Table of contents
1. Introduction 3
2. Research and findings 3
2.1 Government 3
2.2 Political Economic System 5
2.3 Employment laws and regulations 5
2.4 Economy 7
2.5 National Culture and Hierarchy 9
2.5.1 Hofstede’s dimensions 9
3. Analysis 12
3.1 Government 12
3.2 Political Economic System 13
3.3 Employment law and regulations 14
3.4 Economy 14
3.5 National Culture and hierarchy 15
4. Conclusion 17
References 18

1. Introduction
The Kingdom of Sweden; IKEA, VOLVO, forests, lakes, snow, democracy, how is it up there? We all know about how well IKEA is doing, and we all know about Zlatan and Abba… but how do we become equally successful? The demands on Human Resource Management is currently increasing as it has been widely discovered and discussed that it directly affects the economic growth. What do we have to think about when we develop our HR department?
In this paper we will analyze the institutional context of Sweden and evaluate what impact they have on the decision making of Human Resource management. As students of Economics and Business it is a vital part of our education to go in depth to actually understand and be able to adapt our theoretical skills in a new country. To do this we will consider the government aspect, with political system and political landscape included and its affect in the context of people management practices. Subsequently, the political economic system and its impact will be reviewed, looking at aspects such as welfare distribution, welfare benefits and unemployment. Closely linked to the aforementioned factors are also employment laws, which have a direct impact on the management practices of HR of any company operating in Sweden. The following section will analyze and evaluate various laws such as employment contract and employment discrimination. The subsequent part will cover the economic position and its importance for optimal practices in people management. Last, but not least, will be the factor of national culture and the significant influence it has on corporate culture in a country. To keep in the context of organizations, we are going to use Hofstede’s five dimensions as a framework to analyze Sweden’s national culture and later use these findings in giving recommendations for people management practices. Hofstede’s dimensions are a widely recognized tool for comparing work related values within organizations. In the end, analyzing all the factors collectively, a final conclusion and evaluation of these influences will be constructed, and the goal is to bring a number of key advices for HR departments developing in Sweden.
2. Research and findings
2.1 Government
Sweden is a parliamentary democracy with constitutional monarchy. The monarch, a member of the House of Bernadotte, acts as a Head of State with no formal influence on political decisions. (Sweden.se, 2015).
The unicameral parliament is called Riksdag and consists of 349 directly elected representatives. (Riksdagen, 2015) The Riksdag has the legislative power and elects the Prime minister who runs the government and holds the executive power. (Regeringen, 2015).
Elections in the country, county and regional level are held every 4 year and every citizen above the age of 18 is entitled to vote. Furthermore the people can also have an impact on political decisions by participating in referendums, joining a party or commenting on governmental reports.
The composition of the Riksdag follows the principle of proportion which reflects the votes. The only exception to this rule is the 4 per cent rule which prevents too small parties from entering the parliament and hindering the decision making. Currently the Riksdag consists of the following 8 parties:
• (Socialdemokraterna) the Social Democratic Party
• (Moderaterna) the Moderate Party
• (Sverigedemokraterna) the Sweden Democrats
• (Miljöpartiet de Gröna) the Green Party
• (Centerpartiet) the Centre Party
• (Vänsterpartiet) the Left Party
• (Folkpartiet Liberalerna) the Liberal Party
• (Kristdemokraterna) the Christian Democrats
(Sveriges Riksdag, 2015)
The politicians that are part of the government lead by the Prime Minister are usually appointed members of the leading parties. Next to proposing laws the government is also responsible for implement the decisions made by the Riksdag, represent Sweden and sign contracts with other states among other things.
Since the last general election in 2014 the country is ruled by a coalition of Democrats and Greens lead by the Prime Minister Stefan Löfven. However this result is not typical for Sweden. In the last 30 years there was a constant change between social democrats and “non-socials” as the leading party of the parliament. Furthermore the current government holds only 37.9 per cent of the Riksdag which makes controversial political decisions difficult. (Sweden, 2015).
On the official website for the Swedish Riksdag (Riksdagen, 2015) we can learn about how the constitution of Sweden defines the political environment and contains 4 fundamental laws which have significance on the way Sweden defines itself. These are: (1) the act of succession, (2) the instrument of government, (3) the freedom of press and (4) freedom of expression. With these laws anchored in the constitution Sweden guarantees rights which define a modern democracy. Amongst others these are:
• The right to hold demonstrations
• The right to form political parties
• Public access to information
• The right to communicate information
• The right to anonymity
2.2 Political Economic System
Another aspect of the institutional context is the political economic system. It is “the study and use of how economic theory and methods influence political ideology” and involves the analysis of how public policy is created and implemented (Investopedia, 2015).
Firstly, one important aspect in this area is the welfare distribution. As a result of successful political reforms and focus on full employment as the major objective of Sweden’s economic policy, the country became one of the most egalitarian and affluent countries in the world (Lachs Ginsburg & Rosenthal, 2006). In terms of the welfare distribution, the income inequality is slightly increasing, however it is still significantly lower than the rich-world average. The Gini co-efficient was 0.24 in 2012, compared with 0.31 average of the rich-world (The Economist, 2012). This means that Sweden is one of the most equal countries in the world’s income distribution. This is achieved through a strong and comprehensive welfare benefit system and income taxes, reducing inequality by nearly 30%. For example, the richest people pay nearly 9 times more tax than those from lowest income brackets. (Svenskt Näringsliv, 2012).

Closely related to welfare distribution, there is the aspect of unemployment. The unemployment in Sweden is considered to be low, especially when comparing it to other European countries: it is 7.6% in comparison to 9.6% and 11.1% average in European Union and Euro area respectively (Statista, 2015). Also, the welfare benefit system is one of the strongest in the world. It doesn’t just provide comprehensive health and parental benefits, but also unemployed citizens in Sweden can receive benefits between 66% and 90% of their last salary (Woolsey, 2008).
2.3 Employment laws and regulations
Employment relationships in Sweden are partially regulated by civil law, however many aspects are defined in self-regulation by employers and trade unions. Trade unions are able to represent approximately 70 percent of employees in Sweden (L&E Global Knowledge Center, 2015). This means that many rules will depend on whether there are agreements with trade unions and how they were defined. Following are the key employment regulations.
Entering an Employment Contract
Duration of Contract
When entering an employment agreement, it is generally done so for an indefinite term. Employment agreements for defined terms can only be made under certain conditions defined in civil law. For example, fixed-term employment is only possible for a period of 2 years or less; an employee working for a company for more than 2 years will automatically be transferred into an indefinite employment according to the law (L&E Global Knowledge Center, 2015). These policies protect employees from being employed temporarily when not necessary and therefore increase employment security.
Trial Period
An employer and an employee can agree on a trial period of a maximum of 6 months. During this period, the contract can be terminated with a two weeks’ notice and no objective grounds for termination are required (L&E Global Knowledge Center, 2015).
The trial period allows the employee as well as the employer to assess whether they truly want to engage in the contract for an extended period of time. It also assures economic efficiency by avoiding employers to be stuck with unsuitable employees.
Working Conditions
Salary
Sweden does not have any minimum salary by law, however most collective bargain agreements with trade unions contain certain minimum salaries for their industry and require annual salary raises (L&E Global Knowledge Center, 2015)
The absence of a minimum salary by law is mainly due to the fact that most employees do benefit from a minimum salary defined in collective bargaining agreements. Also, letting each industry agree on salaries leads to numbers which are better tailored to each industry and avoid unemployment due to minimum salaries.
Working Hours and Overtime
The maximum working hours per week is 40. However, employers can require their employees to work overtime, which is in turn limited to 50 hours of overtime per month. Under Swedish law, no payment for overtime work is required. However, most bargaining agreements require the employer to compensate for overtime (L&E Global Knowledge Center, 2015).
Holidays
Swedish law stipulates a minimum of 25 vacation days per year and vacation pay. The vacation can consist of paid and unpaid vacation days. Collective bargaining agreements often define individual calculations of vacation pay and vacation accrual.
Employment Termination
Restrictions for termination
An employment can only be terminated on objective grounds - these can either be a shortage of labor or personal reasons, such as ‘serious misconduct or disloyalty’ (L&E Global Knowledge Center, 2015). In extreme cases, the employer is able to dismiss the employee without any notice period. If the employee would be dismissed due to a shortage of labor, the employer is required to first offer a vacant position to the employee, if her/his qualifications are sufficient. Also in such a situation, the company is required to dismiss the employee with shorter periods of employment first. Employees with longer periods of employment are prioritized and remain employed (Baker & McKenzie, 2009). This means that an employer is unable to choose which people to dismiss in such a case. Also, people who were dismissed need to be prioritized should the company increase its workforce again in the future. In any case of redundancy, an employer must also consult trade unions.
In dismissals for personal reasons, the employer bears the burden of proof and is also required to offer support to the employee to improve. Dismissing an employee for personal reasons can be a very time-consuming and a complicated process for the employer.
Notice Period
The notice period for termination of the contract varies between 1 to 6 months, depending on duration of the existing contract. For example, if an employee has been with the company for less than two years, the notice period is 1 month. If the employee has been with the company for more than 10 years, the notice period is 6 months. However, the notice period agreed on in collective bargaining agreements with trade unions may be longer than the periods stated in law. During the notice period, the employee has the obligation to work but also the right to receive salary (L&E Global Knowledge Center, 2015).
This policy also facilitates employment security but on the other hand simultaneously provides the employer with certain security in business planning if the period is reciprocal.
Wrongful Termination
Wrongful termination of an employment contract can be brought to court by the employee and potentially declared invalid. Additionally, if found to be invalid, the employer is also required to pay damages and economic loss of the employee (e.g. salary lost).
Employment Discrimination
In the last 20 years, Sweden has had a strong focus on implementing several regulations concerning equality of employees. It forbids discrimination in recruitment, termination, employment conditions, promotion, training and supervision. Discrimination may occur on the base of gender, ethnicity, origin, religion, sexual orientation, disability and others. Discriminatory acts are also forbidden even is the employer had no intent Baker & McKenzie, 2009, p. 328-329).
2.4 Economy
The first thing to remember when managing a business in Sweden is that it is environmentally conscious and they do not worry about paying a little extra if it can be considered as an act of CSR. It is a country with a high focus on the environment but has been able to keep the economy above surface with this strategy as seen in the figures in the article by Axelsson (2015).
The amount of working population is growing smaller, both in the younger and in the older groups, where less and less people are working and an anticipated fall in labor range is anticipated by Ekonomifakta (2015).
The amount of businesses is steadily increasing in Sweden and we can see an increase of almost 26% from year 2003 to 2014. This is no surprise since almost all the 8 political parties have been easing the restrictions of employment and creating business as seen on their webpages, among them Moderate Party, the Green Party and the Center Party.
The Heritage Foundation (2015) states that Sweden is enjoying an economic freedom at number 23 in the world and is with this score beating the world and regional averages. Not only is the country in a well-known welfare but it is continuously making marginal changes to improve its economic freedom. It is a country with open and global trade and investments, business freedom is increasing and government roles are being reduced. Sutherland (2015) also tells us that the Swedish economy used to experience low growth and high inflation with a constantly devalued krona but has now one of EU´s lowest levels of national debt and a low and stable inflation. The reforms created after the crisis in 1990´s proved so strong that they even kept a balanced budget during the crisis of 2007/2008. The government´s new policy among other things had the goal to keep consistent employment, which they succeeded with after 2009 compared with the past as seen in the following graph. Picture: (Trading economics 2015)
Sutherland (2015) tells us that due to the high performance of the management of the public finances Sweden has remained in the top countries in Europe and is ranked as the 6th most competitive country in the world. He claims that there are not much surprise tax increases and decreases, in fact taxes have been lowered since the crisis began and more money has been invested in welfare areas. The key, it is argued, to its 6th position is the world’s easiest countries to trade with, lies with its liberal and open approach to trade. It is no surprise that Stockholm, Sweden’s capital, is known as the Europe´s hottest start-up city for ICT companies. Information and Communication Technology has grown significantly, by 16% since 2008, and proves to be just as the economy itself – strong. Sweden has higher GDP per capita than the EU average – dynamic economies and the high standards of living is evenly spread out, in fact it is even more so than anywhere else in EU (Sutherland, 2015).
The GDP in 2014 grew 2.1% and with low interest rates, strong employment growth, steadily growing disposable incomes, record high savings rate of households and rising housing process, private consumption is forecasted to remain robust as cited by the European commission economist in The local (2015).
Almost 70 % of Sweden’s exports are destined to Europe and since the economic performance in this area is growing it should automatically benefit Swedish exports. (The Local, 2015)
European commission economists projects the Swedish unemployment rate to sink to 7.6 % that will promote production, limiting social welfare payments and giving more people money for spending, as quoted in The Local (2015). Moreover, today’s actions by the Central Bank have intended to cut interest rates to record low levels in order to stop risky investments and transactions that could impact the bigger economy. (The Local, 2015) They also have a plan to expand the bond-buying program that will automatically increase the flow of money in the economy. The low interest rate should help boost inflation and it could in turn improve Sweden´s economic future. (The Local, 2015)
The government deficit is set to improve from 1,9% to 1% of GDP, but while this is perceived as improving finances, EU warns that the country could fall out of track due to the risk of higher costs linked to rising migration and related integration strategies continues The Local (2015).

2.5 National Culture and Hierarchy
2.5.1 Hofstede’s dimensions
Power Distance
Power distance can be measured to explain how cultures cope with social inequality. It shows how less powerful employees in organizations in a country handle the fact that power is unequally distributed. (Mead & Andrews, 2009)
Sweden has a score of 31 in the Power Distance dimension, which is a relatively low score. This emphasizes that Sweden is not a very hierarchical country. Within Swedish organizations, the workers have equal rights and the employees expects to be consulted by the managers in decision-making. Relationships between managers and employees are relaxed and informal. The communication within an organization is usually participative and direct. (The Hofstede Center, 2015)
Sweden is seen as a country that has a very flat social hierarchy and where there are relatively small class differences. A manual worker can earn just as much as a lower official worker. It is also possible that the manual worker’s children study at the same university as the company’s president’s children as education is provided by the government and is free and available for everyone.
Equality among Swedish citizens and providing them with equal opportunities has long been an important principle in the Swedish society. This is partly due to the fact that the biggest political party in Sweden is the Social Democratic Party, which has for a long time been the dominant political party in Sweden.
The idea of everyone having the same values in Sweden comes from how you address one another in Sweden. When speaking to a single person the Swedes use only one form which is “du” (you). Despite your sex, age or social class the same form is always used. (Sverigeturism, n.d).
Showing respect and taking responsibility are important in the Swedish society. Because of this, Swedes usually discuss different scenarios from everyone’s point of view and make sure that they have come to a mutual understanding before making a decision. (Work in Sweden, 2015).
According to Mole (2011), managers see themselves as coaches rather than the ones giving orders, like in many other cultures. In Sweden both managers and employees may be embarrassed by what in other cultures is seen as clarity, decisiveness or giving instructions. While managers want people to show initiative, the employees only expect suggestions from managers rather than orders. It is assumed that the employee is the expert in their field and thus knows more about it than anyone else, including the manager. (Mole, 2011)
Uncertainty Avoidance
The dimension of uncertainty avoidance measures how people handle, tolerate or avoid uncertainty within organizations. If an organization has a high score of uncertainty avoidance, their members are trying to control the future with security and stability, and if it has a low score, their members like risk-taking and entrepreneurship. (Mead & Andrews, 2009).
The score of uncertainty avoidance in Sweden is only 29, which means that people within organizations do not prefer to avoid uncertainty. They have a relaxed attitude where deviation from norms are accepted. A low score of uncertainty avoidance is also characterized by organizations with as few rules as possible and where schedules are flexible. These affect Sweden’s way of handling innovation, which is not seen as threatening or scary. (The Hofstede Center, 2015)
In Sweden it is common for companies to use a system of flexible work hours. This means that the employees may choose their starting and ending times within guidelines specified by the organization. You might need to leave early one day and by compensating for that you work longer the next day. Companies can also let their employees work from home a specific amount of time per week. (Work in Sweden, 2015).
However, Mole (2011) has a slight different view on uncertainty avoidance in Sweden; he claims it also shows in decision making. According to Mole (2011), anything less than unanimity and active consensus in Sweden is seen as unsatisfactory. He claims that, unlike in many other countries, in Sweden decision-making as a skill itself is not appreciated - any decision is not considered good only if it has been made. This is also related to uncertainty avoidance as, before making a decision, people in Sweden want to make sure it is the correct decision. Decisiveness as a character of a person is not especially prized and compromising does not sound negative to the Swedes. These facts make decision making very slow which can be frustrating to people who come from more action-oriented (and thus even less uncertainty avoiding) cultures. On the other hand, slow decision making is compensated with relatively more efficient information. (Mole, 2011).
Individualism vs Collectivism
The dimension of individualism vs. collectivism measures how people within an organization are depending on groups or individuals. In individual societies people have individual identities and they value individual’s decisions. In societies where people are collectivists, people belong to groups and are loyal to them in decision-making. (Mead & Andrews, 2009)
Sweden has a score of 71, which makes the country an individualistic country. This is visible in the ideology of everyone taking care of themselves and their close family and minding their own business. The relationship between employer and employee is always contract-based on mutual advantage in Sweden, which is a common characteristic for individualistic societies. (The Hofstede Center, 2015)
Also Mole (2011) states that the corporate life in Sweden is non-conformist and thus collectivistic, despite the slow and participative corporate culture. He says that Sweden is a collegiate, not collectivist, society, which are terms that should not be confused with each other. By this he means that people share ideas and responsibilities in a friendly way, have a positive contribution and appreciate each other but they necessarily do not agree on subjects. According to Mole (2011) this leads to managers having to dedicate more time to listening, persuasion and reconciling than the ones in other cultures. Due to the individualistic but collegiate culture in Sweden, disagreement can be uncontrollably wide, but they also place more value on reconciliation. Thus negotiation skills become an important characteristic for a Swede to succeed in their organizational position, whether a manager or an employee. A tangible example of collegiality is the ease of people moving to first-name basis with one another regardless of job title, gender, status or age. (Mole, 2011)

Masculinity vs femininity
The dimension of masculinity vs. femininity measures what forces the society is driven by. A masculine society is driven by competition, gender roles are sharply differentiated and achievement and success are important; in these societies, women do women’s job and vice versa. A feminine society is driven by values such as caring for others and quality of life. Men and women have equal rights and cooperation is highly valuated. (Mead & Andrews, 2009)
Sweden has a score of 5 in this dimension, which is a low score and shows that it is a feminine society. This indicates that organizations in Sweden have a strong belief that it is important to keep a balance between personal life and work life (The Hofstede Center, 2015). On a typical day in the office most employees leave before 4pm to pick up their children from daycare and on Friday afternoons the office will be empty even sooner. It is typical among Swedes to leave earlier on a Friday to head off somewhere else for the weekend to spend time with family and friends. It is also common that hourly workers change their shifts so that the shifts are more suitable for their personal time schedules. (Work in Sweden, 2015.)
Decision making involves listening to several people's opinions and managers are supportive their employees. Compromising is very common, and Swedish people are famous for their long census seeking decisions. This is driven by the idea that happy and healthy employees who feel like they are being valued as a person will perform a better job.
In some cultures business relationships precede social relationships and in some the other way around. In Sweden on the other hand, these two are kept separate. Only topics that belong to business are discussed in business meetings - the Swedes will keep their personal privacy. Personal issues should not cloud business judgements. However in some countries this may be perceived as arrogance - people in other countries may have the impression they never get to know their Swedish business partners or customers. (Mole, 2011).
An important part of the day working for a Swedish company is the coffee break which is called “fika”. It is a coffee break for when you can meet and chat with your colleagues over a cup of coffee and something sweet such as a cinnamon bun, pastry or a piece of cake. The fika is usually held in a room at the workplace that is only meant for the employees. Taking a break from your work can be rewarding. According to Viveka Adelsward, “studies have shown that people who take a break from their work do not do less. It’s actually the opposite.” A fika usually lasts around 15 minutes two times per work day. (The local, 2015a.)

Long term vs. short term
The dimension of Long Term vs. Short Term handles the links between the past and the future. If a country gets a low score in this dimension, its people value traditions, uses the past as a model for the future and look at changes with suspicion. Countries that scores high in this dimension encourage changes and efforts in modern education while planning for the future. (Mead & Andrews, 2009)
Sweden got the score of 53, which says that Sweden is in the middle, being both past- and future-oriented. This shows that Sweden does not have clear characteristics in this dimension, being both innovative and future oriented at the same time as they learn from the past and value traditions. (The Hofstede Center, 2015)
Related to this, Mole (2011) says that organizational life is deeply systematic in Sweden. This implicates that he believes the business view in Sweden is more long- than short-term oriented. Structures and procedures are designed to minimize the need of improvisation in decision making which would force the company to only take short-term view. According to Mole (2011) organizational setting in Sweden is largely based both on target setting (long-term view) and budgetary control (short-term view).
3. Analysis
In the following part we will discuss the impact of the above findings on Human Resources Management practices.
3.1 Government
The government has a huge impact on the political atmosphere in the country and can influence the economy. By proposing specific laws the government choses the direction of change. However the current minority government faces a difficult situation. The bigger opposition makes it difficult to pass controversial laws. Furthermore the alternating in political ideas and leading parties over the last decades shows a certain inconsistency among the Swedish citizens about the right path the country should follow. The sense of democracy is independent of that still deeply rooted in the nation resulting in an expectation of being able to voice problems and needs freely. In order to maintain productivity and motivation, Swedish companies need to focus on a strong employee relationship and align their course of action with their employee’s minds.
Another point, which is already mentioned above in the masculinity vs femininity dimension of the Hofstede analysis, is that Swedish citizens tend to appreciate a good work life balance. That combined with the solid democratic values stated in the constitution and the idea of social equality results in a strong tendency to pass laws which protect employees. (http://www.laweurope-international.com/articles_pdf/Sweden/Cessation_employment_Sweden.pdf). Human resource managers need to keep that in mind and develop their policies accordingly. Laying people off is often a matter of months making it especially important to find the right people for the right job that fit into the company’s culture.
Furthermore it is important to note that Sweden has a political party that is solely dedicated to the protection of the environment (the ‘Green Party’, see section 2.1). This demonstrates clearly how important this issue is to Swedish people and how strongly they value environmental efforts. Therefore companies should be mindful in Recruiting to display their strengths in this regard in order to be an attractive employer for Swedes.
3.2 Political Economic System
The political economic system has certain implications for Human Resource management practices in Sweden. For example, as the unemployment is relatively low and income distribution arguably narrow, according to Maslow’s hierarchy of needs, the first two basic needs (physiological and safety) are fulfilled for the employees in Sweden. This would mean that Human Resource managers could focus on making the jobs more interesting, by for example undertaking the motivational approach to job design to fulfil the subsequent needs in Maslow’s hierarchy. As opposed to countries such as Portugal or France, where with higher unemployment employees might extremely value job security, Human Resource managers in Sweden would need to adopt an alternative approach.
The impact of robust welfare benefits has also direct influence on people practices for companies operating in Sweden. There is an opportunity cost when one considers whether to accept a job offer – one can either spend the time working and earn a salary or sit at home on unemployment benefits. As in Sweden unemployed people receive a lion’s share of their last salary, it might be ‘impracticable’ for them to go and work for an average salary. For Human Resource management it would mean that they would have to focus on paying higher salaries or emphasize incentive pay in the form of financial bonuses or alternative tangible benefits such as fringe benefits. It would be advisable because it would allow to attract better candidates for the job vacancies and also retain current employees who might be considering leaving the job for the welfare benefits. Furthermore, managers in Sweden might choose to pay higher salary to attract younger people especially in the situation of ageing world population, for whom the unemployment rate reached 24.2% which is four times more than the average (Unric.org, n.d.). On top of that, providing extensive training could help to select young people with potential who don’t yet have the necessary skills to enter the job market.
3.3 Employment law and regulations
Due to the extensive regulation for employment contracts for Swedish employers, there are a number of practices that should be employed when doing business in Sweden.
First, employers must put a lot of emphasis on selection of employees due to the restrictions in dismissing non-performing and redundant employees later on. It is advisable to not only assess the candidates in multiple ways before hiring but also observe them closely during the trial period. In some cases, it might be advisable to first agree on a terminated term and only extend to an indefinite contract once performance can be accurately predicted. Second, the limited availability of overtime and the extensive vacation periods demand skill flexibility and strong collaboration within teams. Employees need to be capable to carry out their colleagues’ tasks if necessary.
Third, the power of employees through trade unions and labor courts can cause severe financial and reputational damage to employers. For this reason, companies should preserve healthy relationships with their employees and settle disputes bilaterally rather than through formal institutions whenever possible. This especially applies to termination for personal reasons. Finally, employers in Sweden need to be careful not to encounter issues with employee discrimination, as this is one of Sweden’s focus in employment regulation. Even if certain practices are not intended to discriminate certain employees but they do in fact and are challenged in court, it can lead to a significant financial and reputational loss for a company.
3.4 Economy
In a company that does not adapt a green strategy, an HR manager should keep in mind that the entire Swedish workforce holds an environmentally-conscious strategy and is not only motivated by money.
Due to the projected fall in labor range, one should keep in mind that the age of the workforce is changing. Together with the anticipated growth of businesses and the changing age of the workforce, an HR manager has to make a strategy regarding as to which candidate types they want in this new workforce supply and come out with a way to keep them motivated to stay within our company.
(Arguable it must seeing that it’s such a small country in north of Europe that they have to allow trade to increase the market for its companies to grow).
The Heritage Foundation taught us that the typical Swede enjoys much freedom, not only economical but the government roles are also being reduced. We can compare this with the individual at a company versus the owner of a company. Because the individual enjoys so much economic freedom, he cannot be ruled over with tight reins. He himself will be wanting to be part of the economical decisions of the firm.
The country is run on open and liberal trade, but they are also open people in general (as mentioned in Hofstede’s dimensions for Sweden) which tells us that the people are prepared for most things and will expect the company to be the same. When it comes to the HR manager, we have to know that the people are going to be open and liberal towards us in the sense that they might share their financial situation at home, not just to suppress us for more pay but because they are open. A sensitive soul might give this person a monetary advantage that might offset a new incentive for strategically getting more advantages even though the first person was simply expressing himself openly.
Due to the evenly spread out wealth, we as HR managers do not have to worry about locating an employee in a place where he does not want to live, as he should be equally willing to live anywhere. Although the Swedish people might have preferences in regards to their families, they will not have an economical advantage of living anywhere else.

3.5 National Culture and hierarchy
Since it is important for Swedes to include everyone’s opinion in the decision-making progress and to analyze it from every angle, reaching a final agreement can be much slower. When spending too much time on a decision that should be fairly simple the company may lose valuable time and spend too much effort on focusing on something that may not be that important. It could be beneficial for the HR personnel at a Swedish company to hire a manager that is straight-forward and that knows when too much time has been spent on agreeing on a decision and when it is time to move forward. This could be done for example by asking the candidate situational-based questions during the interview in order to see how the person would react in a certain situation and if being the manager what he would do to solve the problem.
However, this may cause resistance among the employees who are used to participative decision-making practices. These straightforward characteristics would probably be most efficient in combination with understanding the importance of the decision process where the employees can say their opinions, to find a suitable way of doing the decision-making. Therefore, we believe the HR department in a Swedish organization would need a so called change agent (Ulrich, 1997) to work with the manager. They would consider people but have a strategic focus on managing the personnel. Together the change agent and the manager should be able to make decision-making participative but efficient.
Swedes like being punctual and well prepared for meetings. When assessing and interviewing candidates for a position, the HR needs to make sure that the candidates know the importance of being punctual and organized. By missing a deadline or being late in Sweden you might lose your colleagues confidence in you. If an employee doesn’t have these culture-related important skills yet, the HR department should make sure the employee gets appropriate development and training to gain the capabilities.
Since “fika” breaks are a very common thing in Sweden and are held usually at least twice a day, management needs to make sure that these breaks don’t become too regular and that they stay within the time guidelines set up by management. Taking too frequent or too long breaks will also lead to valuable time being lost. Management needs to make sure that clear rules are made for the coffee breaks such as how many you are allowed to take and how long they can be. However they also need to show the employees they are supposed to have coffee breaks as, in Sweden, fika is an important feature of building informal relationships in an organization.
Since it motivates Swedish employees to do a better job when they feel motivated and valued as a person it is important for the management to set up for example a reward system so that employees who have shown to perform excellent at their jobs can be rewarded. The rewards does not have to be monetary, but can also be acknowledgements and appraisal from the manager. When employees feel like their managers or boss appreciate what he or she does that can encourage the employee to work even more effectively and efficiently which can improve the overall company performance.
This also relates to training and development practices which companies should enhance. As all the people in Sweden have similar opportunities in education regardless how wealthy they are, the extent to which job experience is valued is even further emphasized. For example, with enough motivation and hard work, anyone has the same opportunity to get into a university. However only a few people are hired to a specific organization. Experience thus gives people competitive advantage in future job search and this is why people also value development in a job. When people get training and development, they will also feel more tied to the company.
As Sweden is a country of low hierarchy, it should also be considered within organizations working there. Employees from the lower levels of organization to the top executives in a company should be as highly valued and treated as the experts of their own field. It has to be made sure that communication is smooth and any employee from the lower level is able to contact the executives if they need to. Also, speaking to each other by using their first name is a practice that reduces hierarchy and formality in Swedish organizations. 4. Conclusion
We can quickly notice that the culture is a vital part to consider, following the employment rules and regulations when creating our HR department. We therefor recommend to try employ locals to our management team to help maintain the ultimate culture for our employee welfare. The second focus point will be to employ a person preferable with a law degree in Swedish employment.
The problem of the changing workforce is one of the main things to take into consideration in the current situation. The workforce is aging and the unemployment among young people is rising which is an opportunity for HR management to attract younger people. More focus should be put on extensive training since they do not yet have the necessary skills needed that a specific job requires. In addition the young employees would appreciate the training as they would gain a competitive advantage in the field. As education itself is not seen as a competitive advantage since everyone is offered the same opportunities in Sweden extensive training would provide that. One way of doing this is by offering traineeships because it also gives the employer the opportunity to evaluate and assess the candidate during the training period before signing a long term contract since firing an employee in Sweden can be difficult and expensive for the company.
Training and development is a way of enhancing employee motivation. We found that when employees feel motivated they also perform better in their jobs which is why more focus should be put on making jobs more motivating. Also because of the regulation of overtime and vacation period it is necessary for people to know their fellow employees job tasks. This type of job rotation makes the jobs more motivating and solves the problem of working overtime. This would also create more freedom for the employees which is something Swedes value.
Companies should preserve a healthy relationship with their employees by respecting their rights such as letting employees have their ”fika” breaks and respect the balance of personal life and work life. This is very important in particular because of the lack of hierarchical structure in Swedish companies. Due to this it is also very important for the manager to have authority over their employees. For a company to be successful in Sweden, the HR should consider the way of decision making in Sweden. A manager should be able to both speed up a decision making process as well as understand the importance of participative culture.

References
Separate document for nowAxelsson, H. (2015). The Green Economy in Sweden. Drivers, Challanges and Opportunities. Lund University Publications,1-73

Ekonomifakta, (2015). Fakta och Statistik. Retrieved October 13, 2015, from address http://www.ekonomifakta.se/sv/Fakta/

Mead.R, Andrews.T (2009). International Management. John Wiley & Sons Ltd.

Mole, J. (2011). Mind Your Manners: Managing Business Culture in the New Global Europe. Nicholas Brealey Publishing.

Regeringskliet, (September 23, 2014). Så styrs sverige. Retrieved October 23, 2015, from http://www.regeringen.se/sa-styrs-sverige/

Sutherland, A. (2015). How Sweden created a model economy. Retrieved October 12, 2015, from https://sweden.se/business/how-sweden-created-a-model-economy/ Sveriges Riksdag, Ledamöter & Partier. Retrieved October 23, 2015, from http://www.riksdagen.se/sv/ledamoter-partier/
Sveriges Riksdag (June 10, 2014). The Constitution. Retrieved October 23, 2015, from https://www.riksdagen.se/en/How-the-Riksdag-works/Democracy/The-Constitution/

Sveriges Riksdag, (September 30, 2014). The Parties. Retrieved October 23, 2015, from https://www.riksdagen.se/en/How-the-Riksdag-works/The-parties-in-the-Riksdag/

Sverige turism. Absolutely Swedish-Outlining a National Character. Retrieved October 7, 2015, from http://www.sverigeturism.se/smorgasbord/smorgasbord/culture/swedish/

Sweden.se. (September 7, 2015). The Swedish system of government. Retrieved October 23rd, 2015, from https://sweden.se/society/the-swedish-system-of-government/

The Heritage Foundation, (2015). Index of Economic Freedom-Sweden, Retrieved October 12, 2015, from http://www.heritage.org/index/country/sweden#regulatory-efficiency

The Hofstede Center (2015) Sweden. Retrieved October 6, 2015, from http://geert-hofstede.com/sweden.html.

The Local. ´Is Sweden’s “fika” break concept going global?´.The Local June 5, 2015. Retrieved from http://www.thelocal.se/20150609/could-swedens-fika-become-a-global-institution

The Local. 'Why Sweden's Economy Is 'Brightening' In 2015'. The Local May 5, 2015. Retrieved from http://www.thelocal.se/20150505/why-is-swedens-economy-brightening-in-2015

Tradingeconomics, 2015, retrieved October 12, 2015 from http://sv.tradingeconomics.com/sweden/unemployment-rate

Work in Sweden (May 5, 2015) Swedish business culture. Retrieved October 7, 2015, from http://work.sweden.se/living-in-sweden/swedish-business-culture/

Investopedia, (n.d.). Political Economy Definition | Investopedia. [online] Available at: http://www.investopedia.com/terms/p/political-economy.asp [Accessed 13 Oct. 2015].
Lachs Ginsburg, H. and G. Rosenthal, M. (2006). The Ups and Downs of the Swedish Welfare State: General Trends, Benefits and Caregiving, by Marguerite G. Rosenthal and Helen Lachs Ginsburg, New Politics. [online] Newpol.org. Available at: http://newpol.org/content/ups-and-downs-swedish-welfare-state-general-trends-benefits-and-caregiving [Accessed 13 Oct. 2015].
Statista, (2015). Unemployment rate in EU countries 2015 | Statistic. [online] Available at: http://www.statista.com/statistics/268830/unemployment-rate-in-eu-countries/ [Accessed 13 Oct. 2015].
Svenskt Näringsliv, (2012). Sweden's income distribution very equal. [online] Available at: http://www.svensktnaringsliv.se/english/news/swedenas-income-distribution-very-equal_566366.html [Accessed 13 Oct. 2015].
The Economist, (2012). The new model. [online] Available at: http://www.economist.com/node/21564412 [Accessed 13 Oct. 2015].
Unric.org, (n.d.). Sweden: Highest ratio of youth unemployment. [online] Available at: http://www.unric.org/en/youth-unemployment/27411-sweden-highest-ratio-of-youth-unemployment [Accessed 13 Oct. 2015].
Woolsey, M. (2008). Forbes Welcome. [online] Forbes.com. Available at: http://www.forbes.com/2008/06/27/unemployment-benefits-world-forbeslife-cx_mw_0627worldunemployment.html [Accessed 13 Oct. 2015].
Baker & McKenzie, (2015). Sweden. [online] Available at: http://www.bakermckenzie.com/files/Uploads/Documents/Supporting%20Your%20Business/Global%20Markets%20QRGs/Termination,%20Discrimination%20and%20Harassment/qr_sweden_terminationdiscriminationharassmentguide_2009.pdf [Accessed 14 Oct. 2015].

L&E Global Knowledge Center, (2015). Law at a glance Sweden. [online] Available at: http://knowledge.leglobal.org/wp-content/uploads/LEGlobal_Memo_Sweden.pdf [Accessed 14 Oct. 2015]. https://sweden.se/society/the-swedish-system-of-government/ , 14.10.2015
https://www.riksdagen.se/en/How-the-Riksdag-works/Democracy/The-Constitution/