An Insight Into Doing Business In Spain
Anyone who flies regularly between England and Spain will be aware of the many business passengers travelling between the two countries. The last decade has seen significant market expansion of Spanish companies into the UK, now numbering more than 400, including some which have become a familiar presence. High street clothing stores Mango, Massimo Dutti and Zara (Inditex), FCC Environment Ltd. (industrial waste contracts for two UK local authorities), aviation company Iberia, banking giant Santander, Ferrovial airport management, O2 (Telefónica) and Scottish Power (Iberdrola) have all established themselves in Britain in recent years. Despite the economic downturn, expansion is continuing and companies are consolidating their positions: Zara has just opened a new (4th!) store on Oxford Street in London with considerable fanfare. The latest news is that a Spanish hotel developer has purchased the emblematic Admiralty Arch in the heart of London and intends to turn it into a luxury hotel.
UK counterparts with a substantial presence in Spain include Aviva, Barclays, BT, KPMG, Lloyds, Vodaphone, Burberry, British Airways, drinks company Diageo, BP and Bupa, in addition to the many small companies which have been set up in the wake of the popularity of Spain as a tourist destination and the boom of second home ownership. As many as 900 UK businesses operate in Spain, according to official reports. Companies have been affected by the recession and the eurozone crisis, but Spain continues to be an important UK business partner, ranking 8th in the UK’s main export markets, whilst the UK is Spain’s fifth largest supplier.
As the world economy has become increasingly globalised, and an ever growing number of businesses have expanded beyond their borders into other countries, particularly in the EEC, it is perhaps tempting to think that business practice has also taken on a universal character, and that the business person will encounter no surprises when he or she visits suppliers or clients abroad.
However cultural attributes evolve slowly, and are often resistant to methods and frameworks brought in from outside. Cultural differences can be more or less pronounced depending on the sector of operations and the degree of previous international contact.
Regional variation and diversity:
Doing business in London can be very different to doing business in Norfolk or in Scotland. Differences between the seventeen Autonomous Regions in Spain are even more marked, ranging from the flamboyant southern region of Andalusia to the more industrial northern Basque Provinces or wealthy Catalonia. Six areas including the Basque, Galician and Catalan Autonomous Regions have their own official languages alongside Spanish, and cultural identity is often a politically sensitive issue. All the regions run their own budgets and development programmes.
English is now widely taught in Spanish schools and younger Spanish business people may well have spent a period of time studying or working abroad. However many older company bosses do not have a good command of English and may rely on younger members of staff for communication. Publicity material and correspondence is not always well translated into the target language. In many cases an interpreter is essential for high level discussions to avoid misunderstandings.
This will depend on the sector. Professional people in Spain dress very smartly; men normally wear dark, well-cut business suits whilst women favour neat tailored outfits and designer clothing. Dress code in industrial and agricultural sectors is more relaxed, but still conservative. Even casual clothing tends to be smart.
Meeting and greeting:
Normal procedure when people have not met before is to shake hands, but in a less formal context it is standard for women to “air kiss” on both cheeks.
A standard joke in business circles revolves around “la puntualidad inglesa” – fabled English punctuality, and a Spanish businessman may stipulate “hora inglesa” if he particularly wants a meeting to start on time. Whilst you cannot assume that events will not run to time, in general, particularly in the south of Spain, there is a more relaxed attitude to timekeeping. Meetings may start late, may extend way beyond schedule, and may be interrupted by other business and by mobile phone calls. Spaniards like to talk around the subject under discussion, feeling their way, rather than dealing briskly with a series of agenda points.
Traditionally the working day in Spain has involved a long lunch break between 2 and 4 or 5pm, followed by work late into the evening. More recently, practices have changed in some sectors. In summer, some companies and offices may work a “jornada intensiva”, starting early and working through to a 3pm finish. Banks and government departments are usually open to the public between about 9am and 2pm. Many businesses close down completely for the standard August holiday. When a public holiday falls on a Thursday or a Tuesday, the intervening day is often taken off as part of a long weekend or “puente”.
The establishment of good personal relations is fundamental in Spanish business culture. Spaniards value personal contact and prefer meeting and talking for developing understandings and reaching agreements.
It is normal for a visiting business associate to be invited to a meal, usually after the more formal deliberations have been successfully concluded, and this can also be a lengthy affair. Not to accept the invitation as part of the process of establishing good commercial relations may be misconstrued. Spanish company representatives would expect the hospitality to be reciprocated on their visits abroad.
It is common practice for small appropriate gifts such as branded merchandise to be exchanged when a successful commercial relationship has been established. Gifts such as food hampers or bottles of wine are often given at Christmas to employees and to favoured clients.
Spanish companies are usually hierarchical in structure. Top executives have high status: the boss, particularly if he is the owner or larger stakeholder in the company, will expect deference and respect. Qualified members of staff also enjoy high status and may be dogmatic about processes and methodology in their area of competence. However, once persuaded of the potential of a new project they will carry it through with enthusiasm.
Assertiveness and decisiveness may come across as autocratic, but this may be just a question of style. It is common during meetings in Spain for opinions to be expressed forcefully, with a lot of hand gestures, and speakers may interrupt each other during lively discussions without this causing offence.
Dealing with the administration in Spain can be complex, time-consuming and frustrating. It is best to seek local advice and help from others with experience of the system.
Written by: Sarah Wright