Corrections or additions?
This article by Bart Jackson was prepared for the April 17, 2002
edition of U.S. 1 Newspaper. All rights reserved.
The Russians are Buying
The days of America’s wild, wild West, while inspiring
a century of fantasy and mediocre TV, lasted but a few brief decades.
The land of the cowboy fast became a nation of laws. And even the
Tommy Gun blasts of the 1920s gangsters proved a noise offstage to
the real roaring of our nation’s burgeoning business. So it is with
the old Soviet Union. The wide open frontier of the Russian Mafia
and black market has given way to capitalist turf.
Both entrepreneurs and established companies seeking to deal with
some of the world’s wealthiest new democracies may want to attend
“How to Do Business with Russia” on Thursday, April 18, at
8 a.m. at the West Windsor campus of Mercer County Community College.
Cost: $25. Call 609-586-4800, ext. 3639.
This workshop is one in a series of breakfast meetings designed by
the MCCC Global Business Center to help small and medium size
businesses
establish markets abroad. Speakers include Olga Artemenko,
founder
of Collective Consulting International, and Musya Tumanyan,
representative of construction equipment distributor Hoffman
International.
“A wealth of misunderstanding, despite a wealth of need, currently
separates Americans and Russians from joining in profitable business
ventures,” says Artemenko. An expert at bridging this cultural
gap, Artemenko was born and raised in Kiev where she studied for the
diplomatic corp and also earned a teaching degree. After gaining
degrees
from Kiev University, she continued her studies in Princeton
University.
In 1994 she founded Collective Consulting International in Basking
Ridge to help ease the flow of trade in both directions.
For decades, Americans have kept to the style of business practiced
within their own borders. And why not? The Chicago businessman could
trade a thousand miles in any direction and never leave his language
or commercial customs. Unfortunately, as we now enter global markets,
the American trader has found himself burdened with a severe
flexibility
disadvantage. On the up side, Artemenko says, American goods hold
an almost mystical appeal in the Baltics and old Soviet states. Those
American businesspersons willing to arm themselves with a little
preparation
and lots of understanding will find great rewards.
Hurdling the cultural barrier. Obviously the more of theregional language you can learn before you travel, the better. Butsince 88 languages exist within Russia and the old Soviet states,it is not always wise to count on a translator from home. Artemenko,who herself knows seven languages, suggests that an interpreter beestablished in each city or region you intend to visit. While thesmall business may not have the capital, even a middle size firm mayprofitably seek a consultant’s guidance.Co-speaker Tumanyan agrees that language is a major separating point,but argues that the entire culture should be studied beforeformulatingtravel plans, let alone business deals. In addition to holding itsown set of general customs, each nation’s business community operateswithin its own culture.For the past 25 years, Tumanyan has developed a expertise in severalglobal business cultures. After immigrating to the U.S. from Moldavia,where she studied German, Tumanyan studied at the Texas UniversityLatin American Institute and became a teacher of Russian. Since thenshe has worked for Hoffman International, easing the corporate pathin such areas as China, Latin America, the Baltics, and Russia.Financing. Americans too frequently come into dealingsdemanding a letter of credit before any negotiations can begin.”Frankly,”says Artemenko, “you are just not going to get it.” Russiancapitalism is barely a decade old. Established credit records seldomexist — and when they do, they may be scrawled on hand writtenledgers. Virtually every other nation negotiating with new Russiancompanies offers substantial financing. Americans, once legally deniedthis tool, can now employ the financing lever to win contracts.Dealing with the government. “Patience beyond allbelief is required,” says Tumanyan. “In America, laws aredesigned to push trade forward. In Russia, they are made to halt theflow of business and examine it at every step.”For example, five years ago Russia faced an onslaught of new goodsand a cash drain of $20 million a day. To halt this, the governmentinstalled restrictions, forbidding any currency from leaving thecountryfor more than 90 days before the goods were delivered. The fact thatyou may need that cash for goods which take 180 days to produce orprocure is incidental. Yet, as always, there are little instrumentssuch as the “passport of the deal” allowing an exception,or the creatively conceived “comfort letter,” which landsyou within the legal zone. Doing business is a matter of learninghow to negotiate these loopholes.Daily dealings. “Your Russian business day is gobbledup trying to explain, train, and cajole,” warns Tumanyan. Coveringthe complexities and benefits of a three-year T-bill can take easilyan hour and a half. Convincing people to ship in cost-saving partialcontainers, delving in the exactitudes of Russian or American bankingforms — everything takes an enormous amount of time. In addition,the old Soviet states operate on a system of trust. Winning this trustmust be done day in and day out; but once won, your dealings furtheron are assured.Adaptive servicing. Russia desperately craves Americangoods, but it needs them delivered its way. For example, underCommunism,the Soviets dealt only with major manufacturers in large lots. Thisattitude retains. If you are a distributor, who is supplying only100 units to a given dealer, you may have to break down this smalllot reticence by including a full accessories inventory and warrantyand service commitment.Collecting money. Artemenko says that the dollar —not the ruble — is the preferred currency in Russia. Yet too manyoff-site managers have endured losses in this, and other currencies,by depending on the Western system of long-distance cash collection.In Russia, out of sight leads to out of pocket. Managers who continueto present themselves on site, overseeing production and sales, willdiscover that businesses and local banks respond, albeit slowly.However,managers who show up American-style, exacting payment schedules, willvery likely be disappointed.Russia holds a somewhat unique position in the global economy. Inone sense, it is a new democracy with an emerging capitalism. Butunlike others in this category, it is massive in area, unrivaled inresources, and has enormous purchasing power in the hands of bothits government and its individuals. As Tumanyan puts it: “Americaand Russia are closer souls than either one thinks. We are sisters.We learn from them — they learn from us.”— Bart JacksonNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
