Russian negotiation style

Intercultural differences between West and East

A closer look into the Russian negotiation style

No secret that the west and Russia clash with different views and styles of communication. When taking a closer look at the intercultural dimensions of Hofstede, for example, you can already see vast cultural differences. What does this mean for your business communication? What should you be aware of when negotiating with the West and the East?

Keld Jensen and Michael Gates spoke about the Russian negotiation style and how to prepare for intercultural communication. Keld Jensen is an expert in negotiation, trust and behavioral economics. While he is a managing director of a listed Scandinavian company, he has more than 30 years of experience in international management, negotiation and communication. Michael Gates, managing director of CrossCulture, is an international expert on cross-cultural management. They wanted to share the Russian negotiation style with their expertise and background and gave insightful examples of why Europe and Russia often misunderstand each other.

Before we continue, we would like to share a disclaimer. The main goal is to educate, not to generalize, the Russian business culture. It is like the saying that all Dutch are direct: while this is generally true, very indirect Dutch also exists. Furthermore, we wish to give insights on the intercultural differences between Russia and the West, not to justify the actions of Putin.

Russians tend to trust 'the individual' rather than 'the system'

Gates stated that trust is an issue in general. Furthermore, there seems to be a gap in trust in every culture, especially when you take a closer look into ‘official’ and ‘personal’ trust. It is a long-time dilemma: If your friend commits a crime, will you lie in court to save them? In some countries, such as Russia and Korea, the answer is often “yes.” Yet, in other countries, such as Sweden and Finland, the answer is often “no.” These answers have to do with whether the people trust the system or the individual.

"I win, you lose"

When taking a closer look into negotiation, Russians tend to find winning the most important outcome. Gates stated that the Russian culture includes obsessions with strength and power. However, when you compare this obsession of strength to, for example, the United States, the Russian Federation tends to be more passive and patient, like Asian cultures. So if Russians tend to wait for the other party to speak first but want to ‘win,’ how do you prepare for negotiations?

Try to find a third way of negotiating instead of seeing negotiations as positional with a win-lose or lose-lose situation. Instead of acting from your frame of reference, try to understand the other party. What are the characteristics? How can the flow of communication go smoothly?

Negotiation styles

Important factors to know before you start negotiating with Russian enterprises

Geographically, Russia is divided into European Russia and Asian Russia since this country shares its land borders with sixteen countries. Therefore, it is no surprise that the Russian business and negotiation culture is European and Asian. While Russia is relationship-based like Europe, there are vast differences. For example, Russia is more passive and has much patience for doing business. As a European company, if you wish to make it big in Russia, you can only do so by having an extensive Russian network with solid relationships. When European companies negotiate, there is already a level of trust, namely the expectation that the other party also wishes the best for you. In Russia, this is no such thing; Business people tend to be more cautious and want to know what is in it for them.

The start of the negotiation: Be prepared to start strong

When your company starts negotiating with a Russian counterpart, they will most likely ask you first to tell what you think. Afterward, you will most likely hear a form of resistance due to the high level of cautiousness and suspicion. So you might wonder: How do I deal with this? How do I have a healthy negotiation with a partner who does not entirely seem to trust me? Well, Gates stated that you must be strict with Russians.

Russian governments and companies prefer hard power over European ‘soft power.’ To fight pressure, you need to respond with force. Negotiating expects to recommend starting your Russian business journey small but steady. Be well prepared, and expect matters to start slowly. Just as starting doing business in Germany, it takes time for the market participants to trust you fully. If you are working with trial and error, make sure not to do business with life-changing parties that negatively affect your business.

During the negotiation: Mirror and hold your ground

Negotiating and doing business in Russia is a long-term process with much pushing and pulling. It also often happens that Russians have different perceptions of truth. Just as in Korean culture, it is allowed to tell white lies. The views on white lies are often the biggest barricade between European and Russian business; being aware of this will benefit you during negotiations.

Russians tend to be cautious listeners interested in European enterprises, yet also suspicious. Russian culture is full of emotion. However, they do not show emotion and prefer apathy over empathy. You can see this in the way Russians smile. In the Netherlands, it is not uncommon to see people do small talk and smile while doing business. In Russian business life, smiling is seen as a form of intelligence. So actually, if you are communicating with Russian business people, and they never smile at you: See this as a compliment, not an attack. And if you smile, make sure to let your Russian counterparts know it is a form of politeness and trust from the west. Are you unsure how to act? Play it safe and secure by mirroring your negotiation partners.

Finishing the negotiation: Be patient and respectful

As seen in the infographic at the beginning of this article, Russia has a high level of power distance. In general, Russians have different views on trust based on system and personal levels. However, one thing is clear: If you want negotiating to go well, you must have a person in charge that is powerful and a true leader. Russia’s business style is very autocratic.

If you want to finish the negotiation on a positive matter, be sure to build and maintain a close relationship with the CEO and the people the CEO fully trusts. You will find that the process will go much quicker, and the level of trust gaining to go much faster.

 

Jensen shared a clear overview of steps to take during negotiations, namely:

-Replace if necessary. Does the personal chemistry not work as intended? Do not be afraid to replace negotiators on both sides.

 

– Silence is key. If you are unsure how to react to certain provocations, respond by silence.

 

-Do not be afraid to delay the negotiations. Think long-term.

-Be clear in your communication. Choose precise formulations and provide an alternative when necessary.

 

-Empathy works in the west, apathy in the east — play along with your negotiator. Do not be afraid to think from a different mindset than you usually do.

 

-Ask questions to make the other party feel heard and show that you respect them.

 

-If you have no other option, fighting is more effective than giving in.

Conclusion

In the end, Russian organizations that are internationally active will be less challenging to negotiate with than Russian-only enterprises. Currently, doing business with Russia is not recommended due to international sanctions and actions. We hope to show that it is easy to misunderstand other cultures. If you have any questions regarding your international business, please do not hesitate to reach out to us. We will gladly assist you.