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A Brief Business History of Ireland
The Country of Ireland is an island in Western Europe along the Northern Atlantic Ocean. In 1922 it was divided into two by the Irish War of Independence where most of Ireland seceded from the United Kingdom to become the independent Irish Free State. However, six northeastern counties, known as Northern Ireland, remained within the United Kingdom under the Anglo-Irish Treaty. In 1937 the state as Ireland or Éire in Irish was constitutionally established. The country now has four provinces – Connaught, Leinster, Münster and Ulster, and 26 counties. Dublin is the capital. The official national language is Irish or Gaelic. However, English is predominant and generally spoken for all business transactions.
The 1960s began real economic development and globalization for Ireland. Ireland sought admission to the European Economic Community, now known as the European Union (EU), in 1973. Followed by one of the world’s highest economic growth rates, with mass immigration particularly of people from Asia and Eastern Europe into the 1990s. Ireland’s new global economy suffered in 2008 when the banking system collapsed due to the Irish property bubble like the one in the United States. However, Ireland has seen strong economic growth since around 2014.
Irish Culture and the Hofstede Dimensions
Culture is a word that is often used to describe the feeling of a place. Culture can be divided into visible and invisible features. The visible aspects of culture are called High Culture and include things like art and literature. Just beyond the visible, and into the invisible, there is Folk Culture. It consists of things like religion, attire, foods, humor, and etiquette. Finally, the most ingrained and invisible aspects of culture are called Deep Culture. It includes entrenched nonverbal communications, concepts of beauty, problem-solving techniques and gender roles among other things. The Irish High Culture is going to include Trad Music where banjos, fiddles, and flutes are traditionally used. Also, in Irish High Culture is the step dance techniques used in Riverdance. Riverdance is a type of dance known for hornpipe shoes, women in peasant dresses decorated with embroidered Celtic designs, and perfect step unison within the group.
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Irish Folk Culture and Deep Culture traits are seen throughout the six dimensions established through research by Geert Hofstede on National Culture. They include individualism vs. collectivism, power distance, uncertainty avoidance, masculinity vs. femininity, long-term vs. short-term orientation and indulgence vs. restraint.
Hofstede’s first dimension is individualism vs. collectivism. “In Individualist societies people are supposed to look after themselves and their direct family only. In Collectivist societies, people belong to ‘in groups’ that take care of them in exchange for loyalty” (Hofstede Insights, 2019). As with most Northern European countries, Ireland is highly individualistic. Business decisions would be based on individual performance and personal distinction. Resourcefulness would be highly valued by employers and employment would not be seen as a lifetime commitment by the employee.
The next Hofstede dimension is power distance. “Power Distance describes whether a person functions primarily as an individual or as part of a group” (Cavusgil, Knight, & Riesenberger, 2014). Surprisingly, Ireland ranks low on the Power Distance Hofstede Dimension. Even though they are individualistic in their work behavior, they believe society as a whole should not vary greatly from top to bottom. This means “within Irish organizations, (a) hierarchy is established for convenience, however, superiors are always accessible, and managers rely on individual employees and teams for their expertise” (Hofstede Insights, 2019). Managers and employees use this low power distance to have effective communication often in the workplace.
The third Hofstede dimension is Uncertainty Avoidance. This is “the extent to which people can tolerate risk and uncertainty in their lives” (Cavusgil, Knight, & Riesenberger, 2014). Since Ireland embraces initiative it also accepts uncertainty with ease. Critical thinking would be highly valued in business situations in Ireland.
Ireland has a high masculinity score in the fourth Hofstede dimension. “Masculine cultures tend to value competitiveness, assertiveness, ambition, and the accumulation of wealth” (Cavusgil, Knight, & Riesenberger, 2014). All these traits are typically more risk borne behaviors. Individuals in business would want to innovate to stand out or get ahead of the competition. “The Irish are proud of their successes and achievements in life, and it offers a basis for hiring and promotion decisions in the workplace. Conflicts are resolved at the individual level and the goal is to win” (Hofstede Insights, 2019).
The long term vs. short term orientation dimension “refers to the degree to which people and organizations defer gratification to achieve long-term success” (Cavusgil, Knight, & Riesenberger, 2014). Irish culture leans toward short term orientation. Results now are favored over long term thinking. “People in such societies have a strong concern with establishing the absolute Truth; they are normative in their thinking. They exhibit great respect for traditions, a relatively small propensity to save for the future, and a focus on achieving quick results” (Hofstede Insights, 2019).
The indulgence vs. restraint dimension is defined as “the extent to which people try to control their desires and impulses, based on the way they were raised” (Hofstede Insights, 2019). Since Ireland has short-term orientation it makes sense that they are high in this dimension and more indulgent. Irish
Have a “positive attitude and have a tendency towards optimism. In addition, they place a higher degree of importance on leisure time, act as they please and spend money as they wish” (Hofstede Insights, 2019).
U.S./ Ireland Comparison using the Hofstede dimensions
Culture can also be defined as high or low context. High context culture “emphasizes nonverbal messages and views communication as a mean to promote smooth, harmonious relationships” while low context culture “rely on elaborate verbal explanations, putting emphasis on the spoken words” (Cavusgil, Knight, & Riesenberger, 2014). Both Ireland and The United States are considered a Low Context Culture which values efficiency, expertise, and performance.
Even though both are low context, the Irish place more societal importance in relationship building than in the United States. Conversations could last hours, drinking is a very social and frequent outing event, and politeness is serious business. This is their emphasis on words and their meaning. In the United States conversations are typically for a distinct purpose and over as quickly as possible. This is due to the need for efficiency in United States culture. The Irish find loud and obnoxious behavior extremely rude. They are endeared by politeness and soft-spoken small talk.
Next, the indulgence and long term (or rather a short term) orientation dimensions are nearly identical between them. Both Ireland and the United States enjoy living in the moment and creating a work/life balance. There are about a week’s worth of national holidays with pay, or double pay if worked, and a national policy of 20 days annual leave. The United States does not have a national policy that requires a set amount of days leave, but many companies offer substantially similar policies in the US to be competitive in the United States labor market.
Then there are the power distance index, individualism dimension, and masculinity dimension. The United States has higher scores on both dimensions. The Irish outlook on communication and relationships lends itself well to a lower power distance. This means the group is a very close second to the individual in Ireland, constantly in the peripheral. The masculinity dimension shows in the hierarchy in US businesses are generally more overt and there is a clearer distinction between the haves and have nots than in Ireland. These similarities and differences are visually shown below in Exhibit 1.
Conducting Business in Ireland
Conducting business within the Irish culture would feel much like conducting business in the United States. Many of the business practices are the same such as exchanging business cards when meeting with Irish associates, keeping arm’s length personal space should be respected, and maintaining eye contact when speaking, avoiding it is seen as being dishonest. There are certain situations that are a gaffe in both the United States and Ireland. Such as discussing politics and religious matters in business settings. The weather is always a safe conversation starter. Recall, that the Irish love small talk and socialization.
Speaking of being social in Ireland, many business outings take place at restaurants and golf courses. When you are at this business outing in a restaurant, it is customary for everyone to “buy a round” of drinks. Not to do so would be considered very rude. It is also considered rude to say yes on the first ask. The Irish will politely refuse a pleasantry ask first. It is polite to accept on about the third offer. Also considered polite is host or hostess gifts if invited into someone’s home, such as wine or flowers.
One distinct difference between Irish and United States business meetings is punctuality. Being a more business social environment, meetings are more laid back and start times are flexible. However, when a guest in Ireland be on time to any meeting and graciously wait to start. “Socially, the Irish may be perceived as easy going and amiable, but in business, they are astute and tenacious” (Irish Central, 2017.)
It is always a good idea research as much as you can about the culture of the organization you are conducting business with. This will allow you to make your trip as productive as possible, something the Irish will appreciate.
