Impact of American Business Practice Values in Russia Summary Report

1. Impact of American Business Practice Values in RussiaSummary Report Moscow, 2007 Independent survey commissioned by the American Chamber of Commerce in Russia Inc.

2. RESEARCH DESCRIPTION (A) Objective Evaluate the level of impact of American Business Practice Values in Russia and their acceptance by Russian managers Stage 1 – Qualitative As a result of in-depth in-person interviews with middle and top managers of eight Russian and ten American companies, we identified major differences in values, attitudes and management style. Length of each of the one-on-one interviews: 1.5-2 hrs. Each interview was taped with the respondent’s permission

3. RESEARCH DESCRIPTION (B) Stage 2 - Quantitative In the second, quantitative stage we tested the significance of such major differences referencing them against various attributes of Russian companies: industry, size, geography, respondent’s age/position, business relations with international companies and other factors Methodology: CATI (Computer assisted telephone interviewing) Random sample of 202 Russian employees of American companies. A list of AmCham Russia members was used as a sample frame Random sample of 625 Russian employees of Russian companies (50+ employees). A list of fixed private telephone numbers was used as a sample frame Fieldwork: July-October 2006 Report Base: 202 Russian employees of American companies 625 Russian employees of Russian companies Report Color Code:

4. MAIN FINDINGS

5. 1. American companies operating in the Russian market are making a profound and lasting impact on their Russian employees and business partners. HAVE RUSSIAN COMPANIES CHANGED DUE TO THE PRESENCE OF U.S. COMPANIES? PERCIEVED CHANGES (answers to an open-ended question) • Free market competition with foreigners makes Russian companies work harder; product/service quality has improved. • Adoption of western corporate culture: • Higher effectiveness (structure, order) • Greater employee empowerment (relations between executives and subordinates) • Better compensation %

6. 2. U.S. business practice values are communicated and reinforced among Russian employees of American companies through an ongoing comprehensive system of institutionalized procedures EFFECTIVENESS EVALUATION MISSION STATEMENT/ CODE OF CONDUCT AVAILABILITY Top-two boxes (4+5) % FORMAL PERFORMANCE EVALUATION AVAILABILITY Base: Aware of document/procedure availability Base: All

7. 3. American businesses operating in Russia are an important factor in the development of a positive view of the U.S. % of Definitely/ Rather Agree “I can see now it is not that awful ‘Uncle Sam’ they told me about at school. They have many rational things in their approach; I like it” - a Russian employee of an American company, a former military propaganda officer

8. 4. The positive impact of U.S. business practice values is forward-looking, making the greatest impact on younger-generation Russians EDUCATION AGE % % They are young and well-educated 95% of Russian employees of American companies have good relations with expatriate employees. % of Definitely/Rather Agree .. And they like working for an American company “Most people under 30 in Russia, particularly well-educated ones, have a lot in common with Western youth. It’s pretty easy for them to adopt American business values” – an expat general manager of an American consumer goods company

9. 5. Russian employees accept U.S. business practice values willingly, perceiving them as a way to greater efficiency and workproductivity % of Definitely/ Rather Agree % of Definitely/ Rather Agree Effective management with a focus on personnel + Latest Technology = High Quality Product “If you want to do something really well in business – see how Americans usually do it instead of trying to reinvent the wheel” - a Russian engineer from a Russian machinery factory

10. 6 (A). Legal compliance and transparency are perceived as being at the core of American business culture. % of Definitely/ Rather Agree “Since the moment I came here I have never received money in an envelope. I realized what the organization was trying to tell me: “We live according to Russian legislation.” This became crystal clear right away” - a Russian employee of an American company

11. 6 (B). Merit-based promotion, strong business ethics and social responsibility are more typical of American than Russian companies. % of Definitely/Rather Agree % of Definitely/Rather Agree

12. 7. Russian employees of American companies perceive American business culture as relatively non-autocratic, ensuring high levels of personnel involvement and motivation % of Definitely/ Rather Agree Both American and Russian companies’ executives have a lot of requirements for employees… … but due to informal friendly relationships with executives and high involvement, employees in American companies trust executives more and do not feel that they are working under pressure from management: “Here you feel pressure not from the management but from the volume of work that you and your colleagues do. Here everyone works hard. There’s such drive here, and that forces you to work harder” - a Russian employee of an American company

13. 8. Russians are traditionally proud of their creativity and ability to find unusual solutions to problems. More Russian employees of American companies believe that they are offered opportunities for creativity than employees of Russian companies • 74% of Russian employees in American companies believe that their company is “flexible and its employees are encouraged to be creative and informal in their work,” compared to 58% of Russian employees in Russian companies

14. Values by Discrimination Power - Summary • Legal compliance • Training/Teambuilding/Procedures • Business Ethics • Merit-based Promotion • Fair Compensation • Collegial Management Style (informal communication with subordinates, collegial decision-making) • Care about Employees • Involvement • Team Spirit • Social Responsibility Variance analysis was used to identify statistically significant differences between Russian employees of American and Russian companies. The most discriminating values are ordered by the respective estimations of F statistic.

15. About COMCON and Research International COMCON is a full-service market research agency and the official representative of Research International in Russia. The company abides by the standards of the European Society for Opinion and Marketing Research (ESOMAR). COMCON employs about 200 full-time researchers, data analysts and operators, Our staff combines knowledge of the local environment with regular Western training at ESOMAR seminars and conferences, as well as special educational programs with Western European research companies and educational centers. Clients include Procter & Gamble, Shell, DHL, Coca-Cola, Samsung, Intel, Lukoil and many other leading international companies. www.comcon-2.com Research International, a WPP Group Plc company (NASDAQ: WPPGY), is a world leader in custom market research. The company partners with clients the world over, giving them the knowledge to make decisions about businesses and brands, understand people and anticipate and shape their future. www.research-intl.com