Border Crossing Blog

Risky (Russky) Biznes/Русский бизнес

Russian business is founded on two seemingly contradictory premises: trust and lack of interest in the future. These two traditions are ingrained in the system both from communist days as well as from the instability of the economy since the fall, and they make for a deadly mixture.

The difference between most Russian companies and foreign companies in Moscow is frightening. While most foreign companies invest millions of dollars in the future the majority Russian companies try to get as much as they can now while doing the bare minimum to keep their business up to speed.

The company I work for is a prime example of this. As long as the students don’t disappear, then everything is all right. This creates a work environment where everyone is disgruntled and wants to take advantage of the company they work for. Most of the best teachers leave quite quickly as well. The school doesn't seem to mind this either, even if people would stay if they were treated half-decently. Then again, you would have to pay them more money. The second half of the picture—that with experienced teachers the school would also make more money—is lost on them.On the there other hand, all the foreigh comapnies I teach at the employees seem happy and are forever attending conferences and team-building activities.

The school’s computer network is run by a college student who even if he knew what he was doing, wouldn’t stand a chance with computers you that look they came from a Russian garage sale (this is bad as Russians don’t throw anything away. Even in the schools located in the center of town, the school supplies and decorates them with the cheapest materials on the market. They just don’t care about the future. As one my friends says, “maybe Russian owners will start caring after they have everything they need.”

On the other hand trust on a very personal level is absolutely necessary to do business here. For example, one of the students in a human resources company I was working for was having trouble collecting money from a firm with whom she had done business. Instead of demanding payment or taking the women to court she invited the woman from the other company out to dinner. After getting to know each others’ families better, and sharing the difficulties of their respective jobs as well as having a couple of drinks, they got down to business. Since they now felt personally responsible to one another, my student explained that she was going to be in big trouble with her boss of she couldn’t collect the money. The woman sympathized with her, and agreed to put some pressure on her boss. In the end, the money was paid.

Another businessman I teach explained to me that no major deal is ever worked out in the office setting. It is always done over dinner and several shots of vodka. This personal closeness is especially important because of the many shady and semi-legal deals going on—many as a result that the abominable official salaries people make. One of the most famous of these is the otkat. The otkat occurs when a buyer from one company is assigned to make a new purchase let’s say computers, for his company. This buyer, let’s call him Sergei, meets with the seller, Ivan. Sergei goes out to dinner with Ivan and they get to know each other and share their problems. Sergei then suggests that Ivan write up a bill of sale for the computers higher than the retail price and that the two of them will share the difference. Ivan of course agrees and the two probably double their official salary for the deal. As long as neither company finds out they are off scot-free. However, they have to trust each other to make sure nothing happens.

Posted by Aaron at July 19, 2004 11:40 AM