International Human Resource Management among companies in Finland and Estonia

Academic Paper, 2020

20 Pages, Grade: 1


Table of Contents

List of Figures

1. Introduction

2. Answered questions
2.1 Question
2.1.1 Economical differences
2.1.2 National cultural differences
2.1.3 Political differences
2.1.4 Language differences
2.2 Question
2.3 Question
2.3.1 Company A
2.3.2 Company B & C
2.3.3 Company D
2.4 Question
2.4.1 Company A
2.4.2 Company B
2.4.3 Company C
2.4.4 Company D
2.5 Question
2.6 Question
2.6.1 Company A
2.6.2 Company B
2.6.3 Company C
2.6.4 Company D
2.7 Question
2.7.1 Company A
2.7.2 Company B
2.7.3 Company C
2.7.4 Company D
2.8 Question
2.9 Question

3. Conclusion


List of Figures

Figure 1: Country comparison (Cf. Eglitis 2020.)

Figure 2: Country comparison (Cf. Eglitis 2020.)

Figure 3: Country comparison (Cf. Ervasti; Vesa 2004. p.19.)

1. Introduction

During the course International Human Resources Management, we got to know some interesting new topics. We covered numerous topics, starting with the differences between domestic HRM and IHRM, the context of international HRM, international strategies, information about expatriates and much more. In addition, a practical relevance was always established. We not only dealt with numerous interesting cases concerning the teaching content but also discussed possible examples of fellow students who were particularly suited to the respective topic area.

In this paper nine questions concerning the article "HRM is foreign affiliates: A multiple case study among Estonian affiliates of Finnish companies" were elaborated, analysed and interpreted.

2. Answered questions

2.1 Question 1

General differences between Finland and Estonia

Both countries, Finland and Estonia, belong to the European Union. Finland joined the European Union on 01 January 1995 within the framework of the so-called "EFTA enlargement". Estonia joined the European Union on 01 May 2004.1

Formally speaking, Estonia is one of the Baltic States. Culturally, however, most Estonians feel closer to the Finns than the Latvians and Lithuanians. The Estonian capital Tallinn and the Finnish capital Helsinki are only 85 kilometres apart. With the fast ferry you can cover this distance in only 90 minutes.2

Estonians and Finns have the same ancestors. The Finno-Ugric tribes, who immigrated from the Urals.3

In terms of area, Finland is much larger than Estonia. Finland covers 338,450 km2 while Estonia covers only 45,340 km2. Therefore, Estonia has a much smaller population.4

2.1.1 Economical differences

Looking at the chart below, it can be seen that the unemployment rate in Finland is 1.4% higher than in Estonia, probably due to the higher population. The inflation rate in Estonia is much higher with 3.44%. The cost of living is much higher in Finland. If you look at the average income you will also notice that it is more than double the income of Estonia. In import and export the Finnish are also stronger than the Estonians.5

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: Country comparison (Cf. Eglitis 2020.)

2.1.2 National cultural differences

The cultural kinship between Estonia and Finland goes so far that the two countries even share the melody of their national anthem. However, Estonians and Finns each praise their own country as the most beautiful in the lyrics.6

Von Hofstede has a country comparison tool to identify cultural differences between countries. As you can see in the diagram below, there are only very small deviations for the dimensions of power distance, individualism, masculinity and uncertainty avoidance. These four dimensions are assessed quite similarly. Differences can be seen in the long-term orientation and indulgence. The differences are, however, that the Estonian culture is rather pragmatic. The Finnish culture, on the other hand, is a normative culture. The Estonian population finds it easier to adapt to traditions and changed situations. The Finnish people, on the other hand, attach great importance to traditions and prefer quick solutions. It is said that Finns are more optimistic people and that leisure time is very important to them. They are dreamier and chase their desires, while Estonians are more reserved and take a more controlled approach.7

Abbildung in dieser Leseprobe nicht enthalten

Figure 2: Country comparison (Cf. Eglitis 2020.)

2.1.3 Political differences

Politically, both countries have the form of government of a parliamentary republic. Estonia has been an independent country since 1991 AD. Finland since 1917 A.D. 8

In Estonia, the legislative power belongs to the Riigikogu (Parliament), which has 101 members according to the Estonian Constitution. The Riigikogu is elected by all Estonian citizens who have reached the age of 18. Estonian citizens have the right to stand for election when they reach the age of 21. The head of state is the President of the Republic of Estonia, who must be an Estonian citizen by descent and at least 40 years old. The office of President is mainly ceremonial. He or she represents Estonia under international law, appoints Estonian ambassadors, certifies foreign envoys to Estonia and awards medals and military and diplomatic titles. In the parliamentary elections in Estonia on 03 March 2019, the turnout was 63.7%.9

In terms of the military, Estonia has its own armed forces with a total of about 25,000 people. About 4,000 persons are in active service. Estonia is also a member of NATO.10

In Finland, however, the legislative body is also the Parliament. It has over 200 members of parliament, who are elected for four years on the basis of proportional representation. Every Finnish citizen over the age of 18 is entitled to vote. Since 2012 Sauli Niinistö has been Finnish President.11

In Finland, the armed forces have a strength of 35,000 men in peacetime. Of these, 26,000 are in the Army, 5,000 in the Navy and 4,000 in the Air Force. A majority of the Finns were against NATO membership.12

2.1.4 Language differences

In Estonia you can learn Finnish at school and many Estonians also have Finnish television at home. That is why Estonians speak Finnish more than Finns speak Estonian. For example, in Tallinn it is possible to communicate in Finnish everywhere. Even the Russians there usually understand Finnish so well that communication is quite problem -free. In the more southern regions of Estonia, Finnish is understood and spoken much less. This was originally due to the fact that the Finnish television programmes that could be received in Estonia during the Soviet Union's annexation were only visible in the more northern regions. Nowadays the concentration of Finnish tourists in Tallinn is the most important factor. There the demand for Finnish language skills is simply the highest among local residents. As a rule, the Finnish language skills are also better in the cities than in the countryside.13

The biggest challenge is that many common words in Finnish and Estonian have completely different meanings. An example would be "family house", which in Finnish is "omakotitalo". In Estonian, "single-family house" means "erämaja". The Finnish word "erämaja" means "wilderness hut". The risk of misunderstandings is therefore high.14


1 Cf. „Estland“ 2019.

2 Cf. Buth 2020.

3 Cf. Buth 2020.

4 Cf. Buth 2020.

5 Cf. Eglitis 2020.

6 Cf. Buth 2020.

7 Cf. „Hofstede Insights“ 2019.

8 Cf. CIA Factbook 2019a.

9 Cf. CIA Factbook 2019a.

10 Cf. CIA Factbook 2019a.

11 Cf. CIA Factbook 2019b.

12 Cf. CIA Factbook 2019b.

13 Cf. Sapmi 2017.

14 Cf. Sapmi 2017.

Excerpt out of 20 pages


International Human Resource Management among companies in Finland and Estonia
University of Applied Sciences Vorarlberg
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ISBN (eBook)
ISBN (Book)
international, human, resource, management, finland, estonia
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Melanie Gasser (Author), 2020, International Human Resource Management among companies in Finland and Estonia, Munich, GRIN Verlag,


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