Template:Negotiating with a Russian

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Business Negotiations Between Americans and Russians Source: Louneva, Tanya, "Business Negotiations Between Americans and Russians" (2010). Wharton Research Scholars. 57. https://repository.upenn.edu/cgi/viewcontent.cgi?article=1059&context=wharton_research_scholars Both Americans and Russians value: Negotiation goals time sensitivity agreement building, agreement form, communications and personal styles. There are some differences between the negotiating styles of Russians and Americans. For instance, Russians may rely more on interpersonal relationships and indirect communications. Russians are emotionally-driven in negotiations. Russia has a low-trust environment, because it is a high context culture. This could be due to a weak regulatory environment, historical constraints, and rising disposable income levels. Therefore, the key in negotiations in Russia is to built trust. After this is done, a competitive advantage is gained since it will take a long time to build a level of trust with another partner. Americans have a high-trust environment, because it is a low-context culture, as there is a strong regulatory framework and a history of law enforcement. Therefore, building trust is easier, and it is not viewed as a competitive advantage; instead, counterparties often rely more on the signed contracts than on mutual trust. In Russia, the establishment of trust is exhibited through five behaviors: (1) putting the relationship first, (2) having a low sensitivity to time so that trust can be patiently established, (3) forming relationships “outside the boardroom”, (4) focusing on top-down decision making while disregarding the details, and (5) employing high emotions. Russian Business Meeting Characteristics Russian Business Meeting Characteristics There are a few ground rules you should be aware of about a Russian business meeting: 1. Timeliness: While Russians are not as prompt as Germans, Russians are rather prompt. So being 5 minutes late is ok, anything later needs an excuse. Preferably by calling ahead. For example, "We are stuck in traffic". Being 30-40 or more minutes late without a very good reason, such as the Italians or Spaniards tend to do, is considered very bad manners. Note: If during the meeting you agree to set due dates or deadlines, be sure to accomplish them by the agreed upon date. Everything during the meeting will be set down in writing in the Minutes of Meeting and not meeting due dates is a major blow to one's credibility and reliability in Russia. 2. Inclusiveness It is considered very rude to turn your back on someone while continuing your conversation with another person in the group...one to remember for non-Russians who have no such issues. This additionally means, turning to your co-workers, and beginning a conversation in a separate language not understood by everyone. This is also considered very rude. If the need arises to have such a discussion, request some time alone, a break from the meeting and maybe a separate room to do so in. 3. Emotions: While getting into an emotionally "hot" discussion can happen, never over do it. Never get personal and never ever ever throw a temper tantrum and walk out. The author had an Engineering - Procurement - Construction (EPC) project manager who would do this. He had zero respect from the other side who had to beg him to return. This is viewed as unmanly and childish. 4. Shaking Hands: Shake hands with everyone and anyone who enters the room after the start and before you hand out or receive business cards individually. When leaving also shake everyone's hand. Walking by some person who stops to talk to someone in your party? Shake his hand. And make it a firm hand shake. Additionally, women shake hands also, so not to shake the hand of a woman is a grave insult. 5. If a woman enters the room to join the meeting? Get up and show respect, as if it was a senior person, and since 42% of Russian executives are women (twice that of the "progressive" West) it just may be. Additionally, if there are no more seats, surrender yours to the woman. 6. Bargain Hard Russian price negotiations used to be described as something between a mugging and a bar fight. Its gotten a bit more civilized but....The author recalls remembering fighting a supplier over each 0.01$ of a price on forgings. The 2 groupsfinally agreed to limit it to just full round dollars or they would never get it done. This resulted in a 15% savings from already low prices which saved the author's company several million dollars. 7. Never take an initial response of "NO IT CANT BE DONE" as the final answer. If the junior or secondary management says no, go straight to the senior leadership. If they say yes it will be yes. Equally, since Russian culture is conservative, use your persuasion skills to sell the idea, either by its merits or by its profitability. 8. Figure out who the trusted lieutenant of the general director is. Russian chain of commands are linier except for that special lieutenant who has the ear of the boss. 9. Meetings must come to some decisions... ....why else are you in a meeting (except if its just an introductory meeting). People around the equator like to have meetings for the sake of meetings and no decisions are reached, this is very infuriating to Russians. Most meetings usually have a set agenda and the agenda is set to come to a decision. 10. All meetings will end in a Minutes of the Meeting (MoM) with all parties involved signing. Sometimes getting the MoM done takes longer than the whole meeting and all parties most definitely must sign it, so be careful what actually goes in to it, as this is a legal document.