Abstract
Many of the US companies are trying to enter international markets, outsource the manufacturing processes, and become international. Such activity needs certain knowledge from the company’s managers and all those colleagues that will participate in communications with the foreign partners. Spain has a very rich history and culture and therefore there are many aspects that US business people should learn before starting to work with Spanish partners, suppliers or customers. The economic situation, business etiquette and traditions in Spain are different from the US ones. This is mostly caused by the relaxed rhyme of life in this country and its special approach to hierarchy and focus on the relationships and trust rather than on business itself.
Keywords: Spain, Spanish culture, Spanish business etiquette
I. General Country Information ------------------------------------------------------------------4
Work and visa and residence permits -----------------------------------------5
Political system of Spain--------------------------------------------------------5
II. Economic Background --------------------------------------------------------------------------6
Labor Legislation ----------------------------------------------------------------9
Hiring personnel ----------------------------------------------------------------10
Tourism in Spain ----------------------------------------------------------------10
III. Trends in the Labor Market (Tourism Industry) --------------------------------------------10
IV. Foreign Direct Investment to Spain ----------------------------------------------------------11
V. Culture and Business Etiquette of Spain ----------------------------------------------------12
Cultural Dimensions of Hofstede ------------------------------------------------------------12
Languages -----------------------------------------------------------------------14
Business Culture ----------------------------------------------------------------14
Business Dress Guidelines ----------------------------------------------------15
Topics for Conversation -------------------------------------------------------16
Addressing Spanish people with respect ------------------------------------16
Selecting and Giving a Suitable Business Gift -----------------------------17
Business Meetings in Spain ---------------------------------------------------20
Appearance and Behaviors ----------------------------------------------------20
VI. Cultural Values of Spain ------------------------------------------------------------------------21
VII. Conclusions ---------------------------------------------------------------------------------------23
VIII. References ----------------------------------------------------------------------------------------26
In view of the recent economic changes, as well as the ongoing globalization process it has become extremely important for any organization to be able to cooperate with the international partners efficiently in order to expand their businesses, enter new markets, get access to the outsourcing options and reduce costs of production. Therefore, many companies in the U.S. as well, as in the other countries worldwide, are trying to cross borders and get international. At the first glance it seems to be rather easy; however, such activity requires a lot of effort. One of the main obstacles in communication with the other countries that business persons need to overcome is cultural barrier. Therefore it is very important to identify the main aspects of Spanish culture and business etiquette and compare them with the US business customs as well as to offer recommendations to the US businesses how to conduct business in Spain effectively.
General Country Information
The territory of Spain occupies 504,782 square kilometers (‘Doing Business in Spain’, 2014) that includes the Balearic Islands, the Canary Islands and Melilla and Ceuta. Spain has a coastline of around 8000 km. The territory of Spain is divided into 17 autonomous communities that fulfill the conferred to them powers by the Constitution and that are enumerated in the Statute of Autonomy. The communities are autonomous financially, but they are also getting general assignments of budget from the government, therefore Spain is one of the world’s most decentralized states. By its economic structure, the economy of Spain is significantly oriented to the sector of services. Now the sector of services represents 72% of the activity in business while industry possesses 14%, with the agricultural and construction weighing just 9% and 4%.
In terms of macroeconomics, despite the complicated environment that takes place at the moment, Spain, as most Western states, still occupies an important place on the global level. According to the 2011 official data, Spain is the 12th economy of the world for its property investment business, the 7th world’s largest FDI (foreign direct investment) recipient, the 10th foreign direct investments issuer and the 7th commercial services’ exporter.
Companies that have subsidiaries in Spain can access markets in the region of EMEA and the markets of Latin America, taking into account the strong presence and the prestige of Spanish firms in these regions. All of these factors’ combination makes the market of Spain one of the most attractive and interesting for investors from different countries of the world (‘Doing Business in Spain’, 2014).
Work and visa and residence permits
The rules and laws related to foreigners’ residence and work are as follows: the Organic Law 8 / 2000 (December 22nd), Organic Law 4/2000 (January 11th) on the freedoms and rights of foreigners in Spain and social integration of them, and amendments, Reform of the Organic Law 4/2000 and the Organic Law 14/2003 (November 20th).
The country has also incorporated the Blue EU Card into its regulations (managed by Directive 2009/50 of DOUE (2009, June 18th). It is possible to receive a long-term residence permit for the periods of continuous and prior residence in other Member States, as the blue card’s owner (‘Doing Business in Spain’, 2014).
Political system of Spain
Spain is a parliamentary monarchy. A constitutional Head of State is the monarch, and he does not play any executive role. The government is ruled by the President elected by the National Assembly (Doing Business in Spain, 2014).
The Spain is a monarchy, where King Juan Carlos is currently the Head of State. The duties of the King are assigned by the Constitution and the King’s role is mostly official and formal. He moderates the state’s actions and the effective country institutions’ functioning and also he is the state’s representative in the international relations area.
The legislative body of Spain consists of two houses: the Senate (Senado) and the (Lower) House of Representatives (Congreso de los Diputados). The Government is formed of the Ministers and The Prime Minister (Presidente del Gobierno). The Government possesses law making and executive power and is in charge of external and internal affairs, state and administration defense (military and civil).
There are 17 autonomous regions in the country: Aragón, Andalusia, Balearic Islands, Asturias, Cantabria, Canary Islands, Castile-LaMancha, Castile and León, Catalonia, Extremadura, Galicia, Community of Madrid, La Rioja, Basque Country, Region of Murcia, Navarra, Community of Valencia and two autonomous cities – Meillla and Ceuta. The above-mentioned autonomous communities have different powers, however, each possesses its own government, parliament and administrative apparatus (‘Doing business in Spain’, 2014).
Economic Background
Spain economic progress in 1939, started at the end of the Spanish Civil War and the because of this the economy of the country was devastated. Rapid economic development of Spain became popular under the name of ‘Spanish Miracle’. Nowadays agriculture, industry and tourism play the most important role in the economy of the country.
In 1986 Spain and Portugal became members of the European Union. These two countries’ accession brought the membership of EU to 12 countries. Spain was in 1999 among the first 11 states to adopt the Euro currency, and started using Euro coins and notes in 2002. Even though Spain was usually described as a success story of Europe, it appeared to be unstable because a large part of its increase was due to a housing bubble. The bubble of real estate was provoked by a low interest rates’ combination, rising domestic incomes, financial deregulation and high foreign investors’ demand, and falling competitiveness of Spain. Moreover, a lot of new created jobs were limited to low-productivity, low-wage economy’s parts, like domestic and construction services; at the same time other economic sectors that are more lucrative continued to be sluggish. Consequently, the housing bubble’s burst and the world financial crisis lead the economy of Spain into a significant downturn. Banking sector of Spain got destabilized due to the real estate bubble’s massive investments, governments in the Euro area decided to provide funds to Spain in June 2012 in order to recapitalize banks of Spain. Regions of Spain are also in a complicated financial situation. In 2012, the regions of Murcia, Valencia and Catalonia, the Spanish economy’s economic backbone, applied to the central government for rescue funds ('An overview of Spain’s economy', 2012).
Spain can face a slow growth prolonged period. It may make it more difficult to overcome its budgetary and financial challenges for the country. With the purpose to reduce its very high unemployment rate and restore growth, Spain has to establish competition-enhancing efforts and labor market reforms, and also the reforms in banking sector ('An overview of Spain’s economy', 2012).
The economy of Spain has returned to continuous increase after a long recession. This significant change reflects serious reforms to improve the functioning of the banking sector, the actions of European Central Bank, the public finance sustainability’s improvement, with a somewhat slower fiscal consolidation pace now, and reforms in order to enhance labor and product markets. The most important challenge for Spanish economy is to extend these achievements and to improve growth and decrease unemployment through competitiveness and sustained productivity gains and to reduce external debt. It will orderly require public and private sector debt’s reduction, labor market institutions’ improvements and regulations to decrease the high rate of unemployment (that is a key inequality driver itself), and the business sector environment reforms to enhance the growth and entry of firms ('OECD Economic Surveys: Spain', 2014).
After a long recession initially provoked by significant imbalances that the economy of Spain had before the world financial crisis during the boom, and subsequently by sovereign and banking debt crises, at the end of 2013economic growth appeared to be positive; during this time, the unemployment started to decrease and high exports reduced the current structural accounts. Decisive actions of government have improved the banking sector substantially. The Spanish government introduced a large reforms’ range in order to push labor market’s improvement, fiscal framework’s enhancement, housing issues and long-standing education tackling, and business environment’s improving. Such government’s reforms and stronger euro area countries’ commitment to the common currency solidifying, have caused a significant fall of sovereign bond spread ('OECD Economic Surveys: Spain', 2014).
Nevertheless, the economy of Spain remains rather weak and the main challenge of economic policy in the coming years is to work on the sustained and strong growth of employment and productivity. The crisis has caused a high private and public indebtedness’s legacy and also very high rates of unemployment in the OECD and significant poverty and inequality. In order to raise living standards and solidify the recovery, more efforts are necessary to boost growth and competitiveness and to ensure that the recovery’s fruits are useful for all. It is extremely important to consider the cycle of economy while sequencing the reforms ('OECD Economic Surveys: Spain', 2014).
The European Commission made positive changes into the Spanish economy’s growth forecasts. According to the Quarterly National Accounts (QNA) issued by the INE advance estimate, the Spanish GDP, with seasonally and calendar adjusted data and in volume, recorded a 0.9% grow that the beginning of 2015 (first quarter), the rate of growth two tenths higher compared to the previous quarter’s one. ('OECD Economic Surveys: Spain', 2014)
Such forecasts are based on a better than expected employment behavior and on an access to credit and improvement of confidence, in a low price’s and interest rates context. Also, the constant process of deleveraging by companies and households is also very important and, together with easier financing access, provides a significant context improvement for economic activity ('Spanish Economy Report, 2015).
Spain is ranked number 74 out of the 189 economies ranking of the starting a business ease. The comparator economies’ rankings and the average regional ranking also contained other necessary information for understanding. It talks about how easy it is in Spain to start a business for an entrepreneur.
Labor Legislation
The Workers’ Statute (Royal Legislative Decree 1 d.d. 24 March 1995) is the main law that regulates this area in Spain, it establishes the respective rights of employers and workers, the general conditions and terms of working agreements/contracts, the rules and procedures to be followed while personnel’s dismissing, the collective bargaining’s rules, and etc.
Also, specific rules and regulations are applicable to various industries and some groups of workers and groups of special labor-relations. Other important labor law sources are collective wage agreements that can be bargained at nationwide industry level or individual company level, and contracts of employment that set out the labor relationships of the parties
Hiring personnel
Contracts of employment may be signed for an indefinite period of time or for a certain length:
Contracts for a certain term, or temporary employment contracts (signed to meet special circumstances of production, a construction service or project);
Contracts that are designed to encourage organizations to hire workers indefinitely (the government offers special incentives);
Part-time agreements (less working hours than the stipulated in the collective agreement workday);
Training contracts (in-company training sessions) ('Doing business in Spain', 2014).
Tourism in Spain
Although there is an economic crisis, it mostly influences local spending capacity, and tourism is still substantially contributing to the economy of Spain. The sector traditionally accounted for approximately over 10% of country’s GDP and employed over 1,000 000 of people (11% of the Spanish workforce), however, these numbers have declined sharply during the last several years, mainly after 2008.
Main tourism directions in Spain include: coastal tourism, winter sports, cruising/sailing/yachting, spirituals tourism, cultural tourism, wellness and health tourism, cities tours and historical tours, congress/convention and business travel ('Tourism industry sub-sectors: Country Report: Spain', 2014).
Trends in the Labor Market (Tourism Industry)
The economic crisis has been affecting tourism sector employment harshly that lost over 250,000 jobs during the last several years. The economic crisis makes negatively influence upon the domestic tourism. Foreign tourists flow instead represents a significant income source for the whole Spain.
Foreign Direct Investment to Spain
Significant amount of foreign investment has been a characteristic of the Spanish economic situation for a long period of time. This has been pushed forward by the economy’s growth, the domestic market and progressive attitude of Spain towards the development, particularly, to its European Union’s membership and its intent to meet the conditions of Maastricht for joining the European single currency from the outset ('Doing Business in Spain', 2014). Direct investments are sometimes made in the form of branch or subsidiary a foreign company in Spain with assigned specific assets to it. The existing Spanish company’s acquisition or participation is a typical investment form. Investment may include assets, cash or technical assistance.
The securities’ purchase through the stock exchanges in Spain is typical as a financial investment where participation in a company’s management or control of it is not necessary. It is a less permanent foreign investment form. Foreign investment in coastal areas residential property continues to be the economy’s growth’s area, providing a push to building and industries connected with it. Such investment type has the advantage of base creating for future retirement and vacation spending ('Doing Business in Spain', 2014).
Unemployment is also an constant problem of Spanish economy. Since 1994, unemployment decreased annually down to 8.3% (2006), since 1979 it is the lowest rate. However, due to the present economic conditions, unemployment has grown to 26.03% (2013) ('Doing Business in Spain', 2014).
Culture and Business Etiquette of Spain
Culture is define as learned attitudes, behaviors, values, beliefs, and norms of knowledge system that are shared by a people’s group. Culture includes how the group’s members think, how they arrange things to sustain their lives and what they do. Diversity of cultures comes from the each culture’s unique nature. The values, elements, and context of every culture of the world distinguish it from the other cultures ('Building Our Understanding: Culture Insights Communicating with Hispanic/Latinos', 2015).
Cultural Dimensions of Hofstede
The framework that is most broadly used for national cultures categorizing is the one created by Geert Hofstede (a Dutch management scholar and social psychologist). The information used to identify cultural value dimensions was provided by surveys where IBM employee took part, held between 1967 and 1973 and included over 50 cultures. Responses analysis from more than 116,000 employees of IBM to questions regarding their work settings and job revealed typical cultural differences that can be organized into: individualism and collectivism, power distance, masculinity/femininity and uncertainty avoidance.
Language is one more visible cultural aspect, which provides a window into deeper thought processes and beliefs according to some scholars. Some researchers offered the following description of the deeper impact of the language: “Language includes patterns of knowing, seeing, acting and talking patterns which show the easier trails for perception and thought and action”. Scholars, who worked later, especially in the 1960s, did not follow this view much as they made accent on universal languages patterns; however, recently linguistics research has shown its importance again (Ghemawat & Reiche, 2011).
It is especially interesting about the linguistic distance use as a cultural differences’ objective indicator that it has proved to determine cultural distinctions. There are 2 examples that show differences between Spanish and English languages. It is possible consider Hofstede’s individualism/collectivism dimension here. English speaking people and cultures are more individualistic (on this dimension they have a score of 84) while cultures where Spanish is spoken are considered to be collectivistic (22). From the point of view of linguistics, Spanish requirement (not English) to specify a gender of a person while speaking about his or her profession is considered as typical for collectivist pattern. Hofstede’s power distance dimension is also related to Spanish and English linguistic differences. In Spanish, we see the informal (tu) and formal (usted) forms of “you” in English. Such emphasis on hierarchy can be also seen in the patterns of speech such as a habit to introduce an engineer in Mexico or a lawyer while they both would be called “mister” in English speaking country (Ghemawat & Reiche, 2011).
Business is one of the best spheres for observing a culture of any country. Cultures usually reveal themselves in such situations, as their resources are most needed here. Marriage, obligations, family and also stressful experiences as the death and illness of a loved one show much of what is fundamental and distinctive in a culture. With business it is the same, as economic survival is important in any country. Practices of business are determined by cultural attitudes to power, work, wealth, communication and trust. Communication is a basis for business, as it is a collaborative activity. Services and goods are exchanged and created through the many persons’ close coordination. It can be inside a single village, and at the same time across worldwide distances. This kind of coordination needs a lot of communication. Production schedules and complicated product specifications should be understood by all the parties involved, and different deals between the partners in trading should be negotiated. Styles of communication significantly vary from country to country, and it causes the existence of the business styles’ variety (Hooker, 2008).
Languages
In Spain the official language is Spanish, but there are also other official languages that are spoken in different regions of the country: Basque, Catalan, Galician and Valencian. Until the age of 16 education is compulsory and the main foreign language learned at school is English.
More than 350 million people worldwide speak Spanish language. Spanish is the state official language of many countries: Bolivia, Argentina, Colombia, Chile, Cuba, Costa Rica, Ecuador, Dominican Republic, Equatorial Guinea, El Salvador, Guatemala, Mexico, Honduras, Panama, Nicaragua, Peru, Paraguay, Spain, Puerto Rico, Venezuela and Uruguay. People also speak Spanish in many other countries of the world where it is not the official language, for example, the Philippines and the United States of America. Spanish is among the world’s most widely spoken languages ('Spanish Language and Culture', 2006).
Business Culture
Spanish standard office hours are different depending on the region and on the business types, but normally working starts at 9am and can finish at 7-8pm. A lunch break is usually two hour.
There are 14 public holidays annually in Spain and such days are different between the regions. These public holidays may often fall during the week and therefore business is often closed for extra days so that it makes a longer weekend. In many Spanish areas, most people are on holidays and thus not working in Spain during August and many offices are closed for this reason.
People in Spain are usually very friendly and outgoing at business meetings. Built on a face to face environment relationships remain very important and a lot of business persons make use of the extra lunch time to do business.
Business meetings are often more focused not on business itself but rather on the relationship and agendas and starting times are often left without a priority. Some business persons can speak at the same time and interruptions are quite typical ('Doing business in Spain', 2014). Although the siesta is still an integral part of the way of life in Spain, nowadays it is not the case that all offices and businesses are closed in the afternoon. Since the death of Franco (1975), working hours in Spain have changed to European standards.'
Business Dress Guidelines
Business persons in Spain are very dress-conscious and accept the appearance of their partners as an indication of their social standing and professional achievement. It is necessary to wear conservative, top-quality clothes in preferably subdued colors. Men are expected to wear dark linen or woolen suits white cotton shirts and silk ties and women have to wear business dresses of high-quality materials or well-cut suits. Brand names and designer clothes are usually approved by the local business persons (Dray, 2008).
The female travelling on business should try to dress with the exceptional modesty, as women in Spain tend to avoid attention to their sexuality and try to make accent on their femininity due to their hair and immaculate clothes.
Of course, the weather is a significant factor in choosing the dress. As sometimes the temperature in Spain in the shade approaches 40ºC in summer, it is getting very acceptable to be dressed in lightweight suits and, to throw the jacket over the shoulder and loosen the tie outside the office (Dray, 2008).
When the one has free time, it should be taken into account that shorts are not acceptable in public place in Spain and that the dress code for church entering is strict and that luxury restaurants usually expect minimum of smart casual dress even in the second part of summer. Smart casual does not allow cheap jeans, un-ironed T-shirts and trainers/sneakers.
Topics for Conversation
People in Spain are gregarious and vivacious who can also be individualistic and proud. Their exaggerated friendliness can be a surprise for a reserved foreigner as superficial or perfunctory rather than sincerely spontaneous. Their friendly approach does not contain indifference inside it, however, provides a possibility to the Spanish person to observe social behavior and simultaneously affording a proper opportunity and time to get to know the business partner better (Dray, 2008).
Spaniards keep a dignified, serious image in a formal setting or public but in private they are relaxing quickly. The ability to be entertaining and amusing is highly approved and humor plays a significant role even in business negotiations. Personal banter is rather acceptable in Spain but not sarcasm that can offend the honor sense of Spanish people and thus undermine the trust and respect that the partner should try to establish.
It is quite difficult to cause an offence without insulting directly and the foreign partner should not confuse an innate animation of Spanish people with anger or any other emotion, however, the one should avoid making disrespectful expressions about practices or traditions in Spain that the foreigner can find alien. The one should not allude to regional or national stereotypes (Dray, 2008).
Addressing Spanish people with respect
It is very important to address business people in Spain correctly. As there is a developed hierarchy in the country, an incorrect addressing may result into bad relationships and, thus, poor success in business. As a main rule, first names are usually reserved for close friends, family and children. In Spain it is correct to use the courtesy titles, such as Señora [Mrs], Señor [Mr], Señorita [Miss], after which the one should use the person’s surname. Also it is recommended to address professional business persons by the appropriate titles, for example, Professor, and use the surname after it; academic and/or professional titles, but they are not used normally in case of addressing executives in Spain (Dray, 2008).
The old titles of courtesy (doña and don) used before a first name to express respect to an senior or older woman or man when speaking to or about them are rather non typical in modern environment; but still they can be used in contracts and official documents before full names or together with Sra, Sr or Srta in business correspondence. Using such titles while speaking nowadays may appear to be mocking or sarcastic.
Selecting and Giving a Suitable Business Gift
In Spain it is a tradition of many companies for Christmas to give their employees a basket or hamper of drinks and food, friends and families exchange presents on the Epiphany Feast (January 6). However, in typical business culture of Spain, gifts are typically presented only at the successful negotiations’ conclusion. In case the one have received a gift, he or she should immediately open it in the giver’s presence (Dray, 2008).
In case the foreigner is going to make any gift, he or she should ensure that this present is an item of high-quality and that it is wrapped in a smart manner; there should be an advertisement only of the partner’s company name, if it is a tasteful desk accessory or a fine pen. The one should not buy too extravagant gift as such a generosity can be understand as a bribe.
Spain’s visitors should be aware of the fact that there are two different business cultures in this country. First, there are the newer and bigger, or reformed, economic industries that have received substantial foreign investment amounts and use international, modern techniques of management. Second, there are family businesses and the traditional SMEs that make the majority of the GDP of Spain. The prominent banks that still form the elite of business are placed in the middle (Dray, 2008).
Decision-making in Spain may be tedious and slow: different levels of management will be consulted and all the proposal’s aspects will be studied and analyzed in detail. However, at the end, only the highest authoritative individual takes the final decision. The foreign business partner should, thus, be aware that he or she will be dealing often with intermediaries, but that a good relationship’s maintaining with such intermediaries is important to the further success.
Spanish people usually seek the approval and support in their families, colleagues and friends before taking their own decisions. It seems that there is a strong belief in Spain that the one is not a society’s part in case he or she is not recognized as a group, neighborhood, business organization or town’s part. Such a strong community sense extends beyond personal ties and family to all mutual obligations, however, excludes northern European more abstract social responsibility conceptions and the common good that assists to explain hostility of Spanish people to the authorities and the state’s whole apparatus. Thus, there is an 'outsider' resistance and country’s visitors are expected to eliminate their status of 'outsider' by fitting into some kind of a group (Dray, 2008).
Generally Spaniards expect the business persons with whom they are speaking to have the authority for making the decision. It is recommended not to expect negotiating on business at the any meeting’s outset. Institutions are less important than people and, despite the individualism of Spanish, they accept the loyalty primacy in their relations. The business meeting’s concept is rather alien in the Spanish culture where the systematic procedures are less important than leadership.
During the first meeting, Spanish people usually prefer to get acquainted with their partners before talking about business, so the foreign partners can expect and be ready to answer various questions about their family life and background. It is possible that a business meeting will be held in strict accordance with a detailed agenda or turn out to be a clear plan of actions; negotiations are usually rather open, where one side is leading distinctly, but contracts can be quite flexible and the foreign partners have to ensure that obligations are put into effect (Dray, 2008).
The one has to endeavor to be personal and warm during business meetings whilst retaining the courtesy, dignity and diplomacy. The participants from the Spanish side can initially seem to be indirect and restrained; however, it is normal in case the relationship has not been established yet.
Entertaining for Success in Business
It is rather typical and normal in Spain to discuss business issues during meals. Actually going out (for lunch, coffee, tapas, or dinner) is an integral part of all successful business negotiations. However, it is not the time and place for doing business itself (e.g. financial matters have to be arranged in the office) but for personal relationships establishing based on the mutual community of interest and trust, which is essential to the goal’s achieving (Dray, 2008).
It is recommended not to talk about business during the meal before the Spanish partners initiates it and, anyway, protocol tells that the one should wait until coffee is served at the meal’s end to bring up the business’s subject. Lingering over coffee and drinks and late night dining until the early hours may, thus, be a good way of socializing for the people with sufficient stamina (or a desire to adapt to the Spanish life’s rhythm) (Dray, 2008).
Business Meetings in Spain
In Spain a significant part of successful business meeting’s conducting is to gain the potential partner, co-worker or employer’s trust. It means that the foreigner has to spend a large amount of time with the Spanish business partner before they will discuss any deals. When this is done, it is time to speak about transaction’s moving forward.
Although this form of courtship in business may take more nurturing and time than in other world’s parts, the foreigner may expect to be rewarded for such efforts. Many people in the United States prefer to get to business straight and don’t allow time to discuss any personal matters. When doing business in Spain this situation is the exact opposite as well as in some other European countries.
Business partners in Spain will have a stronger allegiance to their foreign business partner as a person then a traditional business relationship by means of creating a more meaningful relationship. It can become very useful when the one needs to grow his or her network, both personal and professional, in Spain.
Appearance and Behaviors
Regardless of the type, Spanish business persons will always tend to arrange in-person meetings if it is possible, as opposed to teleconferences or phone.
It is recommended not to talk about one’s previous accomplishments and success while speaking with Spanish business persons. It is better to remain modest as due to this the one will gain more respect from his or her partners in Spain.
It is generally not recommended in most countries to ‘go over someone's head’, and in Spain it is applied too. Seniority and hierarchy in the organization should determine with whom the foreigner conducts meetings, and especially important when it is time for business negotiations. It is recommended to do business with employees of the Spanish company who are on the same professional level as a foreign partner ('Business Culture in Spain', n.d.).
Cultural Values of Spain
In the social and business circles, Spanish people highly value the individualism. Spanish culture is focused on the self and one’s family importance. The person shoulders his/her own decisions’ responsibility but for the interests of the group and family are taken onto account.
Such Spanish individualism also reflects on a strong personal pride sense. As many other cultures, Spaniards are concerned how good they look in the others’ eyes and try to not to look foolish. It means that Spanish people may be sensitive. It is recommended to treat them in a way not to offend them. Spaniards may, however, often give advice to other people and the one should not consider this to be offensive. Information can also be considered by them a valuable commodity and they may be resistant or refuse to share it ('Working with the Spanish', 2015).
The family is the social structure’s basis and includes both the extended and immediate family. However, now it is less typical for members of the same family to work in a family business together. Many Spanish people suppose that personal relationships and qualities are extremely important. Image and style are considered to be respectability and social status’ signs.
Managers in Spain prefer to provide precise instructions and receive precise answers to their questions with the purpose to reduce conflict. It is also connected with their rather cautious approach to the new ideas.
The business persons in Spain usually prefer to arrange business with those they trust and know well. It is recommended that the foreign partner spends enough time letting his or her business partner from Spain get to know him well. When the one has developed a relationship, it will remain in force even if he changes companies or departments, since the Spanish colleague’s allegiance will be to the person rather than to the organization that he or she represents. Personal relationships and trust is the business cornerstone ('Working with the Spanish', 2015).
Spain, as any other country of the world, has its traditions of conducting business, customs and practices. The most important of them are described below.
Appointments in business have to be confirmed beforehand by email and arranged in advance. Punctuality is required for the foreign visitors; but, the one can realize that the Spanish colleagues come to the meeting around 30 minutes late.
Rank and hierarchy are very important in Spain. The one should contact with Spanish employees of similar rank as his own. Decisions are taken at the company’s top. The foreigner can never meet the business person form the company who takes the decision ultimately ('Working with the Spanish', 2015).
Spaniards are more interested in personal relationships than in high-tech presentations. Before starting a first meeting with Spanish business people, there should be a great deal of short talk. Local people prefer to get to know the personality of the foreigner before they will do business with them. The foreigners can be asked questions about their education, background and interests. Discussions on business can begin after this all is completed.
The meetings’ purpose in Spain has traditionally been considered to be a communicating instructions and not taking decisions, as local people prefer to be independent and take decisions themselves. This is starting to change but the members still take a personal interest in presenting their ideas and getting them accepted by others. Agendas are often used but usually not strictly followed. It is not considered to be rude in Spain to interrupt the person while speaking. Thus, the foreigner can expect to be interrupted rather often during the discussion or conversation. Spanish people consider eye contact to be very important ('Working with the Spanish', 2015).
In Spain participants of a meeting, however, will respect the most senior person’s viewpoint, the proposal of whom is most probably supported by everybody, and this way is the easiest to consensus’s achievement. In Spain it is important to reach unanimity decision rather than a majority one, with the purpose to avoid criticism later.
It is quite acceptable to discuss politics in Spain; however, it is best not to make comparisons of politics between Spain and the other country. Suitably conversation topics include different kinds of sports, especially football. Spanish colleagues will appreciate if their guests show an interest in culture and history of Spain ('Working with the Spanish', 2015).
It is recommended to avoid speaking about religion or asking a lot of questions about job, family and interests until the foreigner is well acquainted. It is not a good idea to make negative comments regarding bullfighting as it is a kind of art in Spain and is not expected to be judged by guests from other countries.
Foreigners should remain patient in all their dealings with the partners from Spain. They are characterized for their relaxed and friendly approach to business negotiations and sometimes bureaucracy in Spain may seem to be frustrating ('Working with the Spanish', 2015).
Conclusions
As stated above, Spanish culture is rich and unique. Its aspects and peculiarities are numerous and it will take time to study it by the business person that is going to do business in Spain. The influence of Spain and its culture is widely spread throughout the world. There are many countries that use Spanish as their state official language and even more countries that are Spanish speaking but without having it as an official one. Language is one of the most significant backgrounds of the culture, thus, Spanish culture made influence upon every place of the world where people speak Spanish.
According the above-described researches, Spain is a very attractive country for Foreign Direct Investments (FDI) and doing business in general. It has either large domestic market or perspectives to enter the market of Latin America through establishing a subsidiary in Spain.
Although economic conditions are not very good at the moment, still there are several industries that are very active and high performing in Spain. For example, one of the largest business sectors in Spain is tourism. The country is rich in natural treasures and offers good accommodation and service and therefore attracts large flows of international tourists every year. This industry can suggest options for FDI from other countries, including the U.S., for example, building hotels, restaurants, and etc. One more-high performing industry in Spain is real estate. Due to similar reasons as for the tourism, many foreigners are willing to buy property in this country for various personal and business purposes. Thus, construction and related to it industries are very important for the country’s economy.
There are many things that the US business persons should be aware of before negotiating with their colleagues, partners or customers from Spain. They should understand that the Spanish rhyme of life is significantly slower than in the U.S. Spanish people may arrive late for meetings, interrupt the speakers, ask many personal questions, but at the same time they do not expect the same behavior from the foreigners’ side. Spanish people appreciate when the guest is interested in the culture, politics and traditions of their country.
Business meetings are quite different from those typical for the U.S. Spaniards usually prefer to hold meetings in the restaurants and they begin discussing about business only at the end of the meeting, unlike the US people, who start negotiating on business right at the beginning.
While the US is considered to be individualistic culture, in Spain it is collectivistic. Strict hierarchy is typical for Spanish organizations and it is practically not allowed to speak with the person of the other status. The decisions are usually taken by the top managers who rarely communicate with the foreign partners in the large organizations.
It is necessary to mention that the requirements to the dresses in Spain are rather high, that may be a surprise for the visitors of this country. Public places require at least casual style and in the offices it is required to wear high quality or brand dresses for both women and men colleagues.
Although the rhyme is mostly slow and relaxing in Spain, managers prefer to give precise instructions in order to ovoid misunderstanding and further problems. As it was mentioned above, Spanish business people are concentrated more on the personal relations and trust between the parties than on the business issues itself. Good relationships with a foreign person may last for years, even though he or she can change companies or departments. It is a very significant feature of Spanish business culture that should be understood by the US people willing to work with Spanish partners.
One more typical characteristic of cooperating with Spanish business people is that there are 2 types of enterprises in this country from the cultural point of view: the first one includes large organizations in a big cities with high technologies and managers of the international level, and the second one includes small traditional family businesses with warm family atmosphere and traditional approach. There is a significant difference between these 2 types of organizations and the US business people should understand what kind of enterprise they deal with.
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Appendix A
GDP Dynamics in Spain (current US$)
Source: World Bank
