2018

Klara Levin Stensson, Faustine Delebarre

Pontificia Universidad Cali

03/05/2018

Doing business in Canada - a guide for Swedish business people

Introduction

Which is the best way for a Swedish business manager to approach a Canadian partner? and where can we find the similarities in business culture that we could more easily overcome? This might be questions you have as a Swede when doing business in Canada. In this guide, we have compiled the most demanded guidance for cultural issues that possibly could occur in this specific situation. The situation we assume and base this guide on is the one of doing business as a Swedish business person in Canada, opening a healthy food-restaurant with Nordic influences in the health- and wellness focused city Vancouver. This suggests that you will have to manage regulation, operational and employee issues, as well as dealing with business partners.

Although Swedish and Canadian cultures match on many points, there are differences that need to be considered before starting a business in the new country. With this guide, we hope to help you smoothen the process and make you prepared for a new journey.

Overview of Swedish business culture

As a starting point, we will provide a brief overview of the Swedish business culture to be able to understand what actually distinguishes it and from there, find out how to deal with the Canadian business culture in comparison to the Swedish.

With Hofstede’s 6 cultural dimensions, we can interpret the business culture a certain country has. The power distance in Sweden is quite low, which means that managers and employees are relatively equal, and managers value contributions from all employees. Furthermore, the boss is not only a decision maker - more of a facilitator. The individualism, on the other hand, is high which means that people are expected to be independent in life as well as in work to some extent. The masculinity in the culture is very low, which indicates the importance of work-life balance for Swedes. It also shows in the way Swedes discuss, where they try to find consensus which leads to long discussions and in the run also a longer decision making process. This requires patience in the decision making process. This feminine approach is also presented in the Swedish word “Lagom” that means that everything should be done with moderation. The uncertainty avoidance is low in the culture, telling us that practice can be valued higher than principles. There should be just the necessary amount of rules and innovations is encouraged - not seen as threatening. When it comes to long term orientation, Swedes don't have a strong standing point and can be found on the middle of the scale. That suggests that the culture holds on to traditions and the past to some extent, but still is willing to change for the future to become better. The last dimension is the indulgence, which Swedish culture strike high on, and therefore is classified as a culture where people wants to enjoy life and has a positive attitude towards life.

What should we know about Canadian business culture?

In order to know what the guide should be focused on, we have collected primary data through surveys and interviews, where the respondents have been both business students and business people. Based on the answers, we have been able to localize the most demanded areas to be included in the guide. Below is a summary of the findings which as a whole is to find in the Appendix A.

Highly demanded information: Negotiation approach Canadians are open to discussions and innovation, as they are more uncertainty accepting. However, not as accepting as Swedes, which means that you could have to be more moderate and patience when it comes to drive through new ideas and expect big changes. (Hofstede Insights, 2018). Punctuality is recommended to always prioritize, and since the same approach is taken in Sweden, you should maintain that habit. Due to the universalistic culture (Mindtools, 2018), the Canadians will try to make fair deals based on rules, and these rules are of higher importance than the relationships. As Sweden also is a universalistic country, the negotiation process will hopefully run smooth. When negotiations are finished, it is recommended to give your partners a gift to celebrate and show appreciation. (World Trade Press, 2010). Legal requirements

The first thing to do in Canada in order to start a business is to get a working visa, to to do so, it is needed to get a letter from potential Canadian investors, show your linguistic competences in English and/or French, proof that you have sufficient funds to support yourself and your business and proof of the legality of your business.

Then, you need to register the business to get the business number and meet some requirements available online. You also need to look for information like minimum wage or legal working hours.

Regulations in Canada change according to the industry or business activities. They also change from state to state and are likely to change on regular basis. As those regulations are key points for your efficiency and reputation, it is important that they are learned and followed. For example, one of those first regulation is to register your business. Then, they are specific to each field (marketing, human resources,...). You can go online to https://canadabusiness.ca/government/regulations/ and follow the links to find specific information for each field and each area of a business.

Contractual laws In Canada, you must know how to draft and understand four different types of contracts: contract of sales, the lease and hire of services, the lease and hire of things and the mandate whereby a person gives another the power to represent her.

Those contracts are the most important and common to use. It is important to know that there are different kinds of law: Canadian common law and Quebec civil law, these two generally follow the same path, although in terms of criminal law, any contract that doesn’t follow the Canadian Common law is invalid. In other provinces than Quebec, legislations also exist with specific contract laws, this is to keep in mind when doing business in Canada. Conditions of a contract in Canada:

mutual consent of both parties contractual capacity (mental ability) the contract should have a specified object or a purpose "lawful cause" in civil law or a "valuable consideration" in common law valid written instrument

All the info you need are on thecanadianencyclopedia website. Managing employees Canadian approach to leadership – top-down and egalitarian:

· Speak up before the decision has been made, regardless of your status. It is important to show your participation in order to show your motivation and self-confidence.

· When the decision has been made, align to it and accept it, no matter what your own opinion is. In order to be seen as a good co-worker – do not show your disagreement.

· However, decisions can be redesigned afterwards, which makes it important to be flexible. These suggestions on Canadian leadership styles gives us an insight in how you would approach your employees as a leader. You need to make your voice heard because no one will be asking for your opinion specifically. Furthermore, it is important to learn how to accept a decision taken, even if it is not the way you wanted it. Once it it set, it is not appropriate to disagree with the leader. Lastly, a Canadian leader expects his subordinates to be flexible regarding changes in decisions. Appropriate business attire According to Mindtools (2018), people are fashionable in Canada. The kind of work you have should be reflected in the way you dress. The same approach is used in Sweden. The weather could also affect the way to dress. The climate could be cold, and particularly in Vancouver - very rainy. Therefore it is recommended with clothes that could deal with this climate. Basic business ethics Canada has according to Mindtools (2018) and Trompenaars seven dimensions of culture, a typical universalistic culture, which means that they see an importance in values, rules and obligations. When it comes to ethics, one of the most common approach is the one of universalism. In the world of ethics, this means that an action should be more or less “universal” approved to be legit. This indicates that one should not make any special exceptions from the norm if you want to act ethically right.

Making connections and building relationships When it comes to building relationships, communication is fundamental. Canadians prefer a straightforward communication, regardless of it is the business partner or a manager to an employee. (Hofstede Insights, 2018). Due to that the culture is more specific, a Swede should however stick to the approach of not overlap private and working life to much. Small talk is fine to start with to build up some kind of trust and relationship, but quite soon you should get down to business as is is preferred to focus on the business before focusing on building relationships.

Less, but yet demanded information: How business decisions are made In Canada, the power distance is small, which means the society is more egalitarian, everyone is free to give his opinion to the manager, and the manager usually encourage this kind of behaviour from the employees or field experts. As a result, the decision making process is something everyone does together rather than being only in the manager’s hand. Canada has a high tolerance for risk and change so they are not afraid to make decision that could change everything as long as everybody agrees with the process.

How to socialize with business partners

Canada has a very strong business culture and etiquette, is it important to keep up with their traditions and social aspects to be accepted.

For example, Canadians like strong eye contact, it is considered impolite not to look people in the eye, even out of shyness.

Canadian business partners will want to take you for lunch or for drinks, it is important not to decline this kind of invitation so they know you take them seriously. While at lunch, order something light and no alcohol, don’t start eating before everyone is served, manners are very important.

Before or even during a business meeting, you might come across different topics such as hockey, football, family, friends, vacations or even the weather. Take parts in those conversations, don’t see it as boring or unappropriate, Canadians like to discuss different topics and socialize with their business partners.

Socialization and social taboos According to World Trade Press (2010), there are no particular taboos, but you should consider that Canada is multicultural and therefore, respect different heritages and religious background. Gayle Cotton on Linkedin (2015), furthermore writes about some social taboos

and has some suggestions on how to deal with them. Pointing at other people, is considered rude, so please do not use that method. Boasting and bragging is seemed to be badly received. In Sweden (Hofstede Insights, 2018), the culture has a similar approach which makes it easier to understand this taboo and not go into deep water. Worth mention is also that the country has too official languages - english and french. To completely exclude one of the languages could be considered rude and should be avoided. Lastly, there is something that might be considered as the biggest taboo - do not call Canadians Americans. The Canadians do not like to be associated with the United States and they are proud of their own and different culture. (World Trade Press, 2010).

What motivates employees Canada is a short term oriented society which means that to motivate them, you need to set up short term goals. One of the strategies would be to divide a long term goal for the company is several short term goals so the employees can see their progress and where they are going. Short term oriented culture also react better to rewards like bonus or gifts after achieving something good, this can also be a good way to motivate them. The masculinity of canadian society can be used to motivate them as well, creating a little bit of competition between them can help them work more efficiently.

Other useful informations and recommendations for doing business:

Interpreted misconceptions:

That the Canadian culture might be more similar to Swedish culture than it actually is That the Canadian culture might be more similar to American culture than it actually is

Conflict resolution Canada has a high score on indulgence in the country comparaison , just like Sweden. To resolve conflict, this could be used as a tool, indeed, indulgent cultures are more willing to see the “bright side” and compromise with one another. In Canada, if there is a conflict, it is better to stay positive and try to discuss it rather than putting distance and avoid talking about it. Canadians are good with communication and are pretty direct. They will tell you the things as they are and won’t hesitate to tell you if they don’t agree with you. The key is to stay open minded and prepared to discuss any issue.

Customer relationships According to the official website of the Canadian Government, CRM (customer relationship management) represented $116 billion of investment and employed 502,000 people in 2009 in Canada.

CRM is a key point in every big Canadian firm and is often divided in three steps: market research and marketing; business development; and customer feedback and support. On the following graphic from www.ic.gc.ca , we can see that in Canada, firms are most likely to invest in CRM when they are in wholesale, logistics and transportation, insurance and retail industry.

Moral and ethical dilemmas Moral and ethics are matters you need to be aware of when you travel to a new country. In business, this knowledge can be used to prevent mistakes such as offending a potential business partner. After looking at surveys made by the website http://abacusdata.ca, we can say that Canadians are more likely to be open minded on several subjects like sex, abortion or LGBT, while they are against cloning or affairs. Canadians have strong family values but believe everyone is free to decide what is best for themselves as long as it doesn't hurt others. They also show sensibility towards animals and nature in general. Here are the graphics, each person was ask his/her opinion nd was they classified by political party:

Conclusion

These suggestions have hopefully given you an insight in how you would preferably change

your approach as a leader and a business partner, going from a Swedish to a Canadian

business. Although Swedish and Canadian culture are similar regarding many topics, they

have their differences which are essential to deal with in order to succeed in business. The

most important lesson might be that one have to understand that Canada has a very diverse

and rich culture (not to be equated with the US culture) that requires attention in every new

environment as well as some flexibility. However, with some shared fundamental values and

the same direct focus on business, between the two countries, we hope that your opening of

a business in Canada will be successful.

References

World Trade Press. (2010). Society and culture - Canada. Petaluma: World Trade Press. Retrieved 2018-05-01 from https://ebookcentral.proquest.com/lib/linkoping-ebooks/reader.action?docID=535693&query=

Mindtools. (2018). The Seven Dimensions of Culture. Retrieved 2018-05-02 from https://www.mindtools.com/pages/article/seven-dimensions.htm

Linkedin. (2015). Cultural Clues, Do’s & Taboos! CANADA: Know the Guidelines. Retrieved 2018-05-02 from https://www.linkedin.com/pulse/communication-guidelines-canada-gayle-cotton/

Hofstede Insights. (2018). Country comparison. Retrieved 2018-05-01 from https://www.hofstede-insights.com/country-comparison/canada,sweden/

Commisceo Global. Management guides: Canada management guide. Retrieved

2018-05-03 from

https://www.commisceo-global.com/resources/management-guides/canada-management-guide

Government of Canada. (2012) State of customer relationship management.

Retrieved 2018-05-03 from

http://www.ic.gc.ca/eic/site/si-is.nsf/eng/h_ai02274.html

Abacus Data (2016) Canadians moral compass set differently from that of our

neighbours to the south Retrieved 2018-05-02 from

http://abacusdata.ca/canadians-moral-compass-set-differently-from-that-of-our-neighbours-to-the-south/

Canadian Business Network. Regulations Retrieved 2018-05-02 from

https://canadabusiness.ca/government/regulations/

Historica Canada (2013) Contract law in Canada Retrieved 2018-05-03 from

http://www.thecanadianencyclopedia.ca/en/article/contract-law/

Today translations. Doing business in Canada Retrieved 2018-05-03 from

https://www.todaytranslations.com/doing-business-in-canada

APPENDIX A:

Interviews:

What do you consider most important to know before starting a business in Canada?

Respondent 1: Would like to know what regulations there are to operate in business, for example how companies can take form, which are the regulations for employment and tax regulations. Respondent 2: Supply and demand. If there might be demands for a good or service which is not imported to Canada today. Do you have any prejudices about Canadian business culture?

Respondent 1: Have no real prejudices, know too little. Respondent 2: That it might be similar to the Swedish culture, since the social politics and average perception of humanity seems quite similar.

Where do you believe the Canadian and Swedish business cultures find their major similarities?

Respondent 1: I have an image of Canada as quite similar to Sweden, a modern country where the living is easy. Think that it is a similar society structure as in Sweden. Respondent 2: Since the weather is similar in both countries, the demand on different imports might be similar due to the climate, for example a demand on fresh fruit during the winter.

Where do you believe the Canadian and Swedish business culture find their major differences?

Respondent 1: Do not know, maybe when it comes to trade issues such as export and import?

Respondent 2: Since Canada might do closer business with the US, they might have a more fast forward approach in negotiations etc. Swedish business culture might be different in its approach with a more guarding and collaborative view, since those types of characteristics are highly valued in the Swedish social culture.