United Kingdom Project

8/10/2019 United Kingdom Project

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Table of Contents

1. Geography and History Pg. 2

2. Hofstede dimensions Pg. 4

3. Business protocol Pg. 7

4. Negotiation style Pg. 12

5. DOs and DON`Ts Pg. 14

6. Superstitions Pg. 22

7.

Possible blunders Pg. 24

8. Language Pg. 29

9. Labour market Pg. 30

10.Labour force Pg. 42

Bibliography Pg. 43


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United Kingdom

1.

Geography and History

Population:62,698,362 (July 2011 estimate)

Capital:London

Area:94,058 square miles (243,610 sq km)

Coastline:7,723 miles (12,429 km)

Highest Point:Ben Nevis at 4,406 feet (1,343

m)

Lowest Point:The Fens at -13 feet (-4 m)

The United Kingdom, consisting of Great Britain (England,Wales, andScotland )

andNorthern Ireland , is twice the size of New York State. England, in the southeast part of the

British Isles, is separated from Scotland on the north by the granite Cheviot Hills; from them the

Pennine chain of uplands extends south through the center of England, reaching its highest point

in the Lake District in the northwest. To the west along the border of Walesa land of steep

hills and valleysare the Cambrian Mountains, while the Cotswolds, a range of hills in

Gloucestershire, extend into the surrounding shires.

TheUnited Kingdomis asovereign state located off the north-western coast

ofcontinental Europe. With a total area of approximately 243,610 square kilometres

(94,060 sq mi), the UK occupies the major part of theBritish Islesarchipelago and includes the

island ofGreat Britain, the north-eastern one-sixth of the island ofIreland and many smaller

surrounding islands.[1]

The mainland areas lie between latitudes 49N and 59N (theShetland

Islands reach to nearly 61N), and longitudes 8W to 2E. TheRoyal Greenwich Observatory,

inSouth East London,is the defining point of thePrime Meridian.

The UK lies between theNorth Atlantic and theNorth Sea, and comes within 35 km

(22 mi) of the north-west coast ofFrance,from which it is separated by theEnglish Channel.It

shares a 360 km international land boundary with theRepublic of Ireland. TheChannel

Tunnelbored beneath the English Channel, now links the UK with France.

Important rivers flowing into the North Sea are the Thames, Humber, Tees, and Tyne. In

the west are the Severn and Wye, which empty into the Bristol Channel and are navigable, as are

the Mersey and Ribble.
http://geography.about.com/od/unitedkingdommaps/a/londonfacts.htmhttp://www.infoplease.com/cgi-bin/id/A0777807http://www.infoplease.com/cgi-bin/id/A0777806http://www.infoplease.com/cgi-bin/id/A0108101http://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/Sovereign_statehttp://en.wikipedia.org/wiki/Continental_Europehttp://en.wikipedia.org/wiki/British_Isleshttp://en.wikipedia.org/wiki/Archipelagohttp://en.wikipedia.org/wiki/Great_Britainhttp://en.wikipedia.org/wiki/Irelandhttp://en.wikipedia.org/wiki/Geography_of_the_United_Kingdom#cite_note-1http://en.wikipedia.org/wiki/Geography_of_the_United_Kingdom#cite_note-1http://en.wikipedia.org/wiki/Geography_of_the_United_Kingdom#cite_note-1http://en.wikipedia.org/wiki/Shetland_Islandshttp://en.wikipedia.org/wiki/Shetland_Islandshttp://en.wikipedia.org/wiki/Royal_Greenwich_Observatoryhttp://en.wikipedia.org/wiki/South_East_(London_sub_region)http://en.wikipedia.org/wiki/Prime_Meridianhttp://en.wikipedia.org/wiki/North_Atlantichttp://en.wikipedia.org/wiki/North_Seahttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/English_Channelhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/Channel_Tunnelhttp://en.wikipedia.org/wiki/Channel_Tunnelhttp://businessculture.org/northern-europe/uk-business-culture/http://en.wikipedia.org/wiki/Channel_Tunnelhttp://en.wikipedia.org/wiki/Channel_Tunnelhttp://en.wikipedia.org/wiki/Republic_of_Irelandhttp://en.wikipedia.org/wiki/English_Channelhttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/North_Seahttp://en.wikipedia.org/wiki/North_Atlantichttp://en.wikipedia.org/wiki/Prime_Meridianhttp://en.wikipedia.org/wiki/South_East_(London_sub_region)http://en.wikipedia.org/wiki/Royal_Greenwich_Observatoryhttp://en.wikipedia.org/wiki/Shetland_Islandshttp://en.wikipedia.org/wiki/Shetland_Islandshttp://en.wikipedia.org/wiki/Geography_of_the_United_Kingdom#cite_note-1http://en.wikipedia.org/wiki/Irelandhttp://en.wikipedia.org/wiki/Great_Britainhttp://en.wikipedia.org/wiki/Archipelagohttp://en.wikipedia.org/wiki/British_Isleshttp://en.wikipedia.org/wiki/Continental_Europehttp://en.wikipedia.org/wiki/Sovereign_statehttp://en.wikipedia.org/wiki/United_Kingdomhttp://www.infoplease.com/cgi-bin/id/A0108101http://www.infoplease.com/cgi-bin/id/A0777806http://www.infoplease.com/cgi-bin/id/A0777807http://geography.about.com/od/unitedkingdommaps/a/londonfacts.htm


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Government

The United Kingdom is a constitutional monarchy and parliamentary democracy, with a

queen and a parliament that has two houses: the House of Lords, with 574 life peers, 92

hereditary peers, and 26 bishops; and the House of Commons, which has 651 popularly elected

members. Supreme legislative power is vested in parliament, which sits for five years unless

dissolved sooner. The House of Lords was stripped of most of its power in 1911, and now its

main function is to revise legislation. In Nov. 1999, hundreds of hereditary peers were expelled

in an effort to make the body more democratic. The executive power of the Crown is exercised

by the cabinet, headed by the prime minister.

England has existed as a unified entity since the 10th century; the union

betweenEngland andWales,begun in 1284 with the Statute of Rhuddlan, was not formalized

until 1536 with an Act of Union; in another Act of Union in 1707, England and Scotland agreed

to permanently join asGreat Britain ; the legislative union of Great Britain and Ireland was

implemented in 1801, with the adoption of the name the United Kingdom of Great Britain andIreland; the Anglo-Irish treaty of 1921 formalized a partition of Ireland; six northern Irish

counties remained part of the United Kingdom asNorthern Ireland and the current name of the

country, the United Kingdom of Great Britain and Northern Ireland, was adopted in 1927.

History

Stonehenge and other examples of prehistoric culture are all that remain of the earliest

inhabitants of Britain. Celtic peoples followed. Roman invasions of the 1st century B.C. brought

Britain into contact with continental Europe. When the Roman legions withdrew in the 5th

century A.D. , Britain fell easy prey to the invading hordes of Angles, Saxons, and Jutes from

Scandinavia and the Low Countries. The invasions had little effect on the Celtic peoples of

Wales and Scotland. Seven large Anglo-Saxon kingdoms were established, and the original

Britons were forced into Wales and Scotland. It was not until the 10th century that the country

finally became united under the kings of Wessex. Following the death of Edward the Confessor

(1066), a dispute about the succession arose, and William, Duke of Normandy, invaded England,

defeating the Saxon king, Harold II, at the Battle of Hastings (1066). The Norman conquest

introduced Norman French law and feudalism.

Climate

The climate of the UK is generallytemperate,although significant local variation occurs,

particularly as a result of altitude and distance from the coast. In general the south of the country

is warmer than the north, and the west wetter than the east. Due to the warming influence of
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theGulf Stream, the UK is significantly warmer than some other locations at similar latitude,

such asNewfoundland.

The prevailing winds are southwesterly, from theNorth Atlantic Current.More than 50%

of the days are overcast.There are few natural hazards, although there can be strong winds and

floods, especially in winter.

Average annual rainfall varies from over 3,000 mm (118.1 in) in theScottish

Highlands down to 553 mm (21.8 in) inCambridge.The county ofEssex is one of the driest in

the UK, with an average annual rainfall of around 600 mm (23.6 in), although it typically rains

on over 100 days per year. In some years rainfall in Essex can be below 450 mm (17.7 in), less

than the average annual rainfall inJerusalem andBeirut.

The highest temperature recorded in the UK was 38.5 C (101.3 F) atBrogdale,

nearFaversham,in the county ofKent,on 10 August 2003. The lowest was 27.2C (17.0F)

recorded atBraemar in theGrampian Mountains,Scotland, on 11 February 1895 and 10 January1982 andAltnaharra,also in Scotland, on 30 December 1995.

2. Hofstede dimensions

If we explore the British culture through the lens of the 6-D Model, we can get a goodoverview of the deep drivers of British culture relative to other world cultures.

Power distance

This dimension deals with the fact that all individuals in societies are not equal itexpresses the attitude of the culture towards these inequalities amongst us. Power distance is

defined as the extent to which the less powerful members of institutions and organisations within

a country expect and accept that power is distributed unequally.

At 35 Britain sits in the lower rankings of PDI i.e. a society that believes thatinequalities amongst people should be minimized. Interestingly is that research shows PD index

lower amongst the higher class in Britain than amongst the working classes. The PDI score at

first seems incongruent with the well established and historical British class system and itsexposes one of the inherent tensions in the British culture between the importance of birth rankon the one hand and a deep seated belief that where you are born should not limit how far you

can travel in life. A sense of fair play drives a belief that people should be treated in some way as

equals.
http://en.wikipedia.org/wiki/Gulf_Streamhttp://en.wikipedia.org/wiki/Newfoundland_(island)http://en.wikipedia.org/wiki/North_Atlantic_Currenthttp://en.wikipedia.org/wiki/Scottish_Highlandshttp://en.wikipedia.org/wiki/Scottish_Highlandshttp://en.wikipedia.org/wiki/Cambridgehttp://en.wikipedia.org/wiki/Essex,_Englandhttp://en.wikipedia.org/wiki/Jerusalemhttp://en.wikipedia.org/wiki/Beiruthttp://en.wikipedia.org/wiki/Brogdalehttp://en.wikipedia.org/wiki/Favershamhttp://en.wikipedia.org/wiki/Kenthttp://en.wikipedia.org/wiki/Kenthttp://en.wikipedia.org/wiki/Braemarhttp://en.wikipedia.org/wiki/Grampian_Mountains_(Scotland)http://en.wikipedia.org/wiki/Altnaharrahttp://en.wikipedia.org/wiki/Altnaharrahttp://en.wikipedia.org/wiki/Grampian_Mountains_(Scotland)http://en.wikipedia.org/wiki/Braemarhttp://en.wikipedia.org/wiki/Kenthttp://en.wikipedia.org/wiki/Favershamhttp://en.wikipedia.org/wiki/Brogdalehttp://en.wikipedia.org/wiki/Beiruthttp://en.wikipedia.org/wiki/Jerusalemhttp://en.wikipedia.org/wiki/Essex,_Englandhttp://en.wikipedia.org/wiki/Cambridgehttp://en.wikipedia.org/wiki/Scottish_Highlandshttp://en.wikipedia.org/wiki/Scottish_Highlandshttp://en.wikipedia.org/wiki/North_Atlantic_Currenthttp://en.wikipedia.org/wiki/Newfoundland_(island)http://en.wikipedia.org/wiki/Gulf_Stream


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Individualism

The fundamental issue addressed by this dimension is the degree of i nterdependence a

society maintains among i ts members.It has to do with whether peoples self-image is defined

in terms of Ior We.In Individualist societies people are supposed to look after themselvesand their direct family only. In Collectivist societies people belong to ingroupsthat take care

of them in exchange for loyalty.

At a score of 89 the UK is amongst the highest of the individualistic scores, beaten onlyby some of the commonwealth countries it spawned i.e. Australia and the USA. The British are a

highly individualistic and private people. Children are taught from an early age to think for

themselves and to find out what their unique purpose in life is and how they uniquely can

contribute to society. The route to happiness is through personal fulfillment. As the affluence ofBritain has increased throughout the last decade, with wealth also spreadingNorth,a much

discussed phenomenon is the rise of what has been seen as rampant consumerism and a

strengthening of the MEculture.

Masculinity

A high score (masculine) on this dimension indicates that the society will be driven by

competition, achievement and success, with success being defined by the winner/best in fieldavalue system that starts in school and continues throughout organisational behaviour.

A low score (feminine) on the dimension means that the dominant values in society are caring

for others and quality of life. A feminine society is one where quality of life is the sign of success

and standing out from the crowd is not admirable. The fundamental issue here is what

motivates people, wanting to be the best (masculi ne) or li king what you do (femin ine).

At 66, Britain is a masculine societyhighly success oriented and driven. A key point of

confusion for the foreigner lies in the apparent contradiction between the British culture ofmodesty and understatement which is at odds with the underlying success driven value system in

the culture. Critical to understanding the British is being able to readbetween the linesWhat

is said is not always what is meant. In comparison to feminine cultures such as the Scandinaviancountries, people in the UK live in order to work and have a clear performance ambition.

Uncertainty avoidance

The dimension Uncertainty Avoidance has to do with the way that a society deals with

the fact that the future can never be known: should we try to control the future or just let it

happen? This ambiguity brings with it anxiety and different cultures have learnt to deal with thisanxiety in different ways. The extent to which the members of a cul ture feel thr eatened by

ambiguous or unknown situations and have created beli efs and instituti ons that try to avoid

theseis reflected in the UAI score.

At 35 the UK has a low score on uncertainty avoidance which means that as a nation they

are quite happy to wake up not knowing what the day brings and they are happy to makeit up as

they go alongchanging plans as new information comes to light. As a low UAI country the


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British are comfortable in ambiguous situations - the term muddlingthroughis a very British

way of expressing this. There are generally not too many rules in British society, but those that

are there are adhered to (the most famous of which of of course the British love of queuingwhich has also to do with the values of fair play).

In work terms this results in planning that is not detail oriented the end goal will be

clear (due to high MAS) but the detail of how we get there will be light and the actual processfluid and flexible to emerging and changing environment. Planning horizons will also beshorter. Most importantly the combination of a highly individualistic and curious nation is a high

level of creativity and strong need for innovation. What is different is attractive! This emerges

throughout the society in both its humour, heavy consumerism for new and innovative productsand the fast highly creative industries it thrives inadvertising, marketing, financial engineering.

Pragmatism

This dimension describes how every society has to maintain some links with its ownpast whi le dealing with the chal lenges of the present and fu tur e, and societies prioritise thesetwo existential goals differently. Normative societies who score low on this dimension, for

example, prefer to maintain time-honoured traditions and norms while viewing societal change

with suspicion. Those with a culture which scores high, on the other hand, take a more pragmaticapproach: they encourage thrift and efforts in modern education as a way to prepare for the

future.

With an intermediate score of 51 in this dimension, a dominant preference in British culturecannot be determined.

Indulgence

One challenge that confronts humanity, now and in the past, is the degree to which little

children are socialized. Without socialization we do not become human. This dimension isdefined as the extent to which people try to control their desir es and impulses, based on the way

they were raised. Relatively weak control is called indulgenceand relatively strong control is

called restraint.Cultures can, therefore, be described as indulgent or restrained.A high score of 69 indicates that the British culture is one that is classified as indulgent.

People in societies classified by a high score in indulgence generally exhibit a willingness to

realise their impulses and desires with regard to enjoying life and having fun. They possess a

positive attitude and have a tendency towards optimism. In addition, they place a higher degreeof importance on leisure time, act as they please and spend money as they wish.


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3. British business culture

Business culture in the UK is characterised bybusiness communication,business

etiquette,business meeting etiquette,in ternshi p and student placements,cost of li ving,work-

life-balance andsocial media guide.

The acronym UK is the abbreviated form of United Kingdom or officially the United

Kingdom of Great Britain and Northern Ireland. The UK is made up of four countries: England,

Scotland, Wales and Northern Ireland and is a member of the European Union (EU). The term

UK is often confused with Britain or Great Britain, which actually refer to England,

Scotland and Wales without Northern Ireland. To add to the confusion, citizens of the UK are

called British.

The UK is located in the north-western part of Europe and covers an area of

243,610 km2 (94,060 mi2). The home nations (England, Wales and Scotland) and the north-

eastern part of Ireland (Northern Ireland) are based on the two large islands of Great Britain. The

only land border that the UK shares with Europe is in Ireland, where Northern Ireland shares a

border with the Republic of Ireland also known as Eire. The UK is surrounded by water, the

English Channels to the south, the Irish Sea to the west, the Atlantic Ocean to the northwest and

theNorth Sea to the East. London is the capital of the UK, and is also the countrys largest city,

in terms of population, and one of the most influential centres in world politics, finance and

culture.

The 2011 UK census estimated the population of the UK to be over 63 million people.

There are two official languages in the UK, English and Welsh. However, over 90% of

the population speak English and for the most part Welsh is only spoken in Wales. Other

languages and regional dialects exist; for example, Gaelic is spoken in some parts of Scotland,

although it is not an official language.

The UK can be described as a multi-faith society, although a majority of 59% classed

themselves as Christian in the 2011 census. The second most prevalent religion is Muslim which

is practised by approximately 5% of the population.
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The UK is in the Western European Time Zone and observes Greenwich Mean Time

(GMT) (CET 1) during the winter months and British Summer Time (BST) from March to

October, to accommodate Daylight Saving Time (DST).

All four seasons are experienced throughout the UK, although the climate and

temperatures vary according to region. Winters are usually damp and cold, especially in

Scotland, with lots of snow particularly in the mountainous areas of the North. Summers are

moderately warm and wet. Being an island, rain is a persistent feature for the majority of the

country with the North West being the wettest and the South East tending to be the driest.

Business etiquette

Attitudes and values form the basis of any culture. They reflect the ways people both think and

behave. Knowledge of attitudes and values can therefore be of significant importance if you wish

to communicate with your counterparts effectively. Ignorance can result in a cultural barrier that

may hinder the communication process and have a detrimental effect on the success of your

activities in a given country.

How important is the work-life balance in the UK? How do they value fairness in

business? Although seemingly unimportant and often neglected during the preparation phase, an

understanding of such issues may prove to be invaluable when doing business in the UK. The

following section will introduce you to the essential attitudes and values you will find in the UK

and highlight their implications for business practice.

Corporate and Social Responsibilities

Corporate Social Responsibility (CSR) is becoming more important for businesses in the

UK, where there is strong growth in consumer activism thanks to the prevalence of social media

and grass roots organisations.

The three main themes for CSR in the UK are work place issues (work life balance,

human rights, employment); community contribution (big society/social justice) and the

environment (sustainability of resources, etc). The UK has subscribed to the Millennium Goals

of the United Nations and many business leaders are actively working towards achieving these.


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The UK Government supports CSR through tax breaks and the encouragement of charitable

giving.

There are several issues that currently represent sensitive topics for UK society. Most

notable is the tax avoidance of large online retailers and international chains exposed by the

media in 2013. In times of austerity it is seen as distasteful that such profitable companies should

be seeking legal loopholes to reduce their tax liabilities when normal people and small

businesses are struggling to make ends meet.

Waste management is an important environmental topic, due to unsustainable

consumption of natural resources and environmental damage caused by excess waste. The sector

is currently undergoing a period of substantial change and extensive discussions are taking place

in order to find the best solutions to the problem. The United Kingdom is substantially reducingthe amount of industrial and commercial waste disposed of in landfill sites and increasingly a

growing percentage of household waste is being recycled or composted.

Genetically-modified (GM) food has become a major health and environmental issue in

the UK. Some authorities argue that people still do not have enough knowledge about the way

genes operate to be able to determine the potential long term effects of any modified crops.

The United Kingdom is also concerned with global warming and, as a signatory to the

Kyoto Protocol, continues to reduce greenhouse gasses. This issue is closely linked to another

problematic area, that of transport and its impact on the environment and air quality.

Punctuality

In general, the British value time-keeping for business arrangements. If you set up a

meeting for two oclock, the chances are your counterparts will arrive on time or just before.

Since the British are so time conscious, sometimes you may feel their lives are very rushed. In

fact, however, they are only doing their best to avoid losing time, which is valued as aneconomic resource. It is considered very impolite to arrive late for a business meeting. If your

delay is inevitable and you arrive late, it is usually sufficient to excuse yourself with an apology.

If, however, you are running more than a few minutes late, you should call ahead to apologise

and give an indication of how long you will be; in the case of a longer delay that would

compromise the value of attending the meeting, you should consider offering to postpone the


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meeting to a new time and/or day. The busier people are, the greater the likelihood that they will

have to leave for another engagement, so respecting their time is very important.

Attending social events is slightly different, and guests may be expected to arrive about

fifteen minutes after the specified time, but this is contingent on the nature of the event and the

number of attendees. You need to be particularly careful when using public transport, as some

journeys may take significantly longer than advertised. Public transport, such as trains and buses,

is generally reliable although it is recommended to allow extra time, especially if travelling in

winter when the transport network is usually unable to cope with even the slightest flurry of

snow (unless you are travelling in Scotland). The golden rule is that the more important the

appointment, the more time you should allow for potential delays.

Gift giving

Gift Giving is not a usual part of British business etiquette, although reciprocation is

good practice when gifts are received. Some organisations are encouraged not to accept any form

of gift and some are prevented from doing so on legal grounds. However, where a gift is offered,

it is important to ensure that it is not expensive enough to be considered a bribe or so inexpensive

as to be considered an insult.

There is a large range of suitable gifts to choose from: company greeting cards, pens,

books, diaries, alcohol, flowers, souvenirs from the visitors country or invitations to a cultural

event etc. If a gift is received in public, it is advisable to open it immediately and express your

gratitude to the giver.

Usually, the successful conclusion of negotiations presents an ideal opportunity for gift

giving. Here the meaning is an acknowledgement of the occasion. Ideally, such gifts will be

gold, silver or porcelain and it is important to consider the suitability of the gift and the taste of

the recipient. It is not usual to exchange business gifts at Christmas; however, it is still good

practice to send a greetings card to express thanks to your business counterparts.

If you receive an invitation to dinner or a party at the home of one of your business

colleagues, it is normal to bring a bottle of wine and possibly a small gift such as flowers or

chocolates. When giving flowers beware that red roses (which signify romantic intentions) and

white lilies (which express grief and are used for funerals) are best avoided.


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Business dress code

When it comes to business dress codes, classical conservative attire is the norm for both

men and women in British culture and dark colours such as black, dark blue and charcoal grey

are predominant. It is common for women to wear either trousers or a skirt in an office

environment, and head scarves are accepted as part of religious freedom. Many senior managers

are fond of quality and express their status through their choice of clothing. Shopping in designer

boutiques is popular among British society and bespoke suits, designer shirts, silk ties and hand-

made shoes are signs of affluence and status.

Denim is not normally acceptable for professional business meetings and the Scots do not

wear kilts to work. When in doubt about the dress code for a particular business event, it is

advisable to be overdressed rather than risk making a poor impression. It is always relativelyeasy to hire suitable attire for special events; your efforts will be appreciated and you will feel

that you are fitting in.

Many organisations provide their non-professional employees with a work-based uniform, which

enables everyone to look corporate and reflects a certain image of the company. The type of

uniform, whether smart or more casual, will give you a good understanding of the type of

organisation and the culture to be found there. Many companies are adopting informal smart

casual uniforms, which are comfortable to wear, but still present a professional image for the

company.

Dress code inevitably varies across industries. In the creative sectors (e.g. digital

marketing) a more relaxed dress code is common just a shirt and trousers. Numerous office-

based organisations have introduced Casual Friday, Casual Day or Dress-Down Friday, where a

more relaxed dress code (and hopefully increased creativity) is encouraged based on the

California inspired Dot Com Business Culture.

If unsure of the dress code and what to wear, it is perfectly acceptable to ask arepresentative from the company. It is often better to find out in advance, so you can make any

necessary changes before your introduction to the company. This will put you at ease and make

you more relaxed in your encounters with the company representatives.


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Bribery and Corruption

A highly valued sense of fairness is probably the reason why the British are an honest

nation with relatively low levels of corruption. This has been confirmed in a recent report (2012)

by the Global Coalition against Corruption, Transparency International and the United Kingdom

has regularly ranked in the top 10% in the International Corruption Perception Index, which

compares countries from all over the world.

Bribery and corruption are generally taken very seriously in the United Kingdom and the

chances of a bribe being accepted are very low. The risks are too high and it is strongly advisable

not to try to bribe anyone.

4.British Negotiation Style

Negotiation

To the British, negotiating is usually a joint problem-solving process

While the buyer is in a superior position, both sides in a business deal own theresponsibility to reach agreement. They may focus mostly on the near-term benefits of the

business deal.

The primary negotiation style is cooperative and people may open to compromise, if

viewed helpful It is strongly advisable to avoid any open confrontation and to remain calm, somewhat

formal, patient, and persistent.

Should a dispute arise at any stage of a negotiation, you might be able to reach resolution

through give-and-take compromising and appeals to your counterparts fairness.

Sharing of Information

British negotiators usually spend some time gathering information and discussing detailsbefore the bargaining stage of a negotiation can begin.

They normally share at least some information and rarely take it negatively if you ask

about sensitive details, even if they may not want to answer. . Similarly, they may ask

many questions themselves.

British negotiators generally keep their initial questions high-level, without too much

attention paid to details. It may indicate serious interest and a willingness to close the

deal if their questions get more specific and technical.


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Pace of Negotiation

How long your negotiation in the U.K. may take can be hard to predict. (Traditional

British companies may still be very slow, spending considerable time gathering

information, bargaining, and making decisions while younger or revitalized enterprisesmay be interested in finishing the negotiation in a short time span, moving at sometimes -

surprising speeds.)

The British generally prefer a monochronic work style. They are used to pursuing actionsand goals systematically, and they dislike interruptions or digressions.

Same like that of Americans.

Bargaining

Most of the British are comfortable with bargaining but dislike haggling. While they can

be tough negotiators, they are usually not out to defeat the other side and will strive toplay a fair game.

Prices may move by about 20 to 30 percent between initial offer and final agreement. The British are quite analytical and usually receptive to outside ideas, so most aspects

of the deal will be open to discussion.

Most people in this country prefer to negotiate in a fairly straightforward and honeststyle. They use deceptive negotiation techniques only occasionally.

Negotiators in the country use pressure techniques only as long as they can be applied in

a non-confrontational fashion.

They may open with their best offer, show some intransigence, or make a final offer, but

often remain willing to make small compromises. Repeatedly making final offers may

trigger ridicule and harsh comments. Avoid all aggressive tactics when negotiating with the British. They will not shy away

from open confrontation if challenged, but this is almost guaranteed to deteriorate rather

than strengthen your bargaining position. Emotional negotiation techniques, such as attitudinal bargaining, sending dual messages,

attempting to make you feel guilty, or grimacing, may occasionally be employed but are

generally rare. It is best to remain calm.

Opening with written offers and introducing written terms and conditions may be

effective tactics that could help shorten the bargaining process, which some of yourBritish counterparts may find desirable.

Corruption and bribery are very rare in the United Kingdom. It is strongly advisable to

stay away from giving gifts of significant value or making offers that could be read asbribery.


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Decision Making

Levels of hierarchy in British companies may vary considerably. Older and more

traditional ones are often quite hierarchical, while those working in fast-paced industriesoften show flat hierarchies and delegate authority to lower ranks.

The decision maker is usually an individual who will consult with others and carefullyconsider their inputs.

Once a decision has been made, it may be very difficult to change. When making decisions, businesspeople may apply universal principles rather than

considering the specific situation.

The British tend to follow established rules and practices.

Empirical evidence and other objective facts weigh much more strongly than personal

feelings and experiences do.

Depending on their companys culture and style, British businesspeople may be low or

moderate risk takers.

5. Do and Don`t

What Not to do in United Kingdom

1. Stand on the left of an escalator

Its funny that something so innocuous can arouse the inner Travis Bickle in even the

most placid Londoner. But thats just how it is: we like one side of an escalator kept free for us

to walk up and down and heaven help anyone who gets in our way. Try flouting the rules if you

must, but expect to be deafened by the sound of tutting.


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2. Ride a rickshaw

Twenty quid to be ridden 100m by a surly bloke with James Deans approach to the

Highway Code? Bargain! For obvious reasons, few Londoners bother with these mobile

money pits, but visitors inexplicably seem to ride them with the enthusiasm of children. It

might be a novel way to get around, but itll probably end up costing more than your airfare

over here.

3. Take the tube from Leicester Square to Covent Garden

If Harry Dunne and Lloyd Christmas (aka Dumb and Dumber) ever came to London,

theyd almost certainly take the tube from Leicester Square to Covent Garden the journey

is that dumb. As with many stations in central London, its far quicker to walk between them

than to schlep down the escalators, wait for a train, then schlep back up. Dont be dumberer.

4. Jump any kind of queue

Do you want to make us mad? Really? Do you want to see a line of Bruce Banners all

simultaneously turn green and start smashing things up? Are you sure? Have you thought this


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through? Do you really want to call Joe Pesci funny? Do you really want to say hello to

Pacinos little friend? Do you think its a good idea to cross Walter White or steal Tony

Sopranos gabagool? Yeah, we didnt think so, now get to the back of the queue.

5.

Play music on your phone

Whatever music youre into, theres a pretty high likelihood that not everyone in the

vicinity is quite so enamoured. Those around you might even shock horror! see it as R&B

noise pollution. With that in mind, stop playing it out loud and buy some ruddy headphones!

6. Don't Pick Up Your Rented Car in a City

Driving on the left is not hard to get used to, but if you haven't done it before,don't try to

learn how in the middle of the busy, confusing traffic of a major city. City drivers, the worldover, are notoriously impatient and the last thing you want to be doing is consulting maps,

finding your way around unfamiliar road layouts and roundabouts and getting used to being on

the "wrong" side of the road at the same time. London traffic can be intimidating, even to other

Brits and Birmingham is a nightmare to get in and out of by car. Besides, if you rent a car in

London or another major city, you'll throw away fortune every day to park it

Instead, use public transportation to enjoy your car-free city visit, then take the train to a quieter

town or village and arrange to collect your rented car there.

5. What to Do in United Kingdom

1. Roman Baths
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The Roman Baths give visitors the ability to still see how public bathing was done in the 19th

century. Guests can check out the Sacred Spring, the Roman Temple, the Roman Bath House,

and the other buildings on its street level however, the bath themselves are located below the

modern street level. This area receives around 1 million visitors per year and was featured in the

2005 TV Program SevenNatural Wondersas one of the wonders of the Western world.

2. University of Cambridge

Aside from being the center of public research in the United Kingdom, it is also the second

oldest university in the English-Speaking world. Visitors will be able to appreciate the cultural

and practical associations that the university portrays. Today, the University of Cambridge is a

collegiate university and has a student population of 18,000 with 31 colleges occupying the

various locations. The university offers students art centers, sports clubs and other school related

amenities.

3. Chinatown in London

At the start of the 20th century at the East End of London, a lot of Chinese immigrants set up

their businesses in order to cater to Chinese sailors who were frequently in the docklands.

However, due to damage from the WWII Blitz; growing popularity of the Chinese cuisine; and

an influx of immigrants from Honk Kong, it led to an increase of Chinese restaurants being

opened elsewhere. Today, you can still find Londonsfinest and most authentic Asian cuisine off

of Shaftesbury Avenue.


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4. Natural History Museum

It was officially known as the British Museum until 1992. It is the home of life and earth

science specimens that range over to over 70 million items.Visitors can see collections related to

mineralogy, paleontology, zoology, and entomology. The best part? There is no admission fee!


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5. Tower of London

Also known as Her MajestysRoyal Palace and Fortress, it is a historical castle located on

the North bank of the River Thames in central London. It was founded at the end of 1066 as part

of the Norman Conquest of England. It served as a royal residence and contains a complex of

several buildings within the two concentric rings of defensive walls. Throughout history it has


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been besieged several times and has been used as a treasury, menagerie and at the same time an

armory.

6. Madame Tussauds Wax Museum

A famous wax museum in London that has branches in different major cities, it was created

by wax sculptor Marie Tussaud. It contains the lifelike likenesses of historical and royal figures,film stars, models, sports stars and infamous murderers. Marie Tussaud was able to model

famous people like Jean-Jacques Rousseau and Benjamin Franklin during their time. She was

even able to model prominent victims in the French Revolution and made wax models of

decapitated heads.

7. Big Ben

Big Ben is the nickname for theGreat Bellof theclock at the north end of thePalace ofWestminster inLondon,and often extended to refer to the clock and theclock tower.The tower

is officially known as the Elizabeth Tower, renamed as such to celebrate theDiamond Jubilee of

Elizabeth II (prior to being renamed in 2012 it was known as simply "Clock Tower"). The tower

holds the largest four-facedchiming clock in the world and is the third-tallestfree-standing clock

tower. The tower was completed in 1858 and had its 150th anniversary on 31 May 2009, during
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which celebratory events took place. The tower has become one of the most prominent symbols

of the United Kingdom and is often in theestablishing shot of films set in London.

8. London Eye

The London Eyeis a giantFerris wheel on theSouth Bank of theRiver Thames inLondon.

Also known as the Millennium Wheel, its official name was originally theBritish

Airways London Eye, then theMerlin Entertainments London Eye, between January 2011 andAugust 2014, theEDF Energy London Eye and is now called the London Eye. From late January

2015, the London Eye will be sponsored byCoca-Cola.
http://en.wikipedia.org/wiki/Establishing_shothttp://en.wikipedia.org/wiki/Ferris_wheelhttp://en.wikipedia.org/wiki/South_Bankhttp://en.wikipedia.org/wiki/River_Thameshttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/British_Airwayshttp://en.wikipedia.org/wiki/British_Airwayshttp://en.wikipedia.org/wiki/Merlin_Entertainmentshttp://en.wikipedia.org/wiki/EDF_Energyhttp://en.wikipedia.org/wiki/Coca-Colahttp://en.wikipedia.org/wiki/Coca-Colahttp://en.wikipedia.org/wiki/EDF_Energyhttp://en.wikipedia.org/wiki/Merlin_Entertainmentshttp://en.wikipedia.org/wiki/British_Airwayshttp://en.wikipedia.org/wiki/British_Airwayshttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/River_Thameshttp://en.wikipedia.org/wiki/South_Bankhttp://en.wikipedia.org/wiki/Ferris_wheelhttp://en.wikipedia.org/wiki/Establishing_shot


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6.Superstitions in Britain

Good Luck

1. Lucky to meet a black cat. Black Cats are featured on many good luck

greetings cards and birthday cards in England.2. Lucky to touch wood .

3. Lucky to find a clover plant with four leaves.

4. A horseshoe over the door brings good luck. But the horse shoe needs

to be the right way up. The luck runs out of the horse shoe if it is

upside down.

5. On the first day of the month it is lucky to say "white rabbits, white rabbits white

rabbits," before uttering your first word of the day.

6. Catch falling leaves in Autumn and you're have good luck. Every leaf means a

lucky month next year.

Bad Luck

1. Unlucky to walk underneath aladder

2. Seven years bad luck to break a mirror.

3. Unlucky to see one magpie, lucky to see two, etc..
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4. Unlucky to spill salt. If you do, you must throw it over your shoulder to counteract the

bad luck.

5. Unlucky to open an umbrella in doors.

6. Thenumber thirteen is unlucky.Friday the thirteenth is a very unlucky day. Friday is

considered to be an unlucky day because Jesus was crucified on a Friday.

7.

Unlucky to put new shoes on the table.8. Unlucky to pass someone on the stairs.

Food Superstitions

1. When finished eating a boiled egg, push the spoon through the bottom of

the empty shell to let the devil out

2. In Yorkshire, housewives used to believe that bread would not rise if

there was a corpse (dead body) in the vicinity, and to cut off both ends of

the loaf would make the Devil fly over the house!

Animal Superstitions

Animals feature a lot in our superstitions as they do in superstitions around the world.

One ancient British superstition holds that if a child rides on a bear's back it

will be protected from whooping-cough. (Bears used to roam Britain but now

they are not seen on our shores)

In some parts of the UK meeting two or threeRavenstogether is

considered really bad. One very English superstition concerns the tameRavens at the Tower of London. It is believed if they leave then the

crown of England will be lost.

It is said to be badluck if you see bats flying and

hear their cries. In the middle ages it was believed that witches were closely

associated with bats.

If a Sparrowenters a house it is an omen of death to one who lives

there. In some areas it is believed that to avoid ill luck any Sparrow caught must be

immediately killed otherwise the person who caught it will die.

In some areas black Rabbits are thought to host the souls of human

beings. White Rabbitsare said to be really witches and some believe that

saying 'White Rabbit' on the first day of each month brings luck. A common lucky

charm is a Rabbit's foot, but not for the Rabbit.
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It is thought very unlucky to have the feathers of a Peacockwithin the home

or handle anything made with them. This is possibly because of the eye shape

present upon these feathers i.e. the Evil-Eye associated with wickedness.

7.British Blunders

What is a blunder?

By a blunder we mean a case of a government initiative to achieve one or more stated

objectives which: Not only fails totally to achieve those objectives, but in addition:

Wastes very large amounts of public money;

and/or causes widespread human distress;

and was eventually abandoned or reversed;

and was foreseeable.

Blunders are only one form of government failure or policy error. They need to be

distinguished from policy disappointments. A great deal of government action produces

outcomes that are smaller, slower, weaker, costlier and less clear cut than envisaged. Much of

New Labours attempts to reduce social exclusion, improve public servicesand raise educationaland health standards fall into this category but they did not achieve the opposite of what was

intended, waste colossal amounts of money or result in collateral damage. They were

disappointments, possibly not worth undertaking in the first place, but not blunders.

Blunders also need to be distinguished from wrong judgement calls. The real world of

government is often intractable and ultimately unpredictable. People in government, as in all

walks of life, know only what they know and can find out, and in conditions of extreme

uncertainty and limited evidence, they decide what, on balance, it makes sense for them to do.

They will sometimes be right, sometimes wrong, but the fact that they turn out to have made a

mistake does not mean that they were careless or stupid. The Treasurys sale of half the UK gold

reserves from 1999-2002 at the bottom of the market and the Labour Governments handling offoot and mouth disease in 2001 are cases in point. All blunders are mistakes; not all mistakes are

blunders.

Blunders are sins of commission and need to be distinguished from sins of omission. UK

governments have flunked from tackling, in good order and in good time, critical structural

challenges to the future of the country. One thinks, for example, of the failure of successive

administrations to establish a system of social care for an aging population; to devise a national


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strategy for sustainable energy and for food sufficiency; and to decide on the location for, let

alone provide, increased airport capacity in London. These failures have massive public

consequences, but our focus is on specific, identifiable instances of deliberate policy decisions

that have gone spectacularly wrong. Perhaps sins of omission should be called meta-blunders.

We studied 12 blunders taken from a much longer list compiled from the suggestions of alarge number of former ministers, senior officials and political commentators. What these

blunders all share in common is that the Government failed in its objectives, spent and wasted

large amounts of public money and/or wrecked the everyday lives of ordinary people. Not all the

blunders were widely foreseen, but they were all foreseeable, if politicians and officials had had

the capacity and willingness to do so.

Structural causes:

(1) the def ici t of deli berati on

The British political system is often admired for its decisiveness. If a government wants

to act, it does so, unconstrained by veto-players institutions with the power to block anyinitiative that they find objectionable. The British system is efficient at converting a ministers

wishes into a legislative bill (even if hastily drawn up and badly drafted). The whips will drive it

through the Commons and the parliamentary committees. Number 10 and the Treasury will lean

on ministers. Ministers will instruct civil servants to deliver. Whitehall will issue guidelines to

town halls or NHS trusts or whoever is responsible for applying the policy locally.

The trouble with a system designed to take such unconstrained decisions is that it is as

efficient at facilitating bad decisions as good ones. All the governments that committed the

blunders we investigated were strong and decisive, but their very strength and decisiveness made

possibleindeed positively encouragedtheir blundering.

The British system is designed for decisiveness rather than deliberation. A decision

arrived at by deliberation is based on the careful and dispassionate weighing of the pros and cons

of alternative options after receiving the advice of a range of experts and interests, including

those known to be sceptical about the proposed policy. Such decisions inevitably take time and

cannot be rushed.

The common feature of the dozen case studies of blunders is that the Government did not

engage in serious deliberation. Almost all of the blunders were gestated largely in-house, within

the executive branch. The Government did not deliberate with the people most directly affected,

with those whose job it is to apply a policy, with independent experts, and with those who were

opposed, before arriving at a decision.

In the case of the poll tax, a small group of exceptionally bright officials and junior

ministers were tasked to propose an alternative to the rates. It was a complex, major project.

They were closeted together, working long hours. They talked incessantly to each other, but

deliberately excluded local government treasurers, the real experts on local tax collection. Nor

did they investigate the probable reaction of local tax payers because they assumed they knew it

already.


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When it came to the Child Support Act, the government ignored doubts expressed by the

child poverty lobby and failed to consult officials who had direct experience of collecting

payments and information from the poor the managers and staff of social security offices. In

the case of Metronet, the Treasury, led by Gordon Brown, ignored the expertise of Transport for

London who managed the London Underground. Nothing in the British system or indeed in the

British political culturerequired the Government to reach out beyond its own confines.

The institutional locus of national deliberation should, of course, be Parliament, one of

whose roles is to scrutinise the details of legislation. Parliament turned out to be an irrelevant

spectator in the policy blunders we examined, even though most involved new primary

legislation. On all essential points the members of the governing party in the Commons did little

more than support their ministers legislative proposals. In neither House were there pre-

legislative hearings; the public bill committees, where legislation is meant to be examined clause

by clause, are systematically whipped, and the select committees, including the Public Accounts

Committee, look at policy after the event, not before.

The bills in most cases were rushed through, with little time afforded either forsubstantive debate or for detailed scrutiny of individual clauses. The few voices raised in

opposition were largely ignored. Indeed, a notable feature of the whole list of blunders was the

inevitability with which the opposition parties would object to the policies on grounds of

principle, but the rarity with which they argued that they would fail in their objectives (the single

exception being the mis-selling of pensions). The official opposition parties played no effective

part in any of the proceedings.

(2) the def ici t of accountabil ity

Why do so many ministers fail to appreciate the benefits of careful deliberation? After

all, they are formally accountable to Parliament for the performance of their department and runthe risk of media exposure when things go badly wrong. In reality, however, they are not held

responsible for the outcomes of their policy initiatives. Only one of the 80 ministers and senior

officials most closely associated with the 12 policy blunders (excluding the chief executives of

the delivery agencies) resigned or suffered demotion or sanctions. The exception was the prime

minister, Margaret Thatcher, who was ousted by her cabinet from Number 10 as a result of the

unpopularity of the poll tax.

Behavioural causes:

(a) cul tur al disconnect

Governments blunder because they frequently suffer from cultural disconnect. Theydevise policies in the belief that those affected by those policies will respond in a particular way,

only to be surprised to discover that they respond very differently or not at all. They project onto

others their own mind sets, values, habits and assumptions, which tend to be markedly

unrepresentative of the people most affected by a policy. The devisers of the poll tax took it for

granted that everybody complied with the law, even laws they hated, because they did, and so

failed to anticipate that large numbers of former non-rate payers would refuse to pay. The


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creators of the Child Support Agency were unaware of two important aspects of life among the

relatively poor, that overwhelmed the IT systems and led to administrative chaos: that the

income of those in casual and intermittent employment fluctuated from week to week, and that

some women had multiple children by different fathers, and some men fathered multiple children

with different women.

(b) operational disconnect

The second behavioural failing is operational disconnect. Time and again those who

designed a policy failed to involve those who, further down the line, would find themselves

having to implement whatever the new policy turned out to be. The rapid rotation of ministers

and officials exacerbated the problem. The policy-makers operated in an implementation

vacuum. They did not regard issues of implementation as their problem, because they did not

imagine it could ever threaten the policys viability. The Whitehall poll tax group did not involve

local government finance officers, who were the experts on local tax collection. Senior

departmental officials did not consult front-line staff in local tax offices about the administration

of tax credits or in welfare benefit offices about the new arrangements for child maintenancepayments.

Why was it not self-evident to ministers that a policy design is only as good as its

practical application? One answer is that most ministers have little or no experience of running a

large organisation, delivering services and satisfying clients or customers, in other words,

managing and delivering change. They are, increasingly, professional politicians who have spent

their entire career, or almost all of it, in politics itself, as student politicians, political researchers,

speech writers and young MPs. Until they assumed office, David Cameron, Nick Clegg, Ed

Miliband, Ed Balls, George Osborne, Michael Gove and William Hague to name just some

had spent almost their entire adult lives in politics but had not run anything. Perhaps it is not

surprising that ministers miscalculate the impact of policies and take little interest in their

practical implementation, as distinct from the principles of their design.

Reducing blunders

What changes might make the UK government less blunder-prone? Institutional reforms

should be designed to inject a larger measure of formal policy deliberation outside the executive,

including pre-legislative scrutiny in Parliament and formal public consultation of organised

interests and expert individuals. Higher priority should be given to improving two-way

collaboration between policy designers and policy implementers. The rotation of civil servants

and officials should be significantly reduced and their public accountability increased.

Behavioural change is more difficult to engineer, although there is scope for the recruitment,training and promotion of officials with skills in risk assessment, project management and policy

evaluation. In addition, the gene pool of ministers should be widened: the UK is one of the very

few democracies in which ministers must be recruited from the ranks of parliamentarians

(largely MPs) and members of parliament are effectively recruited by local constituency parties

for whom competence in governing is a minor consideration.


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In recent years the leaders of the three main parties have pledged to enhance the quality

of our democracy with proposals to reform the working of parliament (Gordon Brown), to

change the electoral system and directly elect the House of Lords (Nick Clegg) and to shift the

balance of power from central government to local institutions (David Cameron). Most of these

ideas have come to nothing, with the exception of directly elected police commissioners. But the

popular legitimacy of our democratic institutions owes more to the standard of governmentaffecting everyday lives, than the quality of governance owes to democratic design. Blundering

governments are not governments that command respect. Perhaps the principal cause of our

discontents is poor governance rather than democratic deficit and is what needs to be

addressed.

Funny example of blunder

The BBC today apologised after a weather bulletin warned festival-goers heading to

Glastonbury to 'prepare for rape'.

The blunder appeared in a subtitle on a forecast broadcast live on BBC One after the

10pm news.

Stunned viewers were warned to 'prepare for rape' rather than to 'prepare for rain' as expertspredicted stormy weather would hit the UK this week.

+7


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Blunder: Viewers were quick to photograph the subtitle blunder after BBC News At Ten

when they were told to expect 'rape' at Glastonbury festival, which kicks off this weekend, rather

than 'rain' as predictedAfter spotting they had typed the word 'rape' instead of 'rain' subtitle writers quickly

corrected the message.

They wrote: 'As we head into Thursday, people going to Glastonbury will want to preparefor rape because this rain is heading - prepare for rain because this rain is heading right for you.'

8.Language

It is estimated that over 95% of the British population are monolingualEnglish speakers.There are various minority Celtic languages, and speakers of these are invariably bilingualEnglish speakers. In Scotland 1.4% speakScottish Gaelic as well as English; in Northern Ireland

6.6% of the population are bilingual inIrish Gaelic and English; in Wales, 21% also

speakWelsh. Welsh is the only Celtic language that enjoys official status.

In Scotland, Northern Ireland and some border areas of England, Scots is a distinct

minority language although at times it overlaps with Scottish English.

There are also large numbers of community languages, brought into the country and

sustained by recent immigrant communities, which account for more than 5.5% of thepopulation. The largest group (spoken by 2.7% of the total UK population) are South Asian

languages such as Bengali, Punjabi, Hindi and Gujarati. Other community languages include

Cantonese,Italian,Polish,Greek andTurkish.45% of the total ethnic minority population lives

in London, but community languages are spoken throughout the United Kingdom.
http://www.bbc.co.uk/languages/european_languages/languages/english.shtmlhttp://www.bbc.co.uk/go/languages/european_languages/countries/uk.shtml/ext/_auto/-/http:/www.scotland.gov.uk/library/documents6/eid_ach_gisf_index.htmhttp://www.bbc.co.uk/northernireland/blas/learners/index.shtmlhttp://www.bbc.co.uk/wales/storyofwelsh/http://www.bbc.co.uk/voices/multilingual/scots.shtmlhttp://www.bbc.co.uk/languages/european_languages/languages/italian.shtmlhttp://www.bbc.co.uk/languages/european_languages/languages/polish.shtmlhttp://www.bbc.co.uk/languages/european_languages/languages/greek.shtmlhttp://www.bbc.co.uk/languages/european_languages/languages/turkish.shtmlhttp://www.bbc.co.uk/languages/european_languages/languages/turkish.shtmlhttp://www.bbc.co.uk/languages/european_languages/languages/greek.shtmlhttp://www.bbc.co.uk/languages/european_languages/languages/polish.shtmlhttp://www.bbc.co.uk/languages/european_languages/languages/italian.shtmlhttp://www.bbc.co.uk/voices/multilingual/scots.shtmlhttp://www.bbc.co.uk/wales/storyofwelsh/http://www.bbc.co.uk/northernireland/blas/learners/index.shtmlhttp://www.bbc.co.uk/go/languages/european_languages/countries/uk.shtml/ext/_auto/-/http:/www.scotland.gov.uk/library/documents6/eid_ach_gisf_index.htmhttp://www.bbc.co.uk/languages/european_languages/languages/english.shtml


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9.Labour market statistics

Employment, unemployment, economic inactivity, claimant count, average earnings, labour

productivity, vacancies and labour disputes statistics.

The United Kingdom Statistics Authority has designated these statistics as NationalStatistics, in accordance with the Statistics and Registration Service Act 2007 and signifying

compliance with the Code of Practice for Official Statistics.

Designation can be broadly interpreted to mean that the statistics:

meet identified user needs;

are well explained and readily accessible;

are produced according to sound methods; and

are managed impartially and objectively in the public interest.

The main findings of this release are that employment continued to rise and unemployment

continued to fall. These changes continue the general direction of movement since late2011/early 2012.

For July to September 2014, 73.0% of people aged from 16 to 64 were in work, up from71.6% for a year earlier.

The unemployment rate for July to September 2014 was 6.0%, down from 7.6% for a yearearlier.

The labour market

Estimates by theONS in 2014 put the size of the Uk labour force at 32.7m workers out ofan estimated population of 63.7m. The labour market includes thesupply of labourbyhouseholds and the demand for labourby firms. Wages represent the price of labour, which

provide anincome to households and represent acost to firms. In a hypothetical freemarket

economy,wages are determined by the unregulated interaction of demand and supply. However,

in realmixed economies,governments and trade unions can exert an influence on wage levels.

Nominal and real nominal wages

Nominal wagesare the money wages paid to labour in a given period of time.Realwagesare nominal wages, adjusted to take into account changes in theprice level.Most workersexpect at least an annual increase in their money wages to reflect price increases, and so maintain

their real wages.
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The demand for labour

The main factors affecting the demand for labourare:

The wage rate

The higher the wage rate, the lower the demand for labour. Hence, the demand for labourcurve slopes downwards. As in all markets, a downward sloping demand curve can be explained

by reference to the income andsubstitutioneffects.

At higher wages, firms look to substitute capital for labour, or cheaper labour for the

relatively expensive labour. In addition, if firms carry on using the same quantity of labour, their

labour costs will rise and their income (profits) will fall. For both reasons, demand for labour

will fall as wages rise.

The demand for the products

The demand for labour is a derived demand, which means it is ultimately based ondemand for the product that labour makes. If consumers want more of a particular good or

service, more firms will want the workers that make the product.

Productivity of labour

Productivity means output per worker, and If workers are more productive, they will be

in greater demand. Productivity is influenced by skill levels, education and training, and the use

of technology.


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Factors other than wages will shift the supply curve to the left or right. These factors include:

The size of the working population

The working population is the number of people of working age (16 60 for women and

16 65 for men) who are willing and able to work. The size of the working population isinfluenced by the retirement and school leaving ages, migration, and numbers staying on at

University.

Migration

Migration can have a considerable impact on the labour market. Migrants tend to be of

working age, and while the general effect is to increase the supply of labour at all wage rates,

migration especially affects supply at lower wage rates. This is because migrants tend to come

from low wage economies, with average wages often far below theminimum wage in the UK.

Peoples preferences for work

If people prefer more work, the supply of labour increases. Preferences can be influenced

by a range of factors including changes in the cost of working, such a subsidised childcare, andnon-wage benefits (advantages) of working.

Net advantages of work

As well as the wage rate, decisions to increase or decrease labour supply are influencedby non-monetary (non-pecuniary) advantages, such as changes inworking conditions,jobsecurity, holiday entitlement,promotion prospects, and otherpyschological benefits of

work. Improvements in these benefits will shift the labour supply curve to the right.

Work and leisure

For many, part-time work is an increasingly attractive option given the advantages ofincreased leisure. Early retirement is also a factor affecting labour supply.

An individuals decision to supply labour is greatly affected by the choice between work

and leisure. Given that time is fixed, work and leisure are substitutes for each other.

The choice between work and leisure can be affected by a number of factors, including:

Ageolder workers often gain more utility from leisure.

Direct taxes higher income tax rates may increase the utility of leisure and

reduce the labour supply.

Dependentshaving children may increase the utility of work, and increase the

labour supply.

Non-work income some individuals can retire from the labour market because

they have company pensions which may be received before state pensions, which are
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available for men at 65 and women at 60. Non-work income can come in the form

of cash benefits, such as the Job Seeker's Allowance, and benefits-in-kind, such as

subsidised travel cards.

Individual labour supply

The supply curve for an individual cannot continue to slope upwards indefinitely. Labourmarket theory suggests it will initially slope upwards, and then bend backwards. Up to a wage

rate of W1, the relative price of leisure increases, and workers will look to switch from leisure to

work. In other words there is a strong substitution effect as wages start to rise. Hence, the supply

curve slopes upwards to point L.

However, beyond W1, the income effect begins to dominate and further rises in money wages,which increase real income, mean that less work is required to achieve the same level of realincome.

Length of training of workers

If workers need lengthy training, the effective supply of labour is less in the short run.

Barriers to entry

Barriers to entry into the labour market, such as the strict requirement for qualifications, will

make the supply of labour less than it would be with no barriers.

Trade Unions

A trade unionis an organisation that aims to protect the interests of workers. Around 30% of UK

employees are members of unions, with women more likely to be in a union than men. Union

membership has fallen steadily over the last 20 years.


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Unions can affect the supply of labour in three ways.

1. Firstly, unions can attract workersinto the labour market because of the benefits

of becoming a member. This will shift the supply curve to the right.

2. Secondly, unions exert control over the labour supply and can withdraw labour

by limiting working hours or going on strike. A strike will shift the supply curve oflabour to the left.

3. Thirdly, by influencing wages through collective bargainingthe supply curve for

unionised workers is moreinelasticthan one for non-unionised workers.

Tax and benefit incentives and disincentives

Tax and benefit rates can lead to increases and decreases in the effective labour supply.When income taxes are excessive and benefits too generous, a stay-at-homeculture may be

encouraged.

Labour subsidies

If the government gives a subsidy to workers to look for work, or to train, then the supply

of labour will increase, and the supply curve will shift to the right.

The actual and potential labour supply

The actual labour supply includes those workers who are both willing and able to supply

their labour, including the unemployed. The potential labour supply also includes those who, for

one reason or another, are currently inactive.
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The equilibrium wage rate

The market wage, or market clearing wage rate, is the wage that brings the demand and supply of

labour into equilibrium.

The equilibrium wage rate can change following changes in the demand or supply of labour,such as:

Labour productivity

An increase in labour productivity will shift the demand curve to the right, and increase

employment (Q to Q1) and increase the wage rate wage rate (W to W1).

Preference for work

An increase in people's preference for work will shift the supply curve to the right, and

increase employment (Q to Q10) but it would also reduce the wage rate (W to W1). Similarly, anincrease in the net advantages of work will shift the supply curve to the right.


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Trade union activity

If a trade union withdraws labour through a strike, the supply curve of labour will shift to

the left, and the wage rate rises. However, the level of employment falls, from Q to Q1.

The importance of elasticity

The effect on the wage rate and level of employment of a shift in either the demand orsupply of labour depends upon the elasticity of the other curve.

For example, if the demand for labour is very inelastic, perhaps because there are no

substitutes for labour, the effect of a strike is to raise the wage rate, but leave employment

largely unaffected. The result is that workers will gain as a group, even though some individualworkers will lose their jobs.


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Wage differentials

If labour markets are very competitive, with identical workers and perfect mobility of labour,wages will move towards the same equilibrium level. However, in reality wages can differ

greatly, even for the same job. A variety of different factors account for this, including thefollowing.

Human capital differences

Some jobs require lengthy training and education, and this is reflected in higher wages.

Human capital is the quantity and quality of labour and human capital development is theprocess of improving the quality of labour through education and training.

Human capital development, through education and training, is a considerable cost toindividuals and firms, both in terms of time spent and resources used. Firms are aware that they

must compensate for human capital development to attract the necessary skilled labour they

require.Airlines, for example, know that they must payskilledpilots significantly morethansemi-skilled cabin crew to compensate pilots for the greater sacrifice pilots make during

their lengthy education and training. In contrast, airlines only need to pay a relatively low wage

to unskilledcleaners because there is little education or training needed, and therefore, little

human capital development.

Over time, market forces will adjust the cost and benefit of education and training so thatlabour shortages in one area push up the wage rate, and it becomes more worthwhile to train for

jobs in these shortage areas.


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Formal education

Formal education is an important determinant of human capital, and wages. Lifetimeearnings vary directly with education and an individual who just obtains A Levels, will earn

much less, on average, than an individual with a university degree.

Wages and skills

The demand for skilled workers is greater than the demand for unskilled workers becausethe value of the output produced by skilled workers will be higher, and can command a higher

price.

The marginal cost of acquiring a skill and improving human capital is greater, so the

skilled workers supply curve is to the left of the unskilled worker. The combined effect of the

higher demand and lower supply is that wages for skilled workers are often much higher that forunskilled workers.

Because of the greater human capital required, skilled workers expect a higher wage to

encourage them to supply more labour.

The widening pay gap

In the UK, the gap between the earnings of skilled and unskilled workers has risen in recentyears, mainly for two reasons:

1. Technological change and the new economy have increased the productivity of

many skilled workers. The application of IT is often more possible in skilled occupations

compared with unskilled ones.


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2. International tradeandglobalisationhave had a significant downward impact on

the pay of the unskilled. In contrast, the skilled, especially those in the service sector, are

generally less adversely effected by global competition. The recent financial crisis has

meant that the financial services sector has experienced difficulties in terms of pay, but

the skills gap and resultant pay gap is unlikely to narrow in any significant way.

Discrimination

Wage levels can also be affected by job discrimination, which means that groups ofworker are denied access, or have limited access, to jobs or to higher paid (elite) jobs. Workers

can suffer discrimination because of their:

Gender

Race

Disability

Age

Discrimination is considered a labour market failure, and its effect is to reduce the supply

of labour into a given profession, and drive up the pay of the elite workers. This leads to a

relative increase in supply of workers available for the non-elite jobs and depresses their wages.Wage differentials can, therefore, be sustained by the practice of discrimination.

Gender and pay

Despite equal pay legislation, gender still affects wage rates. Even though the pay gapbetween men and women is closing, women still earn approximately 75 - 80% of the level of

men.

Factors that might account for this gap include:

1. Possible differences in the level of human capital development, especially formal

education because women may invest less in their own human capital development than

men.

2. There may beproductivitydifferences (in manual work), although this is clearly a

minor factor in a service sector economy.

3. The number of hoursworked, and career breaks will affect labour productivity.

On average, women work fewer hours than men (35 hours per week, for women and 40

hours for men. It is estimated that this alone contributes around 12.5% of the

difference). (Source: OECD)

4. Women are oftencrowdedinto low-paid jobs, with low skill levels.

5. Women are also often crowded into part-time jobs, with lower pay relative to full-

time employees.
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6. In contrast, women are often crowded out of higher paid jobs through

discrimination, or are discriminated against in terms of promotion. Females often make

up a very small percentage of senior jobs.

Female pay as a percentage of male pay has been rising over the last 15 years. Despite the

differences that still exist, the gap between male and female pay is narrowing.

Possible explanations for this include:

1. The human capital of females is catching up with that of males because female

performance in formal education has improved. Girls achieve higher GCSE and A level

grades and are rapidly catching up in terms of degree performance.

2. A decline in the impact of discrimination, due to the gradual impact of theEqual

Pay Act, 1970, and other legislation.

3. More females are becoming employers, and this reduces the likelihood of

discrimination.

4.

Government support for equal opportunitiesinitiatives, such as Opportunity 2000

(now calledOpportunity Now.)

5. The growth of the service sector and decline in the manufacturing sector has also

contributed to a narrowing of the pay gap. Changes in the structure of the economy may

have benefited females in relation to males. The growth of the service sector has led to a

relative increase in demand for service sector workers, which has also increased wages in

parts of the service sector in comparison with declining relative wages in the

manufacturing sector.

6. The introduction of the national minimum wage in 1997 had a proportionately

bigger effect on female wages, compared with male wages.

The national minimum wage

The government can also influence the wage rate by setting a national minimum wage.

The effect is that demand contracts from Q to Q1 and supply extends from Q to Q2 creating a

surplus of labour.
http://www.opportunitynow.org.uk/index.htmlhttp://www.opportunitynow.org.uk/index.htmlht

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