Business culture in Turkey


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Understanding the business culture in Turkey in context of global management

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Business culture in Turkey

  1. 1. Organizational Due Diligencefor Cross-Border M&A – TurkeyFebruary 29, 2012
  2. 2. BACKGROUNDTurkey has the particularity of sharingboth the European and the Asian. Location:Although Turkey professes to be a strictly is located in the Population:secular country, Islam shaped the culture southeastern Europe 74.7 Million people and the Southwesternand the society since it is practiced by the Asia estimated for 2011majority of the population. Capital: AnkaraDifferent Islamic groups managed to co- Language:exist together in tolerance. 90% Turkish. Other dialects: Religion: Kurdish, Arabic, 99% Islamic Circassian, Greek, Armenian, andUrban Population: 70% Judezmo.Rural Population: 30%Internet Access: 43%
  3. 3. HUMAN RESOURCES (TLL) TURKISH LABOUR LAW: Regulates all Employment Relationships. MINIMUM WAGE (MONTHLY): 837 TRY or 474 USD WORKING HOURS: 45 Hours a Week, and 11 Hours a Day UNION LAW: All Employees Working Under an Employment Agreement are Eligible to Become a Member of a Labour UnionMOTIVATION AND TRAINING: Highly Valuated in the Turkish CultureCORPORATE GOVERNANCE: Rule-Based System of Governance, as Opposed to a Relationship-Based
  4. 4. Business EtiquettePersonal relationship is key to success in the businessBusiness conversations should be begun from short conversation• ie: family and soccer, avoiding subjects as religious and politicsPeople respect punctuality and accuracyDecision making process is slow and hierarchicalMale earn 3.5 times more than female• ie: 105th out of 134 countries in equal payment to women
  5. 5. PEST Social TechnologyPolitics • European Union (EU) accession Economics •17th largest economy • Success in reducing •Internet: • 43% of the •Accession filled in •GDP :$1.05 poverty households 2005 •Growth: 6.6% In 2011 •28% in2003 to 18% in • 18.6% of them •Resistance from the 2006 bought goods or EU to accept due to •GDP: services through Human right •25.5% agricultural, • Aim to achieve internet in 2011 violations •26.2% industrial, sustained rapid growth and improving living • 92.4% of enterprises •48.4% services standard use Internet • Prime Minister vs • 59.9% of them have President •Major trade partners: website In 2011 • Difference between •President – •United States, female and male in •Cellphone: Ceremonial •China, education • Fast growth in •Prime Minister – •Russia, • Secondary school: cellphone users Executive power •Switzerland female:77% vs. • 4M in 2000 to 62M •Norway male:87% in 2010 •Currency: • Difference between •Turkish Lira (0.56 urban city and local USD) city about quality of health care
  6. 6. M&AStrategic Financial• More than half of the population are • Fast growth driven by internal under 28 consumption• Entrance to the Muslim world • Economist forecast that it will• Geographic position grow as fast as China and India• Increasing qualified workforce • Types of Deal• Key industries for target • Asset vs. Share Acquisition • Construction, automotive, energy, • Tax Incentives healthcare and banking • Single digit inflation rateRegulations Risk• Unrestricted foreign ownership • Split between the east and west• Legal framework - EU • Accounting standards vary form company to company – moving to IFRS• Customs agreement with the EU • Volatility in energy prices, due to the• Little restriction on cash repatriation dependence on Russia and the middle east
  7. 7. INTERVIEW• Highly individualistic • Hierarchical Organizations• Short term orientated • Preferred leadership styles:• Relationships have priorities over pacesetting and authoritative tasks • Need for Laws and• Easily forget the past Rules National Corporate Culture Culture Business Life in• Traffic jams Norms & • Formal Greeting: hand Turkey• Lack of respect – no cues Practices shake • Normal Greeting: cheek kiss• Penalty Implies loss of face • Showing of emotions is and shame accepted• Muslim society – body is sacred • Conflict is threatening – need to agree • Settle agreements on paper• Potable water is an issue • Work in order to live
  8. 8. Cultural Dimensions Recommendations Team objectives should be aligned with personal objectives in order to achieve companies results AchievementManagers are not expected Even though, the country isto take risks. Decisions are promoted as a secular one, Risk Environment in the East Islam should be made by the Sr. Management taken into account Mercer’s Cultural Dimensions Communication Rapid improvements and should be done Communication Perspective technology adoptions are encouraged top-down Power Do not integrate, Partner with them
  9. 9. Q&A