After the creation of the current state of Austria and during its post-war reconstruction stage, most basic industries were state-owned. Although the level of state involvement in industry has been radically cut back through a series of privatisation measures, the legacy of bureaucracy and hierarchy remain.
Thus most large Austrian organisations would tend towards a high level of hierarchy, with companies managed along fairly tightly defined functional lines. The organisation chart usually reflects the reality of the structure of a business, rather than being merely designed to impress visitors. The head of a business function will wield a great deal of power and can seem to act in an almost autonomous manner, with little reference to other functional heads. (See management style)
Austrian business has always prided itself on the concept of Sozialpartnerschaft, or social partnership, which promotes dialogue and co-determination in industrial relations matters. Thus, all industries, trades and professions have specific bodies which work together to promote and conduct good labour relations. (Trade union membership is high but industrial unrest is not.) It is, therefore, extremely important to work to develop a strong sense of co-determination and co-operation when working with Austrian subsidiary companies.
Written and Produced by Keith Warburton
Although Austria is a landlocked country, its geographic position brings certain advantages as it is perfectly positioned between the countries of western Europe and the former Soviet satellite countries to the East. Thus, Austria is able to command centre stage in central Europe and is often seen as the bridge between the two areas.
Austria is also a very successful exporting nation with strong links to, not only its largest trading partner Germany, but also into the Middle East and Asia. Austria is at the same time traditional and outward looking. The country realises that it must trade internationally if it is to be able to continue to compete globally and maintain its current high standard of living.
All of this points to the fact that doing business in Austria could very well be a good idea for your business. If you are not currently doing business in Austria, we would recommend that you take a serious look at the market – you might be surprised by the opportunities you uncover and you might even start to see a commercial opening into some Eastern European neighbours.
If you do decide to do business in Austria make sure you take a little time out in advance to study the business culture you are likely to meet when you arrive. All countries develop their own unique approach to the way in which business is conducted and Austria is no exception. Austria is quite traditional and formal and you would do well to understand how these formalities play out in day-to-day business activities.
This country profile provides an overview of some of the key aspects of Austrian business culture in a concise, easy to follow-format. The document includes information on: