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Ukraine's Business Culture

Biznes has a bad connotation, a holdover from the Soviet period when socialism was good and capitalism was bad. Many Ukrainians still believe that if they actually reach agreement with a Western businessperson, then it is the Westerner who has gotten the better of the deal and it should be renegotiated. Ukrainians, moreover, tend to see each negotiation as a confrontation in which one side must win and the other lose. They are only beginning to understand a "win-win" situation in which both sides gain something. Uppermost in their minds is whether they will be winners or losers and whether they will be treated as equal partners.

Doing business in Ukraine is different from doing business in other countries, especially the U.S., England, Germany, and other northern and central European countries. For officials, time is not money, and everything takes longer. The Soviet system did not encourage speedy decisions, and today some refer to "a mentality of delay," since it is safer to say no and avoid responsibility. Detailed information is difficult to obtain, and instructions are not always accurate. Ukraine's culture is not by nature very production-oriented, and it may not be the easiest place to do business, but Ukraine has other virtues for example, it is a great place to make friends, meet interesting people, and have fun.

Foreigners in Ukraine find that being late is the norm for Ukrainians. Arriving five minutes late to an appointment or meeting is usually seen as perfectly fine. This trait can cause aggravation between foreign and Ukrainian business partners. Foreigners usually adjust to the lack of punctuality over time, and eventually they end up on the other side of the fence and are late to a business meeting with a foreign partner themselves and are surprised at the other person's "profound irritation." This is a sign that cultural adaptation is well underway.

Business cannot be done over the phone but requires a face-to-face meeting. In Ukraine, meetings are frequently rescheduled and cancelled, often at the last minute. Therefore, it's always a good idea to confirm meetings. On the other hand, by confirming a meeting, you're giving your business partner a convenient opportunity to reschedule. High government officials are accessible but don't like to make appointments and be pinned down too far ahead of time. On the other hand, it is easy to get an appointment a few days in advance, or even on the same day as requested. If good personal rapport with the official can be maintained, access will be assured and deals can be done. (The difficulty in making advance appointments is a holdover from the Soviet era, when officials preferred to keep their future cal-endars clear so they would be immediately available when summoned by a higher-up.)

A fundamental difference between Ukrainians' and westerners' mindset is that westerners tend to take on a greater amount of individual responsibility and rely somewhat less on groups, while the opposite is true in Ukraine. If doing business in Ukraine, you will likely get used to "outside forces" always getting in the way of partners' work and keeping them from fulfilling their responsibilities and meeting expectations. A common culprit are government bodies that drag out bureaucratic matters or unexpectedly demand additional paperwork and formalities. Often Ukrainian organizations foresee problems but hope for the best and don't warn their partners of possible difficulties until they are already underway.

To manage one's affairs in a society that is always in a state of semi-disarray due to incomplete and illogical regulatory systems, Ukrainians rely on the power of personal contact. Contacts in government bodies are particularly prized, as relations between government and business are frequently antagonistic. In addition, Ukrainians prefer arranging meetings in person to discuss business and make joint decisions, whereas phone conferences and online discussions are now commonly used in the West. Perhaps Ukrainians are right in preferring meetings in person; only in person can one adequately judge others' intentions and trustworthiness and resolve concerns. Ukrainians pay more attention to emotional aspects of communication rather than excluding them from business as is the case in many western countries. Many foreigners find this a waste of time, but fun nonetheless!

The different kind of relationship between government and business in Ukraine is one of the biggest obstacles to greater western investment in the country. Of course, bureaucracy is bureaucracy in any country, but in Ukraine (as well as Russia and certain other countries) government and business play games with each other. Different government bodies often have overlapping spheres of responsibility and have conflicting instructions and policies. Controlling and regulating bodies often act unpredictably, based on rules that no one else is aware of.

The rules and principles government bodies adhere by in fulfilling their duties are poorly formulated and not available to the general public. This lack of official, set-in-stone information is maddening to many Ukrainian businessmen as well as foreigners. Even if the rules appear to be written down, "details" (or "nuances," as they like to say in Ukraine) such as bureaus' choice of office hours, the availability of necessary forms, and longer -than-expected lines can easily throw everything out of kilter. It seems that nothing is done to make the system work more smoothly and efficiently. Western businesspeople often know exactly what changes need to be made in the system to make everyone's lives easier, but they are never made.

The immediate reason seems to be that all these inconsistencies, redundancies, and inconveniences allow government bodies to keep businesses and citizens in a state of uncertainty and submissiveness which they can exploit for their own gain if necessary. Historically, bribery of various types has flourished in Ukraine, and businesses are forced to seek out personal relationships with government officers for their own security and for access to information. In most western countries it is usually not crucial to the success of one's business to have good contacts in government bodies. In Ukraine it is. This state of affairs often seems threatening and risky to westerners, and it is hard indeed to adjust to.

Ukrainians do not take on personal responsibility as easily as westerners, whose society prepares them for leadership roles from kindergarten up. After gaining a leadership position, many Ukrainians become rather authoritarian and change their attitude towards their coworkers, who themselves have an ingrained subservient attitude toward authority a well-known trait of Ukrainians and especially Russians. Decisions come from the top, and the people on the ground have little say. The authoritarian system is a hangover from Soviet days, and though no one seems to like it, there isn't much movement for change.

Among western business managers, a democratic and egalitarian leadership style is definitely more common, and leaders are more likely to delegate authority. In Ukraine, leaders tend more to concentrate decision-making powers in their own hands and demand loyalty and subservience from their employees in addition to work-related skills. In the new capitalistic Ukraine, many employers resort to grueling and aggressive interviewing techniques designed to weed out "weak" potential employees who can't take the heat or dislike pressure.

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Page last modified: 02-10-2021 18:04:30 ZULU