by Christopher Bolton and Lyubov Pleshkova.
Close collaboration between Canada and Russia has existed for over two decades beginning in the communist era. Recent
changes in Russia toward a market economy have created a difficult environment for both parties to the point that business
relations are sometime impossible. A number of reasons for failures in negotiation and project initiation exist, both from the
Canadian partner side (for example, inability to assess Russian political risk, reluctance to adapt to the difficulty of conducting
regular business in Russia: transportation, accommodation, currency, communication, security etc.) and from the Russian partner
side (failure to focus on any one particular project, lack of understanding of the basic principles of business operation, and a
tendency to radically over or under value their own product, service or assets). In Canada the concept of "start small - grow big"
is quite acceptable. In Russia, however, the built-in level of uncertainty inevitably leads to unmanageable risk and Russia’s
paradigm of "start big - think bigger" works there. It is important for Western companies to understand the background of the
proposal from the Russian organization and to educate their Russian partners in ways of forming business relationships. It is also
important for the Russian organization to understand exactly what it is trying to sell. Once it has identified the product or service it
must determine its proper value either locally or internationally.