Ukraine's Business Culture
Written in 2005
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. Here we'll look at what foreign expatriates say about how Ukraine's business culture differs from other countries. Don't be surprised that most of the comments here are negative. 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.
Punctuality and reliability in Ukraine
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...
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.
Ukrainians' sense of personal responsibility
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.
I don't know of any way to avoid this problem. My advice is to simply take initial promises and high hopes with a grain of salt, realizing that Ukrainian business and government are full of unexpected "nuances" that get in the way of doing things quickly and efficiently.
How important are personal connections in Ukraine?
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!
Interaction with Ukrainian government bodies
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.
We often hear the word "non-transparent" with regards to Ukrainian governmental processes. What exactly does this mean? It means that 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. What is the reason?
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. To effectively run a large business in Ukraine, you will have to adapt to the existing communication style to some degree, even if you feel like you are "compromising your principles." Remember — those principles come from your upbringing and may not be as absolute as you are used to thinking.
Leadership styles in Ukraine
Foreigners from the West will find somewhat different leadership styles in Ukrainian organizations. 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.
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.
Job-seeking and discrimination in Ukraine
It is common for job vacancies in Ukraine to specify the age and sex of potential employees. Fortunately, this and other personal information such as marital status is supplied at the top of almost all Ukrainians' CVs. In the new economic realities of post-Soviet Ukraine, many people find it virtually impossible to find work after 45. In addition, job discrimination against young, married women is common, and sometimes women are even asked if they plan on having children soon in their job interviews. Of course, such questions are perfectly rational from an employer's point of view, but it grates with westerners' ethical sense and modern ideas of human rights. With Ukraine's more traditional values, discrimination is often not viewed with the same disgust as it is in the U.S.
Western businesswomen often encounter interesting situations when they come over to Ukraine to do business. On the one hand, their business partners have to treat them as equals in order to perform the necessary tasks. On the other hand, social etiquette demands that they treat the woman "like a woman," with all the typical macho-type gestures or with a particular leniency and a more emotional attitude than usual. Effective businesswomen learn to use this to their advantage rather than take constant offense. If your business partners use what might be called "manipulative" tactics, you have every right to manipulate them in return, feigning supreme gratitude as they open doors for you and demonstrate fondness for you around their subordinates.
Work relationships in Ukraine
Except for organizations with managers who tyrannize their employees, relationships between Ukrainians at work tend to be somewhat warmer and more openly emotional than in Protestant western countries where distance and formality are the norm. Employees usually celebrate their birthdays at work by treating coworkers to chocolates, champagne, cake, or even more elaborate buffets, and companies often allot money to be spent on birthday gifts for employees. Ukrainians tend to make emotional bonds easily and find moral support and comradery in their work relationships.