Western Ideology in the East

Norwegian Business in Estonia in the 1990s

Business in today's world has become a universal concern that is discussed on many different arenas. Because business is often done in complex, cross-cultural settings, where misunderstandings are likely to occur, it is important for businesspeople today to understand this global ideological discourse concerning what business is, how business should be done, how a business person ought to dress, speak and behave. Since the business discourse has a powerful influence on global affairs, these misunderstandings often have crucial impact on local conditions. Businesspeople working in cross-cultural environments will be challenged by different ideas of business as well as different practices of business. With business going global, a common understanding or idea of the ground rules of business is important to the actors in order to simplify and understand their jobs. In cross-cultural cooperation there is often disagreement of what the ground rules consist of even when the businesspeople agree among themselves that what they want to do is the same thing; namely Western business.

After the changes in 1989 and the early 1990s Eastern Europe and the Baltic States became part of the global business sphere. The area was considered a promising market, and forty thousand Western European companies opened up offices in Eastern Europe from 1989 to 1995 (Thorheim 1995: 12). Western businesspeople who came to Eastern Europe were seen as carriers of the Western ideology of business. They had a business know how, which was wanted by Eastern European businesspeople. At the same time many of the Western businesspeople saw their business activities not only as a means of making money or a profession, but also as part of an ideological system. For many of these businesspeople business all of a sudden had become ideology.

The majority of foreign business involvement in Estonian comes from Finland, Sweden and Denmark, but businesses from Germany, Norway and the USA are also represented. When Estonia first opened up for Western businesses there was a tremendous sense of expectation and optimism on the Estonian side. The Estonians were eager to learn and wanted to do business in the Western way as opposed to the Soviet or Russian way. Private business was even considered to be part of the nation building, as the Estonian governments focused heavily on market reforms that would accommodate private business. However, by the mid 1990s this optimism had been reduced drastically. By then Estonian businesspeople had developed a more realistic view of Western business, and they did not automatically trust foreign businesspeople. The Estonian businesspeople who initially had been so eager to learn from the Western businesspeople who flooded into their country had started to question whether some of the foreign businesspeople actually knew how to do proper Western business.

During my fieldwork in Tallinn in Estonia in 1996 I studied ways of doing business in 12 small Norwegian-Estonian companies with Norwegian Presidents or Directors. I also had access to the wider Western business environment in Tallinn at the time. My two main concerns were the practical day-to-day business cooperation between Norwegian and Estonian businesspeople and the businesspeople's ideas and definitions of their role in the transformation process. Because of the actors' different business backgrounds and the ongoing transformation of the Estonian society this was a setting where the daily task of doing business was discussed both on the practical and on the ideological level.

In this presentation I will discuss how Estonian and Norwegian businesspeople viewed business differently, at the same time as both parties set out to do Western business, and in many cases were convinced that they were the ones who knew how to do proper Western business. In order to understand the different ideas and practices of business I will discuss the different Norwegian and Estonian motivations for doing business in Tallinn, and look at how the Norwegians often saw themselves as advocates for Western business and capitalism, and how the Estonians after a while doubted that the Norwegians could be automatically trusted as role models for what they wanted modern business to be. The practical situation did not always correspond with the businesspeople's idea of business, and I will give an example of how these different approaches to business and different business experiences were reflected in the practical cooperation.

The opening up of Eastern Europe has lead to an export of Western ideology such as Western business ideology. Ideology and ideals are often hard to define and pin point, especially when they are not presented as for example political doctrines. Before we can discuss Norwegian and Estonian ideas of business we need to take a closer look at what Western business ideology actually consists of. Is it just something that is created through practice on location, or are there some common denominators for modern business? I will argue that business today is an established discursive object, which is part of our reality, while at the same time still being debated. I will in the following attempt to briefly describe some of the general and most common traits that define business and businesspeople within this discourse. These traits or this model of business may be seen as an ideal, which businesspeople everywhere relate to.

The Dutch scholar and humanist Erasmus Rotterdamus described businesspeople in the following way in the fifteenth century:

"The most foolish and vulgar people who exist are businesspeople. They are involved in the most pitiful and degrading craft one can imagine, and besides that they do it in the most shameless way; even though they lie, take false oaths, steal, swindle and always try to cheat on other people, they always force their way in order to be the first, that is why they always have their hands full of gold." (in: Tikkanen 1987:59 - my translation from Norwegian).

This negative quote might sound disrespectful, but in its own way it describes important aspects of business even today.

The most striking aspect of business and the main aim of business and businesspeople is, as Rotterdamus put it, to "...have their hands full of gold". Profit, to make more money than you have invested, is the superior goal of all business. But profit is not a goal that can ever be achieved. Once profit has been "made", the ideal businessperson does not rest contented, but immediately looks around for opportunities for new investments. It was the search for profit that made the Norwegian businesspeople invest in Tallinn and Estonia. Tallinn was considered to be a new market with new possibilities and risks. My material shows that many Norwegian businesspeople came to Tallinn more or less by chance, but no one would even have considered Tallinn if they had not viewed the business opportunities as profitable. As Tallinn was seen as a profitable and high-risk market, it may have been particularly attractive to businesspeople who were trying to start the first turn on a profit spiral, and not only to established firms which just wanted to maximize their surplus.

But business, as a global discursive object, is more than the mere search for profit. The ideal businessperson is also a responsible agent. Max Weber, in his classical discussion of "The Protestant Ethic and the Spirit of Capitalism", described the connection between the search for profit and the emphasis on responsibility, as part of the foundation for the development of capitalistic society. Weber emphasizes that maintaining a cycle of profit is a long-term activity, which is impossible to engage in without long-term predictability in business relations (Weber 1981 [1922]).

A third significant factor of business as a discursive object apart from responsibility and profit is willingness to take risks. Risk and profit are closely connected. Investment is always risky, and gambling is often necessary in order to attain profit. The general opinion among the businesspeople I spoke to is that larger investments increase the chances for a high profit, but also for losses. The factors of risk are seldom constant and they vary from one context to another. Economic crime, insufficient infrastructure, red tape and undeveloped markets are some critical external factors in Tallinn, which increase risk.

Rotterdamus goes on in his description: "...they always force their way in order to be the first". Closely connected to risk is the entrepreneurial activity, which is likewise a distinctive feature of the global discursive object business. The Norwegian anthropologist Fredrik Barth describes entrepreneurial activity as maximization of profit, experimental and speculative activity, and willingness to take risks (Barth 1972:7-8). In order to succeed in business the ability to be the first to exploit or create a new niche and take chances in order to maximize profit are viewed as important. Barth also defines entrepreneurship as the ability to exploit discrepancies between different niches (Barth 1981). An example of this may be to move the production in a Norwegian factory to a low cost country or to attempt to sell previously inaccessible Western products on the Estonian market.

Yet another significant factor of doing business that has global acceptance is the ability to create networks and establish business contacts. Both formal and informal aspects of networking are considered important in business. By knowing and trusting the persons one are doing business with one can reduce the risks involved. The possibility for informal contracts and deals also increases by having a large network. A good and extensive network may simplify the process of creating new business relations and the introduction of new projects in a business environment.

Some external factors like clothing also help us determine whether or not we are dealing with a businessperson. When I asked businesspeople to describe businessmen and women they often started with the dress code. One businesswoman said: "I would have to start with the clothes. Businesspeople have to be dressed nicely and most of them carry a briefcase". The dress code in business makes it easy to recognize businesspeople. The Estonian interpretation of the dress code in business is very formal, and several Norwegian businesspeople were not taken seriously when they showed up without for example a tie.

Businesspeople covet profit. To attain profit, they run risks and try to find new niches for entrepreneurship. They form both formal and informal networks for themselves and the firm, and seek to establish contacts based on responsibility and trust. I believe that these are "common denominators" for business, and constitute an ideological frame of reference for both Norwegian and Estonian businesspeople.

The Norwegian and Estonian businesspeople both agreed that their task was to do Western business. They also related to some common denominators of business, but their motivation and commitment for doing business in Tallinn was very different. The Estonians related to a global business ideology in their own country, whereas the Norwegians articulated global business ideology in a place they could never be as committed to as the native Estonians.

As mentioned above, private business was part of a national project in Estonia. After independence in 1991 it was important for the new Estonian governments to distance the official policies from the policies of the former Estonian Soviet Republic, and private business enterprises and free competition was supported by official policies. As a result, only Hong Kong had more liberal trade regulations than Estonia in the 1990s. At the time of my fieldwork it was as if every Estonian was starting up a business or was involved in some area of the private business sector - or at least every young person. Estonian businesspeople sometimes even defined themselves as competitive businesspeople by nature. Estonian businesspeople would define business by contrast to how things were done during Soviet times. Estonians, they would say, fit the image of competitive and liberal-minded businesspeople perfectly. They would emphasize the intensely competitive nature of the Estonian national character and contrast this to the communist ideology, under which, of course, Estonians as "natural entrepreneurs", had suffered. The competitive nature of the Estonians was sometimes illustrated with the Estonian proverb: "The favorite food of an Estonian is another Estonian", meaning that if your neighbor for example buys an Audi you will not be content with merely getting an Audi yourself, but try to be better than him and buy a Mercedes - as it was explained to me.

Business thus had an enormous effect on parts of the Estonian society. The 1990s was also a time when the Estonian society was starting to be divided and forming new social strata, and some areas of the Estonian society had very little contact or first hand information about the world of business. But nevertheless, private business was a major influence on the Estonian society at large and on the Estonian nation building.

Western companies were attractive to Estonian businesspeople as they potentially could provide easy access to Western know how, foreign business contacts and sometimes high salaries.

The Norwegian businesspeople I studied came to Tallinn for different reasons and had very different backgrounds. In addition to personal motivations for doing business in Estonia the Norwegian businesspeople were affected by the discourse on Eastern Europe in Norwegian and Western media and the official Western European policies towards the region.

After the changes in Eastern Europe in 1989 it became important for the international community to influence the development in the region in order to ensure stability. A will and a sense of obligation from the West to change and help the East evolved. What direction the development should take and how reforms ought to be implemented became important issues both to the countries of the former Eastern Block and to the surrounding world community. Privatization was strongly recommended as a sensible policy for the countries in the East and was implemented in all of them, although to various extents. It was also seen as a value to quickly implement reforms involving a high degree of privatization. The strong belief the world community had in the success of rapid implementation of privatization in Eastern Europe leads the political scientist John M. Howell to point out that the Eastern countries were asked to go through with privatization to an extent that no Western democracy has ever done. He claims that the world had no prior experience with a privatization process like the one about to be realized in the East in the beginning of the 1990s.

The ideology of capitalism and liberalism seems to have become stronger in the Western world after the breakdown of the Soviet Union. But in many ways it is an ideology that is being implemented to its fullest extent in countries outside the Western hemisphere. In practice every Western country is, to a greater or lesser extent, based on the idea of the welfare state, not a totally privatized state, and spends a large part of its gross national product on for example health-related services to its citizens. It thus seems strange that countries which until recently have been heavily dependent on state services should be advised to go through with a rapid privatization of sectors such as the postal services, hospitals, electricity and water supply. Nevertheless, this is the procedure the IMF and the World Bank recommend towards countries in Eastern Europe as well as in Africa, Latin America and Indonesia.

In addition to the Western governments' official policy towards the East, media and popular opinion stressed the importance of the West "helping" the East with know-how derived from the experience of living in the Western world. The "helping" attitude was at the same time a mixture of idealism and condescension on the Western behalf. In the business arena the Western world could offer "help" in the form of hard currency, capital and commercial skills to the East, which was portrayed as a place with high productivity, skilled labor and low wages.

In the 1990s Eastern Europe and the Baltic countries were described as a daring place and a "land of opportunities" in Western media, and the area was often called "Wild West in the East". The focus on the mob, corruption, violence, insecurity on all levels, prostitution and fast money helped to mystify the East and make it attractive and scary at the same time. In order to be successful in the future, investments in the East were seen as essential by both Western media and the public. With both official policy and popular opinion emphasizing Western involvement in the region as aid and help, the motivation for Norwegian businesspeople to go to Estonia was only strengthened. If this was not a conscious motivation it could be utilized as an explanation and justification for the Norwegian businesspeople once they had arrived in Estonia.

One of the most common characteristics of the Norwegian businesspeople I studied in Tallinn was that they belonged to a marginal group of businesspeople in Norway. They were not what one normally would think of as businesspeople. There was one priest, one with a degree in philosophy, another used to be a local politician, yet another man had been a diplomat, there was a diver, and one of the businesspeople was a designer. But there were also Norwegian businesspeople who had graduated from business schools. An illusion often held by Estonian businesspeople, was that these kinds of businesspeople did not exist in the West.

Before their arrival the Norwegian businesspeople had rarely reflected over how their role as advocates for Western ideology would be acted out. This was a role they became aware of in Tallinn and especially, but not only, when things did not work out as planned. If for example a business project failed it was common to blame it on the Estonians who did not know how to do proper Western business, thus implying that they as Norwegians and Western Europeans knew how. The role as Western businesspeople helped them justify their presence in Tallinn no matter how successful or unsuccessful their business ventures were. They could easily see themselves as part of the same national project as the Estonians even though their motivation for doing this quite often was personal justification rather than a collective effort to reshape a country.

We have so far seen that businesspeople no matter where they come from relate to some general characteristics of business. There exists an idea of business as one thing, even though it might be more helpful to view business as a fluid discursive object that is being debated and redefined in various settings all over the world. The Norwegian and Estonian businesspeople had different practical business experiences and different motivations and commitments for working in Tallinn, but nevertheless shared an expectation that business should be the same everywhere. In their practical daily cooperation the Estonian and Norwegian business partners experienced cooperation problems that were based on their different ways of doing business, their different commitment to the projects and their different definitions of proper business. When the cooperation failed or became difficult a regular explanation was that "The Norwegians do not know how to do business" or "Estonians are not proper businesspeople". The businesspeople were in this way referring to business as something existing on the ideological level outside the immediate cooperation context.

The Norwegian and Estonian way of doing business seemed to be compatible when it came to for example management styles and networking. Even though the Norwegians and Estonians had different approaches to for example formality in leadership and personal and instrumental business relationships this seemed to be differences that could be overcome and sometimes combined in surprising and successful ways. The running of risks and entrepreneurship in business, however, were aspects that caused the most difficulty.

A specific form of risk that was typically taken by Norwegian businesspeople in Tallinn may be termed business stunts. The Norwegian business stunts can be contrasted to the Estonian way of running risks, which I have called calculated risks.

Business stunts can be characterized as dangerous, daring, original and flamboyant actions, which are often performed on the spur of the moment. They offer chances of considerable profit as the stakes are high and the projects normally require minimal planning. Stunts may therefore be tempting for small and marginal businesses such as the Norwegian-Estonian companies. These firms have limited financial resources and limited human capital to plan their projects. A stunt does not need planning and, if successful, gives profit. Business activity in Norway can be described as predictable and routine based rather than dangerous and daring. Tallinn can apparently offer more excitement within business than for example Oslo, and the prospect of a place suitable for business stunts may be one factor that attracts a certain category of Norwegian businesspeople to Tallinn. A stunt is also an action, which is meant to attract attention (Webster's 1989:1411). If a stunt is sufficiently original it may pay off financially and because of the high profile of many stunts, the success will be duly noted. A failure will be similarly visible. All of these characteristics give stunts a flare of adventure rather than rational business projects.

Several of the Norwegian companies I studied were involved in business stunts. One small Norwegian company, which had a franchise agreement with a Norwegian chain of stores, established their business in Estonia in 1995 in order to introduce the stores in Estonia. The 'store company' came to Tallinn more or less by accident. One of the owners was actually challenged by a friend, who dared him to do business in the former Soviet Union. The company established an office in Tallinn in order to organize the running and establishment of the stores in Estonia. Initially, the Norwegian owners assumed that the stores in Estonia would multiply at an even higher rate than they had in Norway. They assumed that within the first years they would have established around 20-30 stores in Estonia. But after one year they had only managed to set up five stores.

During the six first months of the venture one of the Norwegian owners who was unfamiliar with the wants and needs of Estonian consumers ordered the goods for the Estonian stores. As a result the stores were unable to offer some goods, which were viewed as essential for that kind of store in Estonia. The Estonian partners in the administration of the Estonian branch of the 'store company' were surprised that the routines for ordering goods were changed only after a number of months and not immediately. According to them this proved that the Norwegians needed more information prior to coming to Estonia. The Estonian Project Manager said that:

"Everything is different here, and our bosses had too little information about Estonia before they came".

This project can clearly be termed a stunt. The planning beforehand was minimal and the Norwegian businesspeople had very little knowledge of the particular business situation in Tallinn. They were seeking profit, but they had not analyzed the market prior to establishing themselves in Tallinn, looked for suitable partners in Estonia or tried to hire Norwegians with knowledge of Estonia. The fact that the company had not even tried to obtain any knowledge of Estonia seems surprising. The Norwegian representative of the owners expressed this explicitly by saying:

"The only thing that matters is that you know your job as for example an economist and that you are qualified for this job. It is hard to know how to prepare."

The lack of information about Estonia was a common characteristic of the Norwegian companies in Tallinn. One explanation for this was that many of the businesspeople did not have time to plan their projects prior to their arrival in Tallinn, as they decided on how and where to do business in the nick of time. Another reason may be that the Norwegian businesspeople felt secure that they would know how to do business in Tallinn. Indeed, if, as the global ideology of business claims, business is the "same" everywhere, then it is sufficient to "know one's job", as the representative of the owners of the above case claimed. Such beliefs cannot be attributed to mere ignorance on the Norwegians' part. After all, Estonia was changing towards a capitalistic society and Estonians' experience of commercial business was limited. Some of the Norwegian businesspeople may thus have arrived in Tallinn believing that their knowledge as Westerners would pull them through.

The Estonian Project Manager of the 'store company' pointed out that since Estonia is an unstable society you need to know what sorts of risks you take. Estonians, he said, take risks in a different manner than Norwegians. He said:

"We calculate our actions. After a thorough evaluation of the situation we act, and then we may run seemingly bigger risks than the Westerners".

He gave me an example from his own experience to exemplify this statement: "Normally, goods ordered by our company are paid for after delivery, and especially if they come from Russia. One of our regular suppliers in Russia was having difficulties paying salary to their workers and needed money to be able to transport the goods to Estonia. They promised us a considerable discount on the delivery if we were willing to pay up-front. I contacted the Norwegian owners, who were doubtful at first. They were persuaded only after I agreed to vouch for the money personally. I was certain that we would receive the goods, as I trusted the company and knew that they were dependent on maintaining a good relationship with our company in order to stay comfortably in business". I asked the Estonian Project Manager if he managed to sleep at night, knowing that he was personally responsible for a big amount of money. "If you borrow ten thousand dollars in a bank, you don't sleep at night. If the bank lends you one million dollars, they don't sleep at night", was his answer. The goods were, as the Project Manager had predicted, delivered to Estonia right after the money was transferred to the Russian company.

The above situation may seem like a dangerous risk for the Estonian Project Manager to take, and we might be tempted to call it a stunt. The Estonian seemed to be risking his reputation as a trustworthy businessperson as well as money. Closer investigation reveals that there are important differences between the risks taken by the Norwegians and the Estonians. The Estonian businessman claimed that he knew what he was doing, that he had knowledge about his partners, and could trust their relationship to his company because his experience with their business partners had taught him to trust them. His actions may seem risky, but they were in fact calculated. At the same time as he stressed the fact that his action was a risk, he also added that he knew what he was doing. He wanted to describe himself as a brave businessperson who took risks at the same time as he had an overview of his business situation. His actions were consequently not risky to him, but similar behavior would have been to other businesspeople, such as the Norwegians, who did not know the setting they were operating within. The description the Estonian businessman gave of himself corresponded to the global ideology of business, consisting of responsible, but risky, business actions. The description was probably meant to make me see him in a certain way. He guided my impressions of him, so that I would consider him a successful businessman operating according to the global business ideology.

Both the Estonian and the Norwegian businesspeople acknowledged that risk was an important factor of doing business. The examples above have illustrated that although they agreed on the importance of risk, they articulated the global ideology of risk in different local ways. The Norwegians' stunts may be a result of their lack of knowledge of the situation. But what was striking was not so much the lack of knowledge in itself, but the fact that the Norwegians did not try to improve their knowledge of the Estonian context. This is indeed paradoxical. For on the one hand, the Norwegians seemed to assume that their experience of doing business in Norway would be sufficient background for doing business successfully in Tallinn. But on the other hand one of the reasons why they were attracted to Estonia was the Western image of Eastern Europe as a place that was very different from Norway, because it was a more risky place to do business. The fact that these Norwegian businesspeople sought a business setting, which was different from Norway, implied that they desired changes. They wanted a fresh start and something new, but did not want business in itself to change. In practice, however, they seemed convinced that business is the same everywhere and that they knew how to do business. The Norwegians were marginally committed in Tallinn, in the sense that if they took a risk, they mostly risked their own reputation and their own personal profit. If they failed they had a chance to move on or return to Norway where almost no one would be familiar with their mistakes.

The Estonians, on the other hand, had to be more careful as they might risk their reputation in the city where they were going to keep doing business maybe for the rest of their lives. They knew the Estonian situation better than the Norwegians and were therefore able to avoid needless risks far better, as the example of the Estonian "doing business" with Russians seems to show. More fundamentally still, they were strongly committed to building a local national identity at the same time as they were doing business and thus the results of their actions mattered in the society as a whole. Estonians are committed to their business because they need to uphold a reputation in Tallinn as good businesspeople. But they are also strongly committed to the building of the Estonian nation in which commercial business plays an important role. The Norwegians on the other hand, normally spend a limited time in Tallinn and their agendas for doing business are mostly personal, although they were influenced by the general Western attitudes towards Eastern Europe. In a way they were more global in their orientation as Tallinn was just another place to do business in the global world of business. These differences in commitments resulted in different ways of practicing business. It was important for the Estonians to calculate their risks, so that they did not fail, whereas the Norwegian businesspeople could afford to take risks without considering the consequences to the same degree as the Estonians.

The Norwegian and Estonian commitment to the business activity was different, and this affected their attitudes towards business. The Norwegian businesspeople were, in many ways, deterritorialized as they were doing business in a foreign business environment. Consequently, they sometimes became more dependent on commitment to the global ideology of business instead of the locality of their business activities. As the global business ideology is an abstract set of rules for how to do business, the Norwegians had to transform the ideology into concrete and specific terms. This was done by an implicit "Norwegianization" of the business ideology. They defined business according to their local Norwegian standards, and claimed these standards to be "Western" and global standards of business. The Estonians, on the other hand, were much more committed to the locality in which they were doing business. They viewed their business activity as an important part of the rebuilding of the Estonian nation. Business was considered to represent the opposite of the Soviet system. Consequently, Estonian businesspeople termed their local practices and interpretations of business as "Western" and global.

I have throughout this presentation examined how business as one part of Western ideology and Western practice was exported to Estonia by Norwegian businesspeople. It is maybe surprising that Norwegian businesspeople could be viewed as Western businesspeople in the first place as Norway is far from international business centers that may be said to lie somewhere in Germany or the United States. We have also seen that these specific Norwegian businesspeople were marginal even in Norway. But it was difficult for Estonians in the early 1990s to recognize genuine foreign businesspeople. It was easy for a businessperson to come off as serious just by wearing a smart suit and flashing his business card. After a while Estonians became more experienced in their judgment of Western businesspeople.

Western ideologies and practices are not only exported by multinational companies, the IMF or the European Bank of Reconstruction and Development, but also by marginal Norwegian businesspeople. As mentioned above, forty thousand Western companies were established in Eastern Europe from 1989 to 1995. I am sure that every single one of these forty thousand companies have redefined Western business and discussed business ideology and practice several times. By looking at how for example Western business is being practiced in Eastern Europe we get a chance to question and shed new light on the concept of Western business. In Western Europe and the USA the Western ideologies such as business are quite often taken for granted. This is especially the case after 9.11 when it is even a little suspect to question the idea of Western capitalism (see Samtiden p. 38). The Norwegian businesspeople in Tallinn, however, were not allowed to take business for granted as they were forced to question their own ideas and practices in their daily cooperation with Estonian businesspeople.