Appreciating cultural laws, norms and nuances is integral to business success in Brazil and Colombia, say Glenn Faass and Daniel Sierra
Legal, economic and political issues will surely affect how business is conducted in a foreign country, but it would be shortsighted to think that these factors alone will determine business success. Laws that were not enacted by parliament, nor laid down by higher court decisions, may determine whether Latin American investments will prosper.
These are not laws concerning rights and duties, but rather bylaws of human conduct, regulations on how to build trust, the hierarchy of values and precedents arising from personal evaluation. No investment analysis can be complete without taking these cultural laws into account.
Appreciating multiculturalism
Both Brazil and Colombia are multicultural. After waves of immigration, these nations have diverse populations and many of their citizens have ethnic identities other than Brazilian or Colombian.
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The Brazilian you meet may be part of that country’s huge Japanese community and the expectations of a Colombian costeño from the Caribbean coast will differ from those in the conservative “Andean” culture in the capital.
Accordingly, sensitivity to individuals’ personal reactions and the human context is the basic rule of conduct. Nonetheless, generalizations can be made, especially since one’s most important relationships will be with businesspeople, professionals and government officials, who collectively form a small and homogeneous subset of the varied Brazilian and Colombian populations.
Moreover, cultural subtleties are evened out by the increasing pace of globalization and so Indians, Brazilians and Colombians have much more in common than you may think.
When in South America …
“Relationship-building first” permeates the entire experience of doing business in Brazil and Colombia. Face-to-face meetings are an extremely important first step, and are usually also necessary to close a deal. Telephone calls and email are great follow-ups, but the deal becomes possible when the two sides look each other in the eye and typically celebrate the closing in person at a lengthy dinner.
This means establishing a personal connection. With some Brazilians and Colombians, business can be done without much small talk, but it is harder to get started and this could cause friction later on.
Brazilians, especially in coastal cities, are often very open and direct, while the Colombians you meet, probably mainly from major mountain cities, will tend to be more formal and diplomatic.
Both Colombians and Brazilians expect you to maintain eye contact; otherwise you may seem to be evasive or disinterested. Smiling within reason is important, since it shows that you are happy to be there, confident and optimistic, but be wary of jokes and humour unless you know someone and their culture well.
Everyone wants to know what others think about their country, so always be ready to share what you like about Brazil, or what your perceptions are of Colombia. Avoid discussions about religion and politics.
In Sao Paulo and Rio de Janeiro, you will almost always be asked about your hotel, and the answer will be taken to show both your economic status and market knowledge.
Both Brazilians and Colombians are conscious of their appearance and how you dress speaks volumes of who you are. Brazilians and coastal Colombians are more casual, as dictated by their warm climates so, for men, an open-necked shirt will often be appropriate even if your host is wearing a jacket and tie. However, in the Colombian capital of Bogota, a businessman or professional should wear a dark suit and tie to a business meeting, preferably with a white shirt and cufflinks.
Handshakes are the rule when men meet or part, but wait for a woman to offer her hand before offering yours. Men should also wait for women to enter or leave a room or a lift before they do.
While Brazilians and Colombians are acutely aware of profit margins, they may also take into account subjective factors such as whether the deal establishes social respect, important contacts or an impressive deal sheet or business history. These factors can be used as bargaining tools.
Language barriers
Spanish is the language of Colombia and most other Latin American countries but because Brazil’s population of 200 million speaks Portuguese, that is the language of the majority of South Americans.
Both the Spanish and Portuguese languages have formal and informal versions of “you” and complicated cultural considerations apply to which version is used in any given situation. This means that hierarchy is present in every conversation and that careful social calculations are involved even in routine Latin American interactions.
If you try to speak Spanish or Portuguese, you will not be expected to know which form to use, but will need to show a general understanding of social hierarchy and norms. For example, in both countries, businesspeople should negotiate with similarly ranked counterparts. To negotiate with lower-ranked employees will be viewed as a sign of weakness, and higher-ranked counterparts will simply ignore meeting requests.
Consultants and books can provide further information on the many subtleties of cross-border business interaction. Businesspeople may also find it worthwhile to engage legal counsel who have represented Indian companies investing in Brazil and Colombia.
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Glenn Faass is the managing partner in both the Bogota and Rio de Janeiro offices of Macleod Dixon. He can be contacted at Glenn.Faass@macleoddixon.com. Daniel Sierra is a lawyer at the firm in Bogota.
