Russia

1
Culture The Key to Global Business
Presentation on RUSSIA
Schulich School of Business January, 2008
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Who Is Who?
Oxana Fedorova Pskov, 1977
Natalia Vodianova Nizhni Novgorod 1982
Maria Sharapova Nyaganj , Siberia 1987
Anastasia Volochkova Saint-Petersburg, 1977
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Outline

• Geography
• Business environment
• Business etiquette
• Culture

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Geopolitical Changes, 1991
USSR, 15 republics
CIS, 12 independent states
Azerbaijan Armenia Belarus Georgia Kazakhstan Kyrg
yzstan Moldova Tajikistan Turkmenistan Uzbekistan
Ukraine
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Cities with population over 1million
Moscow 12 million people Saint-Petersburg
4.5 million people Novosibirsk 1.4 million
people Yekaterinburg 1.3 million
people Nizhniy Novgorod 1.3 million
people Samara 1.1 million people
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Climate Challenges
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Stereotype Russia is the country of winter
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Moscow is not much colder than Toronto
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But Sochi is warmer than Vancouver!
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Spring
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Summer
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Autumn
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that takes us close to...
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Enjoyable Winter!
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The biggest territory in the world

• 16 neighboring countries
• 13 seas, 4 climatic zones, 1/9 of Earths land
• (1.8 times the size of the US)
• 11 time zones (reference to Moscow time)
• 142 million people (4/5 in European part)
• 160 different ethnic groups and indigenous
  peoples
• Christianity, Islam, Buddhism, Judaism, etc.

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Business Environment

• August 1991 new era in Russian history
• Transformation continues
• Changes in property system (privatization,
  nationalization, land inheritance)
• Changes in tax system (personal income tax is
  flat and equal to 13)
• Changes in legal system, government structure,
  elimination of corruption and bureaucracy

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Stereotype Russia is a communist country
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Yes, most of us were born in the Soviet Union
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Yes, we keep monuments of Lenin built in the USSR
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Russia is a democratic country
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Economic environment

• GDP, Per capita - 12.200 USD in 2006, 71.1 of
  population is between 15-64
• Labor force - 74.26 million (2006 est.)
• Exports petroleum, natural gas, wood, metals,
  chemicals, and a wide variety of civilian and
  military manufactures
• Imports machinery, equipment, consumer goods,
  medicines, meat, sugar, semifinished metal
  products
• Moscow, St- Petersburg are major consumers
  markets 13 second-tier cities (over 1 mln
  people) - Novosibirsk, Chelyabinsk, Samara,
  Kazan, Nizhny Novgorod

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Economic Growth by Sectors
Source World Bank Russia Economic Report, Nov.
2007

• In 9M-2007 Construction 23.5 , Retail trade
  15 ,
• Manufacturing and Base
  industries 10

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Foreign Capital in Russia

• Foreign investment in 1991-1995 - 5.0 billion
  USD
• Foreign inv. in Jan-Sept 2007 - 87.5
  billion USD
• (source
  http/finance.rol.ru)

Accumulated foreign capital by July 2007
176,516 Billion USD
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Economic environmenthttps//www.cia.gov/library/p
ublications/the-world-factbook, 2006
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Business Extreme
In Russia there are 53 US dollar billionaires 98
of population earns less than 1000 per month
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Just by looking at the numbers...
Sources Forbes.com/lists/2007/10/07billionaires_a
ll_slide.html
Responsible Competitiveness Index, 2007, top 20,
AccountAbility, July 2007
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Business Challenges

• Climate and Logistics
• ¼ of the territory is above Arctic circle
• Major sea ports are frozen 6 months a year
• High transportation costs
• Seasonality
• Decision making
• Slow decision-making due to hierarchical
  structure
• High level of bureaucracy and corruption
• Communication
• Language, values
• High tendency to avoid law and regulations,
  therefore huge power of government agencies tax
  authorities, courts, enforcement, fire and
  sanitation controllers

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Business Etiquette

• Handshake
• Formal communication
• Appointments
• Gifts
• Follow-up
• Networking
• Hospitality

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Handshake

• Use your RIGHT hand only
• Take off your glove BEFORE handshaking
• If woman gives a hand for handshake, handshake

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Address With Respect

• Use name Patronymic name
• No title
• No more Tovarisch
• Examples
• Vladimir Vladimirovich Putin
• Marina Nickolaevna
• Irina Alexandrovna
• Kirill Vyacheslavovich
• Angelika Rustemovna

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Appointments

• Make in advance
• Confirm a few days before and on the day of
  meeting
• Dont make appointments after statutory holidays
• No business January 1 to 15, May 1 to 10

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Gifts

• New Year (December 31)
• Womens Day (March 8)
• Professional holidays
• Birthdays

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Russians do not write the follow-up letters

• Dont expect follow up letters
• Your follow-up / thank you letters are considered
  OK
• Better to call

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Network is EXTREMELY important for success

• Topics to discuss
• Changes and current events, habits
• Economic difficulties
• Positive contrasts and comparisons between Russia
  and your country
• Books, Art, Films

• Topics to avoid
• Complaints about Russia
• Ethnic minorities
• Politics
• Religion
• Comparing/contrasting Russia to other developing
  countries
• Comparing/contrasting Moscow and Saint Petersburg
  

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Hospitality

• You can bring some candy/flowers/alcohol
• Never eat before coming to Russians
• Eating much is a sign of appreciation
• Strong drinks
• are drunk at shot

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Stereotype Russians are heavy drinkers
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False!Alcohol per-capita consumption, source
World Health Organization
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Cuisine

• 4- course meal salad, soup, main meal and
  dessert
• Traditional Russian food
• Schi soup

Bliny with caviar
Stuffed fish
Pirogy
Roasted pig
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Cross-Cultural Comparisonwww.kwintessential.co.uk
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Culture - Unique coexistence of Europe and Asia
Mosque in Kazan
Contemporary Moscow City
Two-headed eagle looks in both directions
Russian Versailles Peterhoff
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National Treasures The Hermitage and Tretyakov
Art Galleries

• The State Hermitage Museum, St. Petersburg - the
  world's largest art collection with over 3
  million masterpieces.
• Sotheby's, Christie's Report Record Russian Art
  Sales, in 2007 totaled 324.9 million.

Tretyakov Gallery, Moscow
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Architectural Monuments
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National Treasures The Bolshoi (1776) and
Mariinsky (1782) Theatres
Worlds recognized tradition of ballet and music

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Music

• Pyotr Tchaikovsky
• Sergey Rahmaninov
• Dmitri Shostakovich

Ballets Swan Lake, The Nutcracker Sleeping
Beauty One of the last great champions of the
Romantic style of European classical
music Opera Lady Macbeth of Mtsensk
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Literature

• Lev Tolstoi
• Fyodor Dostoevsky
• Anton Chekhov

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Extreme Tourism
Under- ice diving in Valdai
Climbing Elbrus
Fishing in Baikal the worlds deepest lake
Kamchatka Peninsula Volcano. Climbing and
mountain biking
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Sports
Tennis
Ice Skating
Gymnastics
Ice Hockey
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 COUNTDOWN TO THE 2014 GAMES IN
SOCHI2207   DAYS

• Sochi is
• On the same latitude with Toronto, Nice and the
  Gobi desert
• The most popular resort region of Russia
• Enjoys the most northern subtropical climate
  on earth

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Welcome to Russia!
Schulich School of Business January, 2008