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Published on Nov 19, 2013 in Europe, Featured Articles, News

Negotiating in Russia

My partner Dave Dodge and I have negotiated transactions in a great many countries. In those negotiations we’ve noticed that all foreign cultures have a particular negotiating style which sets them apart from negotiators in other countries. This is especially true in Russia where it seems that just about everything requires some degree of negotiation.

Below are some of most common characteristics of the Russian negotiating process.

Characteristics of Russian Negotiations:

  1. Negotiations can be a team sport. Russians take negotiations very seriously. They can negotiate one on one as individuals, or as a team where each team member has a particular strength that can be utilized in the negotiation process. However, unlike in some cultures, the decision maker is unlikely to be present, at least in the initial
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    phases of negotiations. Negotiations are viewed as a process in Russia. Therefore, negotiators will tend to access your credibility and learn as much as they can about you during these initial phases. If the negotiations are deemed to be credible, and progress is being made, the decision maker may join the discussion at some point in the process. However, that’s not always true as the decision maker may continue to relay his decisions to the negotiator and remain in the background.

  2. Negotiations focus on near-term benefits. Political and economic instabilities often make the Russian business environment challenging and therefore focused on short-term benefits. As a result, it’s not advisable to present long-term plans to your Russian counterpart as he’s looking for a proposal that will present him with the greatest short-term benefits.
  3. Negotiations are frequently adversarial. The Russians view negotiations as competitive and, therefore, an adversarial process. They expect that during negotiations one side will prevail and the other will lose. They want to be on the winning team. As a result, Russians sometimes treat negotiations as almost a life and death situation.
  4. Russian negotiators can be impressed. One of the best ways we’ve found to increase our client’s value, and gain leverage in our negotiations with our Russian counterpart, is to convey our client’s expertise and/or technology. The Russians love technology and they have a great deal of respect for Western expertise. Whereas numbers don’t seem to have much of an impact. The most likely reason for this is that numbers are relatively easy to make up and may lack validity. Technology and expertise, on the other hand, are demonstrable.
  5. Disputes may resolve themselves over time. Because negotiations are taken so seriously, heated discussions sometimes occur. When this happens it’s best to adjourn and continue negotiations at some later date when patience prevails. Time tends to be a great healer when negotiating in Russia.
  6. Russian negotiators rarely share information. A Russian negotiator will view the sharing of information as taking away some of his negotiating leverage. He wants to keep his information close to the vest and will only use non-public information when needed. Don’t expect him to educate you. He won’t. He wants to keep you in the dark and take advantage of your lack of information.
  7. Negotiations are usually slow and protracted. The pace of negotiations in Russia is slow. If there ever was a country that required absolute patience, that country would be Russia. Russian negotiators are plodders. They’re extremely methodical and won’t expedite the negotiating process unless it’s in their best interests.
  8. Russian negotiators are polychronic. Expect your Russian counterpart to be polychronic. In other words, they perform multiple tasks contemporaneously. Unlike Western negotiators, who tend to be monochronic and address topics in a sequential order, polychronic negotiators can jump back and forth between topics in an agreement. This often frustrates and distracts many US negotiators who find it difficult to focus when a topic is taken out of sequence.
  9. Russian negotiators view compromise as a sign of weakness. Russian negotiators hate to compromise. They like to dominate and win in the negotiating process and don’t want to concede anything if possible. If they do compromise it’s usually because they’ve been provided adequate concessions in order for them to change their stance. Russians will sometimes compromise if the other side remains resolute and the Russian negotiator still feels he’s still able to achieve his pre-determined objectives and get what he wants and more from the negotiations.
  10. Russian negotiators will employ deceptive techniques. Negotiating in Russia is anything but straightforward. What you see is not what you get.  Deceptive techniques will vary from telling outright lies to sending false or misleading messages. Russian negotiators may also misrepresent the value of an item, feign disinterest, claim they have authority when they don’t, and so on.
  11. Russian negotiators tend to start their pricing at exorbitant levels. It’s not unusual for a Russian negotiator to start their pricing 40 to 50 percent above where they expect to end up. Since concessions don’t come easily in Russia, negotiating down the price can take a great deal of patience and time. In addition, it makes a significant difference to a Russian negotiator if you’re the buyer or the seller, with the buyer always having more leverage in the Russian mindset.
  12. Russian negotiators frequently use pressure techniques. The use of time pressure includes expiring offers which, in our experience, seldom expire. It also includes intransigence as a method to obtain concessions to get negotiations moving again, take-it-or-leave-it offers, which are seldom adhered to, and other pressure techniques designed to make you feel that negotiations are at an impasse and require a concession in order to get back on track and proceed.
  13. Corruption and bribery is common. These are common elements of business transactions in Russia and are often requested as a part of a public or private transaction. Sometimes these payments are designated as rewards or gifts. However they’re designated, many times bribes are an expected part of a business transaction in Russia. The way we usually get around this is to explain that out company has a policy against such payments. Referring to these rewards and gifts as unethical or illegal is not advisable as it’s a clear insult to your Russian counterpart. If your Russian counterpart will still make a sizable profit from the transaction, the bribe will be off the table.
  14. Decision making tends to be hierarchical. Russians have a definitive line of authority and make their decisions at the top with very little, if any, input from those below. Criticizing a decision, or the person making it to you, or another outside party, is seldom done publically in Russia. Therefore, don’t expect to hear your Russian counterpart criticizing the decisions or instructions he’s been given from above. He may do that in private with those he knows, but he’ll follow his instructions to the letter whether or not he agrees with them. In addition, even if you push your counterpart to make a decision he’ll wait until your request is relayed to the proper decision maker and a decision is passed down.
  15. Contracts are not always adhered to. Russians take contracts, at least on their side, as subjective and not cast in concrete. Indeed, contracts in Russia are often moving targets. Russians will sometimes press for concessions after a contract is signed and may, at times, simply not adhere to portions of the contract while fully expecting you to be compliant. The best way to try and prevent a breach of contract on their part is to create a strong relationship with your Russian counterpart. In Russia, relationships can make a huge difference in keeping the company you’re working with compliant, as well as ensuring that your transaction proceeds smoothly in a country where foreigners have very little leverage.

Alan Refkin

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