Ukrainian Entrepreneurs’ Top 3 Cultural Challenges

George Lupascu-Pruna

Based on the cultural scores for Ukraine on the Hofstede 6D model three tendencies with their recommendations can be highlighted, the first two having two opposite sides, so that the reader can chose the one that applies more naturally to their individual personality.

1» Business is businessHolding a Grudge vs. Short Term Deals

In general, when doing business in Ukraine, people go beyond business and invest a good amount of their personal energy on being hospitable (sometimes overly hospitable), and that’s ok. But for people from individualistic cultures this might be a waste of energy, as for them there are two “thresholds” when it comes to relationships: one, much lower than the one of a Ukrainian, above which you get accepted as a pleasant and trustful business partner, and then there is a 2nd threshold that is much higher that accepts you as a close friend and will be open to help you out when the business situation gets very complex. Don’t count on reaching the 2nd threshold, and don’t take business risks based on vague relationship cues that do not exist in the other culture. Disappointment is lurking in such cases and what's even worse, after such a disappointment the local tendency is to close the doors to future huge business opportunities just because the partner from the Individualistic culture didn’t Reciprocate or didn’t go the extra mile outside of the contract. The advice here is to step back, remember that Business is Business, and most importantly don't hold Grudges and keep the doors open for future deals.

On the other hand, some business people from Eastern Europe tend to do the opposite and go for the short term win-lose deal, because they don't believe that a long term win-win deal is possible. Needless to say that such a behavior might lead to having to pull out completely from that market, or even from business overall. The current possibilities to memorize all of someone's public business actions should be a constant reminder of why integrity matters in business.

2» To Delegate or Not to Delegate Obedience vs. Flexibility at the Wrong moment

As a successful business owner, you'll not have time to carry out personally all the negotiations, but the good news is that when negotiating with foreigners from the Western World, you'll not have to, because they accept that the delegated person was invested with a decent amount of power of decision. Locally there can be two tendencies at the lower hierarchical levels: 1. to stick strictly to the clear negotiation plan offered by the leader, because it is comfortable to not have to improvise, especially when there is a chance that the boss will disapprove of that. This sometimes leads to losing the deal or the trust of the negotiating partner. 2. The 2nd variant is showing Flexibility in aspects of the business that should be conveyed as being under control (KPIs mostly related to the stability of the product, service or process). This will make the owner or the sales manager look unreliable for some of the foreign cultures.

The best way to avoid these is to invest into understanding the other culture and how the Ukrainian “normal” behaviors might be perceived differently by the other culture.

3» Is the Glass half Full or half Empty? Preparing a Negotiation Strategy from crumbs

People from the Eastern European cultures have the tendency to see the empty half of the glass, and accept that life is hard, work is even harder and that there are high chances that most of the plans will fail, so why risk it and give it all you've got? This cultural aspect makes it very hard for the entrepreneur to allow themselves to invest into the new things that matter, so they accept easier that the deal failed or that the little they got was enough. The other aspects of these cultures ensures the entrepreneur a constant minimal safety net that allows them to easily shift to new businesses or new venues, in some cases never getting to understand what it would have taken to become successful there. This way of thinking leads to always focusing on the losses or on the costs, and never allowing themselves to invest into the things that would provide the step change in their business, most of the times focusing to use the bits and pieces available for free and thus building a Negotiation Strategy from Crumbs.

This article focuses solely on the Ukrainian mentality, and in its limited space, emphasizes a few tendencies that could lead to loss of business for the Ukrainians. However, in order to master a negotiation with a foreigner, full professional advice is recommended, that elaborates on these tendencies and takes into account the other culture as well.


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