Iceland
Zach Zimmerman, Nicolle Collin, Jonathan Franklin, Jessica Sayedzada, Richard Delgado
Group 1
BUS 498
Cultural Environment
Laugavegur (Iceland’s Main Street)
Hafnarfjörður Viking Festival
Cultural Environment
● Old culture rooted in Norse/Viking culture
● Iceland or Ísland in Icelandic
● Settled in 874 by Ingólfur Arnarson (established Reykjavik)
● Icelandic is the main language rooted in Old Norse
● ég tala ekki íslensku (I don’t speak Icelandic)
● Not a problem since most citizens speaks English, one of the other
Scandinavian languages (Danish, Swedish, Norwegian), or German
● Patronymic naming system (ex. Erikkson)
● Elves? (1998 survey said 54.4% of Icelanders believe in elves)
● Friendly/Helpful however, a bit xenophobic
● Gender equality
http://www.theatlantic.com/international/archive/2013/10/why-so-many-icelanders-still-believe-in-invisible-elves/280783/
Culture Cont.
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Very proud of cultural heritage
Strong connections to other Nordic culture
Progressive view on present and future
Low Context
Strong literary tradition (Icelandic Sagas)
Relatively no class system
Hákarl
Social Environment
Hofstede Analysis
Business Communication
● Face-to-face communication
● Language matters
● Business relationship
● Personal titles
About Icelanders, Fun Facts...
The Icelandic language
Human Rights in Iceland
Nudity and more nudity
The beautiful women of Iceland
The happiness of Icelanders
Peaceful Iceland
Knowledge in Iceland
Political Environment
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The world's oldest Parliament, the Althigi, was established in 1830
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In 1918, Iceland and Denmark become separate states, same monarch (Act of
Union)
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April 9, 1940 - Denmark is occupied by Nazi Germany, all communication is
severed
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April 10, 1940 - Iceland assumes it’s own foreign affairs
Diplomatic Relations
FDR with minister of foreign affairs
● Bilateral Defense Agreement – 1951 (reassessed in 1994)
● Keflavik base is closed down, – 2006 (affirms 1951 agreement)
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Iceland is a constitutional republic with a multi-party system.
Executive power is exercised by the Government.
Legislative power is vested in both the Parliament and the President.
The judiciary is independent of the executive and the legislative.
Government
Office
Name
President
Ólafur Ragnar
Grimsson
Prime minister Sigmundur
Davi
Party
Since
Independent
1 August 1996
Progressive
Party
23 May 2013
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5th president since 1944, 4 year term
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The constitution does not limit the number of terms the president is allowed to
serve
Economic Environment
Economic Environment cont.
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GDP $41,860 USD/Capita
Projected GDP growth -2.8%
Net National Income $34,199 USD/Capita
Social Spending: 16.5% of GDP
Tax on corporate profits: 2.1% of GDP
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Unemployment: 4.5% estimated 2013
http://data.oecd.org/iceland.htm#profile-agriculture
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Service Economy: 71.2% of GDP
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Main industry: fishing, geothermal energy, tourism
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More than 12% of GDP and employs nearly 5% of the work force
from fishing
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Financial crisis put many projects on hold
Monetary Environment
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Exchange Rate: $1=138 Icelandic Krona
Central Bank of Iceland (Seðlabanki Íslands) was established in 1961
-Under the Administration of Finance and Economic Affairs and a Supervisory Board (7 members, elected
after parliamentary elections every 4 years)
-Governor handles the bank’s direction, the administration executes the orders
Coin Denominations: 1,5,10,50,100 Kronur
Banknote Denominations: 500,1000,2000,5000,10000 Kronur
http://www.cb.is/the-bank/about-the-central-bank/
Currency Issues
● Decreased value of Icelandic Krona
due to 2008 financial crisis,
● High value trades done
electronically or in other currencies
● Debated on adoption of the euro and
joining EU in 2009, withdrew
application 2013
● Bitcoin/Auroracoin
http://money.cnn.com/2014/04/02/technology/bitcoin-laws/
http://www.forbes.com/sites/kashmirhill/2014/01/31/bitcoinslegality-around-the-world/
Trade Environment
77,334 Million ISK
($628,936,000 USD in 2012)
http://statice.is/Statistics/External-trade
Exports
● Fish and fish product (40%), aluminum, animal products.
● Export partners: Netherlands 30%, Germany 12.9%, UK 9.8%, Norway 5.1%, US
4.5%,France 4.4% (2012)
Imports
● Machinery and equipment, petroleum products, foodstuffs, textiles
● Import partners: Norway 16.6%, US 10.2%, Germany 9.2%, China 7.2%, Brazil
6.7%, Netherlands 6%, Denmark 5.7%, UK 4.6% (2012)
Legal Environment
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Járnsíða ('ironside') was a law-code introduced over 1271
and one considered one of the first collection of laws
Legal systems are never the exact same between any two countries.
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A foreign government can confiscate, seize property or shut a business down.
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Understanding another country’s laws is important to business success.
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Not much legal risk exists in Iceland.
(Multicultural and Information Center, 2011)
Iceland operates under a code law and has been compiling their laws for nearly
800 years. Everyone is equal before the law and enjoys human rights
regardless of gender, religion, nationality, race, and status in any way.
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The country’s legal system does share some similarities with the United States, however, there
are some major differences.
Iceland’s Largest Legal Issue
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The Cod Wars was a series of three conflicts between Great Britain and Iceland and was fought over ownership of fishing
waters, according to The Cod Wars, written by The National Archives in 2014.
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The first Cod war occurred after WWII when Iceland declared they were going to expand their exclusive fishing territory
around the island by 9 miles (The National Archives, 2014).
Iceland
4 nmi expansion
12 nmi expansion First Cod War
50 nmi expansion Second conflict
200 nmi expansion Third Cod War & Current territory
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Great Britain kept fishing within Iceland’s declared zones under the protection of the Royal Navy. In response, Iceland
deployed their coast guard and several clashes erupted (The National Archives, 2014).
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Shots were fired from both Iceland and Great Britain, however, no one was killed. Great Britain agreed to stay out of
Iceland’s expanded fishing region because too much fuel was needed to maintain their ships. (The National Archives, 2014).
Cod Wars
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The second Cod War began in 1972 when Iceland again increased their exclusive fishing territory by 50 miles. British fishing
boats ignored this gesture and continued to fish in the region (The National Archives, 2014).
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The Icelandic coast guard was deployed and Royal Navy battleships accompanied British fishing boats. Several conflicts ensued
between the British ships and Icelandic patrol boats.
(The National Archives, 2014).
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NATO stepped in to resolve the conflict. A temporary treaty was signed
which only lasted a year (The National Archives, 2014).
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When the treaty ended the third Cod war began.
○ The conflict only ended when Iceland threatened to close a
very strategic NATO base located in the country.
(The National Archives, 2014)
○ Iceland maintains an exclusive fishing perimeter of 200 miles.
○ Total war almost broke out three times between two peaceful
countries.
HMS Scyllaclash in the North Atlantic
Icelandic patrol ship ICGV Odinn and British frigate
Differences in Laws
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Iceland is extremely protective of civil rights. According to Laws and Regulations written by the Multicultural and
Information Center , a person can be charged a misdemeanor for publicly ridiculing a person about their weight, religion,
ethnicity or race.
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Iceland has taken steps to reduce domestic abuse and increase equality between men and women.
o According to Why does liberal Iceland want to ban online pornography? an article written by The Economist, the
country banned strip clubs in 2010 and distributing and selling pornography has been illegal since 1969. Both
industries are criticized as promoting violence and negativity towards women.
o The same article by The Economist suggests, Iceland considers this a progressive idea and explains women’s image
is being promoted rather than their rights restricted.
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Alcohol was illegal in Iceland for 74 years, according to Laws and Regulations.
o Prohibition went into effect in 1915 and lasted until 1 March 1989, since celebrated as "Beer Day".
o Any business involving the sale of alcohol would want to take notice of this.
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Anyone looking to do business in Iceland should focus on a moral or pure product or service.
Thank You!
TAKK FYRIR
References
http://businessculture.org/northern-europe/iceland/
https://www.cia.gov/library/publications/the-world-factbook/geos/ic.html
http://www.theatlantic.com/international/archive/2013/10/why-so-many-icelanders-still-believe-in-invisible-elves/280783/
Ministry of Finance and Economic Affairs. (2011). Acts of Law. Retrieved 3 4, 2015, from Ministry of FInance and Economic Affairs:
http://eng.fjarmalaraduneyti.is/legislation/
Anonymous. (2015). Laws and Regulations. Retrieved 2015, from Multicultural and Information Center:
http://www.mcc.is/english/iceland/laws-and-regulations-/
The National Archives. (2014). The Cod Wars. Retrieved March 10, 2015, from The National Archives:
http://www.nationalarchives.gov.uk/cabinetpapers/themes/cod-wars.htm
E.H. (2013, April 23). Why does liberal Iceland want to ban online pornography? Retrieved March 9, 2015, from The Economist:
http://www.economist.com/blogs/economist-explains/2013/04/economist-explains-why-iceland-ban-pornography
http://data.oecd.org/iceland.htm#profile-agriculture
http://geert-hofstede.com/iceland.htm
http://www.government.is/how-iceland-is-governed/
https://guidetoiceland.is/history-culture/10-reasons-icelanders-are-proud-of-being-icelandic
http://businessculture.org/northern-europe/iceland/business-communication/
http://www.iceland.is/iceland-abroad/us/business-and-trade/
http://www.iceland.is/iceland-abroad/us/iceland-and-the-us/