Organizational Culture, Russian Style

By Olga Kalashnikova

The St. Petersburg Times

Published: April 3, 2013 (Issue # 1753)

for spt Russia’s corporate culture is young, ambitious and dynamic but often anarchic.

At an employment interview at the Russian branch of one transnational company, candidates were asked what they thought an employee should do in case of fire. The answer that HR managers were looking for was “to follow the instructions.” The most common answer received, however, was “to put out the fire.”

“Only one in five candidates gave the right answer,” said Oksana Pochtivaya, senior consultant at Psycon Rus, a consulting company specializing in recruitment, personal assessments, strategic resourcing and leadership development. “And it is this [type of person] who related to the corporate culture of the company and who also accounts for its success.”

This is just one of many example of the differences between Russian and Western outlooks that have an impact on organizational culture. Corporate culture — the values and norms shared by all employees of the organization — exists in every company and influences the efficiency of the business. In cases where it is not specially formulated, corporate culture emerges spontaneously and consists of the vestiges of past working habits brought to the company by its employees — which often may not correspond with the goals of the enterprise.

Another instance of misunderstanding between nationalities, provided by Psycon Rus, concerns the financial director of a large company who moved to Switzerland from Russia and faced difficulties with staff who were not prepared to work a minute past 5 p.m., despite the fact that there was urgent work to be done.

“Russians are usually ready to stay late into the evening without demanding any compensation. To be successful, this director had to adapt to the new culture or leave the company,” said Pochtivaya.

The understanding of organizational culture in Russia and in the West is developing in a broadly parallel fashion, but with the Russian market lagging behind in several key areas. This is because new models of both market and labor relations emerged in Russia little more than 20 years ago.

“Corporate culture in Russian companies is young and is still in the process of being formed. Foreign companies bring us a culture that has been developed over decades,” said Alexander Yegorov, division director at the northwest branch of the Ancor recruitment agency.

“The general differences include the fact that foreign [organizational] culture is more transparent, while there is more impulsiveness and uncertainty in Russian companies,” he said.

“The local approach to forming and managing a corporate culture is characterized by being a young, ambitious and dynamic but anarchic process, while in Europe and the U.S. there are a number of standard practices,” said Olga Shmatko, head of the press office at HeadHunter St. Petersburg, a recruitment agency.

Corporate culture reflects the broader culture of which it is a part, and is strongly influenced by where an organization is headquartered. Finnish companies, for example, are built more on the family business model and have a less aggressive policy in doing business than American ones, according to Ancor. On the other hand, American companies are generally more democratic. Asian corporate culture, for the most part, makes severe demands on discipline, maintains a hierarchic system of seniority and is characterized by a slow decision-making process.

“Russian companies are developing by looking to Western experience while concurrently being influenced by the Russian business environment, and the ideology and policies of business owners and top managers,” said Yegorov.

“Many Russian companies are acutely aware of the need to establish and make dynamic use of corporate culture as a way to encourage best practices and form a common interest in success and prosperity,” said Yekaterina Ovchinnik, personnel director at Intercomp Global Services, a multinational business expansion and integration service provider.

Among the western trends that have been eagerly adopted by Russian corporate culture are the requisite formulation of a company’s mission statement and its corporate philosophy, which reveal the primary goals of the enterprise, according to HeadHunter specialists. An understanding of the significance of the work/life balance and diversity in the workplace is also becoming more and more widespread.

“A respect for horizontal career growth is increasing through the development of professional competencies without promotion. More and more employees are choosing such a career path,” said Shmatko.

The economic crisis of 2008 had a positive influence on the introduction of Western-style corporate culture by Russian business.

“The [uncertainty in] some Western companies coupled with staff reductions allowed many Russian businesses to lure workers with experience of working in Western organizations and to integrate their experience, technologies and approach to business into Russian reality. However, not every expert [coming] from a Western company could find fulfillment in the Russian business environment,” said Yegorov.

The differences in foreign and Russian organizational cultures are also revealed in the approach to decision-making. In Russian companies, important decisions generally rest with one person, while western organizations have a highly developed system of teamwork and most decisions are reached through consensus across the entire group of leaders.

‘The experience gained in the Soviet past may be rusty — due largely to ideological pressures and formality in relationships — but the best traditions are not forgotten, they must simply be reinstated and improved,” said Ovchinnik.

Another significant difference is in the structure of relations between employer and employee. Russian business is largely hierarchical, and concepts of status are extremely important. Managers often prefer to separate themselves from the general workforce, both physically and emotionally.

“The attitude to authority in Russia is rather complicated, encompassing elements of jealousy, fear, excessive demands and a perception of prejudice. In the West it is just a matter of hierarchy and organizational structure, in which employees often alternate between horizontal and managerial posts and the advancement of one worker is regarded with less resentment than often happens in Russian companies,” said Shmatko.

“In Russian companies a new boss does not have the right to put a foot wrong, as all of the employees are waiting for him to make a mistake, in order to satisfy themselves that his appointment was a mistake. It also relates to the insufficient transparency in career growth paths at Russian companies. People see no way of reaching a managerial position and every new appointment is [seen as being] unfair,” she said.

The transparency of evaluation and staff development mechanisms is now one of the principal advantages of working for a Western company, say Ancor experts. The new staff-development tools and proven business procedures offered by Western companies are also attractive for employees. Perhaps surprisingly, salary and perks are no longer a top priority, as Russian companies now offer remuneration packages that compare favorably with those offered by their Western counterparts.

“It is important for employees to feel confident in the company and to understand which objective criteria they should correspond to [in order] to see an advancement in position or salary,” said Shmatko.

Most HR professionals, however, understand that a company’s geographical origin is no guarantee of an advanced organizational culture.

“Far-sighted leaders of successful companies regard corporate culture as a strategic instrument that allows them to instill mutual goals and shared values in employees, and to create loyalty to the company’s business. It is always important to understand the individualities of the company and to look for employees based on these requirements,” said Pochtivaya.