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Differences of Doing Business in Sweden and Austria

Differences of Doing Business in Sweden and Austria

Essay: Differences of doing business in Sweden and Austria For analyzing the cultural differences between Austria and Sweden, I searched through the internet and I consulted the literature concerning Hofstede’s dimensions. Doing business in another country requires a sound knowledge of the society and culture there. Egalitarianism Egalitarianism is the most dominant social value in Sweden. People believe in the genuine equality of individuals. Therefore, consensus and compromise are ingrained into business and social life.

As a consequence, decision-making in business can be a slow process since everyone has a right to contribute and decisions will tend to be made only once everyone is in agreement. Egalitarianism explains both organizational structures and management approach in the country. The management style is very democratic – bosses are more like coaches or mentors. Organizational structures are designed to be pragmatic and systematic and to allow people to perform their tasks effectively and with as little disruption as possible. The hierarchy in a company is very flat.

Hofstede’s dimensions Hofstede established a culture framework which is widely used to develop the field of cross-cultural management. The culture model basically includes five dimensions: Power distance; Individualism versus collectivism; Masculinity versus Femininity; Uncertainty Avoidance; Long-term Orientation versus Short-term Orientation. He used these five dimensions to analyze which different cultures exist and revealed the unexamined rules by which people in different cultures think, feel, and act in business, family, schools and organization. Power distance

Power distance is a measurement of the interpersonal power or influence between people such as between a boss and a subordinate. The Power distance index (PDI) is the extent to which the less powerful members of organizations and institutions accept and expect that power is distributed unequally. The Swedish PDI is at about 30% in comparison to Austria with about 10%. This implies that Austrian employees are only willing to accept that their bosses when they are right in answers and when they personally believe that it is the best way to do their work.

Thus, in a joint venture with a Swedish firm Austrians have to control themselves and should not be insubordinate. Individualism & Collectivism Individualism (IDV) on the one hand versus its opposite, collectivism, that is the degree to which individuals are integrated into groups. On the individualist side, the social ties between individuals are loose; on the collectivist side, people from birth are integrated into strong, cohesive groups which continue protecting them in exchange for unquestioning loyalty. The Swedish IDV is at about 70% in comparison to Austria with about 50%.

This means that Swedish people are more individualistic and therefore less integrated in groups than Austrians. Uncertainty Avoidance Uncertainty Avoidance Index (UAI) deals with a society’s tolerance for uncertainty and ambiguity. It indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations. The figure of Sweden with about 25% differs to Austria’s with about 65%. This shows that Swedish employees are much more sensitive to an uncertain situation than Austrians.

A potential problem might be that Austrian business people do not build up a strong relationship or leave their Swedish partners in unclear circumstances. Masculinity Masculinity (MAS) versus its opposite, femininity refers to the distribution of roles between the genders which is another fundamental issue for any society to which a range of solutions are found. The difference between Austria (~80%) and Sweden (~10%) in this field is enormous. This result implies that Swedish people do not differentiate between men and women due to the value of egalitarianism.

There can be huge problems if Austrian men place little importance on equality between the two sexes in Sweden. As a result Austrian companies should carefully choose their representatives. Another aspect to distinguish between cultures is career and success-orientation or the striving after quality of life. For Austrian people career and success is very important and people generally expect women to stay at home and to care for the children without following a career outside at home.

In comparison Swedish people want a high quality of life and expect women to work outside and give them the same opportunities at the job market as men have. In this area the same problems as mentioned in Masculinity can occur. Communication Style When speaking, Swedes are direct and open, but speak softly and calmly. It is common that everybody is allowed to say what he/she thinks, but it nearly never happens that you can see a Swede demonstrating anger or strong emotion in public. Conversation partners rarely interrupt one another because each person takes his/her turn at offering opinions anyway.

Politeness requires attentive listening, which is often made evident by affirmative murmurs. When people disagree, they avoid open expression of conflict. Direct criticism should be diplomatic and directed towards aspects of the problem and not towards anyone in particular. During conversations it is normal that there is silence for a while. Swedish people feel more comfortable in such situations than other cultures. They think if nobody has anything to say, it is better to say nothing instead of rushing to fill conversation silences.

Therefore, it is important in meetings to try to cope with these silences by respecting them. Anybody who feels the need to talk incessantly will not gain respect for his/her enthusiasm. Although Swedes have a good sense of humour, it is not necessarily appropriate in all business situations. Serious business should be treated seriously. Business Meetings When organizing a meeting it is necessary to keep an eye on some points. Firstly, Swedish people want to know at least two weeks in advance when a meeting is planned.

June, July, August and then Christmas and late February through early March – these months should be avoided for meetings if possible because most Swedes will be on holiday during these periods. If you are planning a meeting, be sure that you are well prepared. Swedish business people are extremely focused on details and require accurate and relevant data. Furthermore, an agenda should be produced which brings a structure to a wide ranging, consensus-seeking debate. Without an agenda, the meeting would run the risk of disintegrating into an aimless discussion. It should be given all attendees prior the meeting.

When you go to a meeting in Sweden, you should wear formal clothes and nothing flashy which could display your status or wealth. Even senior executives do not dress any more elaborately than average employees. When you start a meeting, punctuality is absolutely essential. Lateness is largely indefensible as it implies a lack of courtesy and respect for the other members present and this will reflect very badly on you. At the beginning of the meeting, you should ensure that you maintain eye contact while shaking hands with every participant on both arrival and departure.

Basically, there is no small talk; people will start immediately with the topics on the agenda. A further important aspect is personal space. Swedish people tend to maintain more distance when interacting than in many other countries. Unnecessary touching or embracing should be avoided. This also reflects the separation they will keep between their personal and public life. To summarize, it can be stated that if people are open-minded, well informed and aware of cultural differences, a good cooperation won’t be any problem. (1. 203 words)