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07/09/2006Managing in the 'Wild East'

We discover that while business styles have expanded within Russia, the international appeal of expatriate managers has slowly faded. And patience is a top quality in any successful manager.

Russia's bureaucracy is thick and unavoidable.

Management trends in Russia today are diverse and difficult to map. Along with the rapid changes in government and culture during the past 20 years, "Russian management is changing very, very fast," said Jerome Dumetz, a French-born Cross-cultural specialist who teaches at the Plekhanov Russian Academy of Economy and the American Institute of Business and Economics, in Moscow.

"You have lots of discussions, stories, myths and legends, but there's very little real research about Russian management," Dumetz said.

Business variety

The main difficulty of defining roles of international managers and management styles, Dumetz said, is the variety of businesses within Russia.

"You have big old mammoths of Soviet times," he said, with hazy production, and extremely structured personnel hierarchies," a little like the army, where the very idea of having fun at work is alien."

Then, he said, there are companies that have survived through the decades by remaining fairly efficient through modification with the times.

In addition, newer and mostly technological businesses, such as phone and internet service companies, have begun to crop up, displaying "all the management tricks you have in the west," but they currently remain few and far between, Dumetz, said.

Finally, there are companies such as Renault and Exxon which are established and operate as foreign companies with a company culture endemic to their home countries.

Treading the line between native and Expat

While business styles have expanded, the international appeal of expatriate managers has slowly faded, he said. "Ten or 15 years ago, it was possible to go to Russia, and having a passport was enough to get a job [because] personal experience and living in the west was enough to get a good job." Things have since changed since then, he said. "Today, foreigners have to bring a really, really clear added value."

"The majority of people we're hiring speak Russian," said Elena Goryunova, a Russian native and vice president for global HR at Luxoft.

"There is some gap in how we understand and do things, between Russians and expats," Goryunova said, and a common language somewhat bridges a large cultural divide.

This gap can create major conflict and confusion for foreigners, if not treated with care.

"[An expatriate manager] has to accept the traditions, never make the revolution," said Zbigniew Plaza, country manager for Russia at SpenglerFox International Executive Search & HR Consultancy who has spent several years abroad. Though there are still a large number of expatriate managers in Russia, he said a gradual shift is beginning, toward more economically and culturally viable Russian managers.

"When you have expatriate managers and Russian employees, you have a double situation," where two cultures may clash, Plaza said. Ideally, businesses should be looking for managers who have participated in and understand both Russian and Western cultures.

"A Hybrid [manager] is a way to avoid that and create one company structure," he said.

Several factors and cultural phenomena can create a clash in the Russian workplace.

Working with feeling

"Managers should realise Russians are sometimes more keen on their senses and feelings and they let feelings interfere with their job," Goryunova said.

"For instance, if a person expects some promotion and he's not getting it, the [manager] must explain why he didn't get it, be accurate and give very good reasons, because the reaction of person will be very strongly emotional," she said. "He will discuss it with people all around him and talk about how the whole system is not working, and at the end of the day it will be public opinion that things aren't working," she said.

 

Turning a blind eye

Compounding the emotional volatility of Russian employees is a general lack of westernised time management, and an accepted level of corruption that can shock and frustrate foreigners.

 

"They still have double accounting, an official accounting and an unofficial," said Alex Durmashkin, Russian expatriate and President of the American-Russian Business Council, based in Los Angeles.

"In 99 cases out of a hundred, someone will be bribed to move along a business transaction…It's a part of the current business culture to get something under the table," he said.

Though the level of corruption in Russia depends on the business sector managers are working within, the country's bureaucracy is thick and unavoidable. Patience is a top quality in any successful manager in Russia.

Moreover, Goryunova advises, "at the moment, it's important to change the human resource function from 'supportive and administrative' to a more 'business function,'" to attract and retain a workforce in Russia's competitive and capricious business market.

Creating connections

But foreign managers must keep in mind the ideas of 'business' and 'professionalism' are also cultural standards.

Russians are not trained in the 'linear' thinking western business management calls for, where transactions are straightforward and relationships are clearly drawn, Dumetz said.

"Russians try to be more 'professional,' which means more like in American movies," Dumetz said. But, "as soon as the doors are closed, the 'circular' thinking is back," he said.

Circular thinking highlights multi-tasking, and "the bottom line of business remains connections and relationships," Dumetz said.

In a Russian workplace, "You've got to be involved in the lives of your subordinates. You should not keep too much distance," he said. New, and especially foreign managers, should "be closer than usual, to know how the grandma is feeling and how the kid is doing at school, to create a connection and a true relationship to fall back on when [managers] have a problem. In this case, [managers] will need them to go the extra mile."

While Russian employees rely on social relationships with their superiors, there is no general push in the Russian workplace to land leadership roles. Employees tend to let their superiors dominate company decisions, but this does not mean Russians lack ambition.

Instead, a striving for more corporate responsibility is a trait that has been undervalued in Russian corporate culture in the past and should be actively encouraged by companies now. "You have to teach people how to work with [business] networks," Plaza said. "It's a long lesson."

But going out of the way to foster personal relationships and to encourage business relationships can pay off big, Dumetz said.

"It's true that people are not being taught to take initiatives, but if you ask them to do so, and to think outside the box, you're going to get some golden ideas," he said.

31 August 2006

September 2006

Victoria E Fine is a freelance writer based in the US.

Subject: HR management in Russia, HR management in Eastern Europe

 


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