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
This country profile has been produced to give a short overview of some of the key concepts to bear in mind when doing business with contacts in Austria. It is intended to be an aid to business people who have commercial dealings with counterparties in the country but should not be seen as an exhaustive guide to this topic or as a substitute for more substantial research should there be a need.
With this in mind, we have covered the areas which are key to a better understanding of the cultural mindset underpinning business dealings in Austria and which are, quite often, extremely different from the approach and thought processes associated with business in other parts of the world.
Therefore this briefing note is broken into short, bite-sized sections on the following topics: