Prof. Valery Yakubovich shared insights on Doing Business in Russia with students at ESSEC Asia-Pacific

On Wednesday, 4 May, Prof. Valery Yakubovich, Associate Professor of Management, shared insights on Doing Business in Russia with students at ESSEC Asia-Pacific.

Prof. Yakubovich opened with a summary of the current situation in Russia, discussing the current economic, political and societal situation, the common constraints that businesspeople might face, and the employment situation. He explained that as the oil and gas industries are the key drivers of Russia’s economy, their current low prices, together with Western sanctions, create a very difficult situation. Savings from better years have allowed the government to keep the budget deficit under control so far, but by some estimates, these savings will not last beyond 2017. Prof. Yakubovich highlighted one key challenge of doing business in Russia: a tradition of micromanagement that both leaders and followers often expect.

Prof. Yakubovich explained that relationships and a strong local network are key to doing business successfully in Russia. Although it might be a challenging market, there are definitely opportunities present if businesspeople are able to:

• Have a partner to navigate the complexities and build strong relationships with relevant local networks
• Enter the market with a large established company

Following this, Prof. Yakubovich shared some of the specificities of relating to Russian business partners, such as the style of communication, the importance of taking the time to build relationships gradually, that overt friendliness is generally not well-received, and the critical importance of building trust among all parties involved. In negotiations, one must anticipate and prepare for the zero-sum perception commonly held by Russians in business. 

Elaborating on the point about relationships, Prof. Yakubovich added that it is essential to work with partners who have a comprehensive understanding of the local customs, cultures, nuances, as well as the local legal requirements.

The lecture was a unique opportunity for students to find out more about the current business landscape of Russia and the prospects of doing business there.