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8/11/2011 Havyas Chandragiri, IIM, Indore

Once the centre of the Ottoman Empire, the modern secular republic of Turkey was established in the 1920s by nationalist leader Kemal Ataturk. Sandwiched between Asia and Europe, Turkey s strategic location gives it a major advantage in the region, including the Black Sea. The Turkish state has been officially secular since 1924. Approximately 99% of the population is Muslim. The leaders of the new republic concentrated on consolidating their power and modernizing and Westernizing what had been the empire's core--Asian conservatism and European dynamism. Social, political, linguistic, and economic reforms and attitudes decreed by Ataturk from 1924-1934 continue to be referred to as the ideological base of modern Turkey. Turkey is a large, middle-income country with relatively few natural resources. Its economy has been transforming itself from an agriculture and heavy industry based economy to a more diversified economy with an increasingly large and globalized services sector specially tourism. The two characteristic trades of the Turkish people are Hospitality and closed family relations. 1. Hospitality is indeed the Turkish way of life. Turkish people are the most gracious and generous hosts as a result of their natural instincts. Tradition is inherent in the Turkish psyche. Every individual feels bound to honor his guest in the best possible manner. Being conscious of the foreigner s customs they are highly accommodating and helpful, in line with their code of hospitality which basically is to treat all guests in the best possible manner, as God s guests. 2. Family Relations are much closed within Turks. They respect their elders and support each other in every way. The parents are involved with their children s life even after they are grown up and continue to support them financially until they need it. Children also support their parents in their old age. The family unit is very strong and is mostly male dominated.

Why Turkey?
Turkey has been recently a hot topic of discussion at business forums due to a lot of factors such as its fast growing economy, dynamic culture and rapid westernization. Also, being the only Islamic nation to uphold the principles of democracy, it is more open to innovative and versatile ventures. Its relative political stability builds confidence in investors and budding entrepreneurs. The existing code of hospitality increases Turkey s soft power. At the same time, Turkish people are very proud of their tradition and heritage. They do not appreciate any anti-cultural elements. Handling the multiple dimensions of social sentiment could prove to be a challenge for any new business in this culturally sensitive environment. People are also a little laid back and relaxed and the challenge here would be to find ways to motivate them. The strong family ties tend to make people, largely, less ambitious. Any company will have to understand and respect the trade off

people face between family and career. Therefore, it s important for businesses to restructure their policies to reflect people s preference towards work-life balance. Therefore Turkey offers opportunities as well as challenges to anyone trying to set up a business.

Hofstede s Framework

Power Distance
Hofstede s Power distance Index measures the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally. y y Turkey scores a 60 on this index which is comparatively on a higher side considering the world average. A long history of being ruled by monarchs can be attributed to the existing power distance. It is a possibility that Turkey s history has influenced its present and that influence has percolated into its personality. The people in higher positions of authority are addressed with reverence and people tend to be formal in their interaction.

This index measures the collective inclination of the society towards individualistic goals or collective responsibilities. It also reflects the willingness of people to make sacrifices towards their family or their group while keeping their personal ambitions in the background. Turkey shows a strong inclination towards collectivism which reflects their belief in family values and morals. The individualism index is around 30 which is quite low as compared to the world average. This could be again attributed to the Islamic cultures strong emphasis on the concept of family, community, unity and solidarity.

Masculinity is seen to be the trait which emphasizes ambition, acquisition of wealth, and differentiated gender roles. Femininity is seen to be the trait which stresses caring and nurturing behaviors, sexuality equality, environmental awareness, and more fluid gender roles. Turkey has fairly low masculinity index which means a more caring and modest population. This trait is strongly reflected in their hospitable outlook. The population at large is not madly in race towards wealth and power instead they perceive life to be a journey than a destination. They believe in enjoying the simpler pleasures of life along with family and friends. Business in Turkey deals with a lot more towards building trust, loyalty and respect for your fellow businessmen, customers, vendors and suppliers. As compared to western countries, business in Turkey is more than just numbers, profits and financial statements. It is unlikely that a long standing business relation is severed in the interest of immediate profits. If a partner is going through a tough phase and is not able to deliver raw materials at competitive rates, the firm is likely to continue the existing relationship despite the loss. Honesty & promptness are very fundamental qualities desired in a businessmen.

Uncertainty Avoidance Index UAI for Turkey, according to Hoefstede s website, is 85. This UAI score is normal for countries with Muslim foundations. In a business sense the Turk business person wants to get to know you before he will engage in a business relationship with you. It is important for new businesses to spend time in developing good relations with the partners, vendors and suppliers as people tend to shun away from uncertain situations. Nobody prefers doing business with strangers. The combination of two high scores (UAI) and (PDI) create societies that are highly rule-oriented with laws, rules, regulations, and controls in order to reduce the amount of uncertainty.

Long Term / Short Term Orientation This concept deals the outlook of a country and whether acting for the present or the future. They can be defined as by having Long Term Orientation associated with thrift while Short Term Orientation can be associated with respect for tradition, fulfilling social obligations, and protecting one's 'face' Since Turkey has been long bonded by the values of religion the societal inclination towards a Short Term orientation is justifiable. Turks are highly concerned with tradition. Since they are a collectivist group face is very important and they strive to create a positive face

Business Venture: A business idea which capitalizes on the strong tourism industry already present in Turkey presents a good opportunity as well as a significant challenge, as a lot of factors analyzed under the Hofstede s framework does not favor opening new businesses. These challenges therefore demand significant shift in our business strategies. Since Turkey is considered to be an alternative destination for Europeans as well as Asians most of the travelers include back-packers and hitch-hikers who are more inclined towards enjoying Turkey in its raw native natural form. They tend to stay in cottages and inns to be able to appreciate the true essence of Turkey. Most of the motels or guest-houses in and around Turkey are owned by foreigners who once had visited Turkey, fell in love with the place and decided to settle there. Our business model involves buying these cheap motels on lease for a certain period and converting them into a chain of budget hotels. People Management 1. Recruitment: We need to recruit local people as out motel staff at all the branches who can speak English comfortably. This is again a challenge because the percentage of English speaking population in Turkey is just 17%. Also, recruiting local people would be an added advantage to our guests as they are aware of surrounding area- do s & don ts , scenic places, hang-out places and emergency services. The problem of attrition would be minimal considering the loyalty of people & short term orientation. Since, Turks follow Islam very strictly it is binding on them to serve their master in the best possible way. Otherwise, the money which they get as compensation would be considered haram . Any level of attrition would therefore be a function of our own shortcomings in compensation policy & work culture. 2. Training: As we had identified that local people are only comfortable with basic englsh, we need to design training programs which are specially focused on business communication in hospitality industry. It is also imperative for us to train them in some basic foreign languages & cultures. Much needn t be done on the service part as being hospitable to guests is deeply ingrained in the character of most Turkish people. 3. Operations: In the day-to-day operations we need to emphasis on the importance of developing relationships be it with customers, partners or suppliers of our food products. Relationships here are built over course of time but once established, it becomes very easy for anyone to conduct transactions as a lot still depends on trust & honesty. Credit is freely available with suppliers & patronage is not easily broken. Therefore, the challenge is only during the initial days of business.

Other factors affecting our strategies: 1] Since, the power distance is quite high it would be easier to implement policies relating to work timings, culture & processes as people are willing to abide by the rules & regulations set by a higher authority. 2] The head manager of each motel has to be of a significantly higher age as Turks tend to respect their elders & consider it their duty to abide by their decisions. 3] Steps have to be taken to inculcate a family-like culture among the staff of each motel so as to develop a sense of belonging to the company thus reduce any chance of conflicts with business goals. People being collective in nature will smoothen the process. 4] The work culture has to be more of a formal nature as being the tradition of the country but at the same time due consideration has to be given to the work-life balance of employees. 5] Being more on a feminine side, people tend to be closer to families & like spending quality time with them. Work timings therefore cannot be too elongated and late night shifts be generally avoided. 6] Holidays, shifts & work timings have to tailor made with regards to the religious practices as many people offer 5 times namaz a day & very strictly follow the fasting schedule during the ramzan month. 7] Fridays afternoons have to be necessarily off as Muslims consider it as an auspicious day of the week to offer prayers. .