Doing Business in Turkey
Some of the earliest human settlements are located in Turkey. These major Neolithic sites trace back to the ninth millennium BCE, in particular, Gobekli Tepe, considered the world’s first large-scale place of worship, and Catalhoyuk, considered the world’s first city. The country’s historical treasures also include UNESCO World Heritage sites: Troy, the location of the legendary Trojan War, is in the northwest; Ephesus, with its stunning ancient Greek theater, is on the western coast; and Mount Nermrut, with the remains of enormous ancient statues, is in the southeast. Having been part of Greek, Roman, Christian, and Islamic empires, its historical sites attract millions of visitors to Turkey every year. Today’s Turkey includes an important section of the historical Silk Road that linked China with Rome, allowing for the exchange of goods and ideas between two of the great civilizations at the time.
Following the defeat of the Ottoman Empire in World War I, Turkey entered a turbulent period of partition and reshaping until the Republic of Turkey was constituted on October 29, 1923. The founder of the modern, secular, and nationalist republic was Mustafa Kemal Ataturk, who served as its first president. Ataturk transferred the capital from Istanbul to Ankara as a sign of the country’s break with its Ottoman past.
Most of Turkey’s territory is in the Anatolian Peninsula in far western Asia, also known as Asia Minor, with a small European portion along the Balkan Peninsula in southeastern Europe. With a unique geographical location, it is a transcontinental country, bridging Europe and Western Asia. While only about 3% of its territory is located in Europe, its territory during the Ottoman Empire once stretched deep into Europe and played a part in European history. In 1987, Turkey submitted its application for formal membership in the European Economic Community, and since that time, negotiations have progressed slowly, with full membership not yet achieved. With a population of greater than 84 million, Turkey is the second most populous of the MENA (Middle Eastern and North African) nations (after Egypt) and the second most populous European country (after Russia).
Turkish is the official language. There has been no official state religion since Ataturk established the secular republic in the 1920s, but nearly all Turks are Muslims (mainly Sunnis), living among whom can be found small Christian and Jewish communities.
Though no longer the capital, Istanbul remains Turkey’s largest and best-known city. Extending across the Asian and European shores of the Bosporus, also known as the Strait of Istanbul, the modern city dazzles visitors with its beauty and history. Today’s Istanbul is a cultural, economic, and business hub and one of the largest urban centers in the Middle East and Europe, with an estimated population of 16 million within a greater urban area of 5,500 square kilometers.
Turkey has experienced more or less steady economic growth since Ataturk’s reforms, having moved from an agriculture-based to a diversified industrial economy. Today, Turkey’s total gross domestic product (GDP) is around USD 720 billion, and its per capita GDP is around USD 32,000. The country has enormous economic and human potential and one of the most competitive business environments in the MENA region.
Currently, the tourism, agriculture, and industrial sectors dominate the Turkish economy. The government has set annual economic growth targets to reach 5.5% by 2023. Under its three-year economic program, the average GDP growth target is 5.3%. The annual inflation rate remains high, around 19%, through the summer of 2021 but is expected to drop to 9.8% by the end of 2022, which is a positive indicator for foreign investment .
Four points to keep in mind when doing business in Turkey
Turkish culture is strikingly diverse from region to region. Thus, there is a clear difference between life in the cities and life in the country, between the more conservative southeast and the northwest that has been more open to European influence. Across Turkey, then, you will find wide variation in Islamic traditions, food, dress, and so on. Istanbul and Izmir feel like modern Western cities, while Diyarbakir or Gaziantep show the strong influence of the Middle East. Likewise, this diversity is reflected in the business culture and etiquette, with business people in the country’s northeast being relaxed and modern in the business culture and dressing style and those in eastern and southern Anatolia conducting their affairs in a manner more reminiscent of the MENA countries. It is crucial to keep in mind precisely where it is in Turkey that you are doing business.
The importance of honor
Turks value highly the concepts of preserving honor and saving face. Accordingly, titles are used before first names to show respect, bey (sir) for men and hanim (madam) for women. Older people are addressed as amca or teyze (uncle or aunt) by younger people, with less formal forms of address being considered disrespectful.
Patriarchal and hierarchical society
Turkish society is strongly hierarchical, with individuals being ranked according to their status and age. Status derives from an individual’s reputation, family name, wealth, political connections, and displays of religious devotion. Most businesses are family-owned and run by the family patriarch.
Patience is a necessary virtue
Building personal relationships with Turks takes time. The right relationships can open doors to your success in the country, so the time spent interacting with potential partners is not wasted but an absolute necessity. Also, decisions tend to be made slowly, with business decisions based on the amount of trust the owner-patriarch has in the various parties to a deal.
What to look for in a Turkish business partner
When doing business in Turkey, it is crucial to choose a local partner with whom you can build a trusting and lasting relationship. Such a partner must not only have a good understanding of the language and culture but also share your firm’s values, mission, and goals. In particular, look for the following fundamental attributes in a Turkish partner.
Strong connections: Turkish society is collectivist, built on relationships and personal loyalty. Therefore, you need a partner who is already well-connected and respected in the Turkish business community and able to leverage these longstanding ties to the benefit of your business. The fact is that, without access to a Turkish contact’s personal network, your venture is likely to fail.
Experience: Your Turkish partner should have years of experience working with both government agencies and private firms and specific knowledge of the decision-making processes in the organizations with which you seek to do business. Another key capability is knowing how to expedite processes in a bureaucratic system.
Trustworthiness: Since the strength of a relationship with a Turk is in large part based on familiarity, you need to begin developing mutual trust with your partner from your first meeting. It is necessary to invest heavily in relationship-building before trying to close deals or form a long-term partnership.
Reliability: You must be able to depend on your partner’s expertise and judgment as you navigate a new market and culture. Accordingly, perform a thorough due diligence check of all potential partners to make sure that they fulfill your criteria.
Business culture and etiquette
Turkey is a high power distance culture . Thus, the structure of Turkish businesses is, like that of Turkish society, hierarchical. In business meetings, the highest-ranking person leads the discussion and makes the final decisions. Due respect must always be shown to those in senior positions.
Generally speaking, business meetings in Turkey begin on time. In the big cities, however, especially Istanbul, the traffic can be unpredictable, so if lateness cannot be avoided, be sure to communicate your situation to the host as soon as possible.
Turkey scores high in uncertainty avoidance, indicating that Turks prefer well-defined rules for almost everything. This cultural tendency is also reflected in the extensive bureaucracy and slow decision-making. Likewise, Turks demand large amounts of information, asking many questions and gathering reams of data before making a decision. However, they often try to bypass these rules, and emotions often influence decisions .
With respect to physical contact, Turks are generally sociable, emotional, and tactile, and they tend to stand and sit closer to other people than Westerners do. However, unrelated adults of the opposite sex do not touch.
Business meetings usually start with tea, Turks consider it crucial that the participants become acquainted through a small talk before getting to the matter at hand. Common topics of discussion in these situations include family members, health, and current business, economic, and world affairs. Let your Turkish partner bring the conversation around to the subject of business, which may take 10 or 15 minutes.
Avoid crossing your legs when sitting so as not to show the bottom of your feet to anyone. In Turkey, doing so is considered insulting. Likewise, avoid using the left hand to offer anything to someone else, for it is considered unclean and improper.
As noted, showing respect to elders is considered polite and expected in Turkey. Examples include standing when an elder enters the room and offering your seat if none is available.
Turks are generous to their guests, for hospitality is a key feature of their culture. Hence, they regularly invite business partners and potential business partners to meals. When you are invited to a Turk’s home, it is customary to bring sweets or flowers, or presents for small children. Always wrap a gift and present it with your right hand or both hands, the left hand again being considered unclean. It is also customary to remove your shoes before entering a Turkish person’s home.
Turks tend to dress formally in the office. If you are told to dress casually, this means “smart casual” (not T-shirts and jeans).
Be especially careful with
Criticism. Direct criticism is often perceived as hostile, so never criticize someone in public. Because maintaining face in Turkish culture is crucial, if it is necessary to correct misinformation, do so privately and politely.
Negotiations. Since most Turkish firms are family-owned and -operated, negotiations can take a long time. The decision-making process is slow because decisions must move up the hierarchical ladder. Hence, the most effective strategy is usually to present your project to the highest authority whom you can access. During meetings, you need to communicate your ideas both verbally and visually, with charts, graphics, and maps, as well as a carefully crafted pitch. Also, it is a good idea to set your bottom line in advance and start higher; since concessions are expected, you need to leave room for compromise.
Offhand comments. Turks are proud of their nationality and revered national figures such as Ataturk, the founder of the republic. In general, never joke about Turkish history or society or Islam and avoid off-color comments.
Corruption. Turkey is ranked high in corruption according to the recent (2020) results of the Transparency International Annual Corruption Perception Index . Corruption manifests in multiple ways, from preferential treatment for certain businesses and individuals to outright bribery. The piracy of intellectual property is also a major concern for foreigners doing business in the country. However, the government has taken steps to address corruption by implementing a comprehensive series of reforms aimed to reduce opportunities for corruption and to improve the country’s business environment.
Interpersonal interactions. Because Turkish society is collectivist and built on relationships and personal loyalties, partnering with a well-connected Turkish businessperson is necessary to ensure the success of your venture.
Case Study: Who’s the boss?
Murat Ahmet Yilmaz is a Turkish engineer who has just moved to his company’s headquarters in Eindhoven, the Netherlands. During his time with the company in Turkey, Murat has distinguished himself as a team player and has been responsible for some key technological breakthroughs. In recognition of this strong performance, his firm has promoted him to team leader and transferred him to Western Europe.
Murat was born in Istanbul and has lived there all his life. So, the move to Eindhoven is not only his first time abroad but also his first time visiting his company’s headquarters. The initial meeting on his first workday is with the HR manager, who warmly welcomes him to the team, going over the basics and introducing him to the five senior engineers, all Dutch, whom he will be managing. Based on Murat’s outstanding record in Turkey, his company has high hopes that he will achieve a breakthrough for the production line in Europe.
When Murat’s meeting with them begins, all team members seem genuinely friendly and committed to collaboration. However, as he explains his plan and the processes involved, his subordinates start to push back, suggesting alternatives and new directions, speaking their minds plainly, and calling him by his first name. Murat leaves the meeting disappointed, feeling that the Dutch engineers are arrogant and unwilling to show him the respect that he deserves as their superior. He starts to have grave doubts about his new position.
Murat has spent his entire life in a hierarchical society where subordinates reflexively show respect to their superiors, listen to them, and accept their decisions. Consideration of Hofstede’s cultural dimensions  indicates that Turkish culture is, as already noted, relatively high in the power distance dimension (with a score of 66), which is characteristic of a hierarchical society. Thus, titles are important, and showing respect and deference to superiors is a fundamental aspect of team behavior.
Accordingly, Murat needs to understand the behaviors of his team from the Dutch cultural perspective, which is more egalitarian. At the same time, the Dutch HR manager could also prepare the Dutch team to understand the cultural norms of the talented, if not well-traveled, new manager from Turkey.
References and useful links
 Sahin, T. (2021, September 6) Turkey projects 9% GDP growth this year, 5% in 2022. Anadolu Agency. https://www.aa.com.tr/en/economy/turkey-projects-9-gdp-growth-this-year-5-in-2022/2356625
 Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and Organizations, Software of the Mind (3rd edition). New York: McGraw Hill
 Transparency International (2020). Corruption Perceptions Index 2020. https://www.transparency.org/en/cpi/2020/index/swz
 Hofstede Insights. Country Comparison Tool. https://www.hofstede-insights.com/country-comparison/