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How to Do Business in Norway


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Olga Pechnenko Kopp photoOlga Pechnenko Kopp, our Oil and Gas accounts manager, briefly interviewed one of her clients for some current takeaways for anyone wanting to do business in Norway, from an Oil and Gas industry perspective. This is followed by more in-depth information about the Oil and Gas industry in Norway, and then we wrap things up with our usual brief notes on business cultural etiquette.

  • A new trend in the oil industry is the rapid increase of new small independent oil companies.
  • Until a few years ago we had approximately 20 oil companies in Norway, all major companies and two-three Norwegian including Statoil, the state oil company.
  • Now that the Norwegian shelf has matured, the big companies are losing some of their interest and many small independent companies get in here to pick up the “left-overs." Also a lot of small Norwegian companies are formed by people who leave the big companies, hoping they will make a fortune with some exploration licenses. Many of those smaller companies will have limited staff and will have to buy external services third party vendors.
  • I (like to) think the Norwegians are honest and easy to work with. Everybody speaks English as their second language. Americans will often perceive us as being a bit rude, because we don't emphasize the importance of using as many polite phrases as an American would.
  • Norway English is the “official” language of the oil industry and therefore the official language of an oil and gas company. I think it is common for larger oil and oil service companies to have technical writers (often from the UK or USA) on staff to make sure main publications are done properly. We used to contract the service before, but now we have a full time writer.

A knowledge society

Within the span of just a few decades, Norway has been transformed from a natural resource-based economy to a knowledge society. The Norwegian business sector works to develop cost-effective, environmentally-sound and technologically-advanced solutions, to increase industrial productivity and enhance efficiency. A focus on R&D activities and joint ventures with foreign companies has promoted the development of new areas of national expertise, including software and communications technology, space-related technology, the engineering industry, and biotechnology.

Foreign trade

Norway exports about 40 percent of the goods and services it produces, while imports make up around one-third of its GDP. Norway’s core markets include the Nordic region and Europe, although certain products, like oil, gas, minerals and seafood, are successfully marketed worldwide. Although Norway is not a member of the European Union (EU), its membership in the European Economic Area (EEA) secures it full access to the EU’s internal market. The EU presently accounts for some three-quarters of Norway’s foreign trade.

The petroleum sector

The petroleum industry is very important to Norway. The industry accounts for a third of state income (2005 figures). Around 80,000 people are employed by petroleum-related businesses, and the knock-on effects on other industries are considerable. Norway is the world’s third-largest exporter of oil and gas. In the 2006 national budget, the value of remaining petroleum reserves on the Norwegian continental shelf was estimated at NOK 4,210 billion. Less than a third of Norway’s estimated petroleum reserves have been extracted. There is a very high level of activity on the Norwegian continental shelf. In 2005, 250 million standard cubic meters of oil equivalents were produced. This equates to the annual consumption of more than 100 million Norwegian households.

Successfully How to Do Business in Norway

Business meetings and negotiations

Pre-meeting preperations

  • Appointments should be set up well in advance.
  • Intermediaries are less important to set up initial contacts and securing the deal than in many other cultures.
  • Dress conservatively – at least until the host opens up for an open-shirt dress code.
  • Be punctual. If you are only a few minutes late for a business meeting, call your counterpart and explain the delay.

Start of meeting

  • Shake hands with everyone in the room when you arrive and before you leave.
  • Start out the meeting by suggesting the time frame for the meeting.
  • Exchange of business cards follows after an initial small talk.
  • Business people are not addressed by their titles. Norwegians and Danes are generally less formal than Germans and Swedes and address each other rather informally. First names are used less than in the US, so let your counterpart set the stage for how to address each other.
  • Norwegians are direct and do not focus on rituals and social environments for the negotiations. In the initial meeting Norwegians are ready to talk business after only a few minutes of small talk. During business meetings Norwegians are straightforward and direct.
  • Norwegians use steady, moderate eye contact - less direct than Arabs and Latins but more direct than Japanese and Asians.

Presentation and negotiation tactics

  • There is little secrecy about corporate objectives and strategies and your counterpart will normally be able to see your product in the strategic perspective of his company. Although top managers make the decisions they will be very reluctant not to endorse the recommendations of project groups or lower managers.
  • Norwegian companies are generally willing to pay for quality. They are also willing to switch suppliers to get better terms or better quality.
  • You need to build trust. Bring a good business presentation. Emphasize facts, benefits and profitability during your presentation. It may be wise to give an honest impression by even pointing out certain weaknesses/disadvantages. Your personality and social skills are of some initial importance but of little importance when decisions are made.
  • Negotiators will be oriented towards facts and figures rather than the broad corporate view.
  • Do not over promise, and make sure that you keep your deadline/schedule promises. Otherwise Norwegians quickly lose interest.
  • To Norwegians “new” is not necessarily better. You need to present a convincing case – not based on emotions but on usefulness and technical quality. New concepts have to be proven as high quality, practical and already well tested.

Presenting a proposal

  • If you have made a proposal you will need to stick to it. To your Norwegian counterpart trust is important. Turning around and changing or adding surprising new elements is generally not popular. It is also hard to renegotiate terms after an agreement has been made, even if circumstances have changed.
  • Norwegians are normally not tactical negotiators. If they say your product is too expensive they probably mean it.
  • Present a firm, realistic and competitive initial offer and expect some bargaining. Yield something for psychological reasons but do not drop your initial offer so much that the initial offer appears as a bargaining technique. The counterpart could perceive that as dishonesty.
  • In Norwegian corporations there may be a low level of individual risk taking – making it difficult to get the final signature even when you have convinced the negotiator. To press for greater speed can easily backfire.

Dos and don’ts

In general

  • Avoid excessive gift giving or any other action that can be perceived as a bribe. Scandinavia probably ranks as the most corruption free area in the world. Moderately expensive Christmas gifts and logo items are acceptable. The most successful gift giving practice will be to ask your Norwegian host beforehand if he would like you to bring your tax-free quota when you fly in. Due to the high local prices for these popular items your initiative will almost certainly be appreciated and accepted.
  • Hard selling techniques will get you nowhere in Norway. Avoid bragging and exaggerations and make a well-documented presentation that gets your counterpart involved and lets him/her buy from you rather than you selling through one-way communication.
  • Norwegian body language and tone of voice is less expressive than in North America and southern countries. Do not misinterpret this as lack of interest.
  • Southern Europeans and South Americans should be aware that interrupting a Scandinavian speaker is considered rude.
  • Do not complain about the high cost of living in Norway – the Norwegians are tired of that topic and they largely think the high cost of living is the price they have to pay for maintaining the welfare state in a sparsely populated country.
  • Do not light up a cigarette in a Norwegian home or office without asking permission.
  • During conversations with Norwegians you should be careful with culture related humor unless it is self-depreciating or gives a blow to Swedes. You will find that Norwegians have a brotherly love-hate relationship with their Swedish neighbors.

Business related dining in Norway

Business lunch

  • Norway does not have a lunch culture similar to what is found in Sweden or France. Twenty years ago you could hardly find a restaurant serving warm lunches in Norwegian cities. Although they still can be observed eating open-faced sandwiches, the lunch selections have improved fantastically. Your host will normally host the luncheon.
  • A female business visitor will have no problem inviting to lunch or dinner and paying the bill.
  • Alcoholic beverages during lunch are limited and after-work cocktails are unusual.

Business dining

  • The person who invites pays the bill. However, if you have been invited you might make a slight effort to pay the bill (but do not insist).
  • Be aware of Norwegian toasting procedures. The Vikings used to drink from the empty skulls of their departed enemies, and the “skaal” toasting ritual (English “scole,” French “scaulle” and German “skohl”) is still an important part of Scandinavian social and business gatherings. The host will start by toasting you, the guest. To respond: raise your glass to mid-chest height, look the host in the eyes, drink, lower the glass to mid-chest height again, look each other in the eyes again and return to normal.
  • Norwegians have traditionally been a people who eat to live – unlike other European countries where meals are culture. Things have changed and there is a strong international influx. Norwegian chefs during the 1990s have won gold and silver medals in the Bocuse d’Or (the culinary world championship) – on occasions even beating and impressing their French colleagues.
  • Chances are you will be introduced to Aquavit while in Scandinavia. Aquavit dates back to the 1530s, then introduced as aqua vitae – “the cure of all ills.” It is made from neutral potato spirits and is aged for 3-5 years in oak barrels. The most famous brand is Line Aquavit which passes on Norwegian ships back and forth over the Equator to Australia. The bottle label gives you information on the name of the ship and its route.

Visiting business relations in their homes

  • If invited to a local Norwegian home you are experiencing an honor that should be gratefully accepted. Settle dress code beforehand.
  • Dinner is normally eaten by 5:00 – 6:00 pm. Be punctual. Under no circumstances arrive more than 10 – 15 minutes after the agreed time.
  • Bring flowers, chocolates, your tax-free quota of wine and liquor or a souvenir from your homeland. Present the gift to the hostess.
  • Be prepared for the “skaal” toasting. The host will start by toasting you, the guest. To respond: raise your glass to mid-chest height, look the host in the eyes, drink, lower the glass to mid-chest height again, look each other in the eyes again and return to normal. Usually only the hostess is expected to initiate a “skaal” to the female guests. Visitors should start out by toasting the hostess. Say “Takk” (thank you). Later on you should toast the host.
  • When the meal is over thank the hostess by saying “Takk for maten.”
  • If the next day is a working day it would be normal to leave by 10:00 – 11:00 pm.
  • It is a nice gesture to send flowers to the home along with a “thank you letter” the next day.

Sources used:

www.norway.org
www.npd.no
www.npd.no
www.norway.org
www.intsok.no
www.norway.org
www.norway.com









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