Business Ethics Get Codified

7/24/2019 Business Ethics Get Codified

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Business Ethics Get Codified ByKhristina Narizhnaya

Feb. 24 2011 00:00

Last edited 19:02

Business ethics are improvin in !ussia" on paper at #east.

$ore #oca# companies are emu#atin %estern standards and adoptin ethics

codes to he#p them operate in a corrupt environment and create the appearance

o& trust'orthiness.

(uch codes reu#ate everythin a company)s emp#oyees do" &rom ho' they

dress to ho' they act in case a bribe is o*ered. Businessmen +o,in#y compare

them to a &amous poem by -#adimir $aya,ovs,y ca##ed %hat /s ood and %hat

/s Bad" in 'hich a &ather ives simp#e #i&euidin advice to his son.

/n the #ast three years" state companies" inc#udin (berban, and !osne&t" have

estab#ished codes &or their 'or,ers as part o& resident 3mitry $edvedev)s

initiative to increase transparency. azprom has beun puttin toether its

ethics uide#ines" 'hich cou#d ta,e more than a year to dep#oy. rivate

companies have &o##o'ed suit.

ompanies are re#uctant to ta#, about the e5ciency o& the codes" ho'ever.

L6Koi# added a code &or 'or,ers at the end o& #ast year. (ince L6Koi# has o5ces

in many reions o& the 'or#d and a sta* o& about 170"000" a common seto& ru#es 'as necessary" L6Koi# spo,esman -#adimir (ima,ov said.

%ere there any in&ractions in terms o& business ethics8 & course there 'ere"

(ima,ov said" 'ithout e#aboratin. L6Koi# estab#ished a committee to monitor

the e5cacy o& the code" but (ima,ov said he cou#dn)t assess 'hether

the measure is 'or,in yet since at #east a ha#& a year is necessary.

/t)s not +ust the ban,s and oi# and as iants that are &orma#izin an ethics

cu#ture. Last year" members o& pora o& !ussia" an association o& mediumsized

businesses" sined a reso#ution on ethica# conduct.

pora member coni,a orporation" 'hich inc#udes shoe stores" industria#

e;uipment and rea# estate investment" pub#ished a set o& ru#es &or emp#oyees

in 200


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/t is ood &or the imae = and c#ients" investors and partners respond 'ith

trust" said coni,a chie& e>ecutive ?ndrei /#iopu#o.

(ome e>perts see the ethics code trend as an e>amp#e o& trans&ormin

the economic mode# &rom 'i#d capita#ism to socia##y responsib#e business.

Business &ee#s this need and tries to &u#@## it" said ?#e>ander (ereyev"

a pro&essor at the (choo# o& Aiher conomics. /t miht seem strane" but

peop#e #i,e to #ive by the ru#es.

ompanies are adoptin codes based on internationa# best practices and inc#ude

c#auses on conicts o& interest and socia# responsibi#ity.

British!ussian con#omerate CNKB has one o& the most respected codes in the

country" said $i,hai# Kuznetsov" head o& the ?ssociation o& /ndependent3irectors. Ais roup consu#ts companies on imp#ementin ethica# codes

and other 'ays to improve their practices.

CNKB)s code out#ines a set o& princip#es coverin ethica# conduct" emp#oyee

behavior" e>terna# re#ationships" hea#th" sa&ety" security and environmenta#

per&ormance" contro# and @nance. ? company spo,esman to#d Che $osco'

Cimes that they have never had any issues 'ith the codes" 'hich 'ere

imp#emented in 2004.

odes are not a comp#ete#y ne' &orein phenomenon. 3e#ovaya !ossia"

an association o& DE companies in the retai# and &ranchise sector" inc#udin

the E roup" the country)s #eadin rocer" has re;uired members to sin

a code o& ethics since its &oundin in the 1990s. ?n updated version o& the code

'as ro##ed out in 2007.

Che association)s director" Gury $i,ha#chen,o" said a speci@c bene@t o& their

code has been a reduction in &ranchise &raud = a common occurrence in 'hich

unauthorized aents se## &ranchises to unsuspectin reiona# sma## businessmen.

?nother advantae o& tryin to et emp#oyees in the &ranchise sector

to subscribe to codes o& conduct is that" by standardizin behavior

and e>pectations" they come c#oser to providin uni&orm ;ua#ity o& customer

service" $i,ha#chen,o said.


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But e*ective codes o& conduct are not yet the mainstream. Kuznetsov said that

#ess than 100 companies are @rm#y committed to their codes.

/t)s more #i,e a &acade" somethin needed to improve the imae to outsiders"

not somethin to ta,e serious#y" said Kuznetsov" 'hose c#ients rane &rom iant

state companies to private businesses 'ith an annua# turnover o& H100 mi##ion.

Che ommittee to Fiht orruption" an independent pub#ic oranization that

'or,s to batt#e ra&t" started ear#ier this month to research the e*ect

o& companies) ethics codes on overnance.

Che committee 'i## po## D0 erman companies operatin in !ussia that sined

anticorruption measures #ast year. Che resu#ts 'i## be pub#ished in the ?pri#

issue o& the committee)s maazine.

Che companies sined the codes" but do they &o##o' them8 committee

chairman ?nato#y o#ubev said. Nobody has this in&ormation.

?#thouh many companies imp#emented codes over the #ast three years"

corruption is at a 10year hih. !ussia scored a #o' 2.1 on the Cransparency

/nternationa# orruption erceptions /nde>" in 2010 = do'n &rom 2.2 in 2009

and #ess than the 10year averae o& 2.4.

$any #oca# companies are cynica# 'hen it comes to ethics codes.

Che o'ner o& a midsized trave# aent #auhed 'hen as,ed 'hether there is

a document that out#ines ethics &or emp#oyees o& her company.

Chere are no 'ritten postu#ates o& behavior" she said.

/n their emp#oyment contract there are 'ritten uide#ines concernin customer

service" but that)s a##. Che aency)s more than 1E0 'or,ers are e>pected

to sho' ood +udment and respect to'ard the company and its manaement.

Che company does not accept bribes" but 'hen it comes to ivin" it)sa di*erent story.

Chere is no 'ay to et around it. /t)s not ca##ed a bribe" it)s a )than,you")

the trave# aency)s o'ner said.


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Chan,yous inc#ude &ree or reduced internationa# trave# &ares &or ta> o5cers 'ho

inspect the company)s @nances and monetary presents &or the @remen 'ho

approve the sa&ety o& the company)s o5ces.

/nternationa# companies are not e>empt either.

Last year" a number o& businesses 'ere cauht in corruption scanda#s" inc#udin

Ae'#ettac,ard" 3aim#er" (iemens" /K? and the ('iss #oistics company

ana#pina. Che 6.(. 3epartment o& Iustice has pressed chares aainst severa#

o& them &or vio#atin the Forein orrupt ractices ?ct.

?#thouh" #i,e many internationa# companies" A has a detai#ed code o& conduct

pub#ished open#y on its 'eb site" the company)s $osco' o5ce 'as raided #ast

?pri# on suspicion that emp#oyees paid bribes in e>chane &or a H44.E mi##ion

contract to supp#y e;uipment to the rosecutor enera#)s 5ce.

A dec#ined to comment on its ethics code &or this artic#e" citin the onoin

investiation.

? &ormer A !ussia chie& o& @nancia# operations to#d Che $osco' Cimes that

companies seem to succeed at imp#ementin their 'or#d'ide codes in !ussia"

since the number o& pub#ic#y reported cases o& misconduct is re#ative#y sma##

'hen compared 'ith the #are number o& transactions that bi companies #i,e

A carry out.

But" he said" in enera#" the motto" /n" !ome" do as the !omans do is ;uite

appropriate. /t)s very hard" i& not impossib#e" to a#'ays o aainst

the mainstream.

ne o& the ,ey &eedbac, e#ements o& most ethics codes re;uires an emp#oyee

to te## a superior or ca## a hot#ine 'hen he sees a co'or,er doin somethin

'ron. But this type o& action is traditiona##y seen in !ussia as tatt#in. /t)s not

a part o& our cu#ture" Kuznetsov said.

Che ommittee to Fiht orruption)s o#ubev said a#thouh there are codes"

there are no instruments to app#y them practica##y to the #oca# rea#ity. /& the code

says don)t ive bribes" but a ta> or a @re o5cia# is threatenin to impose

e>orbitant @nes un#ess you pay up" 'hat can you do8 Chis is especia##y true

in #iht o& an ine*ective +udicia# system and #a' en&orcement.


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(ereyev o& the Aiher (choo# o& conomics said it)s natura# that peop#e are

#i,e#y to be s,eptica# to'ard a set o& ru#es imposed &rom above that they 'ere

not invo#ved in creatin.

Che apathy evo,ed by the $ora# ode &or Bui#ders o& ommunism" a set o& 12

ru#es that every proper (oviet citizen 'as supposed to &o##o'" is sti## &resh even

in midd#eaed !ussians) minds" (ereyev said.

coni,a)s /#iopu#o said one 'ay to et emp#oyees to ta,e codes serious#y is

to inc#ude them in the dra&tin.

Chey have to &ee# #i,e it is done 'ith their interests ta,en into consideration"

/#iopu#o said.

(ma## companies are not #i,e#y to have a document that out#ines emp#oyees)conduct" said Catyana !yba,ova" director o& the enter &or (tudy o& orporate

itizenship. But she has seen many companies deve#op codes as they ro'. /t is

no' considered ood &orm to have an ethics code.

Litt#e by #itt#e" 'hether they 'ant to or not" they are rea#izin that it is

important = it inuences pub#ic opinion" investment" it ma,es communication

easier" !yba,ova said.

Both Kuznetsov and the &ormer A @nancia# o5cer aree that the youner

eneration" comin o& ae in a more businessoriented society" is more #i,e#y

to respect ethics codes.

Che bi companies have p#anted the as" so no' hope&u##y everyone e#se 'i##

&o##o'" Kuznetsov said. But" contemp#atin the demand &or his company)s

consu#tin services on ethics codes imp#ementation" he added" / have to say"

peop#e aren)t e>act#y ,noc,in on our doors.

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Russian Business EthicsTo many Russian businesses, business ethics remain terra incognita !"en some entre#reneurs who $eci$e to enro%%

in time&consuming an$ e'#ensi"e ()* #rograms "iew business ethics an$ socia% res#onsibi%ity as obstac%es im#ose$

+rom outsi$e *mong the #ain+u%%y +ew structures in t -etersburg that #ossess re%ati"e%y so%i$ e'#erience in teaching


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business ethics, each +o%%ows a strategy o+ its own to reach the common goa% &showing that business ethics is in +act

an e++ecti"e too% to make a #ro+it !'#erts in the +ie%$ are con"ince$ that as businesses become %onger&term #ro+it

oriente$, ethics wi%% natura%%y become an in$is#ensab%e com#onent .owe"er, they a$$, by teaching ethics e'tensi"e%y

in ()* #rograms the #rocess can be cata%y/e$

*cknow%e$ge$ business ethics s#ecia%ist ury )%ago", hea$ o+ the nternationa% (anagement $e#artment at t

-etersburg tate 2ni"ersity3s choo% o+ (anagement, sai$ that unti% the en$ o+ the 1440s, business was seen asunethica% by $e+inition )usiness ethics were seen not as a "ita% yet or$inary e%ement o+ business $e"e%o#ment, but as

a 5se#arate "a%uation5 main%y connecte$ with the mora%s o+ society as a who%e ti%% %acking, )%ago" sai$, is a c%ear

in$ication that ethics are c%ose%y %inke$ to socia% res#onsibi%ity, the %atter o+ten being misinter#rete$ in a narrow sense

as charity 6n the other han$, )%ago" sai$, 7ust a +ew years ago the !$ucation (inistry inc%u$e$ business ethics as a

man$atory com#onent into the ()* )usiness an$ ociety course, which signa%e$ a better un$erstan$ing o+ the

sub7ect

Three +ourths o+ the o#en 7oint&stock com#anies that #artici#ate$ in the Training 8ee$s *ssessment +or )usiness

!thics an$ 9or#orate :o"ernance m#ro"ement sur"ey con$ucte$ by the 9enter +or )usiness !thics an$ 9or#orate

:o"ernance, or 9F)!, %ast ;ecember e'#resse$ a nee$ +or business ethics training ur"ey res#on$ents most

consistent%y consi$ere$ bribes, $issemination o+ con+i$entia% in+ormation, an$ the+t as the most serious "io%ations o+

business ethics #rinci#%es

5)usiness beha"ior in Russia remains uncu%ture$,5 sai$ 9F)! $irector *%%a


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generate know%e$ge that can be a##%ie$ not on%y to$ay, but a%so tomorrow,5 !3s (argarita *$aye"a sai$

-ro+essors teaching at the ! ()* #rogram are +oreigners an$ no Russian case stu$ies are $iscusse$ since

Russia is not "iewe$ as a $e"e%o#e$ country in terms o+ business ethics The em#hasis is #ut on "a%ue&base$

%ea$ershi#, an$ it is state$ that the business %ea$er is the carrier o+ ethica% "a%ues tu$ents s#en$ a %ot o+ their time in

c%ass $iscussing goo$ #ractices 6ne e'am#%e gi"en by *$aye"a was the case o+ the 2 he%% 9or#

*t the choo% o+ (anagement, on the contrary, it is e'#%aine$ in the ntegrati"e ocia% 9ontract Theory course thatthere are nationa%, regiona% an$ in$ustry&s#eci+ic #ecu%iarities in the current business ethics in "arious #arts o+ the

wor%$ )%ago" sai$ it became #ossib%e to s#eak o+ goo$ #ractices in Russia aroun$ 1444, an$ two e'am#%es wou%$ be

9here#o"ets&base$ stee%maker e"ersta% an$ t -etersburg&base$ 6tis !%e"ator Russia

56ur main task is #ositi"e se%+&i$enti+ication o+ Russian businessmen )y an$ %arge, no country has an i$ea% ethica%

system,5 )%ago" sai$

5!thica% #rob%ems can not be segregate$ by nationa% i$entity,5 sai$ *$aye"a 5!"erything is base$ on the way money

an$ #ro#erty are treate$ in a #articu%ar society *s o##ose$ to the $e"e%o#e$ economies, it is characteristic o+ the

$e"e%o#ing economies to ha"e insu++icient res#ect +or #ri"ate #ro#erty,5 she sai$

(u%ti#%e attem#ts to create uni"ersa%%y suitab%e co$es o+ ethics, such as the 9au' Roun$tab%e 9o$e o+ !thics recent%y

$ra+te$ in the French town o+ 9au', can on%y be regar$e$ as recommen$ations, )%ago" sai$ Russian business

creates its own ethics ste# by ste#, he a$$e$ n )%ago"3s "iew, when choosing an ()* #rogram it is a%ways

im#ortant to #ick the one that re+%ects the e'#ectations in the market where the stu$ent #%ans to work + you see that

an ethics course is name$ something %ike 5)usiness !thics an$ !ti>uette,5 $iscar$ it imme$iate%y, he warne$ 5!thics

is not about which co%or o+ socks to wear,5 )%ago" sai$

5n the course, ac>uire$ an abso%ute%y new "iew on business an$ society, a wi$er "iew,5 one o+ )%ago"3s gra$uates,

$irector o+ %oca% consu%ting +irm (T ;e"e%o#ment *nton *"$eye" sai$ *"$eye" em#hasi/e$ the conce#t o+ mutua%

e'#ectations o+ the #arties in"o%"e$

5The main thing got +rom the course is the i$ea o+ being honest )e honest with yourse%+, with your sta++, with

#artners an$ com#etitors,5 an ! gra$uate, branch manager at uette an$ -rotoco%

Relationships & Communication

!ussians are transactiona# and do not need to estab#ish #onstandin

persona# re#ationships be&ore they do business 'ith peop#e.

/t is sti## a ood idea to deve#op a net'or, o& peop#e 'ho you ,no' and

trust. Che !ussian 'ord svyasi means connections and re&ers to havin &riends

in hih p#aces" 'hich is o&ten re;uired to cut throuh red tape.

atience is essentia#.

/t is best to err on the side o& &orma#ity 'hen you @rst ma,e contact.

(incerity is crucia# as it is re;uired to bui#d trust" and trust is needed to

bui#d a re#ationship.


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$ost !ussians do not trust peop#e 'ho are )a## business).

?n indication that you have success&u##y deve#oped a persona# re#ationship

is bein as,ed &or a &avour by that person.

Business Meeting Etiquette

?ppointments are necessary and shou#d be made as &ar in advance as

possib#e.

/t o&ten ta,es rouh#y D 'ee,s to arrane a meetin 'ith a overnment

o5cia#.

on@rm the meetin 'hen you arrive in the country and aain a day or t'o

in advance.

Che @rst 'ee, o& $ay has severa# pub#ic ho#idays so it is best avoided.

Gou shou#d arrive punctua##y &or meetins.

Cypica# !ussian schedu#es are constant#y chanin and everythin ta,es

#oner than e>pected" so be prepared to be ,ept 'aitin.

$eetins can be cance##ed on short notice.

Che @rst meetin is o&ten a vehic#e to determine i& you and the company

you represent are credib#e and 'orthy o& consideration &or &uture business

dea#ins.

6se the time e*ective#y to demonstrate 'hat di*erentiates your company

&rom the competition.

>pect a #on period o& socia#izin and ettinto,no'you conversation

be&ore business is discussed. Aave a## printed materia# avai#ab#e in both n#ish and !ussian.

!ussians e>pect #on and detai#ed presentations that inc#ude a history o&

the sub+ect and a revie' o& e>istin precedents.

$eetins are &re;uent#y interrupted. /t is common &or severa# side

conversations that have nothin to do 'ith the topic o& the meetin to be carried

on durin the meetin.

?t the end o& the meetin" e>pect to sin a )proto,o#)" 'hich is a summary

o& 'hat 'as discussed.

Business Negotiating

$eetins and neotiations are s#o'. !ussians do not #i,e bein rushed.

/t is a ood idea to inc#ude technica# e>perts on your neotiatin team.

Aierarchy is important to !ussians. Chey respect ae" ran, and position.

Che most senior person reaches decisions.


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!ussian e>ecutives pre&er to meet 'ith peop#e o& simi#ar ran, and position.

!ussians see neotiations as 'in#ose. Chey do not be#ieve in 'in'in

scenarios.

Aave 'ritten materia#s avai#ab#e in both n#ish and !ussian.

!ussians vie' compromise as 'ea,ness. Chey 'i## continue neotiatin

unti# you o*er concessions.

!ussians may #ose their temper" 'a#, out o& the meetin" or threaten to

terminate the re#ationship in an attempt to coerce you to chane your position.

!ussians o&ten use time as a tactic" especia##y i& they ,no' that you have a

dead#ine. Be cautious about #ettin your business co##eaues ,no' that you are

under time pressure or they 'i## de#ay even more.

Nothin is @na# unti# the contract is sined. ven then" !ussians 'i## modi&y

a contract to suit their purposes.

3o not use hihpressure sa#es tactics as they 'i## 'or, aainst you.

Dress Etiquette

Business dress is &orma# and conservative.

$en shou#d 'ear business suits.

%omen shou#d 'ear subdued co#oured business suits 'ith s,irts that cover

the ,nees.

(hoes shou#d be hih#y po#ished.

Business Cards

)usiness car$s are e'change$ a+ter the initia% intro$uctions without +orma% ritua%

.a"e one si$e o+ your business car$ trans%ate$ into Russian using 9yri%%ic te't

nc%u$e a$"ance$ uni"ersity $egrees on your business car$

.an$ your business car$ so the Russian si$e is rea$ab%e to the reci#ient

+ someone $oes not ha"e a business car$, note their #ertinent in+ormation

Doing business in Russia?

=e can he%# you withRussian trans%ation ser"ices,Russian inter#reters wor%$wi$ean$Russian

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Home>New Posting>Cultural Etiquette

Russia

The People

Russia has had a long history of totalitarianism, which has resulted in a rather fatalistic approach to desire to work individually under personal initiative was suppressed by the Czarist and Communist stat

advent of perestroika restructuring!, the "oviet#Communist value system has been scrapped, but the pareform has been slow and many are finding it very difficult to adapt to the Western values of individualprofit ma$imization. %lder Russians are generally &uite pessimistic and don't have much faith in a bette

future. (ounger urban Russians have adopted a more Western outlook on life.

Meeting and Greeting

)nitial greetings may come across as cool. *o not e$pect friendly smiles.

+ handshake is always appropriate but not obligatory! when greeting or leaving, regardless of the relationship. Remove your gloves be

hands. *on't shake hands over a threshold Russian folk belief holds that this action will lead to an argument!.

Body Language

Russians are a very demonstrative people, and public physical contact is common. ugs, backslapping, kisses on the cheeks and other

gestures are common among friends or ac&uaintances and between members of the same se$.

Russians stand close when talking.

-utting your thumb through your inde$ and middle fingers or making the %/ sign are considered very rude gestures in Russia.

Corporate Culture

Russians appreciate punctuality. 0usiness meetings generally begin on time.

1nder Communism there were no incentives for bureaucrats to perform well or to even be pleasant toward clients2 this meant that the uany &uestion was 3o. This practice is still found in Russian society today, but 3o is usually not the final word on an issue. %ne has to bargainto get what he or she wants.

0usiness cards are handed out liberally in Russia and are always e$changed at business meetings. The ceremony of presenting and rece

cards is important. *on't treat it lightly.
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Representatives of the Russian company or government body are usually seated on one side of a table at meetings with guests on the oth

(our company should be represented by a specialized team of e$perts. -resentations should be thoroughly prepared, detailed, factual an

salesmanship.

Russians usually negotiate technical issues very competently, directly and clearly but, being newcomers to capitalism, often do not fully

Western business practices and ob4ectives. (ou may have to e$plain the reasoning behind some of your demands.

Russians find it difficult to admit mistakes, especially publicly. They also find it difficult to risk offending someone by making re&uests

Trying to do business in Russia over the telephone is generally ineffective. The Russian telecommunications system is inade&uate, but

&uickly. The tele$ is widely used.

-ersonal relationships play a crucial role in Russian business.

0usiness negotiations in Russia are lengthy and may test your patience. -lan to be in for the long haul.

3o agreement is final until a contract has been signed.

Dining and Entertainment

When dining in a restaurant, arrive on time.

Russians are great hosts and love entertaining guests in their homes. They will often put more food on the table than can be eaten to ind

abundance of food whether there is or not!. 5uests who leave food on their plates honor their host. )t means they have eaten well.

)f you're invited for dinner, don't make other plans for later in the evening. (ou are e$pected to spend time socializing after the meal.

+n invitation to a Russian dacha country home! is a great honor.

*o not turn down offers of food or drink. 5iven Russian hospitality, this can be difficult, but to decline such offers is considered rude.

+t formal functions, guests do not usually start eating until the host has begun. +t such functions, no one should leave until the guest of

)f you are the guest of honor, do not stay too late.

/now your limits when drinking alcohol in Russia. *rinking is often an all6or6nothing affair 66 moderation is not understood.

Toasts, which are sometimes lengthy and occasionally humorous, are common. The host starts and the guests reply. *o not drink until t

been offered.

+fter a toast, most Russians like to clink their glasses together. *o not do so if you are drinking something non6alcoholic.

Dress

+ serious businessperson is e$pected to look formal and conservative. Wearing very light or bright colors might make you appear lazy

a Russian.

7en should wear suits and ties. Women should wear suits and dresses or pantsuits.


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Gits

+ small business gift is always appropriate, but its value should correspond to the rank of the Russian businessperson with whom you a

+s a general rule, do not give items that are now easily obtainable in Russia.

0ring a gift for the hostess when visiting a Russian home. + small gift for a Russian child is always appropriate and appreciated!.

Helpul Hints

Russians are very proud of their culture and en4oy opportunities to talk about their music, art, literature and dance. /nowledge about ar

some Russian history is appreciated.

8earn Russian9 8earning the language is of incalculable value, and is the best way to win friends for yourself, your company and your c

simply isn't possible, try to learn at least a few phrases in Russian. )t doesn't have to be perfect2 Russians greatly appreciate any attempt by foreigtheir language.

3ever refer to a Russian as Comrade.

*o not e$pect to find smoke6free areas anywhere. + standard 4oke among foreign businesspeople in Russia is that Russian buildings hav

smoking and chain6smoking.

Espe!ially or "omen

Women are initially regarded with skepticism and may have to prove themselves. 0efore you visit, have a mutually respected colleague

introducing you. (our business cards should clearly state your title and academic degree. )f you establish your position and ability immediately, yofar fewer problems.

0e feminine. +llow men to open doors, light cigarettes, etc. ;ven if you think such customs are anti&uated or silly, respect the cultural b

your Russian colleagues.

Documents

Business Ethics Get Codified