Austria - Culture and Business Ethics

Iriciuc AngelaMaster EAI, grupa 1

Facts and StatisticsLocation: Central EuropeCapital: ViennaClimate: temperate; continental, cloudy; cold winters with frequent rain and some snow in lowlands and snow in mountains; moderate summers with occasional showers.Population: 8,174,762 (July 2004 est.)Ethnic Make-up: German 88.5%, indigenous minorities 1.5% (includes Croatians, Slovenes, Hungarians, Czechs, Slovaks, Roma), recent immigrant groups 10% (includes Turks, Bosnians, Serbians, Croatians) (2001).Religions: Roman Catholic 74%, Protestant 5%, Muslim 4%, other 17%.Government: Federal Republic.

Language in AustriaGerman is the official language spoken by 98% of the population as mother tongue. There are distinct differences between the many regional dialects, and also a wide variation in the 'standard' Hochdeutsch spoken from region to region. Slovene is an official language in the southern province of Carinthia. Other minority languages include Croatian (0.5%) and Hungarian (0.1%). All three languages are taught alongside German in some bilingual schools. Another minority language is Slovak.

Austrian Society & CultureThe PeopleAustrians are proud of their contributions to world civilization. They see themselves as modern, liberal and cultured. Austrians have a great love for the outdoors (i.e., walking, skiing, climbing, etc.). Although predominantly Catholic (89%), traditional family values have been weakened by modern life and government legislation. The rate of women working outside the home is one of the highest in the industrialized world.Austrian Family ValuesThe family forms the basis of the Austrian social structure. The family is generally small and, due to lack of migration, generally closely knit within a certain town or village. Weekends are generally devoted to family activities such as outdoor activities. Eating dinner together in the evening is very much the norm. Sundays are usually bookmarked for visiting grandparents for dinner, and/or, enjoying a hike in the country together. The Austrian HomeAustrians take much pride in their homes, keeping them neat and tidy. In a formal culture such as theirs, the home is the place where people relax and let their hair down. Only close friends and relatives are invited into the house, so it is a place where more informal communication may occur. Neighbourly etiquette also has its rules that must be observed. It is imperative that common areas such as sidewalks, pavements, corridors (in flats), and steps be kept clean at all times by all associated with them. ConservatismAustrians are generally conservative people. They are prudent and moderate in their behaviour. 'Regimentation' and 'compartmentalization' are a useful ways of describing how they organise their lives. They extend social invitations in advance of the event, and the more formal the occasion the greater the time between the invitation and the event itself, so that they can be certain that their guests do not have a prior engagement. Appearances Matter!!Presentation and dressing well are important to Austrians. Even when dressed informally, they are neat and conservative; their clothes are never ostentatious. There is sometimes a strict protocol for dressing appropriately in different situations: formal wear for the theatre or a concert, and semiformal wear for better restaurants. Some high level events mayhave a dress code and will turn away patrons who are not dressed properly. Most Austrian women dress up to go shopping, since they dress elegantly, if conservatively, at all times, especially when they will be public. Austrian Etiquette & CustomsMeeting Etiquette Greetings are formal. A quick, firm handshake is the traditional greeting. Maintain eye contact during the greeting. Some Austrian men, particularly those who are older, may kiss the hand of a female. A male from another country should not kiss an Austrian woman's hand. Women may also kiss men, but men never kiss other men. Titles are very important and denote respect. Use a person's title and their surname until invited to use their first name. When entering a room, shake hands with everyone individually, including children.

Gift Giving Etiquette

In general, Austrians exchange gifts with family and close friends at Christmas (generally Christmas Eve) and birthdays. Children receive gifts on December 6th, the feast of St. Nicholas. Gifts are generally not expected in business, but come prepared in case a gift is presented.

If invited to dinner at an Austrian's house, bring a small gift of consumables such as chocolates. If giving flowers, always give an odd number as except for 12, even numbers mean bad luck. Do not give red carnations, lilies, or chrysanthemums. Gifts should be nicely wrapped. Give: desk attire, books, music, a regional or country gift. Do not give: personal gifts, gifts with sharp edges, gifts with company logo (unless very subtle) or a very expensive gift. Gifts are opened immediately upon receipt.Dining EtiquetteIf you are invited to an Austrian's house: Arrive on time. Punctuality is a sign of respect. Dress conservatively and elegantly. In some houses you may be asked to remove your shoes, although the custom is not as prevalent as it once was.

Watch your table manners! Remain standing until invited to sit down. You may be shown to a particular seat. Table manners are Continental the fork is held in the left hand and the knife in the right while eating. Put your napkin on your lap as soon as you sit down. Do not begin eating until the hostess says 'mahlzeit' or 'Guten Appetit'. Cut as much of your food with your fork as possible, since this compliments the cook by saying the food is very tender. Finish everything on your plate. Indicate you have finished eating by laying your knife and fork parallel on your plate with the handles facing to the right. The host gives the first toast. Everyone lifts and clinks glasses, looks the person making the toast in the eye and says, 'Prost!'. An honoured guest offers a toast of thanks to the host at the end of the meal. Background To Business in AustriaAustria is a landlocked country, set in the heart of Europe with a population of scarcely more than eight million people. It has little in the way of natural resources and relies heavily on its larger neighbour Germany in both import and export terms. Yet despite these seeming handicaps, Austrians enjoy an extremely high standard of living and an economy which is relatively robust. This is, in no small measure due, to the drive and application of those eight million Austrians.

Although the current State of Austria has only existed in its current form since 1955, the country has a long and distinguished history. The capital, Vienna, was for centuries one of the major centres of the European world and as the fulcrum of the Austro-Hungarian Empire was, for a long time, a magnet for the best and the brightest amongst European Intelligentsia.

During the Cold War period, the country managed to steer an impressively neutral path between the two competing super powers and the contacts Austrians managed to develop into the old Soviet Bloc countries during that period now stand them in good stead when developing business contacts in the burgeoning markets of Central and Eastern Europe.

Austria is a country with an auspicious past and a bright future. Perfectly located to take advantage of the development and enlargement of the EU, the country has the human capital and highly developed infrastructure needed to act as bridge between Western and Eastern Europe.Austria is an attractive business destination with a strong business culture of its own and has significant strength in such distinct areas as banking and finance, precision engineering and bio-technology.Austrian Business Structures After the creation of the current state of Austria and during its post-war reconstruction stage, most basic industries were state-owned and although the level of state involvement in industry has been radically cut back through a series of privatisation measures, the legacy of bureaucracy and hierarchy remain.

Thus most large Austrian organisations would tend towards a high level of hierarchy, with companies managed along fairly tightly defined functional lines. The organisation chart usually reflects the reality of the structure of a business, rather than being merely designed to impress visitors. The head of a business function will wield a great deal of power within that business function and can seem to act in an almost autonomous manner, with little reference to other functional heads.

Austrian business has always prided itself on the concept of Sozialpartnerschaft, or social partnership, which promotes dialogue and co-determination in industrial relations matters. Thus, all industries, trades and professions have specific bodies which work together to promote and conduct good labour relations. It is, therefore, extremely important to work to develop a strong sense of co-determination and co-operation when working with Austrian subsidiary companies.Austrian Management StyleAs would be expected in a mainly hierarchical business culture, managers are less consensual than would be the case in countries where a more inclusive, matrix-style approach is employed. Therefore, managers can tend towards the directive they give direct instructions to subordinates who will, by and large, carry them out to the letter.

This also means that managers are expected to make the decisions and would involve their colleagues in the decision-making process to a much lesser degree than might be the case in a consensus-oriented countries such as Sweden or the Netherlands. Managers are expected to be sector/function experts and as such should know the answers to problems.

This directive management approach goes hand-in-hand with an almost old-fashioned sense of politeness and courtesy. Do not imagine a tyrannical boss barking orders at frightened subordinates. Everything is done with great charm and warmth. In fact 'charm' would be seen as one of the attributes of a good manager.

Relationships & CommunicationCommunication can seem a little formal to those cultures who are accustomed to using the more informal convention of addressing colleagues by their first names within the business environment. It is still customary in Austria to use family names in the workplace even with quite close colleagues.

Although there is some evidence that the younger generation are moving away from this convention towards the use of first names, it is still probably wise to use family names with when meeting new business colleagues - until asked to switch to first name terms. It is not unusual to hear Austrian business people addressing each other by first names when speaking English in a meeting and then changing immediately back to family names when the language switches back to German.

The code of business conduct is similar in Austria to that in the rest of Europe and the USA. A handshake at the beginning and end of a meeting is the accepted custom. Care should be taken to shake the hand of everyone present at the meeting.

Viennese men may kiss the hand of a woman. Accept this tradition graciously. A foreign man should not kiss the hand of an Austrian woman, since it is not expected and may come as a shock.

First impressions are important and you will be judged on your clothing and demeanour. Although Austrians prefer third-party introductions, they do not need a personal relationship in order to do business. They will be interested in any advanced university degrees you might have as well as the amount of time your company has been in business. Austrians show deference to people in authority, so it is imperative that they understand your level relative to their own. It is imperative that you exercise good manners in all your business interactions. There is little joking or small talk in the office as they are serious and focused on accomplishing business objectives/goals. Communication is formal and follows strict rules of protocol. Always use the formal word for you 'sie' unless invited to use the informal 'du'. Address people by their academic title and surname. You may be referred to simply by your surname. This is not a culture that uses first names except with family and close friends. Austrians are suspicious of hyperbole, promises that sound too good to be true, or displays of emotion. In many situations, Austrians will be direct to the point of bluntness. This is not an attempt to be rude, it is simply indicative of their desire to move the discussion along. Expect a great deal of written communication, both to back up decisions and to maintain a record of discussions and outcomes. Business Meeting Etiquette Meetings are formal affairs and people would be expected to arrive well-prepared. Austrians would be classified as 'pre-planners' in terms of their approach to meetings. It would be unprofessional to arrive at a meeting and to start looking through the papers as the meeting is beginning. 'Brainstorming' type meetings might occur but it would be obvious to all concerned that the meeting was not for decision-making or information exchange in advance and everybody would 'prepare' accordingly.

Appointments are necessary and should be made 3 to 4 weeks in advance when meeting with private companies.You are recommended to avoid making business appointments for the months of July and August as well as around the dates of Austrian national holidays.

Punctuality in Austria, as in Germany, is renowned throughout the world. Make every effort to arrive for a meeting at the appointed time or, if you are a few minutes late, make your apologies to your colleague. It is extremely rude to cancel a meeting at the last minute and it could ruin your business relationship.

Meetings are formalIt is very important at a business meeting to indicate your colleague's title first and then his surname. Use of first names is intended only for private meetings, after a personal relationship has been established. Thus for example if you meet with a professor, address him as Herr Professor Schmidt. At further meetings, you may use his title without his surname - Herr Professor. For women, 'Frau' is used instead of 'Herr' for either single or married women.

Have back-up material and be prepared to defend everything: Austrians are meticulous about details.

Meetings adhere to strict agendas, including starting and ending times. If you have an agenda, it will be followed. Follow-up with a letter outlining what was agreed, what the next steps are, and who is the responsible party.

Business Negotiation Do not sit until invited and told where to sit. There is a rigid protocol to be followed. Meetings adhere to strict agendas, including starting and ending times. A small amount of getting-to-know-you conversation may take place before the business conversation begins. Austrians are more concerned with long-term relationships than making a quick sale. Rank and position are important. Since most companies are relatively small, it is often quite easy to meet with the decision- maker. Business is conducted slowly. You will have to be patient and not appear ruffled by the strict adherence to protocol. Austrians are very detail-oriented and want to understand every innuendo before coming to agreement. Avoid confrontational behaviour or high-pressure tactics. It can work against you. What to Wear?Business dress is conservative and follows most European conventions. Men should wear dark coloured, conservative business suits with white shirts. Women should wear either business suits or conservative dresses, complimented with elegant accessories. Business CardsBusiness cards are exchanged without formal ritual. Have one side of your card translated into German. Although not a business necessity, it demonstrates an attention to detail. Include any advanced academic degrees or honours on your business card. If your company has been in business for a long time, include the founding date on your card as it demonstrates stability.Team WorkingTeamwork in Austria revolves around individuals who work on tasks given to them by the team leader. The team members would expect to be given clearly defined instructions and goals by their manager and will then expect to be allowed to pursue those goals without too much interference or questioning. People would not really expect their team roles to be interchangeable, nor would they expect to be asked to do the tasks allocated to another team member. Demarcation lines can be quite strong.

Cross-departmental teams can often prove very difficult to manage, as people are asked to make decisions in a vacuum which might adversely affect their area of the hierarchy. Thus decisions made at cross-departmental project group level are often revisited after group members have reported back to their superiors.

Especially for WomenIt is still reasonably unusual to meet women in very senior positions in locally-owned Austrian companies. There are some sectoral exceptions to this, such as the law, but any changes that are happening are happening relatively slowly.

Female mangers visiting Austria can, however, expect to be treated with great kindness and professional respect even if they are surprised by the old-fashioned courtesies they are shown by male colleagues. Foreign women will have no problem doing business in Austria. Lunch is the most common setting for business discussions. Women should stick to inviting male colleagues to lunch until they get to know them on a more personal level. Men enter restaurants before women. Offer your hand first upon meeting or greeting a man.

Successful Entertaining in Austria Austria does not have as strong a business entertaining culture as some other, more southern European cultures which reflects the strong separation which is often made between work and private life. Thus, it is fairly unusual to be taken out for dinner and even rarer to be invited to someone's home. Most business entertaining is done over lunch usually at a good restaurant. (Breakfast meetings are extremely rare in Austria.)

During a business meal, it is possible to talk about business, but it might be wisest to delay introducing work related issues until the host raises the matter.

If invited out for a meal, the host will always expect to pay. Similarly, if you invite someone for a business lunch, you will be expected to pick up the bill. In Austria, both the knife and fork are used throughout the meal. Eating with only one hand, with the other hand placed on one's lap under the table, (as is common in North America) is not considered particularly good table etiquette.

Alcohol will usually be offered at lunch and dinner but many Austrians will refrain from drinking at lunch time. It is probably best to take your lead from your host.

It is quite usual to tip in Austria. A tip of around 10% should be given directly to the waiter at the end of a meal.

Top Tips 1-20Tip 1: Due to certain historical and cultural influences, Austrian companies tend towards a hierarchical approach to corporate structure.

Tip 2: Try to find the organisation chart of the company you are dealing with - it usually gives a close reflection of the way in which the company is actually organised.

Tip 3: Social partnership has, for a long time, been a central tenet of the Austrian approach to business. Co-operation and co-determination in industrial matters are of paramount importance.

Tip 4: Managers tend to be instructional and are expected to give direct instructions to subordinates.

Tip 5: In a country which tends towards the development of specialists, managers are usually sector-area experts. They know what they are talking about.

Tip 6: Charm and warmth are much prized characteristics and managers will strive to achieve a 'cosy' relationship with colleagues.

Tip 7: People are expected to be very well prepared for meetings - do not arrive without having thought through the detail of the meeting in some depth.

Tip 8: If 'brainstorming' meetings are to be held, it is best to make sure everybody knows exactly what is expected within the meeting and what the goals of the meeting are.

Tip 9: Punctuality is prized. Do not be late as this could be viewed as unprofessional behaviour.

Tip 10: A certain amount of small talk can be expected at the start of a meeting.

Tip 11: Do not assume that Austrians are exactly like Germans. Austria is a country with a great sense of historiy and a unique culture.

Tip 12: Meetings will be run in a methodical fashion with the agenda, by and large, adhered to. Try to avoid deviating from the set agenda unless it is absolutely unavoidable.

Tip 13: Meetings may be arranged early in the morning as Austrians tend to start at 8:00 am

Tip 14: In a meeting situation, avoid speaking for the sake of speaking. Speak only when you have something relevant to say about a topic which you are knowledgeable upon.

Tip 15: Cross-departmental teams can be difficult to manage as they cut across the normal hierarchical loyalties and lines.

Tip 16: Surnames are usually used in business circles as are academic and professional titles.

Tip 17: Try to be as direct and literal in your use of language as possible. Avoid the use of coded language which can be confusing.

Tip 18: Although women play a less significant role at senior management level than in some other countries, visiting female managers should have few problems and will be treated with professional courtesy and respect.

Tip 19: Dress code still tends towards the formal and it is best to wear conservative, business-formal attire ' this applies to both men and women.

Tip 20: Most business entertaining will be done at local restaurants. It is unusual to be invited to the home of a business colleague for a meal.

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