Doing Business in Latin America
August 01, 1999
by Teresa Acklin
Recognizing cultural and business differences in Latin America, combined with a little homework, can ensure success.
By Ing. Enrique Macias Malacara
Latin America is an enormous market with immense potential. Many countries in Latin America are not self-sufficient in many basic grains, such as maize, sorghum, wheat, soybeans, oilseeds, barley and oats, and are in the process of upgrading or expanding their grain storage facilities and grain processing plants. The market is growing.
Companies interested in doing business in Latin America should be aware of various cultural and business differences.
Latin America is made up of many different countries: Mexico in North America; Guatemala, Belize, Honduras, El Salvador, Nicaragua, Costa Rica and Panama in Central America; and Venezuela, Colombia, Ecuador, Peru, Bolivia, Guyana, Surinam, French Guyana, Brazil, Chile, Argentina, Paraguay and Uruguay in South America.
There is no common “Latin American culture.” Each of these countries has its own culture, sometimes several regional cultures, and each culture has its own way of doing business. Each company also has its own business culture.
Know as much as possible about your customer. Most important, know his full name. It has been said that the common man is more interested in his own name than in any other in the world. Remembering a person's name and pronouncing it with frequency indicates subtle, honest and effective praise.
WHAT'S IN A NAME?
In many parts of Latin America, a typical full name is made up of one or two first names, sometimes more, and two last names, sometimes more. For instance, Juan Manuel Gutiérrez González has two first names, Juan and Manuel, and two last names, Gutiérrez and González. Gutiérrez is the paternal name and González is the maternal name.
Rosa Maria Ibáñez Pérez has two first names, Rosa and Maria, and two last names, Ibáñez (paternal) and Pérez (maternal). Rosa and Juan get married and have a male child, whom they name Francisco Javier. His last names are automatic, Gutiérrez (his father's first last name) and Ibáñez (his mother's first last name).
Some people have more than two last names, although this is not as common. For instance, José Ortega Sánchez de Tagle has one first name, José, and three last names, Ortega and Sáchez de Tagle.
Most Latin Americans use only their paternal last name and only one of their first names. When in doubt, ask which name they prefer to use. It is acceptable to use only the paternal last name, but using only the maternal last name is not.
Unless one is very familiar with the person, it is also best to avoid diminutives, or nicknames. Some common diminutives in Latin America include Pepe (José), Meme (Manuel), Pancho (Francisco), Lupita (Guadalupe), Conchita (Concepción) and Tulita (Gertrudis).
It may be hard for English-speaking persons to pronounce Spanish names, but make an effort to call Latin Americans by their Spanish names.
If addressing the person in Spanish, remember there are two forms: “usted” and “tu.” The “usted” form is used when one is unfamiliar with the other person; it shows respect or regard for a person and good manners on your part. The “tu” form should be used only with those persons one has been dealing with for some time. Women who do business in Latin America should stick to the “usted” form.
Titles also are important in Latin America. Persons who have graduated from a university are proud of this achievement and have earned the right to use a title related to the discipline studied. Some common titles include: Dr. = Doctor, generally a medical doctor but may include doctorates or a veterinarian.
Lic. = Licenciado, generally a lawyer or a business major.
Ing. = Ingeniero, an engineer.
C.P. = Contador Público, a public accountant.
Quim. = Químico, a chemist.
L.A.E. = Licenciado en Administración de Empresas, a bachelor of business administration.
It's good practice to use the person's title in written correspondence or when making presentations.
Next, find out all you can about the customer's family. Inquire about their marital status; spouse's name, education, interests and affiliations; wedding anniversary; and children's names, ages, education and interests.
Learn as much as you can about the customer's business background, including previous employment or previous position at the present company, any status symbols in the office or membership in professional/trade associations, mentors, relationship with others in the company, the clients' attitude toward the company, immediate and long-range business objectives and the company's welfare. What does he think of the present or the future?
DOWN TO BUSINESS.
Consider several cultural differences when working with Latin American customers. Most are used to bargaining and will try to haggle with you in order to get the best possible terms. Be prepared to negotiate professionally. Do your homework and brush up on your negotiating skills.
Latin Americans often start with tough demands or ridiculous offers that affect the other person's expectation level. Be aware that the negotiators often have limited authority. Some use emotional tactics they get red-faced, raise their voices and act exasperated.
Concessions are viewed as weakness. Should you give in and concede something, the customer may be unlikely to reciprocate. They may delay making any concession and when they finally do it will likely reflect only a miniscule change in their position.
Ignore deadlines. Latin Americans tend to act as though time is of no significance.
Most Latin American countries used the metric/decimal system. In Latin America, deals will be made in metric tons (tonnes), kilograms, meters, liters, hectares and such. Bring along conversion tables and a calculator if you are unfamiliar with the metric system.
The type of clothing one wears to a meeting in Latin America will depend on who the meeting is with (top, middle or front-line management), the climate and where the meeting takes place. Consult with colleagues, experienced friends or the customer on how to dress.
When meeting with top management at the main or branch offices, stick to a suit and tie. In some regions with very hot weather, however, dress slacks and a short-sleeve shirt may do. At a grain elevator or processing plant, casual clothes is generally acceptable and in some cases wearing work clothes is a plus.
Also, inquire about the customer's working hours. Top and middle management tend to do a lot of business during lunch and most take long lunch breaks. Doing business away from the office ensures there are practically no interruptions, but many executives cannot live without a pager or cellular phone.
When making invitations to breakfast, lunch or dinners, find out the customer's food preferences, what restaurants he frequents and his favorite items on the menu. Be prepared to invest a lot of time in these business meals. Some lunches in Latin America can run well into the night and some dinners can begin at 10 p.m.
As a general rule, stay with well-boiled or cooked food and bottled drinks. The customer will be flattered if you try local food and drinks, but try to find out what you will be eating, how hot or spicy the food is and how potent the drinks are. Be prudent in declining any offers.
It never hurts to brush up on one's manners and etiquette. Latin Americans place great importance on manners and tend to be more prudent and diplomatic.
There are many opportunities in Latin America in the grain business, in the elevator business and in the grain processing business just waiting for those to make the effort to take advantage of these opportunities.
There are some differences in doing business in Latin America other than the language difference. One may have to do some homework to take advantage of these opportunities, but the rewards are worth it.
Mr. Macías is an agribusiness consultant and supplier represen- tative in Mexico for several U.S. and Canadian companies. He can be reached at 52-5-562-0478 or by e-mail at email@example.com.