Ethics and ethical cultures in business organizations are influenced by numerous contextual factors, including national and organizational cultural characteristics and norms, regulatory frameworks, and political and socioeconomic climates. Identifying all the important contextual influences can be a daunting task in any society. However, Russia presents an especially challenging case, since this country went through several fundamental transformations of its social structure and institutional environment in recent history. This chapter uses the institutional theory framework to discuss major regulatory, normative, and cultural factors that shape the current environment for business ethics in Russia. The historical development of business ethics and its current state are examined, and implications for managers and professionals from other countries working in Russia and/or with Russian companies operating internationally are formulated. Specifically, the chapter demonstrates that the current regulatory framework is characterized by weak legislative structures, ambiguous economic legislation, and growing power of the central government and of a handful of business groups aligned with the presidential administration. This creates opportunities for corruption among government officials at various levels and conditions under which businesspeople are forced to engage in unethical behaviors, ranging from bribes to using informal connections within the government elite to secure preferential treatment. Furthermore, a combination of cultural dimensions of power distance and paternalism suggests that employees are not likely to report ethical violations committed by their superiors, tend to shift the responsibility for making ethical decisions to the boss, and are not likely to question these decisions.