Turkije Instituut
Cultural differences in doing business in Turkey and the Netherlands In the ING publication “Kansrijk Turkije” (January 2009) on chances and pitfalls in doing business in Turkey, a survey among 220 Dutch business people showed that differences in culture and in language were identified as the main impediments for doing business with Turkey. Setting up a business network was perceived as the foremost obstacle and here again ‘cultural differences’ play an important role. How many of these obstacles are real and how many of them stem from a lack of knowledge on how business is being conducted in Turkey? This publication aims at pointing out the differences and similarities in business cultures between the Netherlands and Turkey and their impact on communications between Dutch and Turks in the context of doing business. Since this publication serves to facilitate Dutch professionals, the focus is primarily on the Turkish business culture. Tradition and Change Turkey is a country in transition. This transition is the result of a general trend towards globalization and the adaptation of EU-norms as part of the process of the accession negotiations between Turkey and the European Union. Turkish firms are working more and more with foreign partners, which resulted in a sharp rise in the number of expatriates working in Turkish companies. The rise of Foreign Direct Investment (including the takeover of Turkish firms by foreign companies) made possible by the intensified privatization and market liberalization process since the beginning of this century reinforced these trends. In addition, most of the middle managers and employees in the private sector in Turkey are highly educated people (a growing percentage of them having received their education abroad) who have adopted or are comfortable with western way of thinking and life styles.
These developments, however, are not taking place at the same pace throughout the country at large. In general the west (Marmara Region: Istanbul, Izmir, Bursa) and the coastal regions are more advanced in this respect than e.g. the south-eastern province of Diyarbakır. The majority of Dutch business firms are located in the western part of the Marmara Region (notably Istanbul, 53%). It should also be understood that much of the changes that have occurred over the past 10 years are not yet fully reflected in more traditional family-led enterprises, stateowned enterprises and most of the administrative bodies.
Dutch companies in Turkey by region 6%
4% 2%
8%
53% 17%
3% 7%
■ Istanbul ■ Ankara ■ Aydin ■ Antalya ■ Marmara region ■ Izmir ■ Mersin ■ Rest
Source: Meltem Ücer (2009)
Cultural differences in business Throughout history merchants and business people have been fascinated by the difference in business styles between countries. With the rise of global business after World War II, research in this field became very popular. Researches, notably the Dutch sociologist Geert Hofstede, have developed several so-called dimensions along
Cultural dimensions
The Netherlands 38
POWER DISTANCE
(the distribution of power, acceptance of inequality) low
high
Turkey 66
INDIVIDUALISM
(versus collectivism: strong group loyability and caring) 80
low
high
37
MASCULINITY
(assertive competitive versus feminity: modest and caring) 14
low
high
45
UNCERTAINITY AVOIDANCE
(strictly defined rules, homogennous culture versus acceptance of unstructured situations) 53
low
high
85
Source: Hofstede 1980 The high Dutch score on individualism (80) is only surpassed in the UK (89), Australia (90) and the US (91). The relatively low 37 on the Turkisch side is comparable to the Arab world (38) Japan (42) but still much higher than China (20). Again, these figures date back from 1980, but are generally still suppported by later research.
which culturally defined values and orientations can be identified. These tools enable researchers to label a culture as ‘masculine versus feminine’, ‘individualistic versus collectivistic’, ‘minimal power distance versus maximum power distance’ etc. From the position of a particular national culture on the scale of these dimensions, general patterns of behavior can be distilled. Most of these patterns can be explained by different cultural and historical experiences.
How our historical and cultural heritage influences our business culture National history and culture are the determining forces in shaping the values that will be dealt with in this publication. In the case of Turkey and the Netherlands the differences can be summarized as follows
In explaining business styles, whether in negotiating situations or otherwise, four main categories or dimensions are of relevance. These and the respective score of the Netherlands and Turkey are shown here:
THE NETHERLANDS: low hierarchy- autonomous power notions (symbol: district water board (organization of water control through dyke and polder maintenance).
From these broad categories and the combination they result in (power distance combined with masculinity and uncertainty avoidance e.g.) a whole set of behavioral patterns can be distinguished. In negotiating situations this leads up to significant differences in attitudes between Dutch and Turks.
TURKEY: a strong centralized power structure (symbols: Sultan and the Ankara centered Republican bureaucracy)
In both countries religion has played a strong role in defining national/cultural values. Here significant differences underpin the already historically and geographically shaped values. Countries where Islam is the dominant religion score higher on masculinity, whereas countries with a strong protestant denomination score low in uncertainty avoidance and have in general less affinity with h ierarchy. Although the Netherlands is numerically
Cultural differences in doing business in Turkey and the Netherlands December 2009 2
a mixture of C atholicism and Protestantism, Calvinism, a particular strict version of Protestantism, is seen historically as the most influential denomination when it comes to shaping Dutch national values. Moreover, the wealthier a country is, the more individualism tends to develop as a main characteristic. Coupled with the very individual/ Protestant stance towards collective actions, the Netherlands scores high in this respect. In contrast the Turkish society is historically being formed by tribal traditions and by Ottoman history and figures high in acceptance that other factors than the individual’s own doing shape one’s fate (kısmet/ kader/inshallah). Collectivism therefore is an important trait in the Turkish mindset. The high score of Turkey on the ‘power distance’ dimension, also explains the ‘top down’ character of decision making. Turks will want to communicate directly with the highest position (director) of the opponent’s side. They expect you to do the same.
Personal relations and status Another difference between the Dutch and Turkish business cultures is the role of personal relations. Many companies are used to be characterized by a collective, family-style culture. Knowledge is often implicit and less formalized, less standardized. In most companies the patron/boss is very much seen as a father like figure with in-depth knowledge of the personal circumstances of his staff. Status depends not so much on performance but on age and seniority. It is less linked to a certain position, but is seen as personal. When a person leaves a firm, the contacts he/ she has build up are not automatically transferred to his/her successor. In contrast, respect and status in the Netherlands are very much based on performance. Younger employees can, because of their specific competences, enjoy a higher status in certain fields, than more senior, elder colleagues. When a person changes jobs, the external relations will expect to receive the same treatment by his/her successors. Confidence building will not have to be started from scratch. Contact is between the companies involved and not primarily between persons. This is significantly different in Turkish firms. Any change in personnel will entail a new process of relation/confidence building.
New Managers, New Styles As explained before the business culture in Turkey is changing rapidly. Exceptions are to be found in the government bureaucracy and family-led enterprises, especially outside of Istanbul. The outcomes of this study underline the assumed changes, which are summarized below.
Time awareness In general, Turkey is ranked among countries were time is perceived as polychronic and where time pressure is low. Deadlines are less dominant, people prefer to undertake more tasks at the same time, the distinction between private life and work is diffuse. The study’s results show that these culturally defined characteristics are changing rapidly. This can be explained as follows. Because of the transition in Turkey and with the impact of economic crisis, market conditions in various sectors are getting more competitive. This has a negative impact on the dominance of the social side of doing business. Efficiency is getting more important. Desire for working with contracts is a generally increasing phenomenon: the verbal agreements between parties loose their traditional high status. This could be an evidence for the lessening of personal trust and an increase in so called system trust, expressed by the more frequent insistence on contracts. State-owned firms are still more bureaucratic and do not often care for deadlines. Newly established firms with more global minded managers, however, have adapted western values for deadlines. This leads to a greater degree of time efficiency: in the private sector employees face a huge work load. This is also related to the high unemployment rates in Turkey and the competition on the labour market. Fear of losing one’s job is dominating older, more socially oriented habits on the work floor. In terms of time efficiency the Turkish respondents had an even higher score than the Dutch respondents, with the highest score to be found among the Turkish-Dutch respondents.
Losing face, risk avoidance and leadership In almost every book on business culture in Turkey, references to the issue of loosing face, or better on how important it is to avoid this, can be found in abundance. This is explained by the high score on uncertainty avoidance, on collectivism and the relatively high score on masculinity. The findings of the study support this conventional wisdom. Turkish respondents are much more sensitive to criticism and much less inclined than the Dutch participants to accept compromise in negotiating situations. At the same time, the perceived cultural difference that Dutch are more direct in their communications was refuted. Both groups scored high on direct communications styles. Risk avoidance The traditional high score in risk avoidance on the Turkish side was no longer dominant in the findings of this study. The percentage of Turks expressing their willingness to take risks in certain (negotiating) situations (67,5%) exceeded that of the Dutch (48,6%). This can partly be explained by the
Cultural differences in doing business in Turkey and the Netherlands December 2009 3
fact that Turkish business people have become accustomed over the past few decades to uncertain, unstable economic conditions and have adapted their business styles accordingly. Also the opening bids in negotiation tend to be much higher among Turkish negotiators than among their Dutch peers. The study showed that the gap between first demand and target price is 33,9% for Turkish respondents and 23% for Dutch. Another contrast to earlier findings arose from the inquiry into the matter of leadership. Traditionally Turkish leadership is perceived as top down, relying on one leader, with a strong hierarchy in decision making. The outcome of this study showed however that Turks have developed a preference for consensus, with the traditionally consensus oriented Dutch being divided between consensus and oneleader preference. An explanation could be that Turkey is a vertically collectivistic culture, meaning that emphasis is placed on equality and participation within the collective.
Conclusions No culture can be labeled as static. The study shows that Turkish and Dutch cultures are no exception to this rule. It should be noted however that a substantial part of the respondents have a professional background in TurkishDutch companies. Also the majority is highly educated and internationally oriented. A certain degree of influence from Turkish culture on Dutch culturally defined modes of operation and vice versa therefore can be presupposed. Dutch manager: “Because of our good relationship with the XXGroup, we were able to start the negotiations. Without such a basis, it would have been much more difficult to approach them. In general, I would say that in Turkey contacts that do not necessarily lead to direct results or a contract, still can be most useful for future business” But even outside the Turkish-Dutch context, Dutch people are becoming increasingly aware of the importance of the personal element in doing business, moving away from the somewhat stern concept of a strong division between business and private life. Turks on the other hand have incorporated elements of a lifestyle that was hitherto labeled as ‘western’, but which is in fact becoming more and more international.
Leadership notions
Dutch
Turkish
6,5% 3,2%
11,4% 22,9%
5,7%
29%
29%
32,2%
60%
■ One leader ■ Probably one leader ■ Neutral ■ Probably consensus ■ Consensus Source: Meltem Ücer (2009)
Still, remains of more traditional approaches and values can be traced in even the most urban, cosmopolitan circles. It is therefore useful for anyone doing ‘business’ in Turkey to keep in mind the following observations:
Trust Trust in general and more specifically personal trust, is one of the main characteristics in doing business in Turkey. Personal trust still dominates system trust in Turkey. Turks still put more trust in people then contracts, bureaucratic procedures, international regulations etc. Building a strong (personal) network therefore is one of the most fundamental preconditions for being successful in Turkey. Investing time in personal relations is the key to it. Always accept invitations to visit people at home. Don’t expect to have the ‘evening free’ after your business is concluded and try to be as hospitable as possible in return whenever the occasion arises. Most of the decisions will be taken in an informal atmosphere and not necessarily during work hours. Try to be forthcoming if people inquire after your private life. High hierarchy/power High hierarchy/power distance and connected with this saving face is still important and loss of it will result in depreciation of status and will therefore have to be avoided at all costs. Employees will go through great lengths to protect their superior and will refrain from contradicting or correcting him/or her in public. The reverse also applies, reproaches to staff members can best be made in a private session, to do this in a public meeting could have grave consequences.
Cultural differences in doing business in Turkey and the Netherlands December 2009 4
Don’t expect your negotiating partners, business relations or staff members to come up with critical information on the company, its established procedures, business relations or strategy plans. Most of the negative information people will want to share with you will be communicated to you indirectly. Be also sure to be very respectful towards the more and most senior representatives of a firm or an organization. Never try to undermine somebody’s authority, this will only produce a reverse effect.
Risk aversion Risk aversion is very much related to this and still more common in the public sector than it is in the private sector. Decision making can be slow and will not easily be delegated to employees with a low hierarchical status. Thus, always bring your presentation with you on paper as well. The person(s) to whom you are talking may not be the one who is going to take the decision. To prevent loss of time, try to make an appointment as high up as possible within the h ierarchy and make sure that you get an organizational chart of the organization you are dealing with in advance.
Formality Formality plays an important role in doing business in Turkey. Like in most other countries, academic and other titles meet with great respect and should therefore be used, especially in the initial phase of your contacts. The dress code is also somewhat more formal. Exchange of business cards is very common. Often people might ask for more than one card and this will in most cases turn out to be very useful in building up a network. Contrary to the custom in most western European countries, using jokes to create an informal atmosphere is a relative new phenomenon in Turkish business contacts. Be careful in applying this technique and wait till you know more about your partners. Formality versus informality
Dutch 6,5%
Turkish
3,2% 6,5%
14,3%
5,7%
20% 29% 37,1% 54,8%
Turkish manager: “Turks can show their emotions openly and will do so, otherwise a person will be seen as unreliable and passive in Turkey”
Emotions Emotions are not necessarily seen as a negative element by many Turks. To the contrary: an absence of display of emotions will be seen as a lack of commitment or even as a lack of personal integrity. The emphasis Dutch people generally put on statistics will often not be enough to persuade your Turkish business partners. The story, the motives behind strategic decisions are considered to be just as important. Willingness to do business with you will depend on their trust in you (see above) and in the conviction that they could develop a long lasting relationship not only with your company but also on a personal level. The strict division Dutch are used to when it comes to private life and work environment does not exist in Turkey. Managers are expected to be fully aware of any strain an employee might have in his/her private life and are expected to take that into account.
22,9%
■ Informal ■ Probably informal ■ Neutral ■ Probably formal ■ Formal Source: Meltem Ücer (2009)
Cultural differences in doing business in Turkey and the Netherlands December 2009 5
Finally After having read the above, one might arrive at the conclusion that doing business in Turkey is an adventurous undertaking. That can sometimes indeed be the case, but more often than not a very pleasant and rewarding adventure, which will not only bring professional satisfaction (rapid return of investment, sustained profits and unprecedented growth) but also personal reward in terms of warm and personal relationships and long term commitments and visual and other experiences without precedent. The immense growth of the number of Dutch firms in Turkey (239 new companies in 2007 alone, mounting up to 1428 in total in 2008) and the rise in trade volume (from 2,992 billion in 2000 to 5,49 billion in 2008) are the best indicators for the excellent opportunities that DutchTurkish commercial relations have to offer. Lily Sprangers and Meltem Ücer December 2009
Cultural differences in doing business in Turkey and the Netherlands December 2009 6
Turkey Institute The Turkije Instituut (Turkey Institute) was founded in 2007 in The Hague and aims to increase knowledge of Turkey among a broad Dutch audience. The Turkije Instituut is an independent NGO and is funded by Dutch multinationals and the municipality of The Hague. We inform our audience on political, economic and social developments related to Turkey, by organizing arrays of activities, among which are debates and conferences. Furthermore, we encourage suggestions for cooperation with third parties and promote exchange between the Netherlands and Turkey as much as possible. The Turkije Instituut has contributed to a multitude of events and activities in 2008 and 2009, which include around 60 lectures and conferences, a website www.turkije-instituut.nl and an internship project with our corporate sponsors and several Dutch–Turkish companies in Istanbul.
ING Bank Turkey Following the acquisition of Oyak Bank in 2007, ING’s capabilities also extend to coverage in Turkey. In 2008 Oyak rebranded to ING Bank. ING has now 365 branches throughout Turkey, with 5900 employees and a market share of approximately 3%, ING Bank Turkey offers a full range of banking services, but has a particular focus on retail banking. The bank has 1.3 million active retail customers and 13,500 small and medium enterprise customers. With a customer-focused approach, ING Bank Turkey provides products and services for mid-corporate as well as for corporate clients. Clients of ING in the Netherlands and Belgium also have full access to these products and services and receive assistance from local relationship managers, in the same way as they are used to in their home countries. ING’s Turkish clients looking to move abroad have full access to the international network. The European Business Desk Turkey is at your disposal to making your international expansion a great success.
The basis for this publication is provided by an academic research conducted by Meltem Ücer (MA) from the University of Twente. Together with Professor A. Kadir Varoğlu from Başkent University a survey was developed and hence conducted among 133 Dutch, Turkish-Dutch and Turkish business people. Additional in-depth interviews with senior ‘negotiators’ and a comprehensive literature study completed her findings. The ensuing study: “DutchTurkish Business Cooperation” enabled Meltem Ücer to complete her Master study of International Management at the University of Twente (December 7, 2009).1 In this brochure, the findings of the academic study have been combined with more general and acquired knowledge on cultural differences between Turks and Dutch. We are highly indebted not only to Professor Kadir Varoğlu and his assistant Mehmet Çakar, but also to Dr Ursula Brinkmann from Intercultural Business Improvement (the Netherlands) and naturally to the T urkish, Dutch, and Turkish-Dutch participants who shared their e xperiences in both the survey and the in-depth interviews.
1 The comprehensive study can be found on: www.turkije-instituut. nl/Turkije/NL-TR/cultural differences.
Cultural differences in doing business in Turkey and the Netherlands December 2009 7
For further information: Turkije Instituut Lily Sprangers & Meltem Ücer
[email protected] www.turkije-instituut.nl +31 70 312 20 91
ING Loes Klappe-Linsen General Manager Trade Affairs
[email protected] www.ing.com +31 6 304 95 751 ING Huseyin Celik Manager European Business Desk Istanbul
[email protected] www. ingbank.com.tr
+90 212 335 12 90
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