Wednesday, 3 October 2007

Doing Business in Central and South Latin America

Nowadays, international business executives recognise the complexities of the main factors influencing the business entry process in Central and South American countries. The region as a whole bears all the characteristics of geopolitical, economic, social, religious and ethnic legacy resulting from Hispanic-American processes. From the Spanish conquest, the wars of independence, the aftermath of independence, the search for political stability, the acute disparities of wealth, the periodic armed revolts by dissidents, the coup d'Ðtat, military dictatorships, all have been a regular feature in Central and South America. Also the relationships with the United States and Europe, have contributed to shaping the "psyche" and culture of the "national" personality in each country.

Clearly it would difficult to suggest that there is a standard "Latin American Business Cultural Model". Latin American business executives tend to be extrovert, impatient, talkative, and inquisitive. But of course, in Central America, Venezuela, Colombia, Brazil and Argentina, they are more extrovert than in Chile, Bolivia or Peru.

When preparing your trip, remember that many countries require a business visa to conduct business transactions. Avoid Christmas and the holiday season as everything slows down. Check the climate conditions particularly in countries such as Peru and Bolivia; altitude, rain, heat, etc. may affect your health. Documents such as letters, promotional literature, and presentation materials should be translated into Spanish. If you receive a reply from a Latin company in English, however, you may begin using English in correspondence.

Prior appointments are always preferred, preferably at least one week in advance, making sure you always check the appointment on the day of the meeting. Punctuality is expected and you must take into account the traffic congestion-especially in most of the Capital cities, such as Mexico City, Sao Paulo, Santiago de Chile, Buenos Aires, Lima, Caracas etc- this can be difficult, and you must plan ahead to ensure you have plenty of time to get to your destination.

Latin Americans, tend to be people oriented, they argue emotionally, and instead of giving strict orders, they prefer to do things by seeking favours. In contrast with the "individualist" Anglo-Saxon culture, the "collective" is above everything, as a result interpersonal skills such as the ability to "fit in" and maintain cordial relations with the group, are often considered more important than professional competence and experience.

It is in this context that the "Family" has a broader "collective" connotation as it embraces blood relations, distant family, friends, or even work colleagues. In fact do not be surprised to see Latin business executives intermixing their work environment with their "social-family life". In this culture, nepotism is easily accepted as common practice; family members and relatives are preferred when recruiting staff. To that extent the individual member must take full responsibility for his or her decisions and how they affect the group or family structure.
In recent times there have been an interesting dual development in the business culture, on the one hand, the older generation continues doing business by often placing a greater emphasis on "trust" and "loyalty" by getting to know you personally, as for them, completing a human transaction is the best way they can invest their time. On the opposite side, the younger generation, especially those educated in the USA and Europe, are chiefly preoccupied with business concerns.

In family-owned businesses, senior family members usually make the final decision. In most other organizations, however, senior management makes decisions. Moreover, individuals with professional experience, who have a special understanding of the implications of the proposal, will often have input into the decision-making process .

Times, like truth are relative concepts. Latins are not very interested in schedules or punctuality - they pretend to observe them if being asked or insisted. This creates conflict and irritation with Anglo-Saxon cultures Why they don't arrive in time? Why they don't work to deadline? Why they don't follow a plan? In response, Latin people think they get more done their way!
The pace of negotiations is slower in Latin America than in Europe, as is customary, some preliminary conversation is considered necessary before each meeting, since it allows the participants to become personally acquainted. The best policy is to wait for your Latin counterparts to initiate any "small talk" and follow their lead in establishing rapport.
Meeting formalities must be followed; the two senior executives should sit facing each other. In general, Latin business executives prefer to be the ones "in control", you should try to avoid monopolising conversations or putting pressure of any kind on your colleagues. Be sensitive to the fact that Latins tend to stand and sit extremely close to others. The best policy is to respect this practice and accept that it is the cultural norm. Moreover, attempting to move away will be perceived only as a cold rejection.

A manager's status is attributed on grounds of family, age, educational and professional qualifications. They tend to have less specialisation than European or USA managers. Latins follow a top-down decision making process, where employees follow a trusting subservience to their superior as task orientation is dictated from above.

Opinions of experienced middle-mangers and technical staff do not always carry the weight that they would do in the UK, but as meritocracy slowly grows, their influence grows too. Latin managers are paternalistic and emotionally involved. Managers or heads of departments tend to concern themselves with the personal and private problems of their staff.

Business and corporate social life follow "old world" formalities; etiquette, manners and physical presence are measure of breeding and status symbols. It's considered very important to maintain good posture at all times, even in more informal situations. A firm, assured, handshake is the customary greeting on all occasions. During the handshake, state your full name; your Latin counterpart will then reciprocate by doing the same. You will have to speak not only at a closer distance, but also maintain eye contact as an assurance of your genuine interest.
Local business people tend to be very status-conscious and will often be impressed by these displays. First impression is everlasting in the mind of a Latin. In general the Latin executives are highly conservative and traditional in their dress code. Men wear dark, conservative suits for all formal occasions.

For the Latin, pleasure is before business, and they use entertainment as a way of building a personal relationship with his/her potential business partner. Much leisure time is spent socialising with family, friends and colleagues, mostly at weekends. Business dinners, in particular, are usually purely social occasions, and as such you should refrain from discussing work-related matters unless your Latin contact brings up the subject. Ensure that you write a thank-you note following any social gathering where you were a guest. Thank-you letters can be very helpful in solidifying rapport.

Women, legally enjoy all the same rights as men in most of Central and South American countries. Depending on the degree of economic growth, urbanization, industrialization, education, and expanded opportunities in their respective country, women have better or worse positions in society. Practically the representation of women in the private sector's upper and middle management is growing slowly, but remains fairly small. One can rarely mention a name, which can be easily identified with a women business leader.

Latin women tend to be meticulous dressers who closely follow European fashion. Female visitors are advised to bring conservative, stylish business clothes of the highest quality, including a cocktail dress. Often, women greet each other by quickly touching cheek to cheek and kissing the air.

For middle-class woman who want to combine job and family careers support provided by the extended family and the availability of maids is a pre-requisite. Latin businesswomen are going through the same dilemmas as business women in more other countries - in being mother, lover, wife, professional, and entrepreneur!

When doing business in Latin America, your always must make all the necessary preparations to leave a lasting impression about; your company, your products, yourself, your value systems and your attitude to business. In the final instance Latin American business people are asking themselves; Can I trust this person to do business with? Is our relationship sufficiently solid?
If the answer is YES , and trust has been acknowledge by both parties, then the business flows accordingly, and the chances of securing contracts and agreements are much greater.

© Farnham Castle/ Carlos Gonzalez Carrasco
Carlos Gonzalez Carrasco is a Latin America Business Development Consultant and Adviser to International companies entering into the Latin American market. He is a regular Commentator on Latin America Economic, Financial and Political risk issues for Bloomberg TV Financial Markets and Commodity News. He currently works as Latin American business analyst and consultant for Euromonitor Plc. He has an MBA from University of Westminster Business School and a BA in Business Studies from Chile.

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