Estonia flagEstonian business culture

Did you know about business culture in Estonia? Watch this video animation to find out some interesting facts:

Business Culture in Estonia is characterised by business communicationbusiness etiquettebusiness meeting etiquette, internship and student placementscost of livingwork-life-balance and social media guide.

Estonia is officially referred to as “Eesti Vabariik”, or the Republic of EstoniaAs with the other two Baltic countries (Latvia and Lithuania), it is a relatively small country in the northern part of Europe. Estonia is strategically placed in the business corridor, between the Scandinavian countries (EU) and other eastern European countries, including Russia. Estonia shares a border with fellow Baltic state Latvia to the south, (339km) and Russia to the east, (229km). In the north, it is separated from Finland by the Gulf of Finland and in the west, from Sweden by the Baltic Sea. The Estonian capital city is Tallinn.

Estonia has 109 languages as mother tongues, Estonian being the majority language, and official language of the country, spoken by 67.3% of the population, followed by Russian (29.7%). Of the other 107 mother tongues, the most numerous are Ukrainian, Belarusian, Finnish, Latvian and Lithuanian.  According to the word bank, the total population of  Estonia in 2011  was about 1.3 million., The main religions include Evangelical Lutheran and Orthodox, although religion plays only a small part in society..

Estonia is divided into rural municipalities, counties & towns.  The regional level of local government includes 15 counties as well as 6 republican cities: Tartu, Kohtla-Järve, Narva, Pärnu, Sillamäe and Tallinn.

Estonians have inhabited the territory since around 2500 B.C., making them some of the longest settled of all the European peoples. Because of Estonia’s strategic , which serves  as a link between West and East, the country has been conquered several times, and has experienced many centuries of foreign rule. It finally attained independence briefly in 1918 after centuries of Danish, German, , Swedish, and Russian rule, however, in 1940,  the Soviet Union forcibly annexed Estonia, and it wasn’t until 1991 that it regained its independence. The political situation in Estonia is similar to that of the other Baltic countries. It is a stable, constitutional parliamentary democracy with the Prime Minister serving as the head of the government. The President nominates the incumbent of this position and Parliament approves the nomination.  Usually, the Prime Minister is the leader of the largest party or coalition within the Parliament. The system of government has three branches: the executive, the legislative and the judiciary.

Integration is one of the state’s main priorities in Estonian society. The aim is the creation of a balanced multicultural society through a two-way process. On the one hand, non-Estonians are integrated into a democratic open society and on the other, minority cultures are introduced to Estonians. This harmonises the society around a common core as well as providing the scope to maintain ethnic differences, founded on the recognition of ethnic minorities’ cultural rights. Integration is a bilateral process, meaning that both Estonians and non-Estonians, participate equally in the harmonisation of society. Estonians see themselves more as Scandinavians and they are not very happy to be labelled as a Baltic state.

Estonia is located in the Eastern European Time (EET) zone – UCT + 2. The climate is similar to that in other European continental countries with cold winters and dry and warm summers. Because of its proximity to the Baltic Sea,  the weather is often breezy and humid.

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Xenophobia: being a foreigner in Estonia

Estonia has created a liberal democratic republic with an open market economy, and due to this it has become very attractive to foreign investors. This is also partly due, to Estonia’s workforce, which is well-educated and creative and partly due to the fact that Estonia has proved itself to be culturally open to interaction with the West, as well as to immigration and foreign investment. In January 2011, Estonia made the switch to the Euro, and this further simplified trade with and inside the European Union.

Although Estonia welcomes overseas investments and investors, there are still some cultural aspects that have to be considered when conducting business in the country. Here, business is both very official and matter-of-fact and Estonians prefer to separate their private and working lives. Therefore, unlike business culture in America, small talk is rare and if it does take place, it is kept very ‘small’ and brief . Therefore, foreign business people should bear this in mind and not be offended if, for example, their families’ well being is not enquired about or if they are not otherwise “talked up” during meetings and negotiations.

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International business in Estonia

When doing business in a foreign country it is necessary to be prepared to experience things that are different from your own culture. Without proper preparation and planning you may find yourself experiencing a culture shock, which can have a negative influence on the outcome of your business dealings. It is understandable that, as an active business person, you can only invest a limited amount of time into the exploration of these cultural differences.

The Baltic Sea Region is one of Europe’s fastest-expanding markets with more than 90 million people and Estonia is located at its heart. Since the end of the 1990s, Estonia has enjoyed a modern market-based economy as well as an income level per capita that is one of the highest in Eastern Europe. Proximity to the Scandinavian countries, its geographical position between the East and West, a very competitive cost structure and  a highly-skilled labour force have been  Estonia’s major competitive advantages since the beginning of the new millennium. Tallinn, the capital has emerged as a financial centre. Estonia’s main exports are metals and chemical products, food products, textiles, wood and paper, machinery and equipment and furniture.

Estonia’s strategic goals  are to increase of the number of tourists, enhance foreign investments and to create  a favorable basis for the Estonian exports.

In a nutshell, the new marketing model should introduce Estonia as:

  • a place of interest for tourists
  • an excellent place to conduct business (investments, export)
  • a first class  place to study/work/live

Estonia has a long established tradition of providing  quality education. It has an  education environment, which is vibrant and international.  Estonia also boasts the latest developments in information technology, making it an attractive country for young people who wish to live and study abroad. The combination of a recognised quality education, with tuition and living costs that are relatively low, guarantees good value for money for international students who decide to study in this small EU member state.

In the academic year 2009/2010 Estonian universities offered in excess of 100 English taught degree programmes.

In 2007, an Agreement on Good Practice was signed by Estonian higher education institutions which offered international degree programmes as part of  the internationalisation of Estonia’s Higher Education system. According to this document, participating higher education institutions are only able to admit international students to fully accredited degree programmes.

The aim of this section is to introduce you to the essential issues relevant for business culture and practice in Estonia. Characteristic attitudes and values will be discussed with a particular focus on their implications in the area of business etiquette. The section is divided into three sub-sections: Attitudes and Values, Business Ethics, and Education and Training.

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General education

In Estonia, nearly 90% of the population – have the equivalent of a high-school degree, which is considerably higher than the OECD average of 74%. The quality of Estonian education is ranked very highly by the OECD and this is supported by the higher than average scoring for Estonian students in the OECD’s Programme for International Student Assessment (PISA).

As well as the standard of general educational in Estonia being high, literacy is also high. For most Estonian people, education is a way out of poverty and presents an opportunity to obtain a good job and earn a good living.  The education system consists of:  9 years at primary school, 4 at secondary school, and 3 to 5 years in higher education from (depending on the course or subject of study). Primary and secondary education is free guaranteed by law.

Education starts at pre-primary level and is provided mainly at kindergartens as well as other pre-school childcare organisations, at home or at various elementary groups at schools. Compulsory basic education begins when children  reach the age of seven (grade 1)   and lasts for 9 years. Children start school in September, at the beginning of a school year and continue until they have finished secondary school (grade 9), at the age of seventeen; this is followed by the gymnasium (the foundation for continuing studies in higher education or vocational training) that provides vocational education at upper-secondary or post-secondary levels, as well as applied higher education.

University study is another option. Students who pass the higher education council’s exams receive grants for their education, while others have to pay fees to study. The Estonian higher education system includes applied higher education institutions as well as universities. Since 1995, higher education has  also been provided by some vocational education institutions. Institutions that provide higher education can be  public, state or privately owned. The ultimate responsibility for the administration of higher education lies with the Ministry of Education and Research.

Estonia has a long history of higher education. The first Estonian university was established in the city of Tartu in 1632.

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Educational standards

Estonia had made good progress in the decade before the 2008 financial crisis. Despite  these achievements however, the overall indicators in the Better Life survey for Estonia  are relatively low. However, the OECD’s findings reveal that Estonia has performed better than most of its European neighbours in the area of education.

Other issues such as transport infrastructure

As with all ex-communist countries, workforce mobility is high among the younger generation. Many have moved from the countryside to the cities to look for better paid jobs. Also, with Estonia’s accession to the EU, people have taken the opportunity to work in Europe.

Rights of women are protected by the Constitution, which forbids gender discrimination. However, despite women generally being more highly qualified than men, it is still mostly men who take up executive and top managerial positions, while women tend to be given more visible positions in the service sectors – such as secretarial work in banks and shop work. Some women are active in politics, but few have roles  in the Estonian government.

The family is the fundamental cornerstone of Estonian social life. The average family is a husband, wife and one child and newlyweds often live with the parents of one of them. Much respect is given to elderly family members and they are usually taken care of at home, not placed in a care home. Grandparents usually help with child care whilst parents are at work. Wives are generally responsible for the household even if they also have full time jobs.

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Cultural taboos

Estonians like to discuss their rich historical heritage; but at the same time they are incredibly sensitive about anything that is perceived to be critical of their culture. Therefore, jokes that could be interpreted as being offensive to Estonian culture should be avoided.

It is also recommended not to discuss World War II with Estonians bearing in mind that during the war, they were on both sides. They can therefore, find it difficult to appreciate the concepts of “good” and “bad”, or “winner” and “loser”, in the way that other European countries might.

Furthermore, in Estonia, comparing the country with Latvia or Lithuania  is unwise. Estonians are generally reluctant to describe their country as one of the Baltic States because they perceive themselves as Scandinavians.

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