Portugal: Let’s Make a Deal!

2015-06-12

Negotiating in Portugal

General

Make sure you have understood something of the cultural background first.

None of the ideas in here are absolute guides to all situations and people in Portugal. There are considerable differences between generations, regions and, crucially, the relative depth of their contacts with other business cultures (especially yours). Expect the unexpected.

Negotiating in Portugal takes time and is usually conducted via some not always picturesque byways and detours. It will almost certainly involve some long lunches and social chat.

Do not take statements – verbal or written – as givens or even at face value. Meetings and documents are regarded as approximations and a first step towards behind the scenes wheeler-dealing.

Try to work out who wants what (I am not referring to anything corrupt, rather the motivational dimension) out of the deal and who actually takes decisions.

Don’t ditch all your own cultural approach – you are expected to be different and your contacts will probably already have had good international experience. The key is adaptation rather than transformation.

Strategy and tactics

Consensus rather than winner/loser tends to be the underlying philosophy. They are uncomfortable with confrontation or explicitly competitive positions.

Secrecy is a strong current in negotiations and there is little transparency. They will not put all their cards on the table. You will have problems getting all the financial information you need – if you’re buying a company, for example, it can be amazingly difficult to get the sellers to give you access to accounts. There is always a suspicion that opening up will expose weakness.

Make sure you insist on specific and realistic deadlines and performance measures. “Tomorrow” and “next week” are relative terms in Portuguese. You’ll have to confirm that the deadlines are on track before you find that they have been and gone. Do not automatically expect to be told if deadlines or goals are going to be missed.

Do not take given parameters for negotiation at face value. They may talk about quality, delivery and efficiency when, for example, they are only interested in price.

The analysis of a deal may well be as much emotional and personal as objectively financial. It is more likely to be about short term gain than long term strategic benefit.

The emotional, psychological and social factors referred to mean that their attitude to you as a person will be very important. They would rather close a deal with a friend than an adversary. Don’t let this fool you into thinking they’re not tough negotiators – they are.

The golden rule is not to assume that something said in a meeting is final or absolute or even true. Truthfulness is a flexible concept here. Be prepared for later renegotiation of a position “agreed” at a meeting. The deal is only final when you see the final signed contract. Even then…
Make sure all agreements and commitments are in writing, even if only an e-mail confirmation.

Negotiating Behavior

The first action should be to shake hands and, on a first meeting, exchange business cards. There is no formal etiquette here, other than normal politeness.

You will invariably be offered coffee and water.

Do not launch straight into the negotiation, even if this is your tenth meeting. Give some space for small talk, about business in general, about soccer, about the weather, about personal topics such as the family.
If negotiations talk place at lunch, wait until the coffee is served at the end to get to the real chase. Do the psychological and social sizing-up during the meal itself.

You will find it difficult to get definite answers to all your questions. Try to get information by analyzing the evasions and half statements. Nevertheless, without being brutal, do feel able to insist on clarifying a point.

Meetings are badly run, tend not to be effectively chaired and do not keep to an agenda or timetable. Do try gently to focus the discussion or bring it to closure but allow plenty of room for people to say what they have to say. Disagreement may well be expressed with some pretty tortuous circumlocutions, so you need to listen well.

Never shout or lose your temper – it doesn’t work and ends up putting you in a weaker position.

The Portuguese have an instinctive wish to please. The result can be good but also produces a tendency to say what they think you want to hear. Make sure you get specifics and quantification of assurances that “it’s on time”, “we have lots of experience in this area”, “the decision will be taken soon”, and so on.

Dialogue is important, closure will take time and patience.
Take good meeting notes and offer to do minutes, if there are any (they are not common in normal business meetings but you can insist).

For subsequent meetings make sure commitments (documents, actions etc) for the next meeting are clear and that a gentle reminder of those commitments is made shortly before the next meeting.