In part 1 of my chronicle, I had some sentimental retrospect of my first year in a somewhat adventurous Baltics. I compared the situation with today’s dynamic, fast growing Baltics and demonstrated opportunities and reasons for companies to research and establish contacts. In part 2, I would like to share some of my experiences from different business cultures in Scandinavia/Sweden and the Baltics/Eastern Europe.
Operational methods and business culture:
Scandinavia/ Sweden |
The Baltics/Eastern Europe |
– Old companies, traditions |
– New companies, testing market |
– Big companies, stable, mature markets |
– Small and medium sized, volatile markets, growing |
– Budget process and scheduled meetings in management |
– More direct management control, meetings on demand, budget process secondary and flexible |
– Goal-oriented management, long term |
– Top-down management, short term |
– Less bureaucracy, flat organisation |
– Bureaucratic and hierarchic operations |
– Elaborate personnel policy |
– Neglected personnel policy, unsystematic |
Commercial laws in the Baltics are quite similar to the Swedish ones. However, in Eastern Europe, accounting legislation and legal formalities are much more dominant and elaborate than in Sweden, where operations and business plans are items for discussion rather than legal matters. Only contracts and written agreements are considered, while hand shakes and verbal offers or bids are good in Scandinavia. Information circulates faster, more efficiently and to the right level in Sweden, while Eastern companies are more department than project oriented. The women’s situation in the East is about the same as in Sweden. Some “male” jokes may occur that would not be considered appropriate in a Swedish workplace. On the other hand, a more supportive and chivalresque style may result in better male - female collaboration.
Corruption is another difference. It is still occurring in the East, but hardly at all in Scandinavia. This has no major impact on business culture and ethics. A company is mainly exposed to it when dealing with the authorities.
So-called credit registers and bad payment records are available in various data bases. This has reduced the risk for running into crooks and the East is converging towards the same general business risks as in Sweden. The risks are nevertheless a little higher. Before mobile phones were widespread (Internet and email is still not common), the Baltics were paradise for so-called “horse-traders”. You could hardly believe it when you realised what they were doing. Time and IT has caught up and these individuals have vanished. Most frequently, it was middle age men with an entire life of cons, bankruptcies and confabulations in Scandinavia. In the end, their work methods came back to haunt them. The ones I ran into were brilliant and extremely verbal, some of the worst city slicker’s acts I have ever seen.
Since you tend to be more risk prone and fast to act if something interesting occurs, people switch jobs more frequently and faster in the East than in Sweden.
The difference in price negotiations is that Swedes base the price on costs and quote a long term price. Eastern companies test various price levels based on estimations. This is why Eastern offers get rejected already in an early phase. A typical business meeting between Swedish and Eastern partners could look like this: the Swedes emphasise the technical questions and delivery times, while the Eastern company brings up payment terms, possible faster or advance payment due to shortage in working capital in smaller Eastern companies when receiving big orders from, for example, Sweden.
Financial services are almost non-existent and more expensive in the East - especially bank guarantees as a confidence base between new business partners that don’t know each other.
Personally, I believe a small Swedish company has more in common with small Eastern companies than with large Swedish listed companies. This concerns HR policy, business culture, management etc. There are essential differences in large companies on the other hand, to which I refer above.
To conclude this chronicle, I would like to round off as follows. If a person from the East is given the same game rules, business culture and market conditions as a person from Sweden, I believe that in time he will act as we do. How a Swede is acting and working in the East, based on circumstances, is harder to predict. This is not a negative statement -rather the opposite. With the multiple Baltics challenges, Swedes may find incentives for veritable deeds.
Everybody may not agree with everything I have written, but I speak from my own experience and stand for everything in this chronicle. Fast changes mean, nota bene, experience is perishable. It ages fast.
This chronicle is dedicated to all Baltics/Eastern Europe enthusiasts in Sweden and abroad.
Part 1 of "Stories of a Baltic veteran" >>
Jacob Lalander
, business administration graduate, with 14 years in the Baltics and Eastern Europe. Runs a consulting company for purchasing and acts as contact agent in both directions Scandinavia/the Baltics/Eastern Europe in the construction industry and other industries. Apart from English, Jacob also speaks fluent Latvian and decent Russian. A lot of the information in the chronical is taken from Jacobs lectures at EC Education in Stockholm, course for Logistics and Trade with Eastern Europe, spring of 2007.