Finnish business culture
Did you know about business culture in Finland? Watch this video animation to find out some interesting facts.
Finland is a Nordic country whose neighbouring countries are Sweden, Russia and Norway, as well as Estonia on the other side of the Gulf of Finland. Forests cover three quarters of the country’s surface area. Other outstanding features of Finland’s scenery are some 190,000 lakes and approximately as many islands. There is a self-governing area known as the Åland Islands between Finland and Sweden which is also part of Finland.
Finland is a parliamentary republic and has been a member of the European Union since 1995. It was a founding member of the Economic and Monetary Union (EMU) and adopted the Euro as its currency in 2002.
There are two official languages in Finland: Finnish and Swedish. Finnish is spoken by the vast majority of Finns, 92 %. Swedish is spoken by 6 % of the population and Russian speaking people, numbering 40,000, constitute the largest foreign language minority in Finland, at 0.75 %.
Finland is one of the largest countries in Europe with an area of c. 338,000 sq. kilometres and around 5.3 million inhabitants. Almost two thirds live in urban areas and one third in rural areas. Principal cities are Helsinki (population 561,000), Espoo (232,000), Tampere (204,000), Vantaa (187,000), Turku (180,000) and Oulu (129,000).The capital of Finland is Helsinki, situated on Finland’s southern coast. Approximately one million people live in the capital and surrounding area of Helsinki.
Finland is a modern welfare state with highly developed services and infrastructure. As in other Nordic countries, the Finnish welfare system is extensive. Finnish municipalities take care of health, primary and secondary education, day care for children, care of the elderly, cultural services, libraries, fire and rescue services, environmental services, infrastructure, leisure services and industrial policy. These are mainly financed by tax income, levied by the municipalities and the State.
Paper, pulp and wood, plus metal and engineering products have traditionally been the backbone of Finland’s economy. In the 1990s, these industries were overtaken in importance by electronics, with the Finnish mobile phone company Nokia taking the lead. Today, Finland’s competitiveness is mainly based on technological expertise which is utilized to create new business and promote corporate growth.
There are unusually stark contrasts between the different seasons in Finland. The summer is relatively mild, yet warm and very light, while the winter is cold, dark and long. Spring and autumn also display uniquely beautiful features but these seasons are very brief. The average temperature in the summer time in the southern parts of Finland is around 18-21°C and occasionally Finns enjoy even warmer summer days. In winter, the average temperature remains below zero from December to February.
Finland is in the Eastern European Time zone, that is GMT+3 and in the winter GMT+2.
Xenophobia: being a foreigner in Finland
Finland has long been a culturally homogenous country. Foreign customs and religions are unknown to many Finns. This may cause some confusion or unintended misunderstandings in multicultural dealings however, there is usually a genuine effort to be polite and respect the culture of a foreigner even though this may not seem to be the case on the surface.
The number of foreigners in Finland is nevertheless growing. In 1980, there were 12,800 foreigners, with the largest numbers coming from Sweden, Germany, the United States and the Soviet Union. In 1990, there were 26,200 foreigners, with Swedes remaining the largest group and Russians on the increase. According to 2012 statistics, the number of foreigners in Finland has risen to 195,500, with Estonians being the largest group (about 20% of the total) followed by those with Russian, Swedish or Somali citizenship.
International business in Finland
When doing business in a foreign country you need to be prepared to experience things that are different from your own culture. Without proper preparation and planning you may experience ‘culture shock’ which may have a negative influence on the outcomes of business dealings. It is understandable that as an active business person you can only invest a limited amount of time on the exploration of cultural differences. Sometimes it is only a few hours after landing in a new country that you find yourself in a meeting room talking business.
There is a strong national emphasis on the importance of education and training in Finland. Economic competitiveness is seen to be based on education, knowledge, cooperation and competitiveness. A small country such as Finland needs to specialize and focus on of specific areas of excellence if it is to be competitive in the global marketplace.
Also, on a personal level education has always played a significant role in enabling upward social mobility for anyone willing to seize the opportunity. All this calls for wide and comprehensive basic education and excellent higher education. Thus, the public administration system is investing a lot of money in free education throughout the whole education system. The idea of lifelong learning has also played a very important role in education policies during last decade.
Education has been regarded an important factor in Finland’s economic success. The educational level of the Finns is high with literacy rates at 99 percent. Basic education in Finland consists of nine years of mandatory schooling for everyone between 7 and 16 years of age. One year of pre-school at the age of six is optional, but today 96 percent of six year olds attend pre-school. In some municipalities there is also the possibility of attending a voluntary 10th form. Upper secondary education consists of general upper secondary education and vocational upper secondary qualifications. General upper secondary education is general education that prepares students for the matriculation examination. The principal objective of vocational programmes is to gain vocational competence.
In 2003, approximately 92 % of those who completed basic education continued directly on to general or vocational upper secondary school. Completion of upper secondary education is considered to be the minimum requirement for adequate performance and employability in a career.
The Finnish higher education system consists of two parallel sectors: polytechnics and universities. Universities are characterized by scientific research and higher education based on it. Polytechnics (ammattikorkeakoulut) are more oriented towards working life and operate on the basis of higher practical expertise requirements set by employers. During the 1990’s, many new polytechnics were established. There are 21 universities and institutions of higher learning in Finland today.
In the Programme for International Student Assessment (PISA) studies conducted by the OECD, Finland has traditionally been amongst the highest scoring countries.
When doing business in a foreign country, it is advantageous to have some knowledge about the language and computer competency of your counterparts. This may prove to be particularly useful in the preparation stage of negotiations. Knowledge of such issues may help to decide whether it is safe to rely on a host speaking your language or whether it is necessary to travel with an interpreter which may significantly increase the pace of business negotiations. Some knowledge about your business partner’s computer literacy may help you to adjust your expectations and also to adjust the level of technology you incorporate into your business activities. Not least, it may help you to save valuable time and money.
Workforce flexibility is increased by the use of so called non-standard forms of employment. These include fixed term and part-time contracts, as well as personnel leasing and non-standard employment contracts are becoming more and more common in Finland.
In Finland, there must always be a justifiable reason for assigning someone a fixed term contract or indeed multiple fixed term contracts in a row. In spite of this, today, a little over half of new employment contracts agreed are still for a fixed term. Every sixth (16 %) employee works in a part time job and this figure has been slowly but steadily increasing during the decade.
Personnel leasing services are also increasingly common in Finland. These agencies charge companies for using their service and pay all related expenses. Employees provided by personnel leasing agencies are often students or unemployed people looking for work and there is no cost to them for this service.
Finns are known to be modest but take pride in their history and culture, including technological and athletic achievements and also their part in World War II. You should remember that Finnish people value trust and honesty. In fact, if trust is betrayed, you will have a hard time regaining it. It is worth repeating that you should be punctual so as not to get a reputation for being unreliable.
Finnish society is quite tolerant and there are hardly any subjects that could be called taboos. However, it is best not to discuss religion or politics with a stranger as these are topics that many people have strong feelings about.
There are also some eras in Finnish history that are best avoided. Finland – as a small country – has been forced to make some concessions in its foreign policy during its history, for which it might be criticized. Examples might be their alliance with the Germans at the end of World War II or the so called era of ‘Finlandisation’ during the cold war. There is also a love-hate relationship between the Finns and the Swedes and between the Finns and the Russians. So, it is advisable not to praise the Swedes or the Russians too much to your Finish counterparts.
Finns cherish their reputation for living in an egalitarian country. Hence, any discriminatory or racist jokes should not be told. Finland has recently had a female president for two terms (12 years altogether) and there are also several other women who hold high office in Finland. Any displays of appreciation for Finnish progressiveness therefore are appreciated.
You should not discuss topics of a too personal nature, such as salaries, health issues or love life, particularly at the beginning of a relationship. Finns are usually reserved to start with and you should respect their need for privacy.
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