Ministry of education and science of ukraine donetsk National Technical University Faculty of Economics and Management
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MINISTRY OF EDUCATION AND SCIENCE OF UKRAINE Donetsk National Technical University Faculty of Economics and Management International Business Department PROJECTOn the course “Cross-Cultural Management” Written by: Goncharov Eugen Zenzura Yana Pyzhova Margaryta Tolochko Anton Fateyev Andrew group IBA 00 a/b Supervisor N. U. Todorova Donetsk 2002 Plan.
General information about Ukraine and Switzerland.
Introduction Switzerland Located in the heart of Europe, Switzerland may be best described as a country where "small is beautiful." A landlocked country--bordered on the north by Germany, on the west by France, on the south by Italy and on the east by Liechtenstein and Austria--Switzerland offers great natural beauty as well as incredible cultural variety, combining four languages and a host of local and regional traditions into a patchwork of sights and events that are "typically Swiss." ^ Switzerland's official name, the "Swiss Confederation" (Latin: Confoederatio Helvetica or CH for short), indicates that it is a union of individual allies and recalls the fact that Switzerland is not a homogeneous linguistic and cultural community. Ethnographically speaking, the concept of a Swiss people and a homogeneous Swiss nation does not exist. Nor can one talk about a Swiss culture because various cultures came into contact with one another and even today still overlap. Switzerland has remained a mosaic of world and regional history, religions, languages, and dialects, all confined to a very small space. The basic principle that holds this multilingual (Swiss-German, French, Italian, and Romansh) country together is the political will to remain independent. Much of Switzerland's 700-year-old history remains intact, not just in old castles, museums, and restored towns, but also in the people themselves: in their seemingly reserved attitude toward the outside world, in their sobriety, and in their industriousness. Although in earlier times, such diligence was vital in a country which had hardly any natural resources, nowadays this seemingly inherent quality of industriousness is often a little overemphasised because Switzerland's current prosperity and low unemployment depend largely on the intensity of its international trade relations and its service industry. Many people are no longer aware that only a hundred years ago thousands of people were forced to emigrate in order to survive а and in 2001, almost every fifth inhabitant is from another country. While clichés of yodelling mountaineers, blond and blue-eyed Heidi, cheese- and chocolate-making, bankers of the famous ^ die hard, this small country can offer a surprisingly different picture thanks to its great cultural diversity. LanguageSwitzerland is one of the most multilingual countries in Europe. Many Swiss, particularly those in the service sectors, speak several languages. The four nationally-recognized languages are German (used by 65 percent of the population; concentrated in central and eastern Switzerland), French (18 percent; western Switzerland), Italian (12 percent; southern Switzerland), and Rhaeto-Romanic (1 percent; south-eastern Switzerland). English is also widely spoken in business and tourist centers throughout the country. ^ The country offers first-rate transportation networks. Connections between any points in the country are generally rapid and convenient. The Swiss business infrastructure is excellent. The road and rail networks, despite the country's mountainous terrain, are efficient and well-maintained. The urban public transportation system is unsurpassed. Switzerland's infrastructure is as modern and well-developed as any in the world. The country has an extremely dense and efficient rail network, an extensive road system (complete with tunnels to compensate for the mountainous terrain), and even a marine with some 30 ocean-going vessels, and a more extensive riverain service with connections to the North Sea via tugs and barges on the Rhine river. The port of Basel is a major terminus for goods handling, with efficient connections between rail, road and water. "Rail 2000" is the name given to an upgrade of the highly-developed and extensively-used Swiss rail network. Work is expected to continue through the year 2005. Construction of a high-speed, magnetic underground passenger transportation system (Swissmetro is planned. The ambitious project has attracted considerable attention, due to the magnitude of the project and the nature of the as yet unproven technologies. There are several strong supporters in high levels of the Swiss government. The fact that the German government recently approved funding for a similar mag-lev line in Germany gives hope to the Swiss project proponents. The Swissmetro project is currently in the feasibility study phase. UkraineLanguageThe most spoken languages include Ukrainian, Russian, Romanian, Polish, and Hungarian. Some businessmen, especially those educated abroad or with significant travel experience, will also speak some English or German. Some useful Ukrainian words to remember are dobriy dehn (hello, good day); dya-koo-you (thank you); bood laska (please/you're welcome). ^ There are currently no restrictions on travel within the Ukraine; however, internal travel schedules, especially by air, may be disrupted by fuel shortages and other problems. Although there have been no accidents in recent years, service standards on domestic flights in Ukraine are not up to western standards. Roads in Ukraine are in generally poor condition in comparison with those in the west. Gasoline and diesel fuel may be difficult to obtain and repair services are often unsatisfactory. Many westerners who choose to travel by automobile often rent a car and driver, although some self-drive rental cars are available. Trains are slow but generally safe. Many Westerners who choose to travel by automobile often rent a car and driver, although some "self-drive" rental cars are available. A few isolated cases of carjackings of Western-made or foreign-registered cars, in particular, have been reported in western Ukraine near the Polish border. Recently, there has been an increase in the number of documented reports of criminal acts occurring on Ukrainian trains; these acts include gassings and robberies.dependence. This can create difficulty foy their old names, while maps and street signs may reflect either Communication. Switzerland. ^
CommunicationsSwitzerland ranks high among European countries with the most per capita investment in telecommunications. In order for its sophisticated industry, business, and service sectors to operate competitively, it will continue to modernize its public networks in ISDN (integrated services, digital networks), broad band communications, and mobile systems. Voice transmission and networks are still the monopoly of the Swiss PTT Telecom. The value-added service sector (in data communications and transmission) and the interconnect and customer premise equipment market are deregulated. European moves to deregulate and privatize, and the directives of the European Union calling for opening the market for basic (voice) services and networks by 1998, are affecting Swiss policies as well, even though Switzerland is not in the EU. The cellular telephone market has become very popular. The PTT Telecom has introduced the digital GSM system, in addition to the Nordic analog Natel C system. New paging and cordless systems are also being introduced. UkraineCommunicationsThe telephone system is inadequate both for business and for personal use; about seven million telephone circuits serve 52 million people, with a resultant telephone density of 151.4 telephone circuits per 1,000 persons. Millions of applications for telephones remain to be satisfied. Calls to other CIS countries are carried by land line or microwave; other international calls to 167 countries are carried by satellite or by the 150 leased lines through the Moscow gateway switch. An NMT-450 analog cellular telephone network operates in Kiev and allows direct dialing of international calls through Kiev's EWSD digital exchange, and electronic mail services have been established in Kiev, Odessa, and Lugansk by Sprint. ^ SwitzerlandBusiness Hours
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Business Etiquette Few people recognize the impact that common courtesies have on others in business and social life. It is not uncommon for many of us to dispense with traditions if they get in the way of doing business. However, when interacting with individuals outside the United States, doing business in time-honored ways is not only appreciated by foreign clients -- it is expected. It goes without saying that "First impressions DO make the difference!" Actions that most people take for granted, or never think about, affect business deals. And the further you travel from your home, the more culture and customs may vary. While learning a second language may not be necessary to develop a long-term relationship, knowing the "dos and taboos" of the countries in which you will be doing business is essential to your success. Here are some pointers to raise your level of awareness to the protocol, customs, and etiquette essential for building relationships with German and Swiss customers and clients. ^ Clockwork precision and punctuality mark the business atmosphere of the nation. Swiss business etiquette is similar to other countries in North Europe. The Swiss, especially in the German speaking regions, tend to be conservative in their business attire. They prefer using last names rather than the familiarity of first names. Small talk and personal/family talk is definitely unnecessary. English is widely spoken in business centres. When conducting business with the Swiss, always be punctual and never "cold call" on a business acquaintance; show him the courtesy of fixing an appointment. It is a good idea to schedule appointments for the morning and make sure you are on time. Business cards are important and should be dispensed liberally. If you represent an established company, mention this on the card, as the Swiss are impressed by stability. ^ Switzerland is a very stable multi-ethnic society; ethnic divisions among Swiss nationals (i.e. not including foreign visiting workers) are dominated by Germans (74 percent), followed by French (20 percent), Italian (4 percent), Romansch and other (1 percent each). Religions are somewhat more balanced: Roman Catholics comprise 47.6 percent of the populace, followed by several Protestant denominations (44.3 percent in total), and others (8.1 percent, including a small Jewish community) Switzerland is a small, highly developed, multilingual market situated at the crossroads of Europe. Its population of approximately 7 million people is diversified, well-educated and affluent. Located in the heart of Europe, Switzerland serves as an excellent test market for businesses hoping to introduce new products into the dynamic European marketplace. Experiences gathered in Switzerland can be translated into successes in Germany, France, Italy, Austria and elsewhere in Europe. Despite (or because of) their multicultural society, the Swiss have taken steps to ensure a distance from many international political institutions; though they have free trade agreements with many other countries, they do not hold membership in more broadly-defined organizations such as the European Union or the United Nations (though they do host the non-partisan International Committee of the Red Cross and are involved in other humanitarian and trade-facilitation organizations); the fact that Switzerland holds regular referendum votes on major political issues means that this political path is well-accepted by most of the populace, and neutrality is one of Switzerland's historic selling-points. Avoid making disparaging remarks about Switzerland's policy of neutrality. As a prosperous, highly developed Western democracy with a modern market economy, Switzerland's business customs and practices are similar to those of other northern European countries. While some American business people might find their Swiss counterparts somewhat conservative in such things as dress and the formal use of family (rather than first) names, conducting business in Switzerland is quite similar to how business operates in the United States. Punctuality, particularly in German-speaking Switzerland, is highly valued. Allowing ample lead time in setting up business appointments is also considered polite; one should not expect to "drop in" without appointment on a business client. The Swiss enjoy one of the highest standards of living in the world, with an exceptionally high cost of living to match. Everything is available, albeit at prices higher than in the United States, from modern communications, a wide variety of food, good housing, and well developed tourist facilities. The Swiss feel comfortable doing business with Americans, and there is an affinity for all things American. American promotional themes are popular at stores, shopping centers and restaurants, and there are many social groups that feature American activities. Many Swiss have either studied in the United States or have spent extensive time travelling there. English language usage in business discussions is common. For your offer to be taken seriously, it must be accurate and complete. Swiss buyers, who receive offers from all over the world, are generally not prepared to devote time to requesting additional details. These must be provided at the outset with objective and detailed information, including exact product description with technical specifications; price details (CIF or FOB) in U.S. dollars or Swiss francs; method of payment; quantities available; packaging; and transport and delivery terms. An offer should also include information on the exporting firm; production equipment available and quality control factors; and financial references. Remember the Swiss penchant for precision. The first order given to a new supplier is often regarded by the importer as a trial order for testing the quality of the goods and service provided, as well as consumer reac tion to the product. Commitments made should be scrupulously observed, or the likelihood of success on the market may be seriously compromised, as information travels quickly in Switzerland. The professionals in a given market sector are in fairly close contact with one another, and an exporter's reputation soon becomes common knowledge. Swiss from the German part of the country will tend to be more reserved than their counterparts from the Italian and French areas. Generally, use titles and last names until directed to do otherwise, and expect to invest a fair amount of time in building a relationship with your Swiss counterpart before a firm business relationship is established. Punctuality is the hallmark of Swiss business, and will be expected of you as well; the same is true of good posture. Ukraine. ^ Banking hours are 9 a.m. to 1 p.m., Monday through Friday; banks are closed on Saturday. Business hours are 9 a.m. to 5 p.m. Monday through Friday. Small shops close around 7 p.m., and larger stores stay open one or two hours beyond that. Most stores close for an hour at lunchtime. ^ Ethnic Ukrainians make up 73 percent of the population; Russians account for 22 percent. Most adhere to one of the Patriarchates of the Ukrainian Orthodox Church (either Moscow Patriarchate or Kiev Patriarchate), Ukrainian Autocephalous Orthodox, or Ukrainian Catholic (Uniate), with small Protestant and Jewish communities. The commercial climate in Ukraine holds more than its share of problems and uncertainties and, therefore, requires a pioneering spirit on the part of Western business representatives who are living and working in Ukraine. Most business representatives will agree that choosing and developing the right business partner is probably the single most important decision to be made when engaging potential Ukrainian business associates. A good partner's word and commitment is always more valuable than the paper it is written on, all the more so in the absence of a strong, transparent Ukrainian commercial code. The absence of Western business practices and a standard set of ethics makes Ukraine a difficult commercial environment for the uninitiated to work in and the selection of a reliable partner all the more important. To avoid problems it is extremely important for the Western partner to understand the cultural differences and expectations of the Ukrainian partner. The single most important barrier to doing business in Ukraine is the country's painful transition from a command economy to one based on market economics. As a result, successful commercial activity in Ukraine requires a long term outlook and strategy, as well as a "frontier mentality." Ukraine's shortage of hard currency earnings, underdeveloped and inefficient banking system, poor communications infrastructure, and lack of legal, shipping and other key infrastructure combine to create significant impediments restricting foreign businesspeople working in Ukraine. These barriers are further worsened by Ukraine's inexperience in trading in an open market environment and its general unfamiliarity with Western suppliers and their products, technology and business practices. Centuries of foreign occupation and exploitation, Stalinist repressions, forced collectivization of agriculture, death by artificial famine, two world wars, and decades of anti-capitalist dogma have all played a role in shaping the Ukrainian mentality. For the most part, Ukraine is a nation of low-key survivors. A country where people have developed extremely high levels of tolerance and endurance, unlimited patience and a deep aversion to risk. Extremely conservative in their decision making, Ukrainians prefer making no decision rather than risking the wrong decision. Their experience has taught them that there are stiff penalties for being wrong and generally no rewards for being right in a state-owned economy. A largely closed society until the late 1980s, Ukraine has more than its share of information hoarders and gate-keepers. Given the short supply of goods, services, and information in the Ukrainian market, everything has its price. This is perhaps made most clear in the real-life Soviet anecdote about the "back door," or where good connections, a favor, or a few extra rubles allowed one a better cut of meat, imported goods, etc., that often disappeared out the "back door" of a state-owned shop. Call it a bribe, a favor, or a tip, but such actions have often helped to lubricate business transactions. Given the fact that "business" in a Western sense is something new to the current generation of Ukrainians, it is difficult to generalize as to proper protocol and customs for doing business in Ukraine. Given the tremendous legacy of centralized authority extending back for centuries, bureaucracy, red tape, and an unwillingness to take initiative have been imprinted on the developing Ukrainian business psyche. Signatures, proper letterhead, stamps of authenticity, and forms (in triplicate) are very important to "getting the job done" in Ukraine -- a process which can exercise the most experienced international businessperson. For example, a letter authorizing Mr. X to do Y will sometimes be rejected because it does not have "the proper stamp." Foreign companies will often stamp a document in their own language with an official seal, show the stamp to a customs officer (bureaucrat, etc., who likely cannot read foreign languages anyway), finding that this strategy is often successful. Due to the general lack of knowledge about international business practices and terminology exhibited by most Ukrainians, it is important to take an educating role in business negotiations. Ukrainians can be shrewd and tough negotiators. It is important to be very responsive to one's negotiating partner, even regarding seemingly mindless issues. Visits to factories or other places of business activity in your country can literally be the "picture worth a thousand words," as relatively few Ukrainians have been outside the Soviet Union. As Ukrainians are deeply personal, an extraordinary emphasis is placed on cementing personal relationships before doing business. Face-to-face meetings are the norm, with little business conducted over the phone. Business cards, printed in your own language plus Ukrainian or Russian, are de rigeur, with a firm handshake to open and close a meeting. Long evenings of vodka toasts (moderation is advised) and several course meals are important in building trust with your Ukrainian partner; wishing good health, happiness, and success on your partner's immediate family will be certain to bring a smile and a hearty "thank you." Remembering your Ukrainian partner's birthday, child's birthday, and keeping Ukrainian holidays in mind will be gestures not soon forgotten. Ukrainians are a highly educated people with a 99.9 percent literacy rate. They possess strong family values, dote on their children, and respect their elders. Despite their meager incomes people are well dressed and the women are quite fashionable. In general Ukrainians are very generous and hospitable and express these traits in bountiful offerings of food and drink to their guests. Being a status-conscious people, titles are used with frequency; beyond this, be careful about names in Ukraine. As in Russia, most people are known by their first name, plus their patronym (a name derived from their father's, such as Sergeivich, "son of Sergei") and the family name (many women, even if married, add the letter "a" to their surname), though in many instances only the family name is used, and in some cases both the first name and patronym are used together; when in doubt, ask your host, as there is also an abundance of nicknames, diminutives, and other combinations which are used depending on the occasion, how well you know your host, who else is present, etc. When meeting a Ukrainian, expect to shake hands and exchange formal greetings, though you should allow women to take the initiative with hand shaking, and when doing so (with either gender) it is more common to use your name as an introduction than a typical greeting, such as "How are you?" or "Good afternoon". The Ukrainian people can be extremely productive given the proper incentive and motivation. They are probably unbeatable when it comes to being resourceful and border on ingenious in keeping obsolete machinery and equipment operational. They are a people who like to trust their friends, but when it comes right down to it, they depend on themselves. Ukrainians are a people who have lived through the most difficult of times and will survive their nation's current difficulties. One Ukrainian tactic is to shout and throw a tantrum; either ignoring it or responding in kind is a valid response, and either will yield the same result, i.e. a continuation of shouting until the other side believes that the point has been made. Time is often used as a negotiation weapon, so be prepared for long sessions. Also, as opposed to the air of compromise and give-and-take found in the west, negotiation with Ukrainians is one of power politics, where compromise can easily be understood to mean weakness. Yielding even on seemingly insignificant matters early on can seriously compromise your position. "No" is heard often (a meeting without a "no" is one in which no business has been transacted yet) and "final offers" are never final. One favored tactic of Ukrainian negotiators is to walk out of a meeting once or twice (you might remember such incidents being reported during the 1980s, when the United States and the Soviet Union were conducting talks on arms control); do not be alarmed, the deal is not off, it is merely a tactic designed to throw you off balance and force concessions. Many Ukrainians believe that if there is no conflict in making the deal, then the deal itself is not worth making. Take plenty of business cards. Because telephone books and other listings are hard to come by, business cards are highly treasured and an important source of contact information. Copy machines and printing services are available but not always reliable. Also, bring plenty of paper with your company's logo on it; since everything which was done under Soviet rule required governmental seals and imprints, many Ukrainians have come to believe that a document without these trappings is not valid. Ukrainians, as well as Russians and Belarusians, see punctuality as the hallmark of business practice among westerners, so your position could be seriously undermined if you are late; however, since many Ukrainian managers occupy the positions they held under Soviet rule (and since the majority of enterprises are still state-owned), as you move higher up the ladder you hosts may prove to arrive later and later, "as befits their station". ^ Few examples of local etiquette When visiting Ukraine, there are a few simple rules of etiquette that may be useful, moreover, that may help in establishing good relations with locals: If invited into a family house, it is traditional to bring a gift, even symbolical one. A bottle of wine, a cake or a bouquet of flowers; If you bring flowers, make sure that it is an odd number of flowers; Do not shake hands across the threshold of a door. It is considered as bad luck; When shaking hands take off your gloves; It may be useful to have business cards in Ukrainian, or in Ukrainian/English; When eating dinner at someone’s home, casual dress is usually accepted (unless meeting is of official character or birthday); Be prepared that Ukrainians like toasts during meals and you will be also asked to make it; In Orthodox churches men take off their hats; Do not put thumb between your first two fingers – this is a very rude gesture Conclusion. During made researching of cultures of two countries it was revealed, that a main condition for successful business dealing is the understanding of cultural values and business-etiquette of your partners. It will help you to understand acts your partners and to forecast their behavior in business-sphere. The comparison of cultures of two countries demonstrates, that despite of many differences between these countries, the management of very successful business is possible, than doubtlessly knowledge of specific features and style of business dealing both Ukrainian and Swiss people will help. Though at the given phase of development of a quantitative and qualitative level of economical relations between Ukraine and Switzerland is low-level, successful, mutually-advantageous and the close contacts not only are possible, but also start to be embodied in life. For example support of Ukraine by Switzerland at the entering in WTO. SOURCES Reference sources for this document include: Special assistance in preparing this report was provided by the Foreign Service Institute (FSI), the training arm of the Department of State, located at the new National Foreign Affairs Training Center. FSI supplied background information on Ukrainian business etiquette and protocol and publications such as the Post Report and Background Notes. National Foreign Affairs Training Center, Foreign Service Institute, School of Area Studies, 4000 Arlington Blvd., Room F3420, Arlington, VA 22204-1500. U.S. Department of Commerce, Ukraine -- Country Commercial Guide, prepared March 1998 by the Commercial Section, U.S. Embassy, Kyiv. |
