With the exception of Austria and Ireland (which has been very much influenced by protestant Britain), this score also mirrors the religious background of each European country with high scores being catholic and low scores being protestant, creating a North-South European division.
Individuality
A high score means that people feel responsibity only to themselves and their immediate family, whereas low scores indicate countries where the extended families and the local community are more important then the individual ambitions. Increased affluence may promote individuality because a higher income enables you to do things more for your own benefit. Only Greece and Portugal score low on this aspect.
Masculinity
A high score here indicates a country where masculine attitudes such as achievement and success are paramount. A low score indicates a society where quality of life matters more than material success and where there is a concern for the welfare of people in general. Low scores here intend not to divide the roles between men and women very strictly, which means you will find many women working in more senior positions while men are willing to participate in childcare and domestic chores.
Uncertainty Avoidance
Countries with a high score are these where people cannot tolerate uncertainty and have many systems and rules to cover what should be done in the event of almost every possibility. Low uncertainty avoidance means that this is a country where conflict and competition are seen as natural and people feel secure enough to take risks.
Cultural differences between countries
Language is an important factor in the cultural mix. If your planning to trade or conduct business in Europe, you need a basic understanding on your trading countries language.
In business sense, language forms the hub of communication between managers from different cultures, which then act as a means of firm communication and company-customer communications both in terms of personal contact and promotional effort.
English has become the accepted language of international business because it is the most widely spoken language in the developing Western World. Most people are more confident in communicating in their first language where they fully understand the nuances of the idiom.
If English becomes the dominant language, failure to learn other languages may put individuals operating outside their own EU market at a disadvantage. Communicating in the language of the host may be seen as a symbol of co-operation, faith and trust.
The language of time includes response times for a written communication, punctuality at business meetings, and the time it takes to make a decision, formal schedules and deadlines. All communicate different messages in different societies.
In France, punctuality depends on the importance of the person being kept waiting within 15 minutes. In Germany, people are expected to be on time, and any degree of lateness is considered unacceptable. In Britain, a certain degree of flexibility exists regarding punctuality and it is almost accepted that people will be late for meetings.
The table below shows the language proficiency across Europe and those countries speaking the less well-known tongues such as Dutch and Danish will tend to have English as their 2nd language and certainly since the fall of communism in East Europe, there has been an explosion in the demand for English.
However UK companies cannot assume that everybody will understand and welcome advertising in English. In 1994, there were moves once again in France to try and limit the use of English by law. Even more sensitive will be the business negotiations, which take place before a product can be sold in a new market.
Here the rule is most definitely to sell in the buyer’s language. Only UK importers should expect to be able to negotiate in English, where the local language is used.
Leadership in the business environment tends to be reflective of other elements of the social organisation. Eg: The French have the most hierarchical system within the EU with a strong tendency for centralisation and management is often considered to be a dictorial & highly formalised.
Spanish & Italian management tend to be highly autocratic. Decision-making is shared and systems are highly informal as the organisation is held together on the basis of trust and loyalty rather than formal contracts or monetary incentives.
German leadership roles reflect the status of education within society with technical competence and formal qualifications automatically affording individuals authority and leadership depends on respect not subservience.
Leadership roles in the UK follow job status, which is indicative of the strongly entrenchec class system in Britain.
TASK 2
Directives define the end result, but allow each nation to introduce its own legislation. Directives harmonise a variety of existing practices, persevere the different legal traditions and settle constraints for further developments. Directives are published in the Official Journal of the Economic European Community (EEC). Its title, its date of adoption and its date of publication in the Official Journal characterize each directive.
Within the text of each directive is the date on which the directive becomes effective. The effective date identifies the date when compliance with the directive is mandatory. In addition, directives also identify an implementation date. This date identifies when the use of directive can begin.
During the time period from the implementation date to the effective date, the manufacturer is normally allowed the option of meeting either the directive or the national requirements that existed prior to implementation of the directive. This time period is known as the transition period.
Once compliance with all applicable directives has been verified for a product, that product can be legally placed on the market of any EU member country.
Areas have been adopted in three main areas of health and safety, which are:
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Foodstuffs – These are lists of permitted substances and parity standards have been established for foodstuff additives such as, colourings, antioxidants and preservatives. Regulations have been introduced to govern the production of such foods as coca, tinned milk and chocolate. Directives have been introduced on the labelling of foodstuffs, specifying ingredients, quantity and date by which they should be consumed. Drugs and chemicals used for the rapid growth of animals for human consumption and pesticides have been banned or restricted.
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Dangerous Substances – Directives control the classification, marketing and labelling of toxic substances. The community directive 76/769, issued in 1976, provides for the banning of substances.
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Pharmaceuticals – The testing, patenting, labelling and marketing of pharmaceutical products are all controlled by EC Directives.
Further proposals, which are under consideration, are:
- A Directive establishing an EC obligation to market safe consumer products.
- A Directive strengthening the cosmetic Directive, which ensures safety.
- A Directive on the liability of suppliers of service.
- A Directive on unfair terms in consumer contracts.
- A Directive on distance selling.
- A Directive on footwear labelling.
- A Directive on comparative advertising.
Some Directives however are incorporated into UK law through acts of parliament. Eg: Directive 89/397 ‘Official Controls of Foodstuffs’ was implemented in the UK throughout the Food Safety Act 1990.
For packaging, the EU set up a new Directive, which requires that 50-65% of packaging should be recyclable. Packaging will have to be labelled identifying the type of material used. Companies in certain industries have to carry out and make public, regular, environmental audits.
The Toy Safety Directive now ensures common standards across all member states. Compliance with the standards entitles the producers to use the CE logo as proof of this. The EU Toy Safety Directive (88/378/EEC) requires that only safe toys be supplied within the EU and covers 5 main areas:
- Physical & Mechanical requirements
- Chemical requirements
- Flammability
- Testing
- Certification
Harmonisation Directives now focus on ‘codes of essential requirements’, which establish a basic set of minimum standards. Having set the minimum standard, the commission then leaves it to the manufacturers as to how best satisfy these requirements.
The new codes of requirements are not exhaustively detailed Directives, they often cover broad product areas and have the advantage of harmonising a wide number of products with limited product detail.
Once a product manufactured in one member state conforms to the essential requirements, it is then free to circulate throughout the EC. The commission promotes European standardisation bodies such as the European Committee for Electro technical standardisation, to develop common industrial standards throughout the community. These are comprised of industrial concerns and incorporate EFTA countries as well as EC ones.
The 2nd VAT Directive, passed in 1967, firmly establishes the EC’s intention to create a harmonised tax base. The elimination of frontier barriers from within the community means that fiscal barriers will have to be reduced.
The 6th VAT Directive was successful in creating a common VAT base throughout the community, however, differences still persist in food, fuel, transport and small trade sectors, Eg: food in the UK is zero rated whereas in Denmark it is liable to a 22% VAT rate. All member states except for the UK and Denmark, apply more than one rate.
In July 1987, the commission forwarded a package of seven draft Directives to the council of ministers with the aim of integrating indirect taxation throughout the community.
TASK 6
In 1990, the main capital flows to and from the UK has increased it debts and credit flows, with credit being £1,160 - £2,811 million and the debt flow from £663 - £838 million, which left them with a balance of £1,973 million in the year 2000. As you can see from the charts provided, from debts, total capital transfers amounted to £708 million.
The main source of moving capital transfer was the Migrant transfers, with £461 million. Central government had no credits but in debits and this amounted to £247 million with project grants and debt forgiveness and the purchases of non-produced, non-financial assets came to £130 million.
In Credit terms, total capital transfers came to £2,644 million with EU institutions rising to nearly half of this figure at £1,273 million. The Regional Fund and the Migrants transfers produced a lot of credit for the UK and the sales on non-produced, non-financial assets came to £167 million. A major difference between credits and debits would be the EU institutions.
When assessing the Capital Account in task 4, with the main Capital flows from and to the UK, you can see that the credits outweighs the debits. The sales of non-produced, non-financial assets, oversees the purchases of non- produced, non-financial assets by £247 million. The capital account for the main capital flows to and from the UK has noticeable effects of capital inflows and outflows.
Migrant transfers showed to be a successful capital flow with £910 million and the Regional Development Fund for credits is also high with £989 million.
The total amount of capital transfers have a difference of £1,936 million in the year 2000 which is in favour of debits to credits. The best outcome is from 1999 – 2000, total capital transfers, which rose by £1,200 and from £1,476 million to £2,644 million.
BIBLIOGRAPHY
- Business Cultures in Europe by Colin Randlesome, ISBN:0750608722
- Living & Working in Europe by Ann E M Fox, ISBN:0748725822
- Doing Business in the European Community by Paul Gibbs, ISBN: 0749408146
- Single Market to Social Europe by Mark Wise, ISBN: 0582060885
- The European Community by Stanley A Budd, ISBN: 0340566434
-
European Business Strategy by Terry Garrison, 4th edition
- Business within Europe by Antony Scott
