global business cultural analysis -netherlands

Running head: CULTURAL ANALYSIS - NETHERLANDS 1

Global Business Cultural Analysis - Netherlands

Michael Willis

BUSI604-B10

October 12, 2013

Dr. Stephen Preacher

CULTURAL ANALYSIS - NETHERLANDS 2

Abstract

Through the course of researching and writing this paper

some very interesting things about the Dutch culture have been

concluded. While the Dutch have been known as a country of

acceptance and tolerance for hundreds of years, the level of

tolerance is not very deep. People from different cultural

backgrounds are free to continue their beliefs and customs but

really in a private setting. Public displays of non-Dutch

traditions and culture is generally frowned upon. The Dutch do

expect immigrants to assimilate into their culture as well.

The Netherlands presents an ideal location for businesses

looking to expand globally. The large port and technological

infrastructure will make it very easy for nearly any type of

business. The population is very well educated and a majority

can also speak and write in English.


Introduction

With a rich history and reputation of acceptance and

tolerance, the Dutch are a unique people well suited to be a

leader in global commerce in the 21st century. This is an

ancient culture that dates back to prehistoric times. Over the

centuries the Dutch have endured occupation and conquest from

many other cultures. Through it all they have maintained a

unique cultural identity and have also devised a very unique want

to expand their territory. This paper will explore the culture

of this diverse nation and the suitability it represents for an

American business looking to expand.

The Major Elements and Dimensions of Culture in The Netherlands

Historical Overview

The Dutch people have always been defined by the terrain of

their native lands. Today, The Netherlands is known for tulips,

windmills, and dikes. There is also a great deal of national

pride stemming from the fame of many Dutch artists from the 17th

century and later. People such as Rembrandt, Hals, Mondriaan,

and Van Gogh are regarded as some of the greatest artists in the

history of mankind. In ancient times the many lakes, rivers, and


other wetlands provided a good measure of safety from invading

armies (Youngblood-Coleman, 2010).

The country has withstood conquest from some of the most

well-known and notorious leaders in history such as Julius

Caesar, Napoleon, and Adolph Hitler. Also beginning in the 17th

century, The Netherlands began to evolve into a great colonial

power. There were Dutch outposts all over the world. This not

only exposed the Dutch culture to other nations, it also exposed

the culture of other nations to the Dutch. This multicultural

aspect of the Dutch helped plant the seeds of tolerance and

acceptance that the country is known for today.

Environmental factors that affect culture

The lakes, rivers, the North Sea, and other wetland features

have not only kept The Netherlands mostly safe from conquest for

hundreds of years, but have also provided an avenue to tout Dutch

ingenuity. When faced with either going to war against larger,

more powerful nations in order to expand, the Dutch decided to go

to war against the sea. Through a masterful maze of levies,

dams, and dikes, the Dutch have reclaimed over 27 percent

(Rosenberg) of their land from the sea. This also gives the


Dutch the distinction of having more land reclaimed from the sea

than any other nation in the world.

While being well-known for the great technical achievement of

their series of dams and dikes, the Dutch are just as known for

producing some of the greatest artists in the history of mankind.

Vincent van Gogh, Rembrandt, and Piet Mondrian are just three in

a long line of great Dutch painters. Their works are displayed

all over the world in the most famous museums. Their work still

influences new painters today.

Children and childhood in Dutch society

A culture is defined by how it treats its young and elderly.

Until recently the most overlooked population segment within The

Netherlands by sociologists were children under the age of twelve

years old (van Daalen, 2010). Children were seen as the sole

responsibility of the immediate family unless that child was

somehow a nuisance or a threat to the community. There were laws

to punish those children but not laws to protect children from

such things as neglect or abuse. That did not change until the

1960’s and 1970’s (van Montfoort, 1994).


The Dutch were also large proponents of a single income

family with the mother staying home and raising the children.

This also began changing on the late 20th century. Like many

other countries, The Netherlands had been struggling with a

growing immigrant population that has put a strain on the welfare

system. It has also brought to light many of the issues that are

faced by these young children. Immigration has also affected

areas such as public education. The education system is

overloaded and as a result the quality of education has been on

the decline.

Individualism

The Dutch pride themselves on being an individualist society

that is tolerant of nearly all beliefs and points of view. The

growing liberalism within the country since World War II has

greatly contributed to this individualistic attitude (Roney,

2009). According to the Dutch Social and Cultural Planning

Office, an official government agency, The Netherlands is one of

the most liberal and progressive countries in Europe (1998).

Numerous studies have concluded that The Netherlands is home

to the most postmaterialist people in the world (Inglehart,


1990). A postmaterialist person is one who has gone from being

merely materialistic and is now more concerned with such things

as self-realization, autonomy, and relationships (Edwards, 2010).

These new interests tend to put things such as family, work, and

politics in the back seat.

Another topic showing Dutch individualism is that of

detraditionalization (de Beer, 2007). This is the process of

shedding off and moving away from what is considered traditional.

Multiple studies all point to the fact that the Dutch people are

slowing but surely moving away from such traditional institutions

as marriage and the church. This is a major shift in the values

system of any culture.

It could be argued that the individualism is the national

culture of The Netherlands. As this country has been a safe

haven for ethnic, religious, and even political refugees, that

has resulted in a lack of a “national culture” per se. Through

the course of my research I believe that it is safe to say that

Individualism is indeed the Dutch national culture.

Religion in Dutch culture


Religious tolerance in The Netherlands has existed for

hundreds of years. Both the Renaissance and the Reformation

played key roles in shaping the future landscape of religion in

The Netherlands. The influx of new ways of thinking and

worshiping came from all of the major camps of the day,

especially from Calvin and Luther. Today religion plays a much

smaller role within Dutch culture. Over half of the population

of The Netherlands claim no religious affiliation. For those

that do claim a religious preference, the vast majority are Roman

Catholic, followed by Protestants and then Islam and other

assorted religious beliefs.

A country of religious tolerance. The Netherlands has been

home to multiple religions for centuries. When the Pilgrims

escaped religious persecution in England, they went to The

Netherlands. They settled there and were initially able to

worship how they saw fit. Over time they began to experience

that Dutch tolerance was only on the surface. Because they were

different and did not want to adapt to traditional Dutch culture,

they slowing began to feel the sting of exclusion and oppression.


The need for religious tolerance was high in The Netherlands

due to the large diversity of religious beliefs. From the late

1500’s on other religious views have been tolerated as long as

those with the differing views worshiped in private (Hsia &

Nierop, 2002). People that subscribed to the Calvinist viewpoint

were predominant throughout the country and thus became the

ruling class. While other religious groups were tolerated, they

were not treated equally. Only Calvinists were allowed to hold

political office (Hsia & Nierop, 2002). Other religious groups

were also only allowed to worship in private.

Coping with multiple religions as a nation. The Netherlands

is a nation full of many different religions. While Christianity

(with its many different denominations) is the largest religious

group, there are a good number of Jewish, Muslim, and Hindu

believers within The Netherlands. While people of other

religions can hold public office today, there is still an

undertone of intolerance.

Today the majority of the Dutch population identifies itself

as having no religious affiliation (de Beer, 2007). In fact The

Netherlands is today considered one of the least religious


countries in Europe (de Beer, 2007). While Christianity is on

the decline so is the morality.

Ethics

Influence of religion on the country’s ethics. Liberalism

is on the rise and the culture has embraced such things as

homosexuality, prostitution, euthanasia, and abortion. When

Christianity was more predominant in The Netherlands these topics

were much less accepted. This is a great example of how

religion, or in this case the lack of religion, affects the

ethics of a nation. As religion declines so does the morals of

the population.

Ethical concerns and issues in an international economy.

Something that still needs more emphasis today is

internationalizing the business ethics curriculum taught in

colleges and universities all over the globe. Cowton & Dunfee,

(1995) conducted a telephone survey to gage the amount of

“international” content being taught in universities all over the

world. The results were very surprising. Despite the fact that

businesses are becoming more and more international, most


business schools devote little or no time to instructing students

in ethical considerations within a global context.

Values, Attitudes, Manners, and Customs

An often overlooked issue that is faced by American

businesses looking to expand abroad is how their management

theories and policies will work in a different country. Hofstede

(1980) discusses the four main areas where national cultures

differ. Those areas are Power Distance, Uncertainty Avoidance,

Individualism-Collectivism, and Masculinity-Femininity. He goes

into defining these areas and showing how each area is a key to

national culture.

Hofstede’s five cultural dimensions. When looking at the

five cultural dimensions as defined by Hofstede (1983), The

Netherlands produces some interesting results. While the results

are in line with my previous research, they do provide form some

noteworthy discussion.

Power Distance. Not all individuals are equal. This is a

difficult statement for many in the society of today. In this

area the Dutch scored very low (38 out of 120) (Unknown). This

translates into meaning the Dutch such attributes as


independence, empowerment, and equal rights. Hierarchy is

frowned upon in favor of decentralization and independence. From

a business standpoint this infers that employers cannot treat

employees as simply underlings or inferiors. This score does

suggest that The Netherlands and the United States are very

similar in this area.

Individualism. The next area looks at the individualistic

nature of the Dutch people. This is another area where The

Netherlands (80) and the United State (91) had similar scores

(Unknown). From a business perspective employees are viewed as

individual contributors but are also expected to be team oriented

when needed. With scores this high, everyone has the expectation

to only care for themselves and their immediate family.

Masculinity / Femininity. The third area of Hofstede’s cultural

dimension model deals with individual achievement versus the

caring for others. A high score represents a masculine focus on

such things as competition and winning while a low score is on

the feminine side promoting quality of life and caring for others

as the preferred mannerisms. This is the first area where a huge

difference is seen between The Netherlands and the United States.


Their score of 14 is 48 points lower than that of the United

States (Unknown). With the shortest work week of any other

industrialized nation at just 29 hours, the Dutch certainly put a

much greater emphasis on leisure over work (Kurtz, 2013). This

is nearly ten hours shorter than the average American work week

and may be a source on contention for any American business

looking to expand into The Netherlands.

Uncertainty Avoidance. This is the first area where The

Netherlands had a higher score than the United States (53 to 46)

(Unknown). This area deals with how a society deals with

uncertainty. A high score means a great attempt to avoid

uncertainty by such methods as strict regulations and procedures.

A lower scores lends to out of the box thinking and freedom to

make decisions. With a score of 53, the Dutch prefer a rigid

structure that does not allow much room for that out of the box

thinking.

Short/Long Term Orientation. This is the final aspect of

Hofstede's model and the second where The Netherlands had a

higher score than the United States (44 to 29) (Unknown). This

area looks at how a society deals with such things as tradition.


The scores here point toward a culture that is more oriented with

a short term view. In the most elementary view of this area, the

Dutch have a short attention span and are always looking for the

next new thing. While there are certainly some long term aspects

of this society like home ownership and marriage, they are still

mostly focused on the short term.

Value Orientations

The view of values in Dutch society has changed drastically

since the end of World War II. Since that time The Netherlands

has moved to become one of the most individualist societies in

the Western world. How the Dutch view such topics as religion

and sexuality have seen a drastic shift over the past few

decades.

Treatment of the aging and elderly. Just like in the United

States, the population of The Netherlands is aging. The

percentage of people at or over retirement age continues to rise.

This aging of the population increases the number of people that

receive the Dutch equivalent of Medicare and Social Security. At

the same time the number of worker is shrinking that must support

this increased cost (Bovenberg & Gradus, 2008). There are really


only two ways to maintain fiscal harmony with retirement

benefits. The first option is to simply raise taxes on those

still in the work force. The other option is to raise the

retirement age and thus keep more people working and also have to

pay out retirement benefits for a shorter period of time.

Neither are very popular options but a choice has to be made.

The Dutch are still struggling with how to overcome this issue.

Social Structures and Organizations

Multiculturalism. From Turkish and Moroccan immigrants to

those from southern Europe, The Netherlands has become a true

melting pot. In some areas native Dutch are not considered a

minority. While the Dutch trait of tolerance is well-known, it

does not necessarily mean acceptance. In today’s Netherlands

there is a growing concern that traditional Dutch values and

culture are being overcome by the massive wave of immigrants in

the last five decades.

The large numbers of immigrants have posed a real cultural

problem for The Netherlands. These immigrants generally settle in

communities together and do not assimilate into the Dutch

culture. They tend to not even learn the Dutch language. This


cause ethnic and racial conflicts with native Dutch. Immigration

has also lead to such undesirables as high unemployment, school

drop-outs, and increased crime.

Ethnic Segregation. The Dutch tend to tout their “tolerance

and acceptance” of different people and ideologies, but that

acceptance is only if the different individuals are willing to

embrace certain traditional Dutch ideals. Europeans, especially

the Dutch, tend to avoid any references to skin color in order to

not be seen as racist. While the Dutch, and most of Europe, tend

to avoid the mention of race altogether, this actually works

against the notion that racism does not exist. While race is a

legal category in Dutch law, it is not a formal category in their

political disclosure (Essed & Trienekens 2008). The Dutch and

most European countries instead focus on things like “ethnicity”

and “national identity” which are actually closely tied to race

and even religion. Unfortunately, the increasing amount of

immigration to The Netherlands is causing a rise in racism and

anti-immigration feelings.

Political Structure. The Dutch form of government is known

as a consociational state. This is a relatively foreign term to


most Americans but it simply means that different groups have

guaranteed representation. It is a form of power sharing. It

can also be described as a constitutional monarchy. Here the

monarch is the head of state and not just a figurehead.

Attitudes towards education in The Netherlands

Ethnic segregation in the classroom. The Netherlands and

the United States both share in the issue of ethnic segregation

in schools. While the United States and been studying and

working to solve this issue since the 1950’s, the problem was not

addressed within Europe until over 30 years later (Karsten,

Ledoux, Roeleveld, Felix & Elshof, 2003).

While schools in The Netherlands are not officially

segregated by the government, they are segregated from a

community point of view. When choosing a school for their

children, Dutch parents are more concerned with finding a school

that fits their family socially and culturally. In contrast,

many immigrant families are looking for schools that will provide

the best possible education for their children. This simple

difference can easily keep most schools ethnically segregated for

the foreseeable future (2003).


Flexibility and adaptability of higher education. Another

area of similarity between the United States and The Netherlands

is the need for higher education and how to make it flexible and

adaptable to the change world economy and technology. Beginning

in the 1980’s the government of The Netherlands realized a change

was required in how high education was conducted. The government

did something that is not very common to confront this issue.

Instead of creating rules and regulations to steer higher

education, they chose to partner with academic institutions and

other concerned parties and develop a framework that consisted of

less government restriction and more independence to the colleges

and universities (Maassen & Potman, 2004).

The partnership between academia, government, and industry

has to potential to react quickly to technological changes. The

end result should be a better trained graduate that is qualified

to go to work immediately and that graduate did not have to

“waste” time taking outdated or unnecessary classes. This

strategic view of higher education should pay great dividends for

the Dutch for years to come.

The integration of culture into the domestic business environment


Business manners and customs

The Dutch do not have what would generally be considered odd

or outdated manners or customs. Shaking hands is the expected

greeting there just as it is in the United States. For Americans

meeting with Dutch businesspeople it is expected that either

someone introduces you or you introduce yourself. Identifying

yourself and greeting others stating your last name only instead

of saying “hello.”

As a project manager that has dealt with multi-national

projects, I understand that the temporary and time-constrained

nature of projects makes it critical for the team members to

function and communicate well. Not only does the project manager

have to have a good understanding of labor laws in partner

countries, but also labor customs and culture. It is the customs

and culture that usually cause more issues than the laws.

Customs and culture can vary by region while laws are common

throughout a country. Being in tune with the culture can be the

difference between a project’s success or failure (Hofstede,

1983).

Management styles


Is there is truly a single, common European management

style? There are numerous cultural differences throughout the

continent and they all have a varying effect on corporate

governance. According to Perlitz & Seger (2004), there are five

different cultural areas within Europe and thus there is no

single, all encompassing, European manager. Based on the earlier

review of Hofstede's model, it can be safely assumed that the

management style preferred within The Netherlands is one of

empowerment and cooperation. Managers are seen more as

facilitators to accomplish work tasks.

This management style is a reflection of the general

attitude toward individualism and free expression that is held in

The Netherlands. Depending the company culture of the American

business looking to move into The Netherlands, this could be a

real issue. Any company looking to move into this country will

need to understand this and adjust accordingly.

The Dutch are an extremely individualist society. This also

translates into Dutch business. Managers are more apt to not

treat employees as underlings but more like partners. This is

much different than many American management styles. A


dictatorial style of management may work in some situations in

the United States, it will rarely work in The Netherlands.

Women in the workforce

Traditionally in The Netherlands a single income family with

the woman staying at home was the norm. This has slowly changed

in recent decades with more women entering the labor force. For

the women that are working, a large percentage are only working

part-time and that is more by choice than the unavailability of

full-time opportunities.

In The Netherlands, women receive the same level of

education and training as their male counterparts. The reason

that women are working this part-time jobs is very simple and

also very difficult for many outside of The Netherlands to

understand, they do not want to work full time (Price, 2010).

This is in stark contrast to much of the Western world. Studies

have shown that remarkably only about four percent of Dutch women

would like to work more hours (2010). For those women that are

in the workforce they usually perform less physical duties than

men and are not likely to be in a leadership position (Houtman,

2007).


Effects of ethnic segregation

The Netherlands is a tolerant society but there is still a

great deal of ethnic segregation within the country. As in most

other countries, immigrants tend to gather in communities both

for support and protection. Because the Dutch view of tolerance

is not to try and impose their culture or beliefs in any way on

others, these immigrants tend to not be assimilated into Dutch

culture. As in the United States, these immigrants into The

Netherlands tend to become a burden on the welfare system. There

also tends to be an increase in crime both from and against these

immigrants. All of these make the immigrants a source of spite

and anger to many native Dutch citizens. This can spill over

into the workplace and make it very difficult for immigrants and

native Dutch to work in the same environment.

From a business management perspective there is still

recognizable discrimination, especially against certain ethnic

groups (Subeliani & Tsogas, 2005). For an American company

investigating a move into The Netherlands this may be a serious

cause of concern. This is an opportunity for the right American

company to begin to help affect change in how ethnic diversity is


viewed by the Dutch. Embracing cultural and ethnic diversity is

slowing happening and is being driven by the desire to increase

profits and market share within some lines of business.

Businesses have recognized that by employing people from

different ethnic groups often lead to increased sales within that

ethic group (Subeliani & Tsogas, 2005).

A Comparison of U.S. and Dutch culture and business culture

Contrasts in interdependent and independent cultures

While The Netherlands is a very liberal society that

promotes free expression and individualism, one thing that is

very important to them is being punctual. Even being five

minutes late is considered rude. This also has an effect on

meeting changes of any kind. Once a meeting or deadline has been

set, it is expected to me honored and too many changes could

break down the business relationship completely.

As noted in Hofstede’s model, the Dutch promote cooperation

over individual achievement. As this is a polar opposite of most

American businesses, and the United States in general, the

American businessperson much always be aware of how they are


acting and not to give off the appearance of individual

competition.

The Dutch also tend to not be large risk takers. This is

another characteristic that is very different from Americans.

They will experiment and take calculated risks in terms of

business but this is not their primary focus. This is yet

another area where many American companies differ. These

differences can be deal breaks depending on the company. This

aversion to risk taking also applies to money. Dutch businesses

are interested in making a profit but it is not a driving factor.

The sense of cooperation coupled with the low Power Distance

score for the Dutch lead to the business practice of slow

business decisions that are generally made through large group

consensus. Here is another potential polar opposite to most

American business. The typical American business is very

hierarchical with many decisions made by a very small group on an

individual. While the American model results in quick decisions,

those decisions may not always be the correct choice. The

slowness of the Dutch business decision-making process may lead

to a higher percentage of correct decisions, it can also result


in missed opportunities. For the American manager, this can also

be a source of great frustration.

Contrast alternate work location in the United States and

The Netherlands. There are many different ways and locations to

accomplish work in today’s business environment. Both The

Netherlands and the United States experienced similar benefits

and challenges with alternate work locations (Robertson & Vink,

2012). A key issue shared with businesses in both countries is

how to deal with an increasingly remote workforce. Companies are

struggling with how to create office environments what support

remote workers.

How remote employees are managed is also another dilemma

that must be solved. Many managers are shifting to evaluating

employees based more on output than other factors. Because

managers in The Netherlands tend to give employees for freedom,

this is less of an issue.

Both the employee and the company can benefit from remote

work. By having fewer employees “in the office,” companies

require smaller offices. That results in a significant cost

savings annually. The employee also benefits as they save time


and money by not have to commute to work. For those with

children there is also a savings in reduced or eliminated

childcare costs. Working from home also generally leads to a

more favorable work-life balance as well. There is also an

environmental saving since these remote employees are not driving

or taking some other means of transportation to commute to work.

There is a reduce carbon footprint and less of a strain on roads

and public transportation.

There are of course downsides to remote work. Many managers

feel a loss of control since they cannot see their employees and

know they are working continually. This is often countered by

employees that will work well after the work day has concluded.

Some studies have concluded that companies generally see an

increase in productivity though it is not overly significant.

For companies looking to expand, telework is a great way to

reduce risk. Instead of building or renting a large office

complex to house the expansion, it can be done with a small

office or even no office at all. Depending on the business, an

office in a new city or country could be minimally staffed and

have support provided by other offices. Even such business


functions as Information Technology and administrative support

can actually be done from a single location where office real

estate is inexpensive or completely done from the employee’s

home.

Human resource management within The Netherlands

Comparing The Netherlands and China’s business practices,

provides a great insight into how the Dutch business culture

operates. Verburg, Drenth, Koopman, Muijen & Wang (1999)

explored the different ways that people from different cultures

and value systems must be managed properly in order to maintain

harmony and efficiency in the workplace. To make the comparison

as meaningful as possible, they focused on similar types of

businesses and how human resource management occurs. The major

aspects of human resource management that were studied included

differences in “selection, training, performance appraisal,

promotion, and rewards.” Each of these areas was studied

separately. The main focus here was on production employees in

manufacturing companies instead of management. In the review of

each area, they took into account the technological and cultural

constraints between the two countries.


Cross-cultural analysis. Bagozzi, Verbeke & Gavino Jr.

(2003) presented a very interesting article that explored how

salespeople from completely different cultures (The Netherlands

and the Philippines) experience and dealt with shame in the

workplace caused by customer actions. This is a fascinating look

into how an interdependent-based and independent-based culture

deal with this and self-regulate shame. While both groups tended

to experience shame based on customer action in a similar

fashion, they were completely different how they handled the

fallout from that shame and embarrassment. How self-regulation

of shame was handled was vastly different between the Dutch and

Filipino employees. One group was able to use this as motivation

while it caused lower productivity in the other group.

Unfortunately the study’s sample was not consistent. The

Filipino group was more highly educated and contained more women.

Also the conclusions are based on self-reported performance

versus independently measured performance. While these things may

cast a shadow on the results I feel that the results are still

valid while not necessarily being absolute.


There are many issues facing multinational businesses in

terms of host country ethics and culture. Barker & Cobb (2000)

examine expatriate managers and some of the obstacles and issues

they may be faced with from local employees. Operating a multi-

national corporation is a very complex endeavor. Company

direction and decisions have to be made from a global viewpoint.

What may be a good direction to follow in one country by be

against the law or a serious breach of ethics in another country.

Probably one of the most serious and potentially damaging problem

arises when companies follow a path to ethnocentrism (the belief

of cultural superiority) (Barker & Cobb, 2000). This can have a

devastating on not only the local workers, but on the ability of

the company to continue to operate in that country.

Resolving cross-cultural conflict. As businesses continue to

expand across national borders conflicts of culture should be

expected. With that said, companies should be proactive in

trying to identify potential cross-cultural ethical issues.

According to Kohls & Buller (1994), “Alternatives for responding

to cross-cultural ethical conflict form a continuum from complete

adaptation to the host culture's ethical standards to complete


insistence on the application of home country standards.” Buller

et al. (1991) identify seven methods of conflict resolution:

1. Avoiding: simply ignoring the problem in the hopes it

will go away or be resolved by someone else.

2. Forcing: the manager forces the situation and the

parties involved to “do it their way or the highway.”

3. Infiltration: the manager works to put their ideas by

exposing the host culture to a “new way of thinking.”

4. Accommodation: this is an often-used method when

dealing internationally. Countries often make

accommodations, such as favorable tax status, to entice

companies to set up operations.

5. Collaboration: by having all interested parties

involved in developing a solution, you are often able

to see very favorable results quickly.

6. Education – persuasion: Here a company or manager will

seek to change ethical opinions through education.

7. Negotiation – compromise: Both side of an issue must be

willing to give up something in order to gain something

that is perceived to be of a higher value.


Implications for U.S. firms looking to conduct business in The

Netherlands

For American businesses looking to expand into The

Netherlands, performing an analysis, especially a SWOT

(Strengths, Weakness, Opportunity, Threat) analysis can help to

make the proper business decision. The SWOT analysis is a great

tool in that it allows the user to look at the topic to be

analyzed in a compartmented way. Once the analysis is complete,

it is often very easy to pick a course of action.

Elements of strength in The Netherlands

Ports and Infrastructure. Rotterdam, The Netherlands is

home to one of the busiest shipping ports in the world. The port

also serves as a logistics hub for major American and Japanese

shipping companies (Anonymous, 1998). Adding to the large sea

ports, is an extensive railroad system that stretches throughout

Europe. For American businesses looking to expand into The

Netherlands, these are both highly desirable features.

The Netherlands also has a very robust networking

infrastructure with high speed and wireless Internet access

available in the majority of the country (Durieux, Funk, Gecse,


Hofman, Pallaskari & Sandell, 2010). This intellectual

infrastructure is nearly critical to every type of business in

today’s economy.

Population education and training. The Netherlands boasts a

very well educated population and a large portion of the

population, especially around major cities, can speak English.

Any American company looking to expand into The Netherlands will

be welcomed with a smart and well-educated work force.

European Union membership. Being a member of the European

Union brings some good benefits to any company looking to move

into The Netherlands. Before the European Union, each country

had their own currency and import/export laws. For multinational

companies, especially those with offices in other European

countries, this was a nightmare to navigate. Having a common

currency also makes conducting business more simplified. There

is no longer the issue of fluxuating exchange rates that often

played havoc with Accounts Receivables. From a business

standpoint, an American company can almost look at the European

Union as a single nation. There are no visa requirements to

travel between European Union member countries.


Elements of weaknesses in The Netherlands

Welfare-state mentality of population. The Netherlands has

some of the most generous welfare programs in the world. A

person can receive unemployment benefits, which are not means

tested, for up to five years (Bovenberg & Gradus, 2008). Five

years ago the labor force participation rate was up to 74%

(2008). Labor force participation is calculated based on the

number of people that can work. This means that 26% of the labor

force is unemployed either by choice, disability, or just unable

to find employment.

The costs to maintain these generous programs are on the

rise. The government is working to adjust the benefit time

limits and move to a means-bases system in an effort to control

costs. As the general population becomes older with a larger

percentage reaching retirement age, this costs will only continue

to rise. Many companies used the unemployment program as a sort

of early retirement by laying off employees who were around 60

years old. The employee could then draw unemployment benefits

until they reached 65 years old and then were eligible to receive

retirement benefits.


Issues with immigration. The Netherlands has been

experiencing a large growth in immigration for the past few

decades. The majority of these immigrants tend to be poor,

uneducated, and unable to speak Dutch or English. This

automatically puts a strain on the Dutch welfare system as these

immigrants are not able to secure employment.

Another issue is the social unrest that is a result of the

quickly growing Muslim population (Erlanger, 2011). While The

Netherlands is well known for being a bastion of religious

tolerance, the Muslim faith is not known for being accepting of

other religious beliefs. The doctrine and custom of Muslims is

also general in direct opposition to the ideals held by the

Dutch. Besides religious tolerance, issues such as women’s

rights and sexual freedom are in direct opposition between

Muslims and the Dutch. Generally speaking, there is no

compromise with Islam which has led to volatile and sometimes

deadly confrontations.

Innovation and venture capital. The Netherlands falls well

below the European average when it comes to the availability of

innovation services and venture capital (Durieux, Funk, Gecse,


Hofman, Pallaskari & Sandell, 2010). This falls in line with the

Dutch tendency to avoid out of the box thinking and preference

for a structured environment. This can be a real issue for

companies that need investors for new ideas or products.

High tariffs on agricultural and textile products. For an

agriculture-related multinational company, this can be a major

deterrent to doing business in The Netherlands. With tariff rates

approaching nearly 40 percent (Durieux, Funk, Gecse, Hofman,

Pallaskari & Sandell, 2010), it can make it extremely difficult

to realize a profit. While tariffs on nearly all other products

and services have been drastically reduced or eliminated,

agriculture and textiles are still shackled with high tariffs in

many European countries.

Opportunities for Dutch culture to facilitate growth

Multicultural nature of The Netherlands. The multicultural

nature of The Netherlands presents both distractions and

opportunities. Having many different cultures generally

translates into different ways to look at problems and issues. A

company must be prepared and well educated in the different

cultures in order to take full advantage of the opportunity. In


a country such as The Netherlands where there is a growing

population of immigrants, a critical approach is required to

ensure a company is properly taking advantage of the opportunity

to have a multicultural workforce (Kohls & Buller, 1994).

Creating a diverse workforce. While historically women have

made up a small percentage of the workforce, there has been a

great increase in recent decades in the number of women joining

the workforce. Antidiscrimination laws have helped to enable

women to bet treated and paid more fairly than in past

generations. Since there is still a quite a stigma against

hiring women from traditional Dutch managers, this actually

presents a great opportunity for an American company to hire

talented and educated females.

Historically strong work ethic. While the Dutch do have one

of the lowest average workweeks in the world, they are also well

known as being one of the most productive populations. These two

things do seem to be in stark contrast with each other. In

America where hours worked is often just as important as

production, this can be a difficult concept to grasp. The Dutch


are very organized and agenda driven. This helps to keep them

focused and on task.

Government investment in education and technology. The Dutch

are already one of the most educated countries in the world.

However there is still a great opportunity here to improve in

order to maintain a competitive advantage. Having one of the

largest Internet hubs in Europe is a major advantage in today’s

technologically advanced economy. Having enough properly trained

people to keep that hub running is another opportunity for the

Dutch people and their government.

Government regulation and oversight. While the Dutch people

place a high value on structure and documented rules and process,

they are still very independent. This is reflected in their

national government and the amount of laws and regulations

governing the way business is conducted. In recent years there

has been a conscience effort to reduce the government oversight

burden on business even further.

Cultural behaviors that may threaten business growth

Entitlements and welfare state mentality. This will be a

difficult mentality to overcome. With very generous unemployment


and other welfare benefits it makes it very difficult to hire and

maintain a competent workforce. The short workweeks and a large

amount of vacation days will be another challenge for American

businesses to adapt to.

Acceptance of other cultural values and principles. As

stated throughout this text, the Dutch are tolerant of other

cultures only when that culture does not go against Dutch beliefs

and ideals. The difficulties the country is having with Islamic

immigrants is just one example of what could easily turn into a

volatile situation.

Lowering moral standards. Since World War II there has been

a steady and measurable decline in the morals of The Netherlands.

Previously it was noted that more Dutch describe themselves as

not have any religious beliefs than those that do. With the

decline in religious beliefs, the liberalization of Dutch morals

has taken steam. Things such as homosexuality and prostitution

are widely accepted as normal behaviors. There is also a quickly

growing acceptance of drug use, especially marijuana. As the

Dutch continue on the path of a completely individualist society,

these things as well as other historically unaccepted behaviors


will gain favor and acceptance. For a Christian-based

organization looking to expand into The Netherlands this can

present a large ethical and moral dilemma.

Considerations for everyday business interactions

Guiso, Sapienza & Zingales (2006) draw a distinction between

culture and how it affects a country’s economy. Considering

culture’s effect on economy is something that economists have not

put a lot of work into researching until recently. The have

concluded that culture has a definite effect on economic success

or failure. A culture that is not very open to foreigners, for

instance, will have limited economic success while an open

culture has the potential to be very successful on the global

stage.

Cultural adaptations U.S. firms should expect to make when

conducting business in The Netherlands

There are volatile issues such as religion and how a person

(or company) must take that into account different religious

customer and holidays when operating a business. Such things as

eye contact or even the color of your clothes can have a very

negative outcome on a business negotiation. What may seem like


minor details to Americans can be the source of great controversy

to people of other cultures (Firoz & Ramin, (2004). Companies

cannot live in a vacuum when making decisions. The success or

failure of the company in a new country can hinge on something as

simple as the name of the product. Too many American companies

have not conducted the proper research into the culture of a new

country to ensure they are not using what may be considered a

vulgar or offensive product name.

Accommodations U.S. firms should expect to make towards The

Netherlands employees

For any American business looking to expand into The

Netherlands there are some cultural necessities that must be

embraced. It is unlikely that the American ideal of working 40

or more hours will be tolerated. The same can be said of having

a small number of vacation days. It will be difficult to hire

and retain the best people if issues such as these are not

addressed in favor of Dutch culture.

Due to the diverse workforce, it may also be necessary to

make accommodations to the different customs and holidays of the

population. For a company looking to maintain a gender diversity


within the new Dutch office, that may be an issue if women are

expected to work full time hours.

American managers will have to be very aware of Dutch

culture and adjust their management styles accordingly. The

Dutch are used to having their opinions valued in the business

world and a dictator-style of leadership will not work well at

all in The Netherlands. The organized and educated Dutch worker

will appreciate and expect to be part of the decision-making

process. American companies may struggle with the sometimes slow

movement of business decision due to the cautious nature of the

Dutch as well as the desire to create a consensus with nearly any

decision.

Conclusion

With a major port and a large percentage of the population

that can speak English, The Netherlands is a great destination

for American businesses looking to expand into Europe. The

population is very diverse and highly educated. Steeped in a

history of tolerance for both other religions and ethnic groups,

The Netherlands offers many advantages to any United States based

company looking to expand into Europe. The favorable trade


regulations provided by membership in the European Union are also

a positive benefit. While there is concern over the welfare

state mentality of many Dutch citizens, it is nothing that should

stop a company from expanding into The Netherlands.


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