Den Amerikanske Ambassade, Moskva.
Redaktion: Øst Magasinet
August 1998
WORKING WITH RUSSIAN BUSINESS PARTNERS
PARTNERS
TO DO BUSINESS IN RUSSIA, YOU MUST DO
BUSINESS WITH RUSSIANS. TO DO BUSINESS WITH
RUSSIANS, YOU MUST HAVE PARTNERS. YOU MAY NEED A
PARTNER TO BUY OR DISTRIBUTE YOUR GOODS, A PARTNER
FOR JOINT MANUFACTURING, OR A PARTNER TO MAKE
INTRODUCTIONS AND ESTABLISH CONTACTS.
IN THE EARLY RUSH TO ENTER THIS PROMISING
MARKET, MANY COMPANIES JUMPED AT THE
CHANCE TO ENTER FORMAL PARTNERSHIP AND JOINT
VENTURE AGREEMENTS. RUSSIANS, FOR THEIR PART,
FREQUENTLY INSISTED ON SIGNING CEREMONIES AND AGREEMENTS.
THE RESULTS WERE OFTEN BAD.
YOU CAN DO BUSINESS IN RUSSIA WITHOUT A FORMAL LEGAL PARTNER
OR JOINT VENTURE. BUT YOU CANNOT DO IT WITHOUT
INFORMAL PARTNERS.
PERHAPS THE MOST IMPORTANT SKILL OF THE
WESTERN MANAGER IN RUSSIA IS THE ABILITY TO SAY
"NO". RUSSIAN BUSINESSMEN CAN BE AGGRESSIVE AND
PERSISTENT; AND MANY WESTERNERS, NEW TO THE
COUNTRY, HAVE A HARD TIME TURNING DOWN WHAT SEEMS
LIKE AN INNOCENT AGREEMENT OR PROTOCOL. MANY
RUSSIANS WILL WANT YOU TO JUMP INTO JOINT VENTURE
AGREEMENTS OR PARTNERSHIPS PREMATURELY. BEFORE
YOU ENTER INTO A FORMAL RELATIONSHIP (IF YOU DO SO
AT ALL), SPEND SEVERAL MONTHS WORKING LESS
FORMALLY. FOR EXAMPLE, IF YOUR RUSSIAN PARTNER
PRESSES FOR A JOINT VENTURE, SEE HOW THE PARTNER
DOES SELLING SOME OF YOUR PRODUCTS FIRST. AFTER
THE PARTNER HAS SOLD PRODUCT, OFFER A DISTRIBUTION
AGREEMENT FOR A SINGLE REGION OF RUSSIA.
ABOVE ALL, DO NOT SIGN ANY AGREEMENT,
WITHOUT CONSULTING A TRUSTED ATTORNEY WITH SEVERAL
YEARS OF EXPERIENCE IN RUSSIA. EVEN THE MOST
INNOCENT PROTOCOL, SIGNED AFTER THE CHAMPAGNE
IN THE FIRST MEETING, MAY BIND YOU UNDER RUSSIAN LAW TO
SIGN A MORE ELABORATE AGREEMENT
LATER.
CHOOSING A RUSSIAN PARTNER
RUSSIAN MANAGERS OFTEN COME INTO A
NEGOTIATION WITH VASTLY DIFFERENT ASSUMPTIONS AND
OBJECTIVES. RUSSIA DOES NOT HAVE A LONG HISTORY
OF CAPITALISM, AND THE BUSINESS ETHICS AND COMMON
ASSUMPTIONS OF THE WESTERN BUSINESS WORLD ARE
STILL PENETRATING. IN GENERAL, YOU WILL BE FACED
WITH TWO TYPES OF POSSIBLE PARTNERS -- THE OLD AND
THE NEW.
THE FACTORY MANAGERS
THE OLD RUSSIAN BUSINESS PARTNER IS THE
GENERAL MANAGER OF A LARGE RUSSIAN FACTORY. HE
(AND IT IS NEARLY ALWAYS A "HE") CONTROLS A LARGE
LOW-COST, UNDER-USED, MANUFACTURING FACILITY. HE
HAS GOOD CONNECTIONS IN THE LOCAL AND NATIONAL
GOVERNMENT, AND WITH DOZENS OF LOCAL SUPPLIERS.
HE HAS BEEN DISTRIBUTING HIS PRODUCT TO A ENORMOUS
WEB OF DISTRIBUTORS THAT SPANNED THE ENTIRE FORMER
SOVIET UNION. ("THE FACTORY NAMED AFTER LENIN
PRODUCED 98% OF THE FORKLIFTS IN THE FORMER SOVIET
UNION." IS A TYPICAL AND ACCURATE BOAST.) THOUGH
THE OLD RUSSIAN HAS SPLENDID CONNECTIONS, HE COMES
TO THE NEGOTIATING TABLE WITH VASTLY DIFFERENT
OBJECTIVES. IN HIS HEART, HE OFTEN REALLY WANTS
YOU TO GIVE HIM $10 MILLION TO FINANCE NEW
EQUIPMENT SO HE CAN CONTINUE TO PRODUCE HIS
PRODUCTS FOR HIS CUSTOMERS. BECAUSE THE CENTRAL
GOVERNMENT NO LONGER GIVES HIM MUCH MONEY, HE MAY
BE WILLING TO ENTER A JOINT VENTURE AND ENDURE
YOUR COMPANY'S MANAGEMENT AND TECHNICAL HELP TO
GET THE MONEY AND EQUIPMENT HE SEEKS. OTHER
OPTIONS, SUCH AS DISTRIBUTING YOUR EQUIPMENT, ARE
AN INSULT TO HIS FACTORY. NONETHELESS, MANY U.S.
COMPANIES, INCLUDING CATERPILLAR AND DRESSER, HAVE
FOUND THAT OLD RUSSIANS AND THEIR FACTORIES BECOME
RELIABLE AND REWARDING BUSINESS PARTNERS.
THE TRADERS
THE NEW RUSSIAN BUSINESS PARTNER IS OFTEN
REALLY A TRADER. SOMETIMES, HE GOT HIS START IN
THE BLACK MARKETS OF THE BREZHNEV ERA. MOST OF
THE TIME, HE OR SHE STARTED A NEW TRADING AND
DISTRIBUTION FIRM FROM NOTHING IN THE LAST THREE
YEARS. IN RUSSIA, TO OWN WESTERN GOODS IS TO HAVE
PRESTIGE, AND SOME SECURITY. TO TRADE WESTERN
GOODS IS TO BECOME RICH, AND MANY NEW FORTUNES
HAVE BEEN MADE BY DEALING IN MARS BARS. YOUR NEW
RUSSIAN PARTNER MAY PROMISE YOU THE WORLD:
DISTRIBUTION THROUGHOUT RUSSIA, HELP WITH CUSTOMS,
HELP WITH CERTIFICATION, AND SPACE IN HIS OFFICE.
WHAT HE REALLY MEANS IS THAT HE WILL GIVE YOU HIS
BEST EFFORT, WHICH MAY OR MAY NOT TURN OUT TO BE
ENOUGH. OFTEN, YOUR NEW RUSSIAN PARTNER WHO
CLAIMS HE CAN DISTRIBUTE YOUR PRODUCT THROUGHOUT
RUSSIA REALLY CONTROLS A FEW KIOSKS IN DOWNTOWN
MOSCOW. OFTEN, HIS DISTRIBUTION SYSTEM IN SIBERIA
IS REALLY A CLOSE FRIENDSHIP WITH A MAN WHO DRIVES
A TRUCK TO KRASNOYARSK WHO CAN LOAD SOME OF YOUR
PRODUCT IN THE CAB WITH HIM TO SELL TO A KIOSK
OWNER HE KNOWS. (SEVERAL WESTERN COMPANIES FOUND
THAT THEIR "URALS DISTRIBUTOR" WAS SELLING THEIR
PRODUCT IN KIOSKS JUST OUTSIDE MOSCOW.) ALL THE
SAME, IN THE NEW RUSSIA, THE NEW RUSSIAN BUSINESS
PARTNER MAY BE IDEAL. DISTRIBUTION SYSTEMS ARE
STILL INFANT; AND, IF YOU FIND THE RIGHT
AGGRESSIVE DISTRIBUTOR, YOU MAY DO VERY WELL.
NEGOTIATING WITH RUSSIANS
ALTHOUGH RUSSIANS ARE INEXPERIENCED IN
WESTERN BUSINESS PRACTICE, THEY ARE OFTEN VERY
SKILLED AND SHREWD NEGOTIATORS. IN MANY, MANY
INSTANCES, A STUBBORN RUSSIAN NEGOTIATOR GETS THE
BEST OF AN BUSINESSMAN WHO IS IN A RUSH TO CLOSE A
DEAL.
FOR NEWCOMERS, NEGOTIATING WITH RUSSIANS CAN
BE A TRYING EXPERIENCE. THE DELAYS, THE FIBS, THE
CONTINUAL NEED TO CONSULT WITH HIGHER AUTHORITY,
AND THE STUBBORNNESS HAVE SENT MANY BUSINESS
DELEGATIONS HOME IN ANGER. HOWEVER, THOSE WHO LIVE
IN RUSSIA AND GET USED TO RUSSIAN TECHNIQUES OFTEN
FIND NEGOTIATING RUSSIAN STYLE TO BE AN INTRICATE,
FORMALIZED GAME OF POWER POLITICS.
TO NEGOTIATE WITH RUSSIANS SUCCESSFULLY, YOU MUST BE
THICK-SKINNED, BULL-HEADED, AND WARM-HEARTED. AND ALWAYS
REMEMBER: THE RUSSIANS ARE THE WORLD'S GREATEST CHESS
PLAYERS.
BE READY FOR THIS:
THE OUTRAGEOUS INITIAL POSITION
THE FIRST PHASE IN RUSSIAN NEGOTIATION IS THE
OUTRAGEOUS INITIAL POSITION. THIS POSITION IS PUT
FORWARD AS A TEST OF YOUR CHARACTER. REGRETTABLY,
AMERICANS, ANXIOUS TO PLEASE, SOMETIMES AGREE TO
THE INITIAL DEMANDS WITH ONLY MINOR CHANGES. THIS
THEN TEACHES THE RUSSIAN THAT HE CAN MAKE FURTHER
OUTRAGEOUS DEMANDS. SOMETIMES, THE INITIAL
POSITION IS USED AS A WAY TO GET THE BUSINESSMAN
ANGRY, OR OFF-BALANCE. DON'T TAKE INITIAL RUSSIAN
POSITIONS TOO SERIOUSLY. OFTEN, IT IS BEST TO
COUNTER WITH YOUR OWN EQUALLY OUTRAGEOUS INITIAL
POSITION.
THE CRITIC
SOMETIMES, A RUSSIAN MANAGER ENTERS A
NEGOTIATION WITH A BURST OF CRITICISM. IN THIS
EXAMPLE, BROKEN PROMISES, LIES, AND BREACH OF TRUST.
THE RUSSIAN THEN REQUESTS CONCESSIONS AS A WAY TO MEND
THE RELATIONSHIP. WHEN THE BUSINESSNMAN RESISTS, THE
RUSSIAN REPEATS THE LITANY, AND THE DEMANDS, OFTEN
WITH GREATER EMOTION. HEAR THE RUSSIAN OUT --
YOU MAY LEARN SOMETHING. THEN, CONSIDER
ATTACK HIM FOR HIS SINS AGAINST YOU;
OR, IF ALL ELSE FAILS, APOLOGIZE. FREQUENTLY, THE
HONEST EXCHANGE OF EMOTIONS PUTS YOUR RELATIONSHIP
ON FIRMER GROUND.
THE SAVIOR
OTHER TIMES, A RUSSIAN MANAGER MAY TELL OF A
TALE OF WOE -- UNPAID WORKERS, LOST ORDERS, A
BANKRUPT FACTORY WITH NO PROSPECTS. DESPITE HIS
POVERTY, BECAUSE HE IS A GOOD HOST, HE SPENDS HIS
LAST RUBLE ON FOOD, DRINK, AND GIFTS FOR HIS
GUEST. HE CALLS UPON THE GOOD-HEARTED
BUSINESSMAN TO HELP HIM IN HIS TROUBLES. (MOST OF
THE TIME, THE FACTORY'S TROUBLES ARE ALL TOO TRUE;
THOUGH, SOMETIMES, THE TROUBLED FACTORY MANAGER
HAS A NEW MERCEDES PARKED OUTSIDE.) MANY
BUSINESSMEN FIND THEMSELVES TRANSFORMED FROM
BUSINESS MANAGERS INTO SOCIAL WORKERS TRYING TO
SAVE A TROUBLED RUSSIAN FACTORY. TRY TO AVOID
THIS. TRY TO ENTER AND MAINTAIN A BUSINESS
RELATIONSHIP BETWEEN EQUALS. THE "FACTORY SAVIOR"
APPROACH TO BUSINESS IN RUSSIA USUALLY ENDS BADLY
FOR BOTH SIDES.
DELAY AS A NEGOTIATING TACTIC
RUSSIANS ARE SKILLED AT USING DELAY AS A
NEGOTIATING TACTIC. WHEN RUSSIANS KNOW YOU ARE
ANXIOUS TO MOVE QUICKLY (USUALLY THE CASE), THEY
WILL USE THIS ANXIETY AGAINST YOU. THEY WILL
DELAY ON SETTING A DATE FOR A MEETING, DELAY ON
FIXING A TIME AND PLACE, DELAY ON REACHING AN
AGREEMENT, AND DELAY ON IMPLEMENTING. THE RUSSIAN
MAY BE USING DELAY AS A WAY TO EXTRACT FURTHER
CONCESSIONS FROM YOU (OR, THE RUSSIAN MAY HAVE
BETTER THINGS TO DO.) SOMETIMES, BUSINESS
DELEGATIONS ARRIVING SUNDAY ARE KEPT STEWING
MONDAY AND TUESDAY JUST SO THE RUSSIANS CAN
ESTABLISH A POSITION OF INITIAL ADVANTAGE DURING
THE WEDNESDAY MEETINGS. DON'T BE IN A RUSH. USE
THIS FREE TIME TO YOUR ADVANTAGE BY MEETING WITH
THE RUSSIAN'S COMPETITORS, OR AT LEAST, SEEING THE
KREMLIN OR HERMITAGE, AND, OFCOURSE, CONSULTING
WITH US&FCS COMMERCIAL OFFICERS.
CONCEALMENT
YOUR RUSSIAN COUNTERPART WILL NOT TELL YOU
EVERYTHING. MAKE SURE YOU DON'T TELL HIM
EVERYTHING. CONCEALMENT -- OF ASSETS, OF RIVALS,
OF TACTICS, OF LEGAL ARGUMENTS, OF TECHNOLOGIES --
IS TRIED AND TRUE STRENGTH OF RUSSIAN NEGOTIATORS.
DON'T FIRE ALL YOUR AMMUNITION IN THE FIRST
ENGAGEMENT. A VALUABLE RUSSIAN SAYING: "DON'T
HURRY TO REPLY, BUT HURRY TO LISTEN."
"I DO NOT HAVE THE AUTHORITY."
RUSSIANS USE THIS PHRASE (AND VARIATIONS) AS
A POLITE WAY OF SAYING "NO." SOMETIMES, IT'S TRUE
-- OTHER TIMES, IT JUST MEANS NO. FEEL FREE TO
USE THIS TACTIC YOURSELF; IT'S WORKS.
"I GET HALF - YOU GET HALF"
RUSSIANS PLACE GREAT STAKE IN RECIPROCITY.
IF YOU GIVE ME THIS, I WILL GIVE YOU THAT.
I GET HALF; YOU GET HALF. YOU CAN USE THIS NATIONAL
DESIRE FOR RECIPROCITY AS A TOOL TO REACHING
AGREEMENT -- EVENTUALLY.