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<< Return to Research        published Nov 16, 2006 | updated Dec 19, 2008

Ireland Briefing

Executive Summary

The republic of Ireland consists of the southern five-sixth of the island of Ireland which is located to the west of Europe in the Atlantic Ocean. The entire republic is just slightly larger than the state of West Virginia at 27, 136 square miles (U.S. Department of State, 2005). The capital city of Ireland is Dublin with approximately 40% of the population living within 60 miles of it. The early history of Ireland is categorized by various rulers taking control of the land. More recently, history was full of conflicts with the English, as well as between Protestants and Catholics, and most recently between Ireland and Northern Ireland.

The Republic of Ireland is a Parliamentary democracy consisting of executive, legislative, and judicial branches. Citizens over 18 have a right to vote in elections. The current president is Mary McAllese, who was elected in 1997 for a seven-year term. Bertie Ahern is the Prime Minister, nominated by the House of Representatives and appointed by the president.

The economy of Ireland is open and heavily influenced by foreign trade. Due to its strong growth and high employment, the economy is often referred to as the "Celtic Tiger". The Irish economy is friendly to foreign businesses and investment. The country's corporate tax rate is 12.5%, far below the Eastern European average (Heritage Foundation, 2006).

Additionally, Ireland does not control capital flows or repatriation of profits, the labor force regulations are less restrictive than most other EU countries, and all firms incorporated in Ireland are treated uniformly by the government. The Irish economy is mainly based on technology and internationally traded services. The Irish GDP grew by 8% from 1995-2004, compared with an OECD average of 2.5% (PricewaterhouseCoopers, 2005). Due to the small population, Ireland's ability to grow is heavily dependent on foreign trade. The Irish government has been very supportive of foreign trade and its reliance is evident by the combined exports and imports value to GDP at approximately 150% in 2004 (Economic and Social Research Institute in Ireland, 2006). Ireland's foreign direct investment in 2004 was $2.5 billion, with over 25% of all new U.S. investment in the EU in the past ten years going to Ireland. (Heritage Foundation, 2006)
The currency in Ireland is the Euro which began circulating in 2002
(MSN Encarta, 2006). The Euro is on a
floating exchange system.

The culture of Ireland is colorful and flourishing. The main language is English, although Irish (Gaelic) is the first official language in the constitution. The Roman Catholic religion is predominant in Ireland at 88.4% practicing it in 2002. The population of Ireland as of July 2006 is 4,062,235. (CIA, 2006) The population is fairly young and the gender ratio is equal. The cultural orientation of Ireland, according to the Geert Hofstede index is similar to that of the United States, being low on power distance and uncertainty avoidance, and high on individualism
and masculinity. The Irish value system centers around a need for others balanced with a need for independence. Time is flexible in Ireland, and people are rarely on time. A firm handshake is expected upon meeting and leaving, and business is frequently conducted in pubs over a "pint of plain".

Bribery is an ongoing concern in Ireland. While a law was passed in 2001 making bribery illegal, it only covers bribery conducted in Ireland and has exceptions for any bribes done outside the Irish border leaving loopholes. No effort has been made to communicate or enforce this law. (Transparency International, 2006) Corruption in Ireland has been brought to light recently in the media, making it climb on Transparency International Corruption Perception Index (2006), however, the index measures perception and not the corruption itself making it difficult to determine if the level of corruption is actually increasing.

Doing business in Ireland is similar to other western countries. Being a member of the EU, they utilize the same business law standards and protocol. English is the primary language; counteroffers are made until both parties agree on the terms. The workforce is young and highly educated. While business is similar to the West, there are some crucial differences. The Irish are more environmentally conscious and are more sensitive to advertising directed at children. (Carey, 2006)

Living standards in Ireland are high, and due to the recent economic boom, have increased dramatically. Ireland is one of the wealthiest countries in Western Europe with the average debt falling, and the average salary rising during the economic boom (OECD, 2005). This growth also led to an improvement in infrastructure and growth across all spectrums of the economy. Property values in Ireland have been rising fast, and The Economist has warned of excessive property values. As the disposable income of the Irish increased, there has been a commensurate increase in consumer spending as well. As can be expected, challenges arose from the high growth period. As most businesses set up shop in urban areas, this caused many rural residents to leave for the cities, leaving the countryside. This left some rural farmers concerned about population disparity, as well as wealth as urban areas increase in wealth while the farm lands, due to the decreasing reliance on agriculture is dropping. The economic boom has convinced many young Irish that the American capitalistic ways are superior to any sense of national identity that they may have enjoyed.

Introduction

Located on an island to the west of mainland Europe, Ireland is known around the world
for its rich traditions and a hospitable culture. The island is divided into Ireland in the south and North Ireland, which is part of the UK, in the north. For visitors, there is a variety of cultural and historical sites that invite them to explore. From castles and museums, to festivals and a vibrant nightlife, there is much to see in this country. The Irish have a rich cultural life filled with arts and literature, and music and dance. The majority of the population is Roman Catholic, with a variety of religions making up the rest of the population.

For businesses, the casual Irish culture is welcoming of both business guests as well as businesses looking at locating their operations in Ireland. Ireland's economy is robust and growing, spurred by trade, industry, and services. According to PricewaterhouseCoopers (2006), over 1,200 companies from all over the world chose Ireland to do business in. As a member of the EU, the business climate there is similar to other western countries, making conducting business there simple and enjoyable. The Irish government, a parliamentary democracy, welcomes businesses and has created a climate that fosters high economic growth, among the highest of OECD countries, and competitive wages (PricewaterhouseCoopers, 2006).

Country Background

Geography

Ireland sits in the North Atlantic Ocean as part of Western Europe. The Republic of Ireland is five-sixths of the island of Ireland, which is immediately west of England. The remaining one-sixth of the island is Northern Ireland, which is part of the United Kingdom. Total land area is 27,136 square miles, which is slightly larger than the state of West Virginia (U.S. Department of State, 2005).

According to the U.S. Department of State (2005),
10% of Irish land is arable, 77% meadows and pastures, 11% rough grazing, and 2% inland water. As an island in the North Atlantic, it features nearly 900 miles of coastline, and the western coast is made up of rocky cliffs that drop steeply into the sea. The terrain of Ireland features a rolling interior plain, surrounded by rugged hills and low mountains (CIA, 2006).

Major cities of Ireland include Dublin, Cork, Galway, Limerick, and Waterford. Nearly 40% of the Irish population resides within 60 miles of the capital city, Dublin.

History

Most stories of Irish history begin with the arrival of Celtic tribes from Central Europe circa 600 BC. This period, up until the Christianization of the tribes circa 400 AD, featured a collective of tribes only united by a common culture and language. Politically, it featured 150 mini-kingdoms called tuath, which were organized under five provincial lords (MyFamily.com).

The next era of Irish history begins with the arrival of St. Patrick who Christianized the Celtic Kings beginning in 432 AD. The Vikings arrived in Ireland in the early 9th century and ruled much of the land until early 11th century. The next outside group to impact the Irish landscape was the English in the 12th century, which led to nearly 800 years of English involvement in Irish affairs (MyFamily.com). During this time, the English and Irish consistently fought over control of the Irish lands with each side winning victories and losing conquests. In the 16th century as the English were pre-occupied with domestic conflicts, Irish home-rule was re-established. The Irish, however, lost home rule again during the Nine Years War, after which the English established a centralized government in Dublin, ending the rule of the lordships that have governed the island until that time (MyFamily.com).

The next phase of Irish History is shaped by conflict and civil war between the Protestants and the Catholics, which heightened conflicts with the English. During this time, Ireland was essentially a colony of the English throne. The Great Irish Famine occurred in 1740-41 as a result of consecutive cold winters (MyFamily.com).

In 1800, Ireland united with Great Britain to form the United Kingdom of Great Britain and Ireland by the Act of Union. While this union eventually achieved Catholic Emancipation, it diluted the Irish culture. Due to the establishment of a National School System and the population reduction from eight million to 4.4 million, English replaced Irish as the most common language on the island (MyFamily.com).

In 1921, the Anglo-Irish Treaty was signed which established the separation of Northern Ireland from the rest of Ireland. As most of Ireland remained Catholic, they were allowed to form their own country with the Protestant north remaining part of the United Kingdom. (CIA, 2006) The Republic of Ireland was officially formed in 1949 after it withdrew from the British Commonwealth.

Political System and Government

The Republic of Ireland is a Parliamentary democracy, with executive, legislative and judicial branches. All citizens of Ireland over the age of 18 have the right to vote in elections. Administratively, Ireland is divided into 26 counties. The current President of Ireland is Mary McAllese and the Prime Minister is Bertie Ahern, both of whom assumed their positions in 1997. The president is elected by popular vote for a seven-year term. The prime minister is nominated by the House of Representatives and appointed by the president.

The legislative branch or parliament is bi-cameral in nature with the 60 seat
Seanad Eireann (Senate) and 166 seat Dail
Eirann (House of Representatives). Senators
hold five-year terms and are elected by the universities. Members of the
House of Representatives serve for five years and are elected by a popular
vote on the basis of proportional representation (CIA, 2006).

The Judicial branch features a Supreme Court where the judges are appointed by the sitting president with the advice of the prime minister and cabinet. Law is based on English Common law with significant influence from local traditions as well as the European Union.

The major political parties include Fianna Fail, Fine Gael, Green Party, Labor Party, Progressive Democrats, Sinn Fein, Socialist Party, and The Workers' Party (CIA, 2006). According to the Economist
(2006), "left-right ideology has never played
a significant role in Irish politics" as the major parties Fianna Fail and
Fine Gael have adopted centrist policies.

Economics

Ireland is a small and open economy that is heavily influenced by foreign trade. Since the mid-1990s, Ireland has been one of the best performing economies in the developed world. Due to strong economic growth and high employment, Ireland's economy is often referred to as the "Celtic Tiger."

Economic Climate

Ireland has a pro-business economic environment that is geared to attract foreign businesses and investments. The country's top corporate tax rate of 12.5% is far below the 30% rate for the average country in the European Union (EU) (Heritage Foundation, 2006).

Ireland does not maintain any controls on capital flows or repatriation of profits, and all firms incorporated in Ireland are treated uniformly by the government; this helps to explain why more than 1,200 firms from around the world have operations in Ireland (PricewaterhouseCoopers, 2005). The country's labor force regulations, which are less restrictive than most EU countries, also contribute to the pro-business environment (Heritage Foundation, 2006).
In recent decades, Ireland's economy has transformed from agrarian and basic manufacturing to one based on technology and internationally traded services (Economic and Social Research Institute in Ireland, 2006).

Economic Indicators

The table below highlights several of Ireland's economic indicators for recent calendar year time periods (Economist, 2006).


Ireland's annual GDP growth from 1995-2003 was 8% compared to an average of 2.5% for the 30 countries belonging to the Organization for Economic Co-operation and Development (PricewaterhouseCoopers, 2005).

GDP figures, however, can be misleading due to the inclusion of repatriated profits from multi-national corporations. Ireland's GNP, which adjusts for these repatriations, accounted for 79% of GDP in 2004 (Economic and Social Research Institute in Ireland, 2006). As a result of strong economic growth and high employment levels relative to other EU countries, Ireland's inflation has been typically higher than the EU average (MSN Encarta, 2006). In addition, the strong economy and inflation have significantly impacted the housing market as the average Irish home costs $380,000, nearly ten times the average level of industrial wages (Economist, 2006). Approximately 10% of Ireland's population falls below the poverty line, and the top 10% of the income earners account for 27% of total consumption (CIA, 2006).

Trade Conditions

With a population of only 4 million, Ireland's ability to grow internally is limited and thus the country is heavily dependent on foreign trade for growth. In 2004, exports of goods and services totaled $135 billion while imports totaled $108 billion thereby resulting in a trade surplus of $27 billion. The value of exports has exceeded imports every year since 1985 [#pricewaterhousecoopers|(PricewaterhouseCoopers, 2005)].

Ireland's reliance on foreign trade is evident by the value of its combined exports and imports to GDP, which was approximately 150% in 2004 [#economic_and_social_research_institute|(Economic and Social Research Institute in Ireland, 2006)]. The United Kingdom, United States, and Germany are some of Ireland's largest export and import trading partners.

As a member of the EU, Ireland is subject to various EU trade policies, which include non-tariff trade barriers via regulations and export subsidies (Heritage Foundation, 2006).

Foreign Direct Investment

Aided by the absence of restrictions on capital flows and repatriation of profits, Ireland receives a substantial amount of foreign direct investment. In 2004, net foreign direct investment was $2.5 billion. Although it accounts for only 1% of the EU's population, Ireland has received 25% of all new U.S. investment in the EU over the past ten years (Heritage Foundation, 2006). Furthermore, Ireland attracted more than twice the U.S. investment flow to China in 2004 (U.S. Department of State, 2005).

World Trade Organization

Ireland is a founding member of the World Trade Organization
(WTO). Since joining in 1995, Ireland's exports and imports of goods and services have increased 14% annually. In 2004, the country ranked 11th and 9th in the world, respectively, in exports and imports of commercial services (World Trade Organization, 2006).

Other Economic Treaties

In 1991, Ireland signed the Maastricht Treaty on European Union, which was ratified by a national referendum in 1992, and became a founding member of the EU when it was inaugurated in 1993 (MSN Encarta, 2006). One of the EU's main objectives is to establish economic and monetary union with the member states.

Accordingly, members must coordinate economic policies and submit to financial and budgetary discipline (Europa, 2006). The European Central Bank (ECB) is responsible for all EU monetary policies.

Currency Exchange Rates

Ireland adopted the new single currency of the EU, the euro, when it was introduced in 1999 for electronic transfers; the Irish pound was eliminated when the euro began circulating in 2002 (MSN Encarta, 2006). The ECB utilizes a managed floating exchange rate system for the euro.

Currency Volatility

The table below details the exchange rate volatility of the euro relative to the U.S. dollar since its inception (European Central Bank, 2006).

Culture

Language(s)

The predominant language in Ireland is English. The Irish Constitution, however, recognizes Irish (Gaelic) as the first official language. Additionally, in 2005, the European Union officially recognized Irish to be the national language, which was previously considered a treaty language. According to the 2002 census, 1.4 million of the four million residents said they have "an ability" to speak Irish. (Bbc News, 2005)

Religion(s)

The Roman Catholic religion is the predominant religion in Ireland with 88.4% of residents practicing it in 2002. The other religions are Church of Ireland at 3%, Christianity at 1.6%, other at 1.5%, and none at 3.5%. (CIA, 2006)

Demographics

The estimated population in Ireland as of July 2006 is 4,062,235 (CIA, 2006). The greatest concentration of the people lives on the east and south coasts. The population density of 57 persons per km² is much lower than the European average. A high proportion of the Irish population is young, with 37% of the population being under the age of 25 (PricewaterhouseCoopers, 2005, p.1). As of 2006, the life expectancy of the Irish is 75 years for men, 80 years for women. The approximate median age for men is 33.2 years, 34.8 years for women in 2006. The population growth rate is 1.15%, the birth rate is 14.45 births/1,000, the death rate is 7.82 deaths/1,000, and the immigration rate is 4.87 migrants/1,000. The gender ratio is fairly even at 0.99 males/female. Literacy rates in Ireland are at 99% for both men and women. (CIA, 2006)

Cultural orientation (cognition styles)

The Geert Hofstede index shows that Ireland and the United States are fairly similar in their cultural dimensions. According to the Geert Hofstede Cultural Dimensions Index (2006), the Irish power distance index is slightly lower than that of the United States, demonstrating that their level of inequality is lower, and that power is distributed more equally. The individualism rating is also lower in Ireland, while still higher than world average, it is less individualistic than the U.S, with more of a focus on groups and extended families. The masculinity index is similar in both countries, showing that both cultures are fairly assertive and competitive, and less caring and modest than other countries. Finally, the uncertainty avoidance index is medium in both cultures, indicating that they would both be willing to take a moderate amount of risk.

Value systems

The value system in Ireland centers on a strong need for others while remaining
independent. Family is very important, and many businesses are family operated.
Time and being punctual is secondary to relationships. It is common for the Irish
to be late to everything from family gatherings to business dinners. The Irish
are compliant to authority and accept it, although inside they have a strong
displeasure to acquiescing it. Bureaucracy is also disliked. The Irish are
creative and calm. They prefer to improvise rather than follow a rigid plan.
Planning and strategy are typically done for short term only. The Irish are
also very warm, polite, and friendly. They love to make jokes and have a good
time (eDiplomat, 2006).

Do's and taboos

There are many do's and taboo's in the Irish culture. The following are some examples:

Do's

• Drink Guinness (a pint of plain)


• Go to the pub with colleagues


• Dress modestly and conservatively; e.g., flashy colors and styles, white pants, and nylon running jackets do not blend into Irish style.


• The Irish respect reserved behavior. Initial meetings should be low key.


• Assume that children will be included in family entertaining.


• Send a thank-you note after receiving a gift or being a dinner guest.


• Always be sincere. The Irish dislike pretentious behavior.


• Remember the Irish want to do things their way. You will not succeed if you insist on doing it "your way."


• It is considered more proper for a woman to order a glass of beer or stout rather than a pint.


• The golf course is a major venue for conducting business in Ireland.

Taboos

• Drinking Whiskey with water.


• The Irish are not very physically demonstrative and are not comfortable with public displays of affection.


• The Irish are uncomfortable with loud, aggressive, and arrogant behavior.


• If you are out for a drink, do not bring up business unless your host does so first.

Appointments

Appointments are relatively easy to schedule in Ireland. Many executives are pleasant, approachable, and willing to discuss business. Appointments are best set a couple of weeks prior to the engagement, and some friendly banter with the secretary can work wonders in setting up an appointment with the appropriate person. Irish are not very time conscious and may not be punctual for business and social meetings. A foreigner, however, should be on time to business meetings to show respect to their host (eDiplomat, 2006).

Greetings

When first being introduced, shake hands and make eye contact. Shake hands with everyone present, including men, women, and children. Hand shaking is appropriate whether it's a business or a social gathering. It is expected to shake hands again when leaving. It is also appropriate to talk about the weather. Avoid dicey topics about politics, troubles with the UK, the English, the relations of Protestants and Catholics, the Americans and the Irish. When entering the office in the morning, it is customary to say good morning to each person you know. Shaking hands, however, is not necessary (eDiplomat, 2006).

Title and forms of address

For initial written greetings, last names preceded by 'Mr.', 'Mrs.', or 'Ms.' should be used. In conversation, the Irish tend to move on quickly to a first-name basis. Terms such as 'sir' and 'madam' are rarely used. Even with new acquaintances, it is appropriate to use first names in both personal and business correspondence. The best way to use the correct title is to follow the lead of others. Professional and academic titles do not necessarily command respect or a different title. Additionally, professional tittles are rarely used; they're usually dismissed as pretentious. Accordingly, do not 'advertise' your own title as they may see it as a form of boasting. Slang is commonly used to refer to people; 'yer wan' for women and 'yer man' for man are acceptable.

Gestures

In Ireland, touching one's nose indicates, "keep this a secret" or "between us." The "V for victory" sign must be done with palm facing outward. It is a vulgar gesture of defiance if the palm faces inward (Foster, 2006).

Gifts

In general, gift giving and receiving is unusual in a business setting in Ireland. Small gifts may be exchanged, but are not expected at the successful conclusion of negotiations. When invited to someone's house, it is customary to bring a small gift to the hostess. Flowers, chocolates, wine, a craft, book, or food from your home region are acceptable. A note of caution on flowers: lilies are for religious occasions only while red and white flowers symbolize death. Expensive and ostentatious gifs are not appropriate. The thoughtful choice of the gift is more important then the cost (Executive Planet, 2004).

Bribery and corruption

In 2001, Ireland passed a law on foreign bribery making it illegal for companies or individuals to bribe a public official. This law has some loopholes, as it only covers bribery that is committed in Ireland, not in other countries. The law seems to send the message that it's acceptable to bribe elsewhere, just not here. Additionally, no effort has been made to inform Irish companies or Irish-based multinational companies of the new law. Since the law came into effect, no investigations or prosecutions have taken place. The OECD Anti-Bribery convention examined Ireland's compliance with the agreement. Of the nine categories, four were found to be "unsatisfactory", four "unclear" and only one was deemed "satisfactory". In the past year alone, there have been five foreign bribery allegations brought against Irish companies and nationals, yet no investigations have taken place. In one case, an Irish national is alleged to give a multi-million dollar bribe to officials in an Azerbaijan's state-run oil agency. Under Irish law, he could not be prosecuted since the bribe was arranged in a foreign country. Additionally, three Irish companies are alleged to have paid bribes to Saddam Hussein's regime, and another large company is accused of having paid a $1 million bribe to a foreign government minister in Poland. None of these offenses are covered by the current law and there is strong international pressure to close the loopholes and begin prosecuting these crimes. (Transparency International, 2006)

Until recently, Ireland convinced itself that corruption is not a problem. However, media coverage and investigations have led to a fall in Ireland's ranking on the Transparency Index and to bring corruption issues to light.

According to Transparency International, this index measures perception only, so it is possible that the actual level of corruption did not change, but the awareness has increased. The focus is on the design of the political and administrative systems that are susceptible to corruption by public officials. (Transparency International, 2006)

Hospitality and entertaining

Business entertainment is commonly conducted in restaurants. The Irish see dinners as a good way to develop relationships, so it is an acceptable way to begin a business relationship. It is common for the spouses to not be invited to the business dinner. When eating a meal in a private home, it is polite to eat everything served to you. It is customary to buy a round of drinks, and refusing a drink can be perceived as an insult. Table manners are similar to the United States, but in general they are more relaxed (Executive Planet, 2004).

Business

Ireland's business scene is rooted in the western tradition of modern European professionalism, but has its own cultural idiosyncrasies. As is the standard, English is the primary language used in negotiations, and offers and counteroffers are made until both parities agree on the terms. As a member of the European Union, business law standards and protocol are very much in line with Ireland's own legal foundations so as to not undermine the country's sovereignty.

Ireland's legal history owes a great deal of influence to the British system of common law, where priority is given to protecting private property rights, and legal standards are established through precedent. White collar workers wear suits in a western tradition, whereas blue-collar workers will typically wear uniforms associated with their functions. As is the fashion norm, most dress is conservative in nature and the Irish remain leery of flashy accessories and other accoutrements. As mentioned earlier, professional dinners are often held as a means to conduct business, but excessive formalities are eschewed beyond a handshake greeting and respecting the host.

Marketing

Businesses and Products that May do Well

The current Irish economic environment is one that caters to a youthful and technological culture. According to Enterprise Ireland (2006), 31.8 percent of the Irish population will be under the age of 25 by 2015. Additionally, with nearly 40% of the Irish living in or near Dublin, consumer products that are directed to youthful, urban-dwelling culture should do well.

Currently, the United States-based companies play a large role in the Irish economy, especially in the areas of high-end manufacturing such as pharmaceuticals and medical technology. Six out of ten of the world's top selling drugs including Lipitor and Zocor are produced in Ireland (Enterprise Ireland, 2006). Additionally, 15 of the world's top 25 medical technologies companies have a significant presence in Ireland (Enterprise Ireland, 2006). Information and communications technology companies such as IBM, Intel, Hewlett Packard, Dell, and Microsoft have found success in establishing operations in Ireland.

With a young and highly educated workforce, companies that are successful in Ireland typically focus their investments on the higher end of the value chain. Businesses with a focus on technology products, drug and medical technology developments, and services near the end of the value chain should be successful operating in Ireland.

Particularities

While Ireland maintains a very Western culture where many of the marketing practices employed in Europe and North American apply, there are issues companies should consider in marketing products and services. Environmental concerns are a major issue in the packaging of products. According to PricewaterhouseCoopers (2005), "a clean environment is recognized as a crucial economic factor." Additionally, marketers should be cautious in their advertising to children as this is a sensitive issue in the area of promotion (Carey, 2006).

Management

The Irish are interested in people and place great emphasis on the individual. Similar to U.S. practices, individual recognition and rewards are important in managing Irish employees (Bosrock, n.d.). The Irish are dedicated to a lifestyle that allows time for friends and family, and an expatriate manager must be respectful of this value in dealing with Irish employees. In addition to strong individualism, Irish culture is known to exhibit strong masculinity. Generally, women in Ireland are assertive and competitive, but not to the degree of men, thereby creating a gap between men's and women's values in this respect (Hofstede, n.d.).

As mentioned earlier, the Irish are not overly time conscious and may not be punctual for business meetings. An expatriate manager might be challenged with this facet of Irish culture while keeping projects on track and progressing. According to Jean-Philippe Pierre (personal communication, November 7, 2006), a manager with IBM Sales and Distribution in Dublin, the Irish are less precise than other European cultures, such as Germany, when it comes to time consciousness but are generally punctual. (Jean-Philippe is a French national managing a diverse team of employees from Ireland, the U.K., and Nordic European countries.)

Differences in Management Practices/Strategies for Managing Host Country Employees

Jean-Philippe felt that as a manager, he must tailor his approach with employees based on their origin. He explained, "A direct approach is effective with the French, but is not effective in working with Irish employees." He also shared his perception that the Irish do not voice their concerns or displeasure as often as citizens of other countries, in a personal or professional environment. An expatriate manager should be aware of this tendency and ensure that he/she is sensitive to the needs and thoughts of host country employees.

Jean-Philippe felt the IBM company culture and individual differences in communication style were generally more important in conducting business in Ireland than national origin. While his team is very diverse, Jean-Philippe believes that ideal methods for employee recognition are highly dependent on the individual as well as the job function performed. Sales employees at IBM expect monetary recognition while operations support staff generally do not expect these types of rewards. Jean-Philippe takes his team to dinner when he wants to recognize their performance as a group and provides a sincere thank you from team-leads.

Among the notably different legal requirements between Ireland and the U.S.
are those concerning maternity leave. All women in Ireland are entitled to
22 weeks of maternity leave, increased from 16 weeks in March of 2006. This includes casual workers and is independent of tenure with the company. Payment for women during maternity leave is provided through the Department of State and Family Affairs. (Oasis Project, 2006)

A successful management strategy will include a "flexible and rewarding work environment that recognizes the needs of people as people." (Mercer Human Resource Consulting, n.d.) A transparent rewards framework built on measurable goals and objectives as wells an open and direct communication that emphasizes a culture of "we" rather than "us-them" is also recommended. Finally, an expatriate manager will be most successful when he/she recognizes and respects the Irish culture but builds a strong corporate culture on the values of the company.

Strategies for Dealing with Local Bosses

When asked about strategies for dealing with Irish managers/superiors, Jean-Philippe also felt this was very dependent on the individual manager and relationship. He explained that his manager is not highly involved with his team on a daily basis and relies on weekly status updates. He said he was also aware of Irish managers that tended to be much more involved with the work of first-line managers reporting to them.

Attributes of Ireland's culture and legal requirements will require adjustment of the management strategies utilized in the U.S. to realize a successful relationship with Irish employees and managers.

Living

Living Standards

Due to the recent economic revival of Ireland, the country's standard of living has increased dramatically. Once a country plagued by mass emigration that led to a declining population, sound economic policies such as low taxes, an investment in public infrastructure, and lack of government interference have attracted jobs and workers to the country (World Bank, 2006).

During this boom period from the early 1990s till the global slowdown circa September 2001, Ireland transformed itself from one of the poorest countries in Western Europe, to one of the wealthiest. According to the World Bank, the average Irish citizen's share of the public debt fell to 34% from 90% of the GDP during the economic boom, and their average salary mushroomed from Euro $31,453.00 to Euro $51,673.00 (OECD, 2005).

This change is significant because public spending on infrastructure and education was able to increase, but was not accompanied by a concurrent rise in taxation levels that would have stymied economic growth. Furthermore, this growth has been seen across all spectrums of the economy. Some of the job creation has been disproportionately concentrated at the higher-end segments of the service
industry, including the robust job creation associated with the information
technology sector, management services, and multinational activities such as finance, accounting, and legal services. The influx of skilled workers,
the boom in corporate spending, and the surge in hiring, however, has
had a trickle down effect on ancillary levels of the economy. While high
tech firms like Dell and Intel have set up European operations in Dublin
because of favorable corporate taxes and the availability of a relatively
cheap, well-educated, English speaking work force in proximity to key
European markets, less affluent immigrants from eastern Europe have
flocked to Ireland to take lower paying jobs in the growing service
and manufacturing sectors. It is estimated by some forecasters that
almost 50,000 immigrants a year are coming to Ireland, 30% of whom
are employed in the construction industry to build homes for themselves,
other Irish residents, and investors (Sweeney, 2000).
This trend has had a profound effect on the demographics of the once cloistered country, and helped to drive the economic recovery and real-estate boom (Jacoby, 2006).

Housing

Ireland's housing boom is one of the longest and significant in recent history, particularly in Europe. Driven by job growth in urban areas, workers have flocked to downtown infill projects, and new suburbs that are sprouting up around the major cities. Ireland's significant re-investment of increased revenues from tax receipts has been astutely placed in modernizing the country's public infrastructure, particularly in roads and railways. Real-estate developments located near these transportation hubs have seen a premium attached to their prices.

There is some concern that residential real-estate prices are frothy. While a recent resurgence in growth has been mainly driven by the country's construction sector, observers think this is mostly a fact of supply catching up with demand. While valuation changes remain up and steady at 10% the Irish housing market may be cooling as speculators chase other opportunities in the US and Eastern Europe.
(See Exhibit 8).

Of greater concern is the role foreign speculators and institutional investors are playing in driving up prices in search of outsized returns. The Economist has warned of excessive Irish property values. Already, rent yields are falling nationwide on residential property and output has now outpaced supply. 2004 saw the construction of 80,000 new homes, compared to the United Kingdom's 160,000-a nation that has 15 times Ireland's population. From 1997 to 2006 housing prices in Ireland have climbed a staggering 244%. (See Exhibit 9).

Shopping

The rapid growth and ascension of wealth created by the Celtic Tiger has had widespread economic and social consequences. With the large increase in jobs and competitive wages, Irish workers have seen their disposable income catapult, and with that a commensurate increase in consumer spending. Particularly among the higher income brackets, the newly affluent have expressed their status by gobbling up consumer goods and luxury items reflective of their earning power.

The growing consumer marketplace has also led to even more foreign investment. Luxury producers such as apparel makers Gucci and Luis Vitton decided to increase their retail presence in Ireland because of growing consumer prosperity (One up for the LVMH, 2006).While this conspicuous consumption may cause some class tensions, all Irish workers seem to share in collective sense of national prosperity. This rosy sentiment is reinforced by the reversal of key economic indicators.

While Ireland long suffered from double digit unemployment in the 1970's and 1980's, the country saw unemployment data plummet from 18 % to fewer than 5% by turn of the twenty-first century (International Monetary Fund, 2006). Furthermore,
all of the new jobs provided a substantial increase to workers' wages, with
the average industrial compensation growing significantly. How Ireland manages this increase in the cost of labor and maintains workers' robust productivity increases will be one of the key challenges the country faces in keeping the businesses who relocated to Ireland for it low wage climate from moving to new Eastern European entrants into the EU that are confronting Ireland's competitive advantage. This dramatic rise in wages was matched by a significant climb in inflation of prices for consumer goods. While the government has been astute at keeping monetary inflation at about 5% per year, lower income workers have been disproportionately affected by the doubling of prices of groceries and the even greater rise in property values exacerbated by speculators (The global housing market: checking the thermostat, 2006).

Challenges/Strategies for day-to-day living

Rapid job creation has also significantly altered living patterns and demographics. Multi-nationals have set up shop primarily in major cities such as Dublin, which has led to increased urbanization and in turn attracted many younger rural residents to leave the countryside for these new opportunities. Some Irish, particularly older farmers and sheep herders, are concerned about an emerging polarity and disparity in both wealth and values between the countryside and the urban centers. Many family farmers are also worried that their occupations will soon be outsourced, and their land consumed by speculators hungry for development.

Due to their history of poverty, protectionism, and insecurity the Irish seem to have abandoned their self-doubt and discovered a self-confidence that reflects their new standing in the world. With the surge in economic growth and prosperity, the Irish seem to have embraced the power of capitalism and entrepreneurial activities such as the risk taking in starting a new business are widespread.

Some native critics argue that this trend has eroded national culture, with
too many younger Irish believing American styled capitalism is superior to
any sense of national identity.

Conclusions

Ireland is a very special country. With a long and rich history dating back to 600 BC,
the country is still evolving and progressing as a nation. Ireland's location in Western Europe, and specifically its proximity to England, has been an important factor in shaping its culture, political system, and economic environment. Despite being one of Europe's smallest countries in terms of population, Ireland's open, trade dependent economy is among the strongest in Europe as well the developed world. Ireland's English speaking population is predominantly comprised of Roman Catholics with a high percentage of young people. The country's culture maintains a healthy balance between individualism and community.

As a member of the European Union, Ireland follows many of the same business practices commonplace in Western Europe, and its legal system is rooted in British common law. Ireland's business friendly government, as well as its young and well-educated workforce, has attracted many technology, health care, and financial multi-national companies to the country. The country certainly faces challenges, such as an expensive housing market, but overall, the future is bright for Ireland.

References

Suggested Readings

• Masculinity and Femininity by Geert H. Hofstede


• A Short History of Ireland by Richard Killeen


• This Is Ireland by M. Sasek


• Living Abroad in by Steenie Harvey


• Round Ireland in Low Gear by Eric Newby


• "The polymath's polymath." by William Butler Yeats


• "A Swim-Two-Birds" by Flan O'Brian's


• "Ulysses." by James Joyce's


• "Word made flesh: How Ireland celebrates its writers." The Economist Magazine. May 25th, 2006.

Global Business Imperative
Fall Quarter 2006

Bryan Harmsen
William Howard
Eric Lazzari
Jane Sagalovich
Julian Scurci

University of Denver
Daniels College of Business
* reproduced on W303.com with permisson of the authors

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Very interesting and informative paper, this information will come in very
handy on an upcoming trip to Ireland. Thank you for sharing your work!