IcelandZach Zimmerman, Nicolle Collin, Jonathan Franklin, Jessica Sayedzada, Richard Delgado

Group 1BUS 498

Cultural Environment

Laugavegur (Iceland’s Main Street) Hafnarfjörður Viking Festival

● Old culture rooted in Norse/Viking culture● Iceland or Ísland in Icelandic● Settled in 874 by Ingólfur Arnarson (established Reykjavik)● Icelandic is the main language rooted in Old Norse ● ég tala ekki íslensku (I don’t speak Icelandic)● Not a problem since most citizens speaks English, one of the other

Scandinavian languages (Danish, Swedish, Norwegian), or German● Patronymic naming system (ex. Erikkson)● Elves? (1998 survey said 54.4% of Icelanders believe in elves)● Friendly/Helpful however, a bit xenophobic ● Gender equality

http://www.theatlantic.com/international/archive/2013/10/why-so-many-icelanders-still-believe-in-invisible-elves/280783/

Cultural Environment

Culture Cont.

● Very proud of cultural heritage● Strong connections to other Nordic culture● Progressive view on present and future● Low Context ● Strong literary tradition (Icelandic Sagas)● Relatively no class system● Hákarl

Social Environment

Hofstede Analysis

Business Communication

● Face-to-face communication

● Language matters

● Business relationship

● Personal titles

About Icelanders, Fun Facts... The Icelandic language

Human Rights in Iceland

Nudity and more nudity

The beautiful women of Iceland

The happiness of Icelanders

Peaceful Iceland

Knowledge in Iceland

Political Environment

● The world's oldest Parliament, the Althigi, was established in 1830

● In 1918, Iceland and Denmark become separate states, same monarch (Act of

Union)

● April 9, 1940 - Denmark is occupied by Nazi Germany, all communication

is

severed

● April 10, 1940 - Iceland assumes it’s own foreign affairs

● Bilateral Defense Agreement – 1951 (reassessed in 1994)

● Keflavik base is closed down, – 2006 (affirms 1951 agreement)

Diplomatic Relations

FDR with minister of foreign affairs

● Iceland is a constitutional republic with a multi-party system.● Executive power is exercised by the Government.● Legislative power is vested in both the Parliament and the President.● The judiciary is independent of the executive and the legislative.

Government Office Name Party Since

President Ólafur Ragnar Grimsson

Independent 1 August 1996

Prime minister Sigmundur Davi

Progressive Party

23 May 2013

● 5th president since 1944, 4 year term

● The constitution does not limit the number of terms the president is allowed to serve

Economic Environment

Economic Environment cont.● GDP $41,860 USD/Capita

● Projected GDP growth -2.8%

● Net National Income $34,199 USD/Capita

● Social Spending: 16.5% of GDP

● Tax on corporate profits: 2.1% of GDP

● Unemployment: 4.5% estimated 2013

http://data.oecd.org/iceland.htm#profile-agriculture

● Service Economy: 71.2% of GDP

● Main industry: fishing, geothermal energy, tourism

● More than 12% of GDP and employs nearly 5% of the work force

from fishing

● Financial crisis put many projects on hold

https://www.cia.gov/library/publications/the-world-factbook/geos/ic.html

Monetary Environment● Exchange Rate: $1=138 Icelandic Krona● Central Bank of Iceland (Seðlabanki Íslands) was established in 1961

-Under the Administration of Finance and Economic Affairs and a Supervisory Board (7 members, elected after parliamentary elections every 4 years)-Governor handles the bank’s direction, the administration executes the orders

● Coin Denominations: 1,5,10,50,100 Kronur

● Banknote Denominations: 500,1000,2000,5000,10000 Kronurhttp://www.cb.is/the-bank/about-the-central-bank/

Currency Issues

● Decreased value of Icelandic Krona due to 2008 financial crisis,

● High value trades done electronically or in other currencies

● Debated on adoption of the euro and joining EU in 2009, withdrew application 2013

● Bitcoin/Auroracoinhttp://money.cnn.com/2014/04/02/technology/bitcoin-laws/http://www.forbes.com/sites/kashmirhill/2014/01/31/bitcoins-legality-around-the-world/

Trade Environment

http://statice.is/Statistics/External-trade

633,029 Million ISK

555,695 Million ISK

633,

029

Milli

on IS

K 555,695 Million ISK

633,029 Million ISK

77,334 Million ISK

($628,936,000 USD in 2012)

Exports● Fish and fish product (40%), aluminum, animal products.

● Export partners: Netherlands 30%, Germany 12.9%, UK 9.8%, Norway 5.1%, US 4.5%,France 4.4% (2012)

Imports● Machinery and equipment, petroleum products, foodstuffs, textiles

● Import partners: Norway 16.6%, US 10.2%, Germany 9.2%, China 7.2%, Brazil 6.7%, Netherlands 6%, Denmark 5.7%, UK 4.6% (2012)

Legal Environment

Járnsíða ('ironside') was a law-code introduced over 1271 and one considered one of the first collection of laws

● Legal systems are never the exact same between any two countries.

● A foreign government can confiscate, seize property or shut a business down.

● Understanding another country’s laws is important to business success.

● Not much legal risk exists in Iceland. (Multicultural and Information Center, 2011)Iceland operates under a code law and has been compiling their laws for nearly 800 years. Everyone is equal before the law and enjoys human rightsregardless of gender, religion, nationality, race, and status in any way.

● The country’s legal system does share some similarities with the United States, however, there are some major differences.

Iceland’s Largest Legal Issue

● The Cod Wars was a series of three conflicts between Great Britain and Iceland and was fought over ownership of fishing waters, according to The Cod Wars, written by The National Archives in 2014.

● The first Cod war occurred after WWII when Iceland declared they were going to expand their exclusive fishing territory around the island by 9 miles (The National Archives, 2014).

Iceland

4 nmi expansion

12 nmi expansion First Cod War

50 nmi expansion Second conflict

200 nmi expansion Third Cod War & Current territory

● Great Britain kept fishing within Iceland’s declared zones under the protection of the Royal Navy. In response, Iceland deployed their coast guard and several clashes erupted (The National Archives, 2014).

● Shots were fired from both Iceland and Great Britain, however, no one was killed. Great Britain agreed to stay out of Iceland’s expanded fishing region because too much fuel was needed to maintain their ships. (The National Archives, 2014).

Cod Wars● The second Cod War began in 1972 when Iceland again increased their exclusive fishing territory by 50 miles. British fishing

boats ignored this gesture and continued to fish in the region (The National Archives, 2014).

● The Icelandic coast guard was deployed and Royal Navy battleships accompanied British fishing boats. Several conflicts ensued between the British ships and Icelandic patrol boats.(The National Archives, 2014).

● NATO stepped in to resolve the conflict. A temporary treaty was signedwhich only lasted a year (The National Archives, 2014).

● When the treaty ended the third Cod war began.○ The conflict only ended when Iceland threatened to close a

very strategic NATO base located in the country.(The National Archives, 2014)

○ Iceland maintains an exclusive fishing perimeter of 200 miles.○ Total war almost broke out three times between two peaceful Icelandic patrol ship ICGV Odinn and British

frigate

countries.HMS Scyllaclash in the North Atlantic

Differences in Laws● Iceland is extremely protective of civil rights. According to Laws and Regulations written by the Multicultural and

Information Center , a person can be charged a misdemeanor for publicly ridiculing a person about their weight, religion, ethnicity or race.

● Iceland has taken steps to reduce domestic abuse and increase equality between men and women.o According to Why does liberal Iceland want to ban online pornography? an article written by The Economist, the

country banned strip clubs in 2010 and distributing and selling pornography has been illegal since 1969. Both industries are criticized as promoting violence and negativity towards women.

o The same article by The Economist suggests, Iceland considers this a progressive idea and explains women’s image is being promoted rather than their rights restricted.

● Alcohol was illegal in Iceland for 74 years, according to Laws and Regulations.o Prohibition went into effect in 1915 and lasted until 1 March 1989, since celebrated as "Beer Day".o Any business involving the sale of alcohol would want to take notice of this.

● Anyone looking to do business in Iceland should focus on a moral or pure product or service.

Thank You! TAKK FYRIR

References http://businessculture.org/northern-europe/iceland/https://www.cia.gov/library/publications/the-world-factbook/geos/ic.htmlhttp://www.theatlantic.com/international/archive/2013/10/why-so-many-icelanders-still-believe-in-invisible-elves/280783/Ministry of Finance and Economic Affairs. (2011). Acts of Law. Retrieved 3 4, 2015, from Ministry of FInance and Economic Affairs: http://eng.fjarmalaraduneyti.is/legislation/Anonymous. (2015). Laws and Regulations. Retrieved 2015, from Multicultural and Information Center: http://www.mcc.is/english/iceland/laws-and-regulations-/The National Archives. (2014). The Cod Wars. Retrieved March 10, 2015, from The National Archives: http://www.nationalarchives.gov.uk/cabinetpapers/themes/cod-wars.htmE.H. (2013, April 23). Why does liberal Iceland want to ban online pornography? Retrieved March 9, 2015, from The Economist: http://www.economist.com/blogs/economist-explains/2013/04/economist-explains-why-iceland-ban-pornographyhttp://data.oecd.org/iceland.htm#profile-agriculture

http://geert-hofstede.com/iceland.htmhttp://www.government.is/how-iceland-is-governed/ https://guidetoiceland.is/history-culture/10-reasons-icelanders-are-proud-of-being-icelandichttp://businessculture.org/northern-europe/iceland/business-communication/

http://www.iceland.is/iceland-abroad/us/business-and-trade/http://www.iceland.is/iceland-abroad/us/iceland-and-the-us/