There is a grouping of countries within Europe called the European Free Trade Association (EFTA).
Although only now consisting of four countries – Iceland, Liechtenstein, Norway and Switzerland – EFTA is one of the off-the-shelf alternatives that exist for trading with EU countries. Another is the European Economic Area (EEA) which unites the 27 EU member states and the EFTA countries (excepted Switzerland) into an internal market for citizens and economic operators in EEA. Britain will stay in the EEA, and is tempted to take the
‘Norway option’, outside the EU but part of EFTA:
by switching to the ‘Norway option’, Britain could
control its own affairs, save money, free business from unnecessary regulations and reduce un- employment, claims a think-tank. The EU coun- tries are spending a lot of their time on the euro experiment, while other countries in the world are getting better managed and improving the lives of their people – what normal government is supposed to do.
Source: extract from Hugo van Randwyck on behalf of the Bruges Group think-tank in the UK.
http://www.publicserviceeurope.com/article/3177/
norway-option-a-clear-choice-for-britain-in-europe , accessed 12/3/2013.
SPOTLIGHT 3.3
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Concept 3.1 European cultures
67 Whatever agreements may be reached at economic or social level with countries that already are or aspire to EU membership, co-operation of whatever sort can clearly only work if there is a willingness to do so at cultural level. Observers of the developments in Europe have noted this from the start, including one of the founders of the original European Community, Jean Monnet. He was asked what he would do diff erently if he had the chance to start over again with the development of the community. It is oft en suggested that he replied:
‘I would start fi rst through culture’ ( http://www.ecb.int/press/key/date/2011/html/sp110602.
en.html ). Th ese words resound as strongly nowadays as they did when fi rst reported.
Eastern Europe
Th e GLOBE researchers have placed most of the former communist countries in the Eastern Europe cluster (see Concept 2.2 ) rather than including the countries there in one of the Western European clusters. It is clear that the aft ermath of the Second World War involved Europe being divided into two, with Eastern Europe becoming closed off , thrown back on itself and dependent on Soviet communism. Western Europe, on the other hand, fell under the very strong infl uence of the US, its enterprising mind, its taste for risk and championing of individual rights. However, aft er the fall of the Berlin Wall (9 November 1989), Western and Eastern Europe were no longer separated and the restructuring of the East German economy began, along with that of the Soviet Union and the satellite states of the communist bloc.
Another incongruity in the GLOBE project’s classifi cation is that Turkey, which is placed in the Middle East cluster, has been an associate member of the European Union since 1963 and is striving to become a full member.
Emergent economies
Although the economies of the Eastern and Central European countries, including Russia and Turkey, have been growing rapidly, these countries have some similarities with other countries around the world, which are called ‘emerging markets’ and defi ned by Cavusgil, Ghauri and Akcal (2013: 5) as follows:
Emerging markets are countries which are in a transition phase from developing to developed markets due to rapid growth and industrialization.
Diff erent indices classify the countries in emerging markets according to inter alia their devel- opment level, the size of the companies and their openness to foreign ownership and trade.
In terms of this defi nition, a number of EU members (Poland, Czech Republic, Hungary, and Romania) can be considered as ‘emerging markets’. It is therefore important from a ‘developed markets’ point of view to take into consideration cultural diff erences when conducting business with these countries.
East and Central Europe
Th e Austro-Hungarian Empire, the Russian Empire and the Soviet hegemony have had a major infl uence on East and Central European cultures. Th e post-revolution regimes
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Chapter 3 Business cultures in the Western world
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in particular had a profound eff ect on these countries. Before the Iron Curtain eventually fell, countries under Soviet sway were characterised by highly autocratic, centralised organisations with many bureaucratic levels, refl ecting the presence of a dual hierarchy (politics and business worked hand-in-hand) and an obsession with state planning. Th e legacy of the communist system of administration is what the societies of East and Central Europe have had to contend with since the early 1990s, when Western political and economic practices were introduced. Th e transformation of highly bureaucratic and cen- tralised economies has taken much longer than anticipated. Th e withdrawal of centralised control has increased feelings of uncertainty and helplessness. Individuals and companies can no longer rely on the ‘system’ to help them out; instead they must battle their own way through, develop self-confi dence and learn how to deal with a more open, less merciful environment. Th is transition has, however, caused considerable unrest, and there is still a longing for how things used to be among those unwilling to adapt to the new environment.
Th e opportunity to take on roles and responsibilities similar to those of their Western neighbours is still seen as a threat, especially by those who grew up and worked under the old regimes.
Russia, a BRIC country
With the political collapse of the Soviet Union, 15 republics emerged, of which Russia itself is a collection of smaller republics, hence, its offi cial name: Th e Russian Federation. Th is
‘new’ country, which spans Europe and Asia, has also been struggling since 1991 to replace the social, political and economic features of the Communist era with a more democratic political system and a market-oriented economy. Close association with the EU is seen as an important way of developing the Russian economy, but membership is a step too far for many Russians who fear their independence being swallowed up in a greater Europe.
Is the country really a European nation? If, in geographic terms, the border of Europe is considered to be the Urals mountain range, can that part of Russia to the west of the Urals, and where most of the population is centred, be considered as ‘European Russia’?
In economics terms, Russia not only belongs to the category of European emergent markets but is also classifi ed as one of the BRIC countries, along with emerging countries from other continents – B razil ( concept 3.2 ) plus I ndia and C hina ( Chapter 4 ). Th e BRIC countries are seen as rapidly developing, with a potential to overshoot the world’s largest economies in the future. A high level of power distance enables the BRIC companies to make decisions quickly since only a small percentage of individuals are involved in the process (Cavusgil et al. , 2013). Recently, South Africa ( Chapter 4 ) joined this organisation of the largest emerging and developing economies – so the acronym was changed to BRICS, thus representing 40 per cent of the Earth’s population.
Although the EU and Russia have been exploring the idea of developing a common European economic space, competing political and economic aims and interests appear to have gained the upper hand. Even if Russia’s presence on the European business stage is becoming increasingly dominant, there are many who question whether Russians have the same regard for essential values (such as democracy, human rights and freedom) as countries in and close to the EU. Russia and Europe, they argue, are unlikely ever to share such cultural values.
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Concept 3.1 European cultures
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