Intercultural Management in Denmark

Table of Contents

Preface

1. ECONOMIC AND POLITICAL BACKGROUND
1.1. Basic indicators in comparison
1.2. Economic and political structure
1.2.1. Denmark and the EU
1.2.2. Denmark and its foreign policy

2. SOCIO-CULTURAL BACKGROUND
2.1. The importance of the Danish welfare system
2.1.1. The Danish education system
2.2. The Danish way of life
2.2.1. The concept of equality
2.2.2. The “Law of Jante”
2.2.3. Social individualism
2.2.4. The influence of the family
2.2.5. The concept of “hygge”
2.2.6. The urge for security
2.3. The cultural life in Denmark
2.3.1. The philosophy of sport
2.3.2. Clubs and associations
2.4. The importance of culture-specific models
2.5. Basic assumptions of the Danish culture
2.6. The cultural dimensions by Hofstede
2.6.1. Power Distance
2.6.2. Individualism versus Collectivism
2.6.3. Masculinity versus Femininity
2.6.4. Uncertainty Avoidance
2.6.5. Long-term Orientation
2.7. Summary of cultural aspects

3. INTERCULTURAL COMMUNICATION
3.1. The Greeting
3.1.1. Verbal introduction
3.1.2. The exchange of business cards
3.1.3. Topics of conversation
3.2. The value of gifts
3.3. The working environment
3.4. Para-verbal communication
3.5. Non-verbal communication
3.5.1. The Smile
3.5.2. Proxemics
3.5.3. Gestures
3.5.4. The Danish dress code

4. LEADERSHIP AND DECISION BEHAVIOUR
4.1. The hierarchical structure
4.2. The decision-making process
4.3. Dealing with criticism

Summary

Bibliography

Appendix

Preface

When in 1998 the Scandlines A/S and the Deutsche Fährgesellschaft Ostsee mbH (DFO) amalgamated into the Scandlines AG, this seemed to be an important step for building bridges between these two neighbours within the Baltic Sea region. Today, almost four years later, it is quite obvious that differences between the Danish and German side of the head have contributed to enormous barriers concerning Scandlines’ policy. Notwithstanding equal goals, mutual ideas and nearly the same perceptions with regard to the further maintenance of the market-leader position within the region, it has been figured out that both parties have steadily tried to take the sole lead, while influencing the ferry line policy of Scandlines. Hence, it seems to be only a matter of time until the bi-national company will break up.

In this respect, not only management is becoming increasingly multicultural, even our ideas, views, attitudes and thoughts are beyond the local horizon. Thus, the significance of dealing with foreign cultures in its total range of complexity is a decisive step to success. But those who do not board the cross-cultural train of variety, will definitely miss the boat and ultimately end in failure.

So, what has led to the crucial struggle for power within Scandlines’ top management? Are there any special aspects, which have influenced the relationship between Denmark and Germany? Or had the fate of a merger between a Danish and a German firm been predetermined from the very start?

As a matter of fact, these questions cannot be answered, without considering the political, economic and cultural framework. Therefore, the present paper deals with the general intercultural aspects of doing business in Denmark. It also provides detailed information about distinct elements of a cultural study, including different values and beliefs as far as the mentality or the Danish way of life in general is concerned. Thus, this paper can be considered as a guideline before starting business with Denmark, in order to be able to meet the demands in an entirely new environment.

Finally, I would like to point out the possibility of reading this paper, before going abroad whatever the destination will be. If you favour Sweden, Norway, Finland or even Australia, it is all the same: You nonetheless benefit from this cross-cultural guiding hand, because it is, of course, Denmark-specific, but in spite of that one will gain a lot of useful principles and hints to answer cultural-related questions.

Stephan Dannehl

1. ECONOMIC AND POLITICAL BACKGROUND

First of all, the Danish economy is very dependent on trade with other countries. and due to the fact that Germany is Denmark’s most important bilateral trading partner, it seems to be clear why it is of particular significance that especially German managers who are currently doing business with Denmark as well as those who are willing to do so in the near future should be sufficiently aware of the domestic economic and political framework. While doing so, it is not only possible to strengthen the general commerce or individual business relations, but also to benefit from the cultural exchange arising from the trading partners’ business relationships.

As it is vitally important to take the basic economic and political background into account before starting business in an international context, we now need to consider what the economic and political structure in Denmark looks like in detail.

1.1. Basic indicators in comparison

Table 1: Selected basic indicators of Denmark and Germany in the year 2001/2002[1]

illustration not visible in this excerpt

Source: CIA World Factbook on http://www.cia.gov/cia/publications/factbook/index.html

* http://www.worldbank.org

** http://www.imf.org

*** http://www.dst.dk/yearbook, 2003, p. 5; http://www.destatis.de/basis/d/bevoe/bevoetab3.htm, 98/00, unpaged

**** http://www.prb.org

illustration not visible in this excerpt

[1] The given figures inside the table refer to the available facts on the web platform of the US Central Intelligence Agency (CIA), whereas the figures that are marked with stars refer to current information of different suppliers of economic data.

1.2. Economic and political structure

1.2.1. Denmark and the EU

During the process of unifying the European economy after World War II, Denmark did not participate in the negotiations, which eventually led to the creation of the European Economic Community (EEC) by the end of the 1950s. Instead of this, Denmark joined the European Free Trade Association (EFTA) in 1960. Due to the fact that Great Britain was the main export market of Denmark at that time, the British followed Denmark’s example of joining EFTA. Finally, it took a very long time until Denmark joined the EEC in 1973 together with Great Britain.^[1] Since then, the relationship with the EEC – from 1993 the European Union (EU) – has steadily stood under pressure, which has consequently led to an almost equal division of the population into two groups i.e. the advocates and opponents of EU policy.

In 1992, however, when Denmark put the Maastricht Treaty to the vote – while using a referendum, which dealt with the increased integration criteria at that time – the opponents were in a slight majority. Hence, it took another referendum before the Danes could take the Treaty’s side after obtaining special opt-out clauses.^[2]

Last but not least, ever since the introduction of ‘opt-outs’, Denmark has had – together with citizens’ referendum – two powerful tools to influence EU policy at the domestic as well as at the European level. Regarding this it should be mentioned that the idea for a single European currency, the Euro, was rejected at a referendum in 2000. Thus, Denmark is one of the few European countries refusing the Euro, although current studies have revealed that the Danes will agree to the Euro at the next referendum or to say it with the words of Denmark’s foreign minister Per Stig Møller:

“Time is right for a new referendum when we have practical experiences in how

unpractical it is not to be in the euro."^[3]

1.2.2. Denmark and its foreign policy

In 2001, many countries in Europe were alarmed at the fact that the liberal party of Denmark Venstre did gain power together with the Conservatives, which finally formed the new coalition after nine years of Social Democrat – led government^[4], because the preceding election campaign of the right-liberal wing in parliament, that then provided the new Prime Minister, Anders Fogh Rasmussen, was entirely determined by public concerns over immigration.

Notwithstanding the increase of xenophobic tendencies within the population after the September 11 attacks, public concerns with regard to immigrants had already been dominating political debate. But what has been crucial concerning the anxiety of other EU member states up to now was the fact that the other ‘great winner’ of the elections in 2001 was the extreme right wing party, Dansk Folkeparti, that is preliminary well known for its anti immigrant policies. As a matter of fact, this particular party was then not invited to be part of the government. However, it has a great impact on how PM Rasmussen estimates the guidelines of Denmark’s internal as well as external policy. Especially, ever since Denmark took over the Presidency of the European Union on 1 July 2002^[5], it has been figured out that Denmark could use its position to influence EU policy with regard to a further 12 countries’ EU joining, besides the tightening up of domestic integration rules for foreigners.

2. SOCIO - CULTURAL BACKGROUND

The Danish business life with all its aspects is basically determined by a particular system of values. Hence, the Danes behave in a certain way that is quite unique compared with other countries due to different values and beliefs. In addition, it is of considerable significance to understand and estimate these principles in order to gain deeper insights into the decision-making process as well as into the procedures of the day-to-day business.

2.1. The importance of the Danish welfare system

The extensive welfare system of Denmark, Sweden and Norway is also known as the ‘Scandinavian welfare model’^[6] due to the fact that these countries have nearly the same principles of organizing and financing their social security systems, health services and education. The main idea of this model is to provide “access to social benefits to all inhabitants regardless of their social or ethnic background”.^[7] Thus, the system covers everyone whatever the employment or family situation looks like. It is - so to say - universal and people are supported in times of sickness and old age that depends only to a limited extent on former activity. Moreover, the system offers supplementary and advanced services (e.g. help with rent payment and with expenses on children, day-care centres, health and home care).

For this reason, the strong-social Scandinavian welfare system has an important impact on the business life, because citizens enjoy extensive financial security and this leads to a reduction of anxiety, because “the government is there to serve the people”^[8] contributing to a reduction of stress in the business context, as well.

2.1.1. The Danish education system

The way of educating the future generation is not only at the centre of public debate, ever since the OECD^[9] PISA^[10] study has found out that the educational systems in numerous countries do not correspond to the steadily increasing demands for the achievement-oriented society on the whole. The Danish education system, however, is - besides the Swedish and the Finnish one - a good measure of how countries could improve its efforts concerning a more sophisticated educational policy. With respect to this it should be mentioned that Denmark has one of the best educational systems in the world, as well. Thus, due to the fact of Denmark’s tradition for life-long education it is not astonishing that Danes have excellent language skills (i.e. 78% of the Danes speak English, 43% German and 14% French)^[11]. The success of this system including a permanent dialogue of students and teachers can be summarised by the following quotation:

“The Danish education system has a tradition of focusing not only on academic accomplishments, but also on the students’ personal development and contributing to making them committed community members. Democracy and shared experiences are given a high priority, and the students’ critical sense is sharpened.”^[12]

2.2. The Danish way of life

The manner Danish citizens feel, think and behave is mainly defined by their mentality. The Danes are a very proud people. They are proud of their country with all its accomplishments including the Dannebrog – the Danish flag that is said to be the oldest flag on earth – and the Danes pride themselves on being thoroughly modern but they also appreciate their former tradition, customs and habits. In addition, Danes are informal and think highly of their tolerant life-style, individuality and cosiness.

2.2.1. The concept of equality

One of the main aspects of equal rights in Denmark is the fact that everybody is treated equally, regardless his or hers gender, origin or race. In addition, in 1989 Denmark became the first European country that legalised same-sex marriages with all its benefits and rights and there are additional laws (e.g. an anti-Sex Discrimination Act) to ensure the equality of the sexes. Moreover, there is even a minister for gender equality and besides an equality council^[13] and a centre for equality research^[14] many things are done to prevent firms of basing its human resource decisions on gender or ethnicity. And there is no denying that these efforts have positive effects on the labour market, in particular. In essence, Denmark is not only a country with one of the lowest unemployment rates in world (6%)^[15], but also a workplace with the highest proportion of women on the labour market, in which equal pay for men and women in the same job is taken for granted.

2.2.2. The “Law of Jante”

The mentioned concept of equality is also expressed in the Law of Jante, but to avoid the notion that this is a law in the legal sense, it is important that it can rather be considered as an unwritten codex of behaviour. Among other things it notably contains the following aspects:

“Do not think you are something” and “Do not think you are more than others”, respectively.^[16]

[see appendix]

2.2.3. Social individualism

One might argue that Danes are certainly anti-individualists because they think in common patterns but this is everything but true. In essence, “the concept of the rights of the individual is very strong in Denmark and people base their choices of career, accommodation, etc. on their individual preferences and needs. Enterprise and initiative are respected, and the Danes are generally very self-confident.”¹¹

Thus, the way of combining individualism with common ideas and goods is called “Social Individualism” because Individualism and The Law of Jante amalgamate into the perception that the community is as significant as the individual.

2.2.4. The influence of the family

A commonly held perception in Denmark is that the family plays an important role in every day’s life or even the most important one. Many people do not only decide while thinking of what is good for themselves, but the loci of decision making^[17] is also determined by the consideration of “What is best for my family?”. Therefore, the family influences business practices to a certain degree, because a manager who does not only want his or hers best has numerous incentives to deal and react differently, compared with somebody who is thinking in a personal or individual manner (e.g. an employee who lives in Copenhagen – the capital of Denmark – might choose not to go to Aalborg to work in one of the firm’s subsidiaries, because his or hers family is not willing to move, although this could obviously be a setback for the career of the employee).

In addition, Danish employers basically respect their employees’ family life and are eager to create a certain balance between the family and the working life, so that everybody has more time for the family. Moreover, many employers give their staff the possibility to adjust the working hours in an adequate way in order to pick up children from the childcare. In this context, it is quite useful to know that Danes usually live relatively close to their place of work and spend less time in traffic. Thus, the family does not only play an important role just because the Danes generally work where they live and vice versa, but also because of the fact that people weekend a lot of time with their relatives. And the more time you spend with your family, the more you (and your decisions) will be influenced.

2.2.5. The concept of “hygge”

Perhaps nothing captures the Danish perspective on life more than the concept of hygge which is, incidentally, difficult to translate but can be considered as living in a comfortable, pleasant or relaxed way. Some even argue that hygge also implies “having a good time together”^[18] including eating and drinking, whereas others associate the term with the idea that everything has to be in harmony including personal values and beliefs. As a result of this, hygge is somewhat hard to explain, but it has always had a tremendous impact on the Danish private and business behaviour because it also comprises the idea of avoiding trouble and striving for consensus.

[...]

^[1] http://www.eu2002.dk/eu/default.asp?MenuElementID=5005, http://www.um.dk/english/fp/dkandeu.asp

^[2] Opt out = to choose not to participate in something

^[3] http://news.bbc.co.uk/1/hi/uk_politics/1750489.stm

^[4] http://www.electionworld.org/election/denmark.htm

^[5] http://www.um.dk/english/presidency, N.B. Denmark’s Presidency of the European Union expired on 31 December 2002 and was turned over to Greece for six month. At present, Italy holds the EU Presidency.

^[6] http://www.workindenmark.dk/Welfare, N.B. The Scandinavian model is also referred to as the Nordic model, the Social Democratic model or the institutional model.

^[7] ibid.

^[8] Morrison, T., Conaway, W.A., Borden, G.A., Kiss, Bow, or Shake Hands, 1994, p. 84

^[9] OECD = Organization for Economic Cooperation and Development

^[10] PISA = Programme for International Student Assessment

^[11] Eurostat 2000, see also http://www.eu2002.dk/denmark/default.asp?MenuElementID=6112

^[12] http://www.workindenmark.dk/School_culture

^[13] Gender Equality Council to examine discrimination cases; http://www.ligenaevn.dk

^[14] Centre for Gender Equality Research; http://www.celi.dk/Engelsk/Engelsk%20om%20vil.htm

^[15] http://www.dst.dk/dst/extview.asp?o_id=458&file=/pukora/view/view.asp&viewho=4&viewflash=1&viewun=3&pub=1

^[16] Eaton Consulting Group on http://www.workindenmark.dk/Mentality

^[17] Morrison, Conaway, Borden, 1994, p. xiii

^[18] http://www.workindenmark.dk/Mentality