Market Cultural Report: Iceland

The world has become one global village with companies moving their operations from the home country in search of opportunities in foreign markets. Globalisation has seen the birth of multinational enterprises (MNEs) that operate in more than one country. International companies must understand the culture of the host country in addition to understanding their own culture to be able to function effectively in the global market. Countries have a unique culture that affects business operations and long-term growth. Multinational companies must, therefore, understand the impact of culture on their process and how to align their activities according to cultural practices of a market. This essay presents a market culture report of the host country Iceland. The paper will also compare the cultural traditions of Iceland and Singapore. 

The Rationale for Choosing Iceland 

Iceland is considered to be a stable democracy with a very dynamic consumer economy. Its main exports include fish and its products and ferrosilicon and aluminium. The country is rich in natural resources and is abundant in clean power sources. The Icelanders are known to be well-educated, and they readily accept foreign consumer goods (Export.gov, 2018). Almost all Icelanders speak English which is the case with Singapore meaning that there is virtually no language barrier for foreign companies seeking to set shop in the country. The country is a close trade partner with the US meaning that companies which establish their operations in the country can use it as a launch pad into the broad US market (CIA, 2018). Iceland is an ideal investment destination having positive attributes that make it a perfect host nation for companies seeking to expand their operations to the international market. 

The Four Attributes 

History of Ireland 

The Norwegian and Celtic immigrants were the first inhabitants to settle in Iceland around the 9 th and 10 th centuries A.D. Denmark and Norway once colonised Iceland. The country enjoyed a limited home rule in 1874 followed by complete independence in 1944. Some of the significant life-changing events include the Askja volcano disaster of 1875 that devastated the country’s economy and caused widespread famine. Twenty-five years after the famine, 20% of the population migrated to the US and Canada (Bressan, 2015). According to CIA (2018), Iceland reported steady growth from the mid-20 th Century. 

Iceland is both a parliamentary republic and a representative democracy with a popularly elected president with ceremonial powers. The head of government is the Prime Minister who is appointed by the President. The Prime minister together with the cabinet forms the executive government. Leaders of political parties propose the members of the cabinet and formally appointed by the President (Guðni, 2013). The author further points out that if the leaders fail to agree on the list within the specified time span, the president can exercise his powers and appoint the cabinet without their input 

Geography of Ireland 

Iceland is geologically and volcanically active. It is ranked as the 18 th largest island in the world, and it is also the second-largest island in Europe after Great Britain. Geologically, Iceland is considered to be part of the Mid-Atlantic Ridge. Geographically, the country is closer to continental Europe than it is to the Americas (Gudmundsson, 2017). Similarly, according to the author, the nearest part to Europe is Norway which is about 600 miles away, while the closest part to North America is 1,290 miles away at Labrador. 

Volcanically, Iceland has many active volcanoes. One of the country's worst volcanic eruptions occurred in 1783, which caused a famine that killed close to 25% of the country's population (Bressan, 2015). Over time, the country still experienced periodic eruptions, but none has been as severe as the 1783 eruption. On the flipside, being geologically and volcanically active means that the country has access to renewable energy in the form of geothermal power (Gudmundsson, 2017). The country also has many rivers which act as a source of hydroelectric power. Most of the residents can access inexpensive electricity, heating, and hot water. 

Economy of Iceland 

Iceland's economy is a combination of both a capitalistic and free-market systems. Except for the period following the 2008 financial crisis, Iceland has always maintained steady economic growth with low unemployment and an impressive record when it comes to the distribution of income (CIA, 2018). Traditionally, the economy relied on the smelting and fishing industries, but of late, the country has been diversifying into the service and manufacturing sectors within sectors such as biotechnology, tourism and software production. 

The country has abundant hydropower and geothermal sources which have attracted FDI in sectors such as the aluminium and also sparked interest among firms seeking to establish state-of-the-art data centres using cheap renewable green energy. Iceland has three pillars that hold its economy. These include aluminium smelting, tourism, and fishing. For decades, Iceland depended on aluminium smelting and fisheries as the primary foreign exchange earner (CIA, 2018). The author points out that the tables have since changed with tourism becoming the number one foreign exchange earner (accounting for 8.6% of the country's GDP in 2016) followed by fishing and aluminium smelting. 

Foreign Relations 

Iceland is a member of many international organisations including the UN, EFTA, NATO, OECD, and Council of Europe. The country maintains strong and mutual diplomatic and commercial relations virtually with all countries. However, it enjoys close ties with Nordic countries, NATO nations, the US, Canada, and Germany. Owing to its economic, cultural and linguistic similarities with Nordic countries, Iceland is part of the Nordic Council that promotes intergovernmental cooperation. Iceland is said to be heavily integrated into the EU via the Schengen and the European Economic Area Agreement (CIA, 2018). The country had applied for EU membership, but the Icelandic government later froze this. Despite this move Iceland enjoys direct access to the EU market where it exports its goods to and earns foreign exchange. 

Cultural Analysis of Iceland 

Icelandic culture has its origin from the more celebrated North Germanic traditions. The nation has gone through centuries of isolation which has helped to buffer the country and insulate it against external influence. An excellent example of cultural preservation is in the language and traditions of the Icelandic people. To this day, the Icelandic language, which has remained unaltered for centuries is arguably the oldest of all modern Nordic languages. 

Four Unique Things about the Icelanders 

Gender Equality 

Iceland is known as one of the countries where both the men and women are treated equally and fairly. The principle of equality seems to be engraved into the very fabric of their culture. They do not discriminate each other on any basis, be it by gender, sexual orientation, race, or social class (Dal Fuoco et al., 2012). Women have an equal chance at career advancement just as their male counterparts and Iceland has since been listed as one of the best places for women to live and work in. Being one of the most gender equal countries means that women in the country are powerful and independent. 

The country has always been liberal on matters LGBT. In 1996, the parliament voted to allow for registration of same-sex marriages and in 2010 Iceland became the first country to openly legalise same-sex marriage which was done through an amendment to the Marriage Act (Dal Fuoco et al., 2012). Same-sex couples were in effect given the same rights as heterosexual couples in matters such as assisted insemination, adoption and parenting. 

Egalitarianism 

The people of Iceland value egalitarianism in a significant way. This has seen the country become one with the lowest income inequalities. The country's Constitution explicitly prohibits the creation and enactment of proper rights, privileges, titles, and ranks. In this regard, it is commonplace to find the Icelanders addressing each other by their first names (Dal Fuoco et al., 2012). Most families don't have a surname naming system and as such foreigners should not take offence if the locals fail to address them with titles or by their second or surnames. 

Since the culture treats all people as being equal, it, therefore, means that meritocracy is used as one of the main determinants of who gets to progress in life(Dal Fuoco et al., 2012).Since the ground is even for everyone, men and women get equal opportunities to compete for opportunities that life present. For this reason, it is common to find women in Singapore occupying positions of power. 

Strong sense of Community 

Icelanders are known to value their sense of community a great deal. Having survived centuries isolated from the rest of the world, the Icelanders learned a long time to rely on each other for support both in good and bad times. Icelanders take life easy, and they often look at life through the positive lens (Dal Fuoco et al., 2012). Most believe that things have a way of working out. This has seen them become one of the countries with the highest life satisfaction. Majority of the people think that their lives are better or it will get better soon. They still hold to their Viking heritage and are very proud of their Nordic language. 

Strong Work Ethic 

Iceland is known as a great working nation. The country has one of the lowest unemployment rates in the world. There is high participation in the productive work both for women and the elderly. Most Icelanders stay employed to the age of 70 retiring later than most people in the world. This helps them to keep their pension expenditures on the lower side (Ólafsson, 2008). Most Icelanders work long hours some of which are set off against the long summer holidays and the numerous occasional holidays during the year. In the developed world, the Koreans and Icelanders are known to be the ones that put in the highest work volumes. 

Icelanders are affluent, and they enjoy good material living. Therefore, no one can coerce them to work. They work hard because they have a strong and positive work attitude (Ólafsson, 2008). Again, relying on their history, it can be seen that the Icelanders have their strong work ethic developed from their isolated centuries where they learned the value of intense individualism and the value help and work. Since they were established as settlers, most of them have retained these characteristics both in their behaviour and mindset. 

Comparison of Business Cultures in the Two Countries 

Business Communication 

The Icelanders are very particular in the way that they communicate. Most of them prefer face to face communication. They are often straightforward and to the point. Some of their notable characteristics include punctuality, straight talking, honesty and accountability (Passport to Trade, 2018). With this in mind, anyone planning to do business with Icelanders is well advised never to overpromise or set expectations that are unlikely to be fulfilled. They also value friendships, and it is common for them to allow pleasure and business to mix. 

Singaporeans just like Icelanders prefer face to face communication. They value friendships and often have their meetings over what they call power meals served during lunch. Since breakfast is rare in Singapore, it is common to find that lunches are long (Danish Embassy, 2018). 

Business Etiquette 

The culture of the Icelanders informs their business etiquette. Since the Icelanders take their work seriously, they equally treat their business meetings with the same level of seriousness. They have a business dress code which they adhere to. Some of them dress in formal business attire when attending meetings while some prefer causal dressing as long as the dressing is appropriate to the business environment (Passport to Trade, 2018). Singaporeans are strict when it comes to observing business etiquette. It is always important that when one is making introductions for the first time to pay particular attention to the person's title and family name followed by his name. 

The Malays do not use their family names. Instead, they use bin (son of) or Binti (daughter of). Women in Singapore hold positions of power because they enjoy equal footing with their male counterparts (Danish Embassy, 2018). Similar to Singapore which treats women as equals to their male counterparts, Icelanders also value their women and see them as equals. The main difference here is that Icelanders do not refer to each other using titles or surnames it is therefore essential to pay attention to this difference. 

Punctuality 

In their meetings, the Icelanders are known to be very punctual preferring to keep time. They expect this of the other parties too (Passport to Trade, 2018). The trait of being punctual is also shared with the Singaporeans who are strict when it comes to keeping time. They expect the other party to the meeting also to save time and be punctual (Danish Embassy, 2018). 

Gift Giving 

Gift giving is appreciated. When invited to an Icelander's home, one should carry a small donation, maybe a small bottle of wine or a grant from the foreigner's country. Bribery and corruption are taken seriously, and Icelanders value transparency in business dealings. Singaporeans also encourage donation giving. However, one should be very careful when selecting and presenting the award. A simple gift will do as it is considered as a token of appreciation (Passport to Trade, 2018). When giving or receiving awards, one should do that with two hands and only open the gift after the giver has left. The choice of charity is critical. If the recipient is Chinese, the gifts should not be given in pairs of fours for number 4 represents death. Clocks are also inappropriate because "giving clock" in Chinese represents a departure. It is important to inquire from a representative of an appropriate gift to give (Danish Embassy, 2018). Similar to the Icelanders, the Singaporeans abhor corruption and bribery and value transparency in business dealings. Hofstede’s 5 Cultural Dimensions Analysis 

Hofstede's five cultural dimensions include power distance, individualism, masculinity, uncertainty avoidance, and long-term orientation. According to Hofstede (2004), these dimensions can be used to describe the effect of a society's or nation's culture on the value of its members and how these relate to the behaviour of the said individuals. Here is a comparison of the two cultures- Singapore and Iceland. 

Power Distance 

According to Hofstede (2004), this dimension opines that in any society not all individuals are equal and it therefore expresses or tries to explain the attitude of the culture towards these perceived inequalities. Hofstede Insights (2018) defines power distance as the extent to which those members of the society within the country in question accept the fact that power is distributed unequally. 

With a low score of 30, it can be seen that in Iceland hierarchy is established for convenience purposes only and superiors are always accessible to their subordinates. Both the employees and managers expect that they are consulted, and information be shared through top-down and vertical communication. 

In Singapore, the power distance is quite high with a very high score of 74. Singaporeans, some of who are Chinese embrace the Confucian teaching which emphasises the stability of society that is mostly premised on unequal relationships between the members of the society (Hofstede Insights, 2018). Power is, therefore, and managers rely on orders from their bosses and established rules. Employees expect to be told what to do, and information flow is selective and indirect (Hofstede Insights, 2018). 

Individualism 

This dimension looks at whether people's self-image is based on "We" or "I." In an individualist society, people are expected to look after themselves and take care of their direct family only while in collectivist societies people belong to groups that take care of them in exchange for their loyalty (Rugimbana & Nwankwo, 2003). 

With a score of 60, Iceland is a highly individualistic culture. Here people look after themselves and their immediate families. Employees are expected to be self-reliant and show initiative. Also hiring and promotion is based on meritocracy as in what one has done or can do (Hofstede Insights, 2018). Conversely, in Singapore, the score is meagre at 20 revealing that this is a collectivist society. The group takes care of its members, and members must reciprocate by being loyal to the group. The family is considered to be the prototype for all social organisations in Singapore. 

Masculinity 

A high score shows that the society is masculine and as thus it will be driven by achievement, success, and competition (Rugimbana & Nwankwo, 2003). Success is determined by the winner or the best in a particular field, and this starts from school and persists through life. A low score is indicative of a feminine society where caring for the needs of others, and quality of life is more important than competition. The critical issue here is the drive that motivates people- wanting to be the best (masculine) or merely liking what one does (feminine). 

With a score of 20. Iceland is no doubt a feminine society with its primary values focusing on quality of life and caring for others. Here people value equality, excellence in their working lives and solidarity. Most of the conflicts are resolved via negotiation and compromise. Conversely, Singapore has a middle score of 48 revealing that it tilts more the feminine side. The consensus is, and people try to avoid conflict. 

Uncertainty Avoidance 

This dimension seeks to look at how cultures tend to approach the fact that the future is uncertain. Should the future be allowed to unfold or should plans be instituted to plan for the future? That is the question that this dimension seeks to answer. 

Iceland scores 50 meaning that it stands right at the centre of the scale. Both generalists and experts are needed, and plans are made for the future, but these plans can be modified in a short notice (Hofstede Insights, 2018). The people are not too attached to the plans, and neither are they anxious about the future. With a meagre score of 8, Singaporeans appear to be a culture that would do all it can to avoid uncertainties. The society is guided by rules, breaking these rules lead to fines. 

Long-Term Orientation 

This dimension looks at how societies try to maintain some ties with their past while dealing with both present and future challenges (Rugimbana & Nwankwo, 2003). Pragmatic organisations such as that in Singapore score high (score of 72) meaning that they are more forward-looking and have no attachments to their pasts. Conversely, a normative society such as Iceland with a low score of 28 tends to be more concerned with staying true to their history as they make small strides towards the future (Hofstede Insights, 2018). 

From the discussion just ended, it can be inferred that both Singapore and Iceland have some differences in their business cultures. It is essential for the company to understand the culture of a host country and to adjust its operations accordingly. Similarly, the company must understand the culture of the home country and the host country to develop appropriate strategies that enhance long-term growth. The analysis has revealed that both Iceland and Singapore are feminine societies meaning that both men and women can compete on equal footing. Another similarity is in the fact that both countries score low on uncertainty avoidance meaning that the people in these countries are not overly anxious about the future. Some notable differences worth paying attention to include the power distance, individualism and long-term orientation in which the host and home countries differ in. Since a firm cannot change the national culture of the host country where it intends to set shop, it is essential for the firm and its management to come up with strategies to align its operations to the prevailing national culture in the host country. If the firm hopes to send expats from the home country to work in the new branch, these should be trained on how to operate in the new branch. 

References 

BBC (2018). Iceland country profile. Retrieved from< https://www.bbc.com/news/world-europe-17383525>[Accessed on 09.11.18]. 

Bressan, D., (2015). This 1783 Volcanic Eruption Changed the Course of History. Retrieved from https://www.forbes.com/sites/davidbressan/2015/06/08/this-1783-volcanic-eruption-changed-the-course-of-history/#44e0a32a53c8 [Accessed on 09.11.18]. 

CIA, (2018). The World Factbook: Iceland . Retrieved from <https://www.cia.gov/library/publications/the-world-factbook/geos/ic.html> [Accessed on 09.11.18]. 

Dal Fuoco, A., Weiss, O., Hofsteller, L., and Petrig, T., (2012). Country Profile: Iceland. Available at <blog.petrig.net/petrignet/wp-content/uploads/2013/01/country_profile_final_v7.pdf> [Accessed on 09.11.18]. 

Danish Embassy, (2018). Business culture in Singapore. Retrieved from <http://singapore.um.dk/en/the-trade-council/menu-4/> [Accessed on 09.11.18]. 

Export.gov, (2017). Iceland Market Overview. Retrieved from https://www.export.gov/article?id=Iceland-Market-Overview [Accessed on 09/11/18] 

Gudmundsson, A. (2017). The Glorious Geology of Iceland's Golden Circle. Cham: Springer International Publishing, 2017. 

Guðni, T. J. (2013). The history of Iceland. Santa Barbara, California: Greenwood. 

Hofstede Insights (2018). Country Comparison. Retrieved from <https://www.hofstede-insights.com/country-comparison/iceland,singapore/> [Accessed on 10.11.18] 

Hofstede, G., (2004). Cultures and Organizations. Blacklick: McGraw-Hill Publishing. 

Ólafsson, S., (2008). Working Nation: The Mindset of the Enterprising Icelanders. Nordic Labour Journal. Retrieved from http://www.nordiclabourjournal.org/artikler/forskning/forskning-2008/working-nation-the-mindset-of-the-enterprising-icelanders. [Accessed on 09.11.18]. 

Passport to Trade (2018). Icelandic business culture. Retrieved from <https://businessculture.org/northern-europe/iceland/business-etiquette/> [Accessed on 09.11.18]. 

Rugimbana, R., & Nwankwo, S. (2003). Cross-cultural marketing . London: Thomson Learning.