Global Business Cultural Analysis In Turkey Commerce Essay

orbiculate Business Cultural Analysis In dud Commerce turn outPeculiarities of running caper and trans field parleys argon drively associate to the finish of the awkward. Globalization of the scrimping has undoubtedly become a ordinarily accepted phenomenon. Even sm both and medium assembly linees, wanting or not, pillow slip problems of inter studyistic note relationships be it the purchase of equipment, materials or other employment and procurement activities, search for partners or investors, not to mention the direct competitor with multinational companies in their own domestic food market. Larger dictati cardinalrs of market, in cab atomic number 18t with its inevitable saturation, argon forced to think about entering the international arena.All these factors make the study of goal of c whollying relationships and international communication increasingly relevant for managers. Awareness about the peculiarities of a particular culture, the exponent to c onsider and use these peculiarities in practice help around companies quick and at less cost to establish relations with partners, and others to deal to a great extent effectively with rivals. The knowledge of the features of international communication is excessively useful for managers running(a) in international companies, since they help to better adapt to a unusual environment, understand the requirements of top-management, permissible frames of conduct and, accordingly, to move faster through the ranks. study dimensions of culture in jokesterand their baffle on Turkish economy and business practicesWhen construction business relationships, finding partners for business, maturation privy business in the territory of another res publica, it is always necessary to take into composition the totality of the rules of business etiquette and specializedities of traditions of each heathen environment. dud has long been a secular state with European style of doing busi ness, simply it should be re fragmented that the influence of Islam, though not pronounced in new-fangled condemnations is reflected in many aspects of the Turkish business etiquette and bears a deep cultural meaning. jokester combines European and Middle East traditions in the business culture, therefore earthy business etiquette here has some nuances which are useful to know for building triple-crown and lasting business relationships. Lets consider these nuances.First, joker has a sufficiently healthful developed family-owned business with a light sended hierarchy. Family traditions in washout are very(prenominal) important, both in life and in business (Burnaz, 2009).Second, different spheres of life in misfire are influenced by religion. If the partners are religious people, one should come on in school principal that Friday is a sanctified day for Muslims when they visit temple to pray, so no important business meetings and negotiations should be appointed on thi s day. Ramazan is a month-long sacred abstinence of on the whole Muslims, during which one cannot eat, drink, smoke cigarettes from sunrise to sunset. This should be kept this in mind when planning a business lunch or dinner in a restaurant. During Ramazan it is better to appoint business meetings with Turkish Muslims after sunset, however, if it is attainable to obviate them, it is better to postpone all negotiations until after Ramazan. Many dud residents leave on vacation in July or August, so the put of summer is not the best clipping for negotiations and business meetings, dapple from October to whitethorn is the close to active and fruitful percentage point for Turkish business culture (Burnaz, 2009 OECD scotch Surveys joker, 2010).It should be re segmented that as in any other country, manners and respect for etiquette in business in bomb is especially important. level-headed personalised relationships based on trust and mutual respect play a significant role in building business relationships with Turkish partners, therefore, before proceeding to business negotiations, it is necessary to show them openness and bent for friendship and to emphasize the mutuality of benefits (Burnaz, 2009 Ararat, 2008, Gupta, 2009).Motivation in negotiating with the Turks should be clear and precise. It is very important in the process of business negotiations to clearly dodging the advantages and profitability of a proposal for the Turkish side, although it is not the only liaison a benefit may be expressed in for Turkish partners. Instead of profits it is recommended to focus often on such points of the act as increased authority and baron. Respect, recognition and other intangible benefits may also affirm a positive impact on the gist of business negotiations in Turkey (Gupta, 2009).Thus, understanding that Turkish culture is very different from European or American business culture is a big step in doing business in Turkey and with the Turks. It takes exertion and age to learn all the ins and outs, only if the Turks also show pains towards exoticers and willing to make allowances for any mistake or error in etiquette made by a outsideer.In general, Turkey is an attractive country to do business with the positive dynamics in the economy. Turkey managed to avoid large losses that might have occurred as a exit of the global economic crisis of 2008-2009 (Turkey passes the crisis test, 2009). Having analyzed the economic tuition of Turkey for the period from 2002 to the present day, it can be argued that the state of the economy has become especially favorable, due to the on a lower floor factors (OECD Economic Surveys Turkey, 2010 Turkey passes the crisis test, 2009 Turkey Business environment at a glance, 2011 Aydin, 2006) The currency reform in Turkey, 2002 reforms in societal security and health care assess reform beneficial for entrepreneurs TOK Innovations (Housing organisation Projects) gave impetus to the d evelopment of national construction companies State nourish for blue and medium-sized enterprises, which constitute 97% of the Turkish economy Increased economic harvest-festival in Turkey, which is largely due to the auto fluid industry, real estate and framework industry Successful enthronements in tourism Active development of the logistics sphere of influence in Europe New international communications and new markets the most promising emerging markets for Turkey are China, South Korea, India, BRIIC group, as well(p) as markets of Pakistan and Bangladesh Regional and neighborly development 40% of the EU bud bring on is al fixed to regional development and social infrastructure Funding at the expenditure of TOBB (the Union of domiciliate and Commodity Exchange of Turkey) Development of nobleer schooling there are already 95 populace and 45 private universities in Turkey.Apart from that, the governing of the mutualwealth of Turkey considers foreign direct investmen t as the driving force of economic development and prosperity of the country. Turkey has one of the most liberal intelligent regimes for FDI among the member countries of the fundamental law for Economic Cooperation and Development (OECD). Except for some heavenss, businesses that are open to the private sector in Turkey are mostly open to foreign partners and investors (OECD Economic Surveys Turkey, 2010). Nevertheless, all investors, regardless of nationality, face a number of specific obstacles characteristic of developing Eastern countries excessive bureaucracy, slacken acting arbitrator arrangement, naughty pryes, corpo array governance weaknesses, sometimes unpredictability of the decisions taken at local government level, as well as frequent changes in principle and regulatory framework (Gupta, 2009).However, foreign investment regulation, for the most part, is transparent. Turkey supports national regime, including the purchase of real estate by foreign gravid c ompanies registered in accordance with Turkish law, and in most sectors no investment audit is provided (only notification is required). The Turkish organisation supports the principle of transparency with the associated nation as a precondition for the acquisition of real estate by foreigners, and imposes a limit of 2.5 hectare of property acquired by foreign someones. Individuals cannot own more than than than 10% of the nation in any of the areas of industrial development (Kalafatoglu, 2010 Keyman, 2005).The supreme share of foreign equity participation is limited to 25% in broadcasting and 49% in aviation and maritime transport. Establishment of companies crack fiscal services including banking and insurance, as well as oil-related companies, requires special leave from the Government of Turkey for both domestic and foreign investors. In practice, regulators do not restrict foreign ownership in the financial sector in 2005 and 2006 a series of acquisitions by foreign per sons were approved, and several foreign financial companies has been operating in Turkey for a long time (Ulusoy, 2009).The privatization process in Turkey is currently going on. The Government of the majority rule of Turkey privatizes the state economic enterprises through selling lots of securities, public offerings, or a combination of both. The total amount of transactions in the Turkish privatization program amounted to 8.1 zillion dollars in 2006, 4.3 billion dollars in 2007, and 6.3 billion dollars in 2008. The state continues privatization process, scorn the fact that the reduction of global financial flows, which began in 2008, may entail certain obstacles (Ulusoy, 2009 OECD Economic Surveys Turkey, 2010).Bureaucratic delays use to be significant obstacles to both national and foreign companies. However, recent reforms have simplified the process of establishment of companies, reduced the requirements to obtain permits, set a single form of adaption of companies and ena bled individuals to register their businesses in the Union of Chambers and Commodities Exchange of Turkey.Cross-cultural summary business cultures of ground forces and TurkeyGenerally, deuce polar opposite styles of management are distinguished, and consequently, business relation cultures American or Western and Oriental styles. They are fundamentally different in structure of army and exchange of information, separation and segregation of duties, arcdegree of standardization, coordination and subordination.The American system is characterized by management based on science, individualism and personal responsibility, a clear division of labor, specialization, planning based on the analysis of large amounts of quantitative information. Oriental management system is based on collective responsibility, rotation system, long-term rush planning, equation of employees to the company and its usage (Burnaz, 2009 Gupta, 2009).At the same time, in line with the Western style, there has tardily distinguished a pan-European, also partly inherent to Turkey as an EU member, with a simultaneous focus on economic and social indicators, such as a guaranteed opportunity for staff development, involvement of employees in decision-making process, the stress on favorable climate in the company (Burnaz, 2009 Gupta, 2009).However, despite the tendency to unify business methods and communication standards, we believe that the explicit eternal sleeps in business culture will remain in the forthcoming.Despite the vast variety of business cultures, there are methods to predict certain aspects of air of representative of a certain culture. unitarys of the most applicable methods are the categorisation of countries according to G. Hofstedes four variative characteristics reflecting basic residues of cultural values, and contextual ranking of cultures, proposed by E. Hall (Cateora, 2000).According to these theories, the USA is a notable event of a country with a high offi ce of individualism (IDV=91), when a recount individual poorly integrates itself into the group, and strong individualistic mentality is observed with a focus on the magnificence of personal life and initiative. The Turkish society is rather a society where the mentality of community relations dominates, so it is based on morality, sense of duty, predominance of the interests of the collective over the individual ones, and loyalty (IDV=37) (Table 1).Another important cultural dimension is the parameter of power ( ranked) distance. Power distance index measures the tolerance of the society towards social inequality, i.e., inadequate distribution of power amidst superior and subordinate members of the social system. The degree of distancing shows the relation of employees to the power of managers. Turkey has a culture with a high index of power distance (PDI=66), and power in Turkey may even be inherited. Here there is a significant inequality between the members of the society wh o are at different social levels and difference in the privileges, which are perceived by the members of the society for granted. In countries with a low power distance index, like USA (PDI=40), the reverse linguistic rule is observed (Table 1).The next quality largely determined by culture is the control of the level of uncertainty, which shows the extent to which members of a cultural community are programmed to bring outdom of action in unstructured non-standard situations. In this aspect, the USA and Turkey also hold totally different positions. As a country with high uncertainty avoidance index, Turkey (UAI=85) is less resistant to stress, more concerned with security issues and following the rules, which leads to poor perception of change and slow adaptation to new ideas. USA is characterized by culture with low UAI (UAI=46) associated with greater mobility, willingness to take risks, innovation, tendency to rely on knowledge, rather than absolute knowledge (Table 1).Moreove r, the USA is rather a country described by Hofstede as the country with masculinity behavior (MAS=62), i.e. dominance, encouragement to competition, high demands, desire for career getments and entrepreneurship, greed and passion for capital accumulation, lack of caring about others. In contrast, though attached now to the European community, Turkey still belongs to womanhood pattern (MAS=45) and the prevailing values are humility and altruism, gender equality, emphasis on serving people, mutual aid (Table 1).Table 1. Indexing USA and Turkey depending on cultural values by Hofstede.CountryIDV be by IDV*PDIRanking by PDIUAIRanking by UAIMASRanking by MASUSA911403846436215Turkey37286618/198516/174532/33* Classification among 53 countries of the world, by 2000. (Cateora, 2000)In addition to the parameters identified by Hofstede, the predominant and characteristic of the culture type of communication is of great importance in the typology of business cultures. On this parameter, all n ations can be be by the degree of cultural contextuality. Recent studies have revealed a high correlation between high/low-contextuality and the Hofstedes indices of individualism/collectivism, and hierarchical level of distancing (Cateora, 2000).Thus, low-context American culture shares relatively low hierarchical differences and high level of individualism. On the contrary, high-context Muslim culture is typically characterized by a significant difference between the hierarchical levels and low levels of individualism. Therefore, the majority of modern managers, employees of international companies, are more effective in countries with the low-context language, since they are relying on the reports, contracts and other acts enter in writing. But even in low-context cultures, communication is largely subject on cultural differences (Cateora, 2000 Gupta, 2009).High-context cultures require a considerable period of time before starting the business part of the relationship, becaus e future partners must get to know each other for joint business. For example, if one cannot find time and desire to drink coffee and talk about abstract topics, one cannot advance to the business part of the conversation (Cateora, 2000 Gupta, 2009).Another indicator is the witnesser of power and level of authority, which is a direct consequence of the level of the hierarchical distance, as it combines the effect of the power structure in business with the circumstance and position of manager in the community, depending on the size of the company, publicity, type of property, and cultural values. In Turkey, the decisions are mainly made exclusively by the head of the company, who prefers to deal only with senior executives of other companies. Business here is not between companies or divisions, but between individuals. The latter also marrow that in case of leadership changes from one side or another, the achieved agreements may lose their power, if trust relationships arent re-e stablished between new top executives of companies. Besides, the decentralized system, common for the U.S., enables managers at various levels to make decisions relevant to their functions, which is not common for Turkey (Ararat, 2008 Gupta, 2009).Thus, the obvious conclusion is that it is necessary for the authoritarian cultures as well as companies with a decentralized power structure to correctly determine the decision-makers, while working with companies in which decisions are taken by consensus, it is important to entice each member of the committee or group.Peculiarities of conducting business in TurkeyBusiness in Turkey is quite difficult to arrange. But the results of registration of the business in Turkey and certain investments can be easily recouped. Peculiarities of doing business in Turkey determine such things as cut-rate sale and purchase, opening bank accounts, measure system, offshore, ready business, small business and profitability of big business.In general, 2 011 will be very important for Turkey. In June, the general election will be held. The current government has been successful in many areas of the economy although some serious problems still remain. Therefore, resister political parties should form new political-economic strategies with respect to the above areas. Turkey has to achieve significant economic growth, reduce unemployment, ensure social justice, and resolve valuate issues. If it is done succeeds, it will be able to join the BRIIC (Kalafatoglu, 2010 OECD Economic Surveys Turkey, 2010).The Government of Turkey since 2001 has been implementing a comprehensive program designed to accelerate all the procedures related to investments and attract more direct foreign capital into the country. The national body, the Coordinating Council for the Improvement of the Investment Environment (YOIKK) provides methodological support in this issue. In addition, in 2004 the Investment Advisory Council for Turkey (IAC) was established, w hose recommendations serve as a guide for YOIKK, and activities undertaken within the Councils recommendations are published in one-year reports of the Treasury of Turkey on the activities of IAC (Keyman, 2005).The government continues to implement legislative reforms, some of which are aimed at attracting foreign investment to Turkey. The draft of National legislative Network, a project of automation and integration completed the process of developing the technical infrastructure in 2008, designed to accelerate the execution of business cases by facilitating the communicate of documents and transcripts of court proceedings and give the opportunity to file away an application online. In addition, the government simplified the approach shot of foreign investors to justice, including sanctioned advice and Alternative Dispute Resolution, supported by the U.S., EU and World hope (Turkey Business environment at a glance, 2011 Kalafatoglu, 2010).Turkey made the tax system more conv enient for investors as well. In 2006 the basic rate of income tax was reduced from 30 to 20%. The government also scrub the income tax for foreign investors who own bonds, notes and shares, preserving it for bank deposits and repurchase transactions. In 2007 tax administration established a division designed to manage taxes collection from large corporations (Keyman, 2005). However, the Government of Turkey has not yet managed to implement come on tax reforms, including reducing the tax on wages, which is one of the highest among OECD members. The Turkish Government also increased the VAT on leasing transactions from 1 to 18% in 2007. Special consumption tax on alcoholic beverages in 2008 reached 275.6% with the minimum requirements for special tax based on market prices of products (Ulusoy, 2008).Turkish laws affecting the investment climate continues to develop. It guarantees freedom of transfer of profits, fees and royalties and repatriation of capital. This guarantee is refle cted in the bilateral investment treaties between Turkey and the United States in 1986, and in some similar agreements, which regulate the unlimited and proper handling of all funds related to investment in a freely convertible currency in the self-regulating market (Treaties and Agreements, Turkey-United States, 1986). Turkey is a member of the International Centre for Settlement of Investment Disputes (ICSID). Turkey also validate the Convention Establishing the Multilateral Investment Guarantee Agency (MIGA) in 1987. Turkish law provides the confirmation of international arbitration execution of investment disputes between foreign investors and the state. Turkeys is also a member of the WTO Agreement on craftsmanship Related Investment Measures (TRIMS) (Keyman, 2005 Ulusoy, 2008).Turkey investment stimuli system was significantly change in 2006 to support manufacturing industry, energy sector, and export. General regime of investment incentives suggests tax benefits and, in s ome cases, the contingency of lending. Turkish Treasury also regulates some issues regarding interest rates on investment loans for small and medium enterprises, RD projects, environmental protection, as well as projects in 50 provinces, where the annual income per capita is below 1500 U.S. dollars. For such provinces, the law provides income tax incentives, social insurance benefits, free land and reduced electricity cost up to 20-50% (Ulusoy, 2009 OECD Economic Surveys Turkey, 2010).In RD sphere, scientific and Technological Research Council of Turkey (TUBITAK) and Technology Development Foundation of Turkey (TTGV) deal with reimbursements for RD and capital borrowing. Projects that get such benefits include development concepts, engineering research, technical feasibility evaluation, concept-to-design laboratory researches, samples study, test products production, experimental facilities construction, product testing, observable research and design problems solutions. In addit ion to these incentives, the Government of Turkey provides support for technological development zones, which involves the creation of infrastructure and production facilities, exemption from taxes, VAT, income taxes and revenues, and from customs duty duties for special IT-sector. Moreover, export stimulating program is focused on RD, market research, and participation in international exhibitions and fairs.In Turkey, no technical requirements for the beginning, slaying and expansion of investment projects are provided. There are also no restrictions to the acquisition by investors of goods from national sources and exporting specific percentage of products. Investors access to foreign currency does not affect exports. There are also no restrictions for domestic companies to own shares of foreign investors for the fact that the proportion of foreign shares will be gradually reduced or investor will transfer its technology on certain terms. There are also no conditions established by the state in terms of the permission to invest, including the localization of function in specialized geographic areas, specific percentage of national resources for the production of goods and services, national shares packages, import substitution, export requirements, employment of the population the investor technically located in, technology transfer and financing from national sources (Ulusoy, 2008 Ulusoy, 2009 OECD Economic Surveys Turkey, 2010).The Government of the Republic of Turkey does not force investors to disclose proprietary information or any other kind of information different from the publicly operational one during the process of obtaining permission from the supervisory authority. Companies with foreign capital are to send a report on their activities, submitted to the General Assembly of shareholders, the auditors report, and balance sheet in the Foreign Investment Department of the Treasury yearly in May.Except for issues relating to openness to foreign investment and transparency of the system of regulation, Turkey provides all the rights, benefits, deductions and privileges available to national capital and companies, as well as foreign capital and companies on the basis of most raise nation regime (for selected countries). For example, American and other foreign firms can infix in publicly funded programs and programs of subsidizing research and development on the basis of national treatment.The Government of the Republic of Turkey has adopted policies and laws that, for the most part, should promote free competition and transparency in business. However, foreign companies in some sectors kick back that the regulations are not transparent and understandable from time to time. One should keep in mind that Turkey is an observer, but not a member of World Trade Organisations Commission on Government Procurement.However, Turkey is an actively developing country, which tries to keep pace on all the contemporary European and Americ an innovations. One of the most perspective areas in Turkey is mesh and mobile commerce. For instance, recent researches show that mobile merchandising has acquired great popularity with the development of technology SMS since 2000 in Europe and different parts of Asia. Over the quondam(prenominal) few years SMS-messages have become a major ad channel in Turkey, and many experts even tend to view Turkey as an innovator in mobile marketing (Demirbag, 2008).The vivid example of this success is the experience of the Turkish branch of Pepsi, which in the last 3 years has been one of the most active players using mobile marketing tools. To date, according to the data of Pepsi Turkey, the level of participation in promotional campaigns conducted by the department is the highest in the category. The company uses mobile technologies, because it considers them more effective than TV tool to provide an opportunity for interactive communication with Turkish consumers. One of the campaigns i ntroduced by Pepsi offered consumers wallpapers and ringtones, including the famous song Da Da Da. Over the flow of a promotional campaign, users downloaded more than 200,000 ringtones (Tsalikis, 2009). Turkish companies (like Finansbank, BP, FritoLay) proved that simplicity and possibility of immediate gratification are of great importance for the Turkish consumer, and the mobile channel can provide this effect (Demirbag, 2008).In general, the trust of Turkish consumers continues to rise since February 2010, reaching 85.8. This is the highest level over the past 14 months (OECD Economic Surveys Turkey, 2010). According to the report published by the Institute of Statistics of Turkey in 2010 jointly with the Central Bank of Turkey, the index of consumer say-so amounting to 85.8 points is the highest mark since February of 2009 when it amounted to 87.60% (Tsalikis, 2009). The index started to rise since November 2009, after reaching a record low value of 78.38 points. If the index exceeds 100, it means that consumers are optimistic, and if it equals to 100, it means that consumers are neither optimistic, nor pessimistic, but if the index is below 100, it indicates pessimistic consumers (Aydin, 2006). The report determines the growth of the index of consumer confidence through the increase of the purchasing power of consumers in the current and future period, the general state of the economy and employment opportunities in the coming quarter. closedownThe research has shown that Turkey is characterized by the specific business culture, experiencing the influence of European Union, USA, and its Asian partners. Belonging rather to eastern patterns of business culture, Turkey differs very much form the United States in the major cultural indicators, such as indices of power distance, individualism, uncertainty avoidance, and type of business behavior (masculinity vs. femininity).However, in recent years, Turkey demonstrates high indicators of economy growth, op enness to reforms, laws adjustments and democratic investment policy, which makes Turkey a favorable business partner. In addition, Turkish policy and legislation on labor, health and safety do not impede investment, although legal restrictions on firing workers may create obstacles to labor-intensive activities in the lump economy. The specific tax policy sometimes hinders investment decisions, e.g. high tax revenue of beverages, similar to Coca-Cola, hinders investment in the sector. However, serious tax incentives for free sell zones provide incentives to invest in these zones. Similarly, incentives for investment in certain low-income provinces are designed to increase investments in these areas.Nowadays, international credit rating agencies take a firm stand that the investment level of the Turkish economy is still not high, but markets do not express much concern. Credit default swaps insuring Turkish securities against default for 5 years, are estimated at 1.84%. And while the Eurozone is struggling with figure deficits, Turkey states huge budget surplus due to the growth of tax revenues. Turkey is considered to be a country of investment grade in the market of credit default swaps after its dollar-denominated bonds started to exceed the bonds of developing countries in Europe largely due to accelerated economic growth.According to overture estimates of the Government, the economy of Turkey grew in first quarter by 12%, which allowed the Prime Minister of Turkey to claim that Turkeys credit rating wont be reduced in the coming 6-10 months. Generally, the country retains the trend towards emolument of economic performance, development and innovation, which opens new perspectives for foreign investment, collaboration and partnership.