Israel is a very diverse country. Tel Aviv is known for its secularity and is the business capital of Israel, Jerusalem is known for its religious significance. There are numerous Arab villages, kibbutzim and moshavim. The origin of the Israeli culture stems from Europe, North and South America, the former Soviet Union, various African countries, as well as a large population from the Arab world.
Israel has one of the fastest growing GDP rates in the world, currently standing at over 300 billion USD making it a very lucrative market to investors. Much of this progress is due to Israel’s innovative abilities in the fields of applied sciences and technology. The education system in Israel has generated 15 percent of its graduates from engineering departments as specialist in fields such as: Software development, IT, cyber-security and more. Israeli universities are rated within the 100 top research institutions in the annual “World University” rankings.
The Israeli army (IDF) is a compulsory service. The men serve for three years, and the women serve for two years. The army provides practical technical experience and teaches computer, intelligence, teamwork and leadership skills.
Technology companies and global investors are finding in Israel a unique combination of audacity, creativity, and drive. In addition to having the highest density of start-ups in the world (a total of 3,850 start-ups, one for every 1,844 Israelis), more Israeli companies are listed on the NASDAQ exchange than all companies from the entire European continent.
In 2008, per capita venture capital investments in Israel were 2.5 times greater than in the United States, more than 30 percent greater than in Europe, 80 times greater than in China and 350 times greater than in India. Israel – a country of over 7 million people, has attracted close to $2 billion in venture capital. Lastly, Israel is the world leader in the percentage of the economy that is spent on research and development.
Israel ranked 52 (of 189 economies) in the World Bank’s 2017 Ease of Doing Business Survey, standing out in the categories of protecting minority investors (9th) and resolving insolvency (31st). However it ranked poorly in the enforcing contracts (89th) and registering property (126th) categories. These issues reveal the underlying religious nature of the country where land ownership is regulated according to biblical law. This insight exposes the contrast and contradictions that exist in Israeli culture, a modern democratic country with dynamic diverse religious interests.
Everything is fluid and can change
Israel is not just a country but a “state of mind.” Whereas Americans emphasize decorum and comprehensive preparation, Israelis are very spontaneous and entrepreneurship oriented. “When an Israeli business person has an idea, he will start it that week.” On the other hand, everything you agree to can be subject to last minute changes, even after the agreement is finalized. Within this framework, Israelis are less process oriented than their American counterparts. Flexibility, adapting to change and taking an initiative in problem solving setting is a norm in many Israeli organizations.
Israelis negotiate with a zero-sum mentality. They will always push for a better deal based on common mutual objectives. Israelis are empowered to act independently and decision-making may be quick. It is not uncommon that negotiators around the table finalize a transaction based on a first-time meeting.
International business is conducted in English; internal business is conducted in Hebrew.
The Israeli style of communication is very direct, frank and sometimes blunt. Israelis often communicate in an argumentative style and always openly state their opinions. You do not need to agree with; contradicting opinions are accepted and are a part of the communication culture. Israelis value honesty and straight forwardness when conducting business and expect the other side to talk with clarity and to the point.
Israel being a polychronic society, relationship building is an important value in a business setting, though not always necessary. Business meetings usually involve small talk and become part of the culture of a business meeting, and as such, meetings often run overtime or begin late.
Hierarchy in the Israeli organizational structure exists but it is not affected when teamwork and exchange of information and ideas is necessary. Brainstorming is highly valued and the open communication style across ranks allows for input from all members of the organization.
Greetings and Protocol
Men shake hands upon greeting other men. Some Israeli or Jewish businessmen will shake hands with women, unless they are strict Muslims or Orthodox Jews, in which case they are prohibited by religious law to do so. Allow an Israeli businesswoman to extend her hand first.
When you are introduced, address all colleagues and co-workers with their title and surname. That said, Israeli culture is very open and informal, and communication on a first name basis should be expected thereafter.
Time schedules are not strictly adhered to. You should expect that not all meetings start or end on time. Agendas for meetings is common, but should not be expected to be sent out in advance. Deadlines are always defined but often moved to accommodate issues and problems that need to be dealt with.
For the most part, business dress in Israel is generally less formal than in North America and Europe. A western style of dress is the accepted standard for women and men in business settings. Men usually wear an open collar shirts with jacket. Women dress similarly to appropriate business dress accepted in Europe or North America. The exception to this rule is when doing business in religious cities, women should cover their arms to the wrist; short skirt/dresses are inappropriate, as is tight fitting clothing. Men should also dress in conservative business attire when conducting business in these cities.
Business cards are common, but there is no formality involved in exchanging them.
Business hours in Israel are usually 8.30am to 5pm. The working week is Sunday to Thursday as well as Friday mornings. Employees work nine hours per day, including an hour for lunch, and according to labor laws, working hours may not exceed 45 hours per week.