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The purpose of this paper is to illustrate the difference between the U.S. Market and the Greek Market place. By using various internet articles and books about Business in Greece I obtained the most recent information that was available. Although information may change constantly, for example economic data, this report will still give a precise overview of the Greek marketplace. To avoid stating the known facts about the U.S. Marketplace, this report mainly focuses on the Greek market.
Greece is emerging as a prime destination for foreign investment, thanks to favorable economic indicators, exceptional returns on the Athens stock market, and Economic and Monetary Union (EMU) membership. In addition structural reforms, including wide-ranging privatizations, are further increasing the country’s allure for foreign investors. This report will help any interested U.S. investors find out how the Greek market differs from theirs, and it will further prepare them for any future investments in Greece they decide to make.
II Geography of Greece
Greece (The Hellenic Republic) with geographic coordinates of 39 00 N and 22 00 E, lies at the southeastern tip of Europe, occupying the southernmost part of the Balkan Peninsula and numerous islands. It shares borders with Albania and Former Republic of Yugoslav Macedonia on the North-west side, Bulgaria on the North side, and Turkey on the North-east side. Greece’s south side is open to the Mediterranean Sea; its east side is open to the Aegean Sea and its west side open to the Ionian Sea. This unique location makes Greece the crossroads of several civilizations and an important east-west and north-south transport and communications hub. This is also why Greece is well known for its great fleet of ships.
The total area of Greece is 131,940 squared kilometers which are divided into 130,800 squared kilometers of land and 1,140 squared kilometers of water. In comparison, Greece is slightly smaller than the American State of Alabama. Around eighty percent of the land in Greece is mountainous or hilly, with many mountain ranges extending into the sea as peninsulas or chains of islands. The elevation extremes of Greece range from a lowest point of zero meters at the Mediterranean Sea, to the highest point of 2,917 meters at Mount Olympus. In addition, most of the country is dry and rocky; making only twenty eight percent of the land arable.
Greece’s natural resource consists of bauxite, lignite, magnesite, petroleum, marble, and hydropower. It’s only natural hazards are severe earthquakes but is does suffer some envromental hazards such as air pollution and water pollution.
Greece has predominantly hot, dry summers and cold, damp winters. All of Greece has pretty much the same weather, it hardly changes. Snow can fall anywhere in Greece, but it is very rare, especially for the islands. Greece’s climate is called Mediterranean or subtropical. The summers are long, hot, and dry and it usually stays that way with no rain fall for three to four months. Winters are short, and mildly wet, it is also the wettest during this season. Spring and autumn are the shortest seasons because it either rains or it’s hot. If it does happen to rain in the summer, it rains in the morning and is hot and dry in the afternoon, just enough time to go to the beach.
IV History of Greece
Greece has one of the oldest histories in the world. Its history stretches back more than 4,000 years. In the second half of the 4th century BC, the Greeks, led by Alexander the Great conquered most of the world and tried to Hellenize it. But in 146 BC Greece fell to the Romans and Emperor Constantine in 330AD formed the Byzantine Empire. Following that period, in 1453 the Byzantine Empire fell into the hands of Turks which resulted in the Greeks being under the Ottoman Yoke for 400 years. A very memorable day was to come for Greece and that was March 25, 1821, in which the Greeks revolted against the Turks and won their independence by 1828.
The newly state of Greece that was established continued to fight for the liberation of all lands inhabited by Greeks. Following the independence of Greece many islands were added to it. First in 1864 the Ionian Islands were added followed by parts of Epirus and Thessaly in 1881. After more fighting, Crete, the Islands of the Eastern Aegean and Macedonia were also added in 1913. Eastern Thrace was also added in 1919 and then the Dodecanese (Twelve Islands) were added after World War II.
Following the defeat of communist rebels in 1949 Greece joined NATO in 1952. The North Atlantic Treaty Organization (NATO) is an alliance of 19 countries from North America and Europe committed to fulfilling the goals of the North Atlantic Treaty signed on 4 April 1949. Their main goal is to settle international dispute through peace and to make sure security and justice are not endangered.
A military dictatorship in Greece called the JUNTA suspended many political liberties in 1967, which forced King Constantine to flee his native country of Greece. The JUNTA played a major role in the Turkish occupation of Cyprus in 1974, and it also left behind hatred between Greece and Turkey. The Monarchy was abolished in 1974 and democratic elections took place. This was when the new republic of Greece was declared on Dec 9 1974. New constitution was adopted in 1975 and Greece has been peaceful ever since. In 1981 Greece joined the European Community (E.C) which is known as the E.U. (European Union). The E.U. is a family of democratic European countries, committed to working together for peace and prosperity. Greece now enjoys the advantage of free trade and free borders with fellow members of the E.U.
The Greek government is called Elliniki Dhimokratia which is translated as the Democracy of Greece. Greece is also known as Hellas, which is known to be the birthplace of politics and democracy. Its democratic ideals inspired, among others, the framers of the US constitution. The country’s political system is defined as a Parliamentary Democracy headed by a President. This present constitution was voted in 11 June 1975 and later amended in March of 1986 and April of 2001. Legislative powers are exercised by a single Chamber Parliament (the “Vouli”) and executive powers are vested in the Government and the President. General elections for the 300 parliamentary seats are held every four years. The President of the Republic is elected by the members of Parliament for a five-year term, renewable only once. Currently the president of Greece is Mr. Kostis Stephanopoulos and the prime minister of Greece who also has extensive powers is Mr. Konstandinos Simitis.
Greece’s Legal system is based on the codified Roman law, and the judiciary is divided into civil, criminal, and administrative courts. The highest types of courts in Greece are the Supreme Judicial Court and the Special Supreme Tribunal. All judges in Greece are appointed for life by the president after consultation with a judicial council.
VI People of Greece
As of July 2003 Greece has a population of 10,665,989 people, in which the capital Athens contains more than 30 percent of it. About 98 percent of the population is ethnic Greek and the other 2 percent consists of minority groups of Albanians, Armenians, Bulgarians, Macedonian Slavs, Pomaks, Turks, and Vlachs. In addition 93 percent of the population over age fifteen is literate. This is due to the fact that the first nine years of education are free and compulsory. The population is divided into the following age structure: 14.7% of age 0-14, 67% of age 15-64, and 18.3% of age 65 and over. Greece has a birth rate of 9.79 births per 1000 people, and a death rate of 9.86 deaths per 1000 people. This is why Greece has a very low population growth rate of only 0.19%.
Greek people are very religious, with 98% of the population belonging to the Greek Orthodox Church. The other religions in Greece are 1.3% Muslims and 0.7 % of Jews and Roman Catholics. Greek religion plays a part in people’s everyday life, with churches being built all over the country. In addition the most celebrated events are religion related, for example weddings, baptisms, name days of saints, Easter and Christmas. In relation to religion, Greek people are also very superstitious. They believe that Tuesdays are unlucky (similar to Friday the 13Th in the U.S.) because it is the day that Constantinople fell to the Ottoman Turks. In addition they believe highly in the evil eye which can be cast by envy. If someone praises something highly, he will be blamed if anything happens to it.
C. Greek Hospitality
The Greek people are known for their hospitality and generosity towards foreigners, although nowadays it is harder to find than it used to be. Nevertheless Greece is still one of the few countries in the world where a local will invite you in his home for a meal or treat you for a meal. Greek people never allow their guest to pay when they invite them for a meal, because they consider it a big insult. Greeks are also great hosts and will offer you a feast of delicious food. As long as you keep eating they will not stop filling your plate and cup. So if you don’t want seconds leave a little on your plate and leave your cup just about half empty.
D. Language and Education
The vast majority of Greece speaks Modern Greek and English. This is because the first nine years of school in Greece is free and mandatory. In addition Greek universities are free for Greek Citizens. So due to free education, 94 per cent of Greek managers are university or polytechnic graduates and a further 54 per cent have a postgraduate degree, usually from some college in the US, Britain, France or Germany. In addition, there are a large number of foreign-language speakers among Greeks, facilitating communication with foreigners.
Forty-five per cent are familiar with at least one foreign language, usually English, while common second languages are French and German (all three of these languages are currently taught in Greek high schools). There are also several very small linguistic minorities that speak other languages including Romany, Vlach, or Turkish. Even though, a high percentage of Greek workers speak more than one language, immigrants are still a problem for foreign businesspeople. Most Greek can communicate in English but the majority of legal and illegal immigrants only speak their native which makes it very difficult for them to communicate with both foreign and Greek business people.
E. Greek Labor
It is important to mention that Greek people are very hard working. Until recent years there was very little inherited wealth in Greece, most Greek millionaires, like the legendary Aristotle Onassis, are self-made. This is why the poor or middle class people in Greece respect the rich rather than envy them. There are many Greeks that fled to other countries during the wars with nothing and now they are respectable business owners.
The Greek manpower pool is remarkable in possessing both a highly qualified workforce and a large supply of low-cost, unskilled labor. Greek workers tend to be well-trained and adapt easily to new conditions. Any gaps in technical expertise are more than made up by an ability and readiness to learn new skills. Wages, meanwhile, are the second lowest in Europe after Albania, due to a constant influx of foreign nationals coming to Greece in search of work (an estimated 500,000 have now settled in the country). Albanians, Poles, Egyptians, Africans, Pakistanis, Indians, Filipinos, Bulgarians, Romanians and many others – who have entered Greece both legally and illegally – have swelled the ranks of the workforce and kept wages low. In this way, Greece has preserved its traditional advantage over its European partners as a low-wage country. With judicious use of the necessary technology, a foreign firm that chooses to invest in Greece is well placed to use this advantage to best effect.
Greek workers respect their superiors and they usually follow all the guidelines that they are given, but superiors have to respect them back if they want to keep a good relationship. Greeks like new approaches in all levels of business; they like to learn from others using new technology and ideas. However, a foreign manager should not try to turn the whole organization around and follow only his culture believes because they workers are not going to appreciate that.
For regular workers the normal working week is 40 hours, spread over five eight-hour days. If a worker works overtime then he is entitled to extra pay which may range from 25% to 75% of base salary. Workers in Greece are paid on a 14 month salary basis. This includes 12 monthly salaries of the year, one extra monthly salary paid as a Christmas bonus, and two half-month salaries paid as an Easter bonus and a summer-leave bonus. Employees in Greece are also allowed to form and join labor unions which are affiliated with national labor federations. About 25% to 30% of Greek labor force belongs to a union. Although unions are fairly strong, strikes in the private sector are not common. Agreements negotiated by trade unions provide for mandatory working conditions and minimum wages and salaries. For the year 2002 Greece had the second lowest monthly minimum wage of 473 euros, in the EU after Portugal.
VII Cultural Dimensions
It is helpful to look at some of Greece’s cultural dimensions when examining the country from a business perspective. Greece and the United States have similarities and differences when it comes to cultural dimensions. Greece is similar to the U.S. according to power distance. They both are in the middle of Hofstede’s Chart (Cullen, 65). This means that the decision and organizational pyramid is neither tall nor flat but in between. Both countries also rate high on Hofstede’s chart in the dimension of Masculinity. This indicates that the countries experience a high degree of gender differentiation. In these cultures, males dominate a significant portion of the society and power structure, with females being controlled by male domination.
Greece is a collectivist culture. They rely on group decision making and people in the group protect each other in exchange for their loyalty to the group. If attempting to reach a decision concerning business in Greece, it might take a while. This is because the Greeks take into account how each decision affects the group as a whole, which can slow down business processes. In a collectivist culture like Greece, one’s identity is based on their group memberships including family, organization and community. So in other words you are who you are associated with.
Greek business people do not like uncertainty, which explains why they are at the highest level of Hofstede’s Cultural dimension model (Cullen, 65). Greece is a task oriented country, which is based highly on seniority and loyalty. People in Greece seek security and avoid conflicts and competition. Business people in Greece try to minimize risk by following set procedures. The people of Greece are not open for changes because they prefer to follow their traditional methods, which have been working for them for so many years. For them unknown situations are perceived to be threatening, therefore they avoid them.