in all areas of business interactions: be it visits, negotiations or cooperation; the approach ought to be top-down and give clear commands for any assignments (Hofstede Insights, 2019).
Uncertainty Avoidance Scoring 95 Russians feel exceptionally much debilitated by vague circumstances, as well as they have built up one of the foremost complex bureaucracies within the world. Presentations are now ready when the negotiation has been started and the focus is on the relationship establishment. Moreover, well-detailed planning is usual as Russians like when they have the background information. Russians negotiate with strangers formally, however by communicating this way Russians show their respect (Hofstede Insights, 2019).
Establishment of trusted relationships
No successful negotiations can take place if 2 parties have not established a friendly and trusted relationships. Establishing enduring and trusting relationships are exceptionally imperative and can be pivotal for a commerce victory. On the off chance that Russians lock-in in trade without first building personal relationships, Russians will then continue with incredible caution. They may also start treating foreign partners unfairly once they get a chance. Establishing a trusted relationship takes time and it is considered to be a slow process. However, people in Russia got used to taking their time and do not recognize the fast-paced western way of building relationships. Once mutual trust is established, cooperation and negotiation with existing partners runs smoothly. When it comes to face-to-face interaction, parties examine their subjective needs and inclinations and endeavor to impact them by utilizing different powerful strategies. Russians pays more attention to common goals and less to the ways of achieving them (Evenko, 2005).
Communication Barriers
At a pre-negotiation stage, both parties introduce themselves to each other. Negotiation style of Russians can be seen as somehow slow, illustrating lack of interest and uninterested outwardly. Foreign negotiators might face with Russian respective techniques. Deceptive techniques tend to vary from telling outright lies to sending deluding or untrue messages. Russian negotiators may also misrepresent the value of an item, feign disinterest, claim they have authority when they don’t. Moreover, Russians tend to also use pressure techniques. The use of time pressure includes expiring offers. It incorporates uncompromising nature as a strategy to get concessions to induce negotiations moving again, take-it-or-leave-it offers, which are at times adhered to, and other pressure techniques to create foreign representatives to feel that negotiations are at an impasse stage and require a concession in order to get back on track and proceed (Thornhill Capital, 2019).
Moreover, when negotiating with Russians, the other parties can face the language barrier. The official language in Russia is Russian. Therefore, even though English language is considered to be a business language wildly spoken, in Russia however, not all the business people were able to master the English language. Therefore, in this case it might be vital to have a translator during the negotiation process. It is common, the time pressures on negotiations mean that translations will be significantly different from the original versions. This entire procedure definitely leads to delays, miscommunications and misunderstandings from time to time. This might be overseen with a proficient approach. When communicating in English, a foreign individual should use simple, straightforward and short sentences as well as using less complicated slang and uncommon jargon. By following this approach, it gives a chance for an interpreter to translate it for Russian representatives with a great detail to minimize a misunderstanding between 2 parties.
Furthermore, bribes are a form of corruption. However, these are common components of trade exchanges in Russia and are often requested as a part of a public or private transaction. Sometimes these elements can be an equivalent to a gift. Referring to these rewards and gifts as unethical and unlawful is not advisable as it’s a clear insult to a Russian partner. If a Russian partner still makes a sizable profit from the transaction, the bribe will be off the table (Thornhill Capital, 2019).
Negotiation with Russians in the short-term
Let’s assume the short-term negotiation scenario is negotiation with one party over the price and terms of a sale of some luxurious goods. In this case, the seller is a foreign representative and the buyer is Russian individual. People in Russia are used to bargaining and most of the time they are quite good at it. Therefore, foreigners normally are not able to even realize when Russians bluffing and when the 'final offer' is finally made. It is common for a Russian business person to bring the price down as much as they can. Otherwise, they will just turn around and shut the door as their offer must be accepted. In Russia, an essential approach to negotiating is to employ distributive and contingency bargaining. The buyer is frequently in an emphatically favorable position and may attempt to thrust the duty to reach an agreement to the dealer. Russia experiences a comparatively unstable and unpredictable economic situation. Therefore, negotiators may focus mostly on the short-term benefits of the business deal. The main negotiation style in Russia is way too competitive and people may become outright adversarial. Russians see negotiating as a zero-sum game in which one side’s gain equals the other side’s loss.
Moreover, Russians are considered to be massive skeptics. First of all, Russians do not trust anything that's not been recorded on paper and signed. There is even a phrase which does not make sense in English: 'talk is cheap'. It basically means that verbal agreements without a record in writing do not constitute a real obligation. Additionally, Russians are afraid of being cheated and fooled, that's why they are super careful when it comes to making a deal. Furthermore, for a Russian status means everything, because most of the time Russians use this as a good way to impress. However, this may negatively reflect on the foreign party if they do not do a proper research about Russian business partners they are going to deal with.
In addition, the most essential criteria for making a successful short-term deal is to create a trusted environment in the short-given time period. It has been analyzed that Russians tend not to share and provide any information to people they are not familiar with. However, this is time consuming.
Negotiation with Russians in the long-term
Let’s assume 1 party is interested in the services which are provided by the other party. An example of that might be the aviation industry. 1 party has purchased an expensive aircraft, say Embraer, Phenom 300 and seeks to travel the world. However, an aircraft should be maintained properly, and this should be done not only in the home country, Brazil, but in all other countries an aircraft is flying to. Hence, a Brazilian aircraft owner should make a deal with a Russian company which provides services in Sheremetyevo airport in Moscow. Those services are ground handling, travel management, and aircraft maintenance. This deal cannot be made overnight as the process requires knowledge of both parties and should have trusted relationships.
In this case, face-to-face meeting and a visit a Russian company which provides services might be inevitable and crucial. When scheduling a meeting, a foreign partner should let the Russians know about his plans in advance. Russians like when they are informed in advance, so they have some time to know who they will be meeting, will have some information about titles, positions and also responsibilities. A foreign partner should be ready to deal with subordinates, not with the top executives of the organization. However, it's common for Russians to postpone or even cancel a meeting without a little notice. Therefore, foreign partners should confirm the meeting multiple times. Additionally, Russian subordinate might struggle with English, so Brazilian partner should use a simplified business language and keep the sentences short. Moreover, Russians love when the other party is punctual and stay patient even if a Russian side is an hour late.
Furthermore, it is common for Russians to keep their names in a specific order. First is their name, then it is a middle name which is derived from dad’s first name, the following is a surname. However, if Russians negotiate with foreigners, they tend to keep a usual form of addressing, such as Mr/Mrs/Miss and a surname. However, once trusted and friendly relationships are established, Russians might offer a foreign partner to call them by their first name only, however it comes with the time.
Negotiations might go along with presentations. Russians like when presentations are short, precise and colorful. Russians tend to always be pessimistic. Therefore, even though Russians are more than satisfied with the presentation, they most likely will not show it, which can potentially demotivate a foreign representative. The presentation should consist of different graphs and diagrams so it looks informative and the sentences should be kept short with a simple language. For Russians first impression is extremely important, there is even a phrase “You are judged by appearance at first but by your mind later”. Therefore, the dress code should be taken into consideration before the negotiation takes place. Business dress code in Russia is conservative and formal (Lon Call, 2019).
Russians tend to follow a holistic approach when communicating. Also, it is normal for them to jump forth and back between the topics than addressing them in proper order. Moreover, a direct question to a Russian might not be answered immediately as Russians tend to answer a question by asking a question. Additionally, Russians have quite specific negotiation style. The style is relatively harsh. Russians easily express their emotions in order to show how powerful they are. A foreign partner should show an ability to be extremely patient, should be willing to listen and reply in a positive manner. “Show respect and sympathy with the human aspect involved and do not be influenced by their emotional displays” (Lewis 2006).
At the end of a meeting, if the negotiation went successfully or at least it has a future potential, Russians my offer to have some business lunch or dinner. Normally, these activities include quite heavy consumption of alcohol and this might lead to a following offer, such as a visit to a Russian sauna. Foreign partners should be careful when refusing an offer as Russians may consider it as the uncertainty and irresponsibility of the future potential mutual business plans (Lothar Katz, 2017).
Conclusion
As the evidence suggests, there are some steps and procedures that should be taken into consideration before dealing with Russian business people. The social and cultural dimensions have some specific Russian negotiation way of communication, such as Russians always demonstrate the power of dominance along with the win-lose approach. It is also common for Russians to discuss business-related topics in an informal environment, however the final decision will be made and conducted in the office and the reason of that has been analyzed above.
References
- Lewis, R. D. (2006): When cultures collide: leading across cultures. 3rd ed. Nicholas Brealey Publishing.
- Hendon, D. W., Hendon, R. & Herbig, P. (1996): Cross-cultural business negotiations. London: Praeger Publishers.
- Thornhill Capital (2019). Negotiating in Russia. Retrieved from http://thornhillcapital.info/europe/negotiating-in-russia
- Lon Call (2019). Business Etiquette around the World: Russia. Retrieved from https://blog.oncallinternational.com/business-etiquette-around-world-russia/
- Lothar Katz (2017). Negotiating International Business- Russia.
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