Portugal: About Portugal

2015-06-12

Portuguese business culture – general

Only 30 odd years ago, Portugal still had a poor, backward agrarian economy propped up by wealth stripped from its colonies. While the changes since have been dramatic, Portugal has not yet fully taken on board the requirements for competitiveness in a modern market economy
Nevertheless, it is important to stress that Portugal’s is definitely a thoroughly and very modern economy. Infrastructures (physical and virtual), the retail and entertainment offering, services and so, indeed, all the trappings of modern life are pretty much as advanced as anywhere else in the West and in some cases, more so. The democracy is thriving and, broadly speaking, transparent and uncorrupt. Much business is competitive, dynamic and innovative. However, there remain some aspects of Portuguese business culture which are generally regarded – including by the Portuguese themselves – as retrograde and anti-competitive, for example:

• Short term gain usually beats strategic long term interest
• No respect for deadlines
• Meetings are badly run and inconclusive
• Customer focus is blurred
• Insider information is often viewed as merely the social dimension of trading.
• Little team spirit
• The justice system works extremely slowly
• Nepotistic recruitment, promotion and procurement
• Lack of directness and transparency
• Large, inefficient bureaucracy
• Disorganization
• Culture of short cuts and rule-breaking

An analysis of Portuguese business culture as viewed by foreigners working here can be found in a report by the author, available free on request.
It is important to be prepared for frustration and the possibility of being ripped off. However, while there certainly is some corruption and a lot of petty dishonesty, the underlying current is generally fair and honest.

The key is patience and a willingness unobtrusively to educate your business partners into your way of doing things. The carrot is generally more effective than the stick but an occasional “whack” is useful.

On the other hand, take care to adapt to the good side of Portuguese or, more generally, Latin culture.

Overall, the biggest strength here is a willingness to be flexible and to learn. There is respect and admiration for more advanced methods and economies. Provided that these values can be instilled sensitively, you will find that there is considerable creativity and drive to resolve problems and to adapt to circumstances.

The most important environmental factors are the bureaucracy and weak justice system. Any interaction with the State takes much longer than it should. Having said that, there has been considerable effort made by the Government to simplify the bureaucracy. Thus a company can now be set up and fully functional within 4 hours or less; online income tax, VAT and other fiscal declarations are very clear, simple and quick. On the other hand, contracts really are just pieces of paper because the courts are so slow (five to ten years is typical in company law disputes.), although they are not generally corrupt.

Labor laws are very tough for employers – it is virtually impossible to fire someone with a permanent contract for poor performance. There is a culture of state involvement in business and collective labor agreements.

Corporate culture

Status is important. The use of academic titles, the trimmings of executive remuneration and other symbols are powerful. For example, car brand and model are astonishingly significant perks here – more than the salary itself. Job title and rank are less significant although it is important to know who really takes the decision in a deal but that is true in all cultures and business situations.

The obverse of status is deference. Bosses tend to be dictators and their staff buck-passers. There is exaggerated deference to superiors, academic titles and, be prepared, foreigners. The Portuguese are extraordinarily and charmingly self-critical. Almost everything foreign is viewed as being better. They are extremely welcoming to foreigners: it is the most xenophilic culture I know. The biggest downside is a profound unwillingness properly to challenge authority and the status quo or to say what they really think..
Teamwork is weak, exactly because people don’t like challenging authority. They also tend first to analyze their personal interest in an action or deal. Understanding hidden agendas is an important skill.

At the same time, individuals avoid taking responsibility. Neither blame nor credit is taken. Even high up in organizations, when things go wrong it’s always the fault of a colleague, a competitor, the government, the economy, or just “the way things are” with a helpless shrug. People do not seek empowerment and it can be difficult to find someone who will take personal responsibility for the carrying out of a course of action, a deal or an event.

The workplace can be somewhat formal with even close colleagues using titles and last names. There is great variability in this aspect, however.

If responsibility avoidance is the biggest problem, then the non-fulfillment of commitments is the most serious corollary. Never assume that a commitment – however clearly made – will be fulfilled without constant vigilance and cajolery.

Cultural strengths

You will find great personal warmth here. It is expressed undemonstratively but sincerely – if someone tells you to “have a nice day”, they actually mean it. Developing good personal relationships is very important in business and will often be at least as significant a factor as the product or service offering itself.

Because planning is poor and deadlines viewed with a very “relaxed” eye, Portuguese business people are expert at dealing with the last minute crisis. There is always someone around who will fix it or find a creative way through. Of course, the solution may well be a kludge but a solution will be found.

Psychologically and sociologically the Portuguese are very well adjusted, with a flexible balance between home and work, family and business. I believe it is socially the healthiest place in the world to bring up children. The Portuguese are pacific and dislike confrontation. It is a remarkably non-violent society – what little violence there is tends to derive from drug problems, not the national character. Dispute is typically resolved through discourse, negotiation or avoidance.

As mentioned above, the Portuguese are willing to learn new approaches and be flexible in the way they do things. Portuguese managers can be world beating, especially if they work outside Portugal.