DOING BUSINESS IN RUSSIA / «Difference in mentality between Russian and European business people tod

I have heard and read a lot about the difference in mentality and attitude between Russian and Foreign business people, particularly with European and USA businessmen. Based on my over 20 years’ experience of working with European, USA and Asian companies I will try briefly to describe this topic.

First a bit of history. Back to beginning 90th, when «Perestroyka» has happened in USSR (end of communism era and beginning of capitalism) the difference in mentality, attitude and business approach between Russians and West Europeans was huge indeed. Market economy has just started, people had lack of experience in business, communication with foreign companies and even just travelling to other countries. But since then local market in Russia was developing extremely fast and if you would have visited Russia 20 years ago and come today, you would find two different states, including people’s mentality changes… During last 20 years - dramatic changes have happened in all parts of life in Russian Federation. Competition, foreign and local capitals, market economy, government policy and other factors pushed country development. Companies and businesses had to learn on the spot, people and companies, which could not adapt to the realities fell over the years. Today people work hard in order to get income and I would easily compare style of life in most of Russian cities with Europe or USA. Most of local cities and towns have changed their face completely, there are a lot of modern buildings, shopping malls, hotels, office centers, roads and other new infrastructure. But due to short period of time of market economy, big country size and other factors - local markets are still under development. Today on the market you can find all types of companies, business attitudes, approaches to mutual cooperation – from old fashion / USSR approach (which is still exists because market is new and there are not enough development in some areas) up to the most modern one, particular in companies, which are led by people, who for 10+ years have been working in Russia for World market leaders as HP, Boeing, Schell, Mercedes and other giants of industries. When you start communicating with local companies, my advice - you should try to understand who is in front of you or on the other side of the line or PC. Judge it based on your personal experience. Of course because the market is quite young, there are false mirrors in mind of some local business people – number of Russian companies think that they are big and have good sales volume but in fact it is just a misunderstanding of market realities.

But from my point of view today the majority of local companies understand who they are and what they are looking for in terms of joint business (sales, production or services). Of course it would be best to visit a local partner(s) in their own city, to see their behavior, an office, a warehouse, a restaurant, a factory or other facilities in order to make your own opinion about the company and possibility of mutual cooperation.

Concerning business attitude and mentality today. From my point of view the major factor of successful cooperation is comfort in working together with local partner in Russia. I mean it should be general positive feeling about company staff and management, high level of trust and confidence, supportive position from both sides.

In my business career there were many cases when we go well with our partners from Europe, USA and Asia or sometimes it was tough to go together due to variety of reasons.

There are no universal rules to choose a business partner. It could be number of factors, which influence your mind – starting from attitude, dress code, IQ level, degree, temperament, up to company nature, structure, market positioning, approach to business and other staff. The factors, which influence cooperation must be analyzed by yourself from maximum number of sides in order to make right choice. This is in case you are looking to have cooperation with local partner(s). If you are planning to open your own local company. It is better from my point of view to find a local service provider, which will help you to understand a market situation in terms of your product or service, to solve legal issues concerning the setting up of a company, employment of local staff and initial stage of sales and market development. I would not advise employing a local staff by yourself at the beginning of your business in Russia in order to avoid employing wrong people. All above info is valid for start of your own business in Russia as well. Please mind the difference in mentality and business approach between people from far destinations and small towns compare to big cities, it is much bigger than in Europe or USA. Also I would advise if you are looking for a long term employment contract - it is better to employ local people or people, who own local properties. It is because usually flat rent rate in Russia is quite high compare to average salary and your staff after couple of years work could decide to leave job back to their home place due to economic reason.

Summarizing my brief view about mentality difference between Russians and Europeans businessmen I would say that today there are no big difference in it, the major point is to find a proper local partner in Russia for mutual cooperation or to find an appropriate local service provider to start your enterprise in Russia.


Sergei Kulakov CEO and Chief Consultant Russian Market Entry / feel in Russia like at home

P.S. Feel free to contact me for free consultation

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