The aim of this original research, conducted as part of studies at the University of Geneva and the University of Savoie Mont Blanc, is to help Swiss, and more broadly European, businesses better understand the expectations of Iranian small and medium-sized enterprises (SMEs). The goals of this research are as follows:
- Address the perception of Switzerland by Iranian SME managers in the industrial sector
- Identify the expectations of Iranian managers when entering into a partnership with a Swiss company
- Outline the importance of informal networks and the role of the "in-group" aspect in Iranian culture
A quantitative survey was conducted covering 101 managers from the textile industry, based primarily in Tehran and Kashan. These managers represent 87 different companies, of which 97 percent employ less than 250 people and therefore qualify as SMEs.
This survey clearly indicates the willingness of Iranian SME managers to do business with foreign companies and reflects the belief of these managers in international cooperation. When asked about the importance of an international network of business partners, a resounding 99 percent considered such a network "very" or "extremely" important. Currently, international connections are being established: 87 percent of the surveyed managers say that foreign companies have approached them for potential partnerships.
It is also important to consider the prevailing hierarchical model of business when approaching Iranian managers. Combined with understanding the strong "in-group" dimension of Iranian SMEs, a foreign company’s primary mission will be identifying the primary decision-maker. Resources could be wasted if this person is not identified, and if equivocal communication were to skew perceptions or the understanding of terms and conditions, it could lead to failure.
Accessing the full range of networks will be the key success factor for conducting business with Iran. This is a prominent cultural component, and the kind of networks that are important to Iranian managers have been quantified and qualified in our survey. We have addressed professional, personal, institutional, and international networks.
From a business perspective, we can conclude that Iranian managers are open for business, and they wish to expand their relationships with foreign entities. That being said, foreign companies hoping to engage Iranian SMEs will need to develop cultural skills, and develop an awareness of Persian culture, Islamic tradition, and sentiments regarding Westernization.
This will allow interested parties to mediate what sociologist Ronald Stuart Burt refers to as "structural holes within a network." The informal networks of all managers can be leveraged, not just the professional networks. This view of networks is similar to the concept of "social context" as described by sociologist Mark Granovetter in his seminal work Strength of Weak Ties. In this sense, economic transactions in Iran are embedded within informal networks.
In regard to the perception of Swiss companies, we noticed that surprisingly, innovation is the least-favored feature. It is more important to Iranian managers that Swiss companies are trustworthy, precise, and that they deliver quality.
Overall, the insights from this survey can help foreign companies develop an entry strategy by outlining Iranian managers’ expectations. Iranian SMEs are very interested in foreign partnerships, but their approach to business depends greatly on informal networks. It is therefore important that potential foreign partners can navigate cultural nuance in order to successfully navigate business relationships.