Culture, often ignored, plays a decisive role in determining the success or failure of a business in a new market. While doing business in Spain it is critical to understand the cultural nuances of a country before entering the market to ensure that the brand and its products/services resonate with the local population.
For instance, KFC's "Finger Lickin' Good" slogan failed to translate well in China, where it was interpreted as "Eat Your Fingers Off" due to a cultural misunderstanding. Hence, understanding cultural dimensions is critical to inform market entry strategies.
Likewise, the entry of Walmart into the German market serves as a cautionary tale of cultural missteps in business. Walmart's low-price, high-volume business model did not align with German preferences for high-quality goods. The company failed to adapt to the local market and culture.
Doing business in Spain
Hofstede's cultural dimensions
Geert Hofstede was a social psychologist, he identified six cultural dimensions that help understand the cultural differences between countries over twenty years of research, a study involving more than 100,000 IBM employees. These dimensions examined cultural areas such as power distance, individualism vs. collectivism, masculinity vs. femininity, uncertainty avoidance, long-term orientation vs. short-term orientation, and indulgence vs. restraint. In this article, we will compare the cultural dimensions of Spain and Finland and provide actionable insights for foreign founders and CEOs who want to inform strategic decisions entering the Spanish market.
Power Distance
Power distance refers to the extent to which the less powerful members of a society accept and expect that power is distributed unequally. Spain scores high on power distance, meaning that hierarchy and authority are respected in their culture. On the other hand, Finland scores low on power distance, meaning that they value equality and participation.
For foreign founders and CEOs who want to enter the Spanish market, it is important to recognize the hierarchical structures in the country and within organisations. They should be aware of the power dynamics, particularly when dealing with local partners, government officials, or even their own employees. A hierarchical approach is expected and appreciated. A flat organizational structure may not be as effective in Spain as it is in other countries.
In a high power distance culture like Spain, forcing a flat organizational structure can have unintended consequences. Some individuals may interpret this approach as an opportunity to relax, behave poorly, and negatively impact the group. This can set a poor precedent and demotivate high-performing individuals who require strong leadership and guidance. Therefore, it is essential to be mindful of the cultural nuances of power distance when implementing organizational structures and maintain an appropriate level of leadership to encourage high performance and productivity.
Individualism vs. Collectivism
Individualism vs. collectivism refers to the degree to which individuals are integrated into groups. Spain scores low on individualism, meaning that they value family and community ties over individual needs. In contrast, Finland scores high on individualism, meaning that they prioritize individual freedom and autonomy.
Spaniards consider community and family ties to be essential elements for a fulfilling life. Family and community networks are viewed as indicative of a healthy and developed personality, as well as a crucial element for talent management. In Spain, personal relationships hold great value, and businesses must prioritize building a foundation of trust and mutual respect with their employees, stakeholders, and partners to foster strong, lasting relationships.
Masculinity vs. Femininity
Masculinity vs. femininity is a fundamental cultural dimension that reflects the distribution of emotional roles between genders in a society. Spain is considered a high masculinity country, where traditional gender roles are still prevalent. Spanish culture values qualities such as assertiveness, competitiveness, and achievement, typically associated with masculinity, while stereotypically feminine qualities like nurturance, care, and emotional sensitivity are less emphasized. In contrast, Finland is considered a low masculinity country, where gender equality is highly valued, and emotional roles are more fluidly distributed.
In Spain, it is essential to approach gender dynamics sensitively. Though the society may have more traditional gender roles, the younger generations and urban areas are pushing for more gender equality. Therefore, it is essential for foreign business owners to be mindful of their approach towards gender dynamics in Spain. They should avoid stereotypical assumptions about gender roles and approach the issue of gender equality in a sensitive, nuanced way. For example, when building a diverse team, business owners should aim to have equal representation of genders and provide opportunities for women in leadership roles. By embracing gender equality and encouraging diversity and inclusivity in the workplace, businesses can attract and retain top talent and succeed in the Spanish market.
Uncertainty Avoidance
Uncertainty avoidance refers to the extent to which a society feels threatened by ambiguity. Spain scores high on this dimension, indicating a preference for clear rules, regulations, and formal structures. Spanish culture values order, predictability, and a sense of security, which can be attributed to their tumultuous history. In contrast, Finland scores low on uncertainty avoidance, meaning that they are more comfortable with ambiguity and improvisation. This can be attributed to the Finnish culture's focus on innovation and a willingness to take risks.
Foreign business owners entering the Spanish market must be mindful of the high uncertainty avoidance in Spain. The Spanish population may feel uncomfortable with ambiguous situations, which can result in a lack of creativity and risk-taking, and management should provide clear policies and internal structures to provide a sense of security and stability. This can help build trust with employees, stakeholders, and partners likewise.
However, this does not mean that businesses cannot be innovative and creative. By providing a clear framework of rules and regulations, businesses can offer a structured environment that encourages creativity and innovation. Businesses can provide their employees with the necessary training and resources to foster innovation while also respecting the local culture's need for order and predictability.
Long-term Orientation vs. Short-term Orientation
Long-term orientation versus short-term orientation is a less known cultural dimension, it reflects the emphasis on immediate gratification or long-term planning in a society. Spain's low score on long-term orientation highlights the focus on present needs and desires, while Finland's high score indicates a preference for long-term planning and consideration of future outcomes.
This dimension's understanding is crucial for foreign founders and CEOs to enter the Spanish market with a clear and concise business plan that includes both long-term as well as short-term manageable goals and outputs. Additionally, employers must consider employees' short-term orientation style, and balance short-term and long-term reward schemes to maintain a dedicated and motivated workforce.
Indulgence vs. Restraint
Indulgence vs. restraint refers to the degree to which a society is willing to indulge in their desires and impulses. Spain scores high on indulgence, meaning that they value enjoying life and having fun. Finland, on the other hand, scores low on indulgence, meaning that they place a greater emphasis on self-control and restraint.
This cultural dimension informs business strategy by suggesting that foreign corporations should consider incorporating leisure activities to create a positive work culture, encouraging team-building activities and providing opportunities for employees to relax and enjoy their work environment. This can improve employee morale and motivation, leading to increased productivity and job satisfaction.
Other cultural nuances
Other general cultural nuances can be grouped into different categories such as business culture, social culture, art and culture, regional culture, and work culture, among others. Understanding these cultural nuances can help make informed decisions when entering new markets. It can inform business strategies, marketing efforts, and communication tactics to ensure that the brand and its products/services resonate with the local customer. By taking cultural nuances into account, businesses can build stronger relationships with local partners, employees, and customers, leading to long-term success.
At iBerotech, we bring over a decade of hands-on expertise in partnering with financial services organizations. Through strategic insights and a deep understanding of the landscape, we have effectively navigated the intricacies of the Spanish market, establishing a strong foothold in the Spanish fintech ecosystem.
Business Culture
Punctuality: In Spain, punctuality is not always considered a top priority, and it is not uncommon for business meetings to start later than scheduled. This can be attributed to the Spanish culture's focus on personal relationships, where socializing and building trust with business partners often takes precedence over strict adherence to time schedules.
Foreign executives planning to do business in Spain should be aware of this cultural nuance and allow flexibility in scheduling. They should build extra time into their schedule and avoid scheduling back-to-back meetings that may be affected by delays. By doing so, foreign executives can avoid frustration and minimize the risk of being perceived as impatient or disrespectful.
Furthermore, foreign executives should use this time to build personal relationships with their business partners. They can take advantage of the relaxed atmosphere to engage in small talk and learn about their partners' interests and values. This can help build trust and improve the chances of a successful business partnership.
Family-oriented culture: Building relationships with Spanish business partners requires taking the time to understand their family, culture, and personal lives. Business owners should prioritize building personal relationships with their partners, sharing information about their own families, and taking a genuine interest in the other person.
Bureaucracy: Spain's bureaucratic system has traditionally been slow and challenging, although recent years have seen significant developments in digitalization and the simplification of bureaucratic procedures. Nonetheless, to ensure business success, foreign executives should still engage with local experts to navigate the regulations, comply with legal requirements, and provide effective lobbying.
Local experts can provide valuable insights into the country's legal, social, and political landscape, which is the unavoidable bedrock for foreign executives planning to do business in Spain. They can help businesses navigate bureaucratic procedures, including permits and licensing requirements, and provide critical advice on engaging with government officials and other institutions.
Moreover, local experts can help foreign executives adapt their business practices to the Spanish culture, including language, marketing strategies, and social customs. This can improve communication and build stronger relationships with business partners and talented employees.
Gift-giving: Giving and receiving gifts is part of the local business culture, and foreign business owners should be aware of the cultural significance of gifts. When building business relationships, choose culturally appropriate gifts that reflect the values of the recipient and show respect for the local culture.
Social Culture
Meal times: Spaniards have a late lunch and dinner schedule, and foreign business owners are welcome to schedule meetings and business dinners later in the day. This will ensure that business partners are not distracted, and can give their full attention to the meeting or event.
Respect for the elderly: Spanish culture values the elderly, and foreign executives should take into account their input and opinions in business decisions. They can gain valuable insights into the local culture and how to navigate local business practices.
Religion: Spain is a predominantly Catholic country, and foreign business owners should respect the importance of religious holidays and practices when scheduling business meetings and events. They should also avoid scheduling important events on religious holidays.
Siesta: The siesta is a cultural tradition in Spain where people take a break from work and take a nap in the afternoon. To show respect for the local culture, foreign executives should avoid scheduling meetings or events during this time.
It is essential to recognize the value that Spaniards place on the siesta and how it is an integral part of their cultural identity. By avoiding scheduling meetings during the siesta, foreign executives can demonstrate respect for the Spanish culture and improve their relationships with local business partners and stakeholders.
Moreover, in the current scenario where a considerable workforce works from home, it is equally crucial for foreign executives to show consideration for their employees, stakeholders, and partners by allowing flexibility in scheduling and considering their personal needs and preferences.
High-context communication: High-context communication is a prevalent style of communication in Spain, where non-verbal cues and context play a significant role in conveying meaning. Spaniards often use non-verbal cues, such as facial expressions, gestures, and tone of voice, to communicate their message effectively.
To avoid miscommunication during negotiations, savvy negotiators should be attentive to non-verbal cues during meetings, such as body language and facial expressions, and learn to read them accurately. Foreign executives should also pay attention to their own non-verbal communication to ensure that their message is conveyed effectively. It is crucial to match the tone of voice, body language, and facial expressions to the context of the communication to ensure that the message is conveyed correctly.
Finnish negotiators who take a quiet, emotionless appearance and avoid eye contact may be perceived as disengaged or uninterested by Spanish negotiators who rely heavily on non-verbal cues to interpret the message. Finnish negotiators can use more non-verbal cues, such as maintaining eye contact, using hand gestures, and varying their tone of voice and smiling to convey their message effectively.
On the other hand, Spanish negotiators should also be aware of the cultural differences and the need for explicit communication in some contexts. They should aim to be more direct and clear in their communication to ensure that their message is accurately interpreted by Finnish counterparts.
Emotional communication: Emotional communication refers to the style of communication that involves expressing feelings and emotions to convey a message. Effective communication involves the accurate expression of feelings and emotions to convey a message. In Spain, people are known to be more expressive and emotive in their communication style, which can make it challenging for foreigners to understand the message accurately.
On the one hand, It is crucial to take into account the emotional tone of communication, and be mindful of the impact of words, tone, and body language.On the other hand, executives should avoid being too direct or confrontational, as this may be perceived as aggressive or impolite in the Spanish culture. It would be beneficial to choose words carefully and be sensitive to cultural nuances to avoid offending business partners. Foreign executives should also be aware of the emotional impact of their words and avoid using language that may be considered offensive or insensitive. Cultural faux pas can negatively impact business relationships, and it is crucial to take the necessary steps to avoid them.
Art and Culture
Spanish art and culture: Incorporating Spanish art and culture in branding and marketing efforts can increase the appeal of the brand in the Spanish market. Foreign business owners should showcase Spanish art and culture in a culturally sensitive way to respect the local traditions and to build strong relationships with potential customers.
Soccer: Soccer, or football as it is known in Spain, is a highly popular sport and a cultural phenomenon. The sport has deep roots in Spanish culture and is an essential part of everyday life for many Spaniards. Incorporating soccer into marketing and branding efforts can be a highly effective way to engage with Spanish customers and partners. It is likewise to be mindful of cultural nuances and the competitive nature of soccer in Spain. Soccer is a highly competitive sport, and Spaniards are passionate about their local teams.
Nightlife: Spaniards have a vibrant nightlife culture, and foreign business owners can organize business events and meetings in popular nightlife areas to build relationships with business partners.
Cuisine: To incorporate the local cuisine into business events and meetings to showcase local culture, foreign business owners should recognize that Spanish cuisine is diverse and flavorful, with a unique emphasis on local ingredients. However, it is essential to understand that the Spanish cuisine does not tolerate hot, spicy flavors, which are more popular in Finland.
Flamenco: Incorporating Flamenco in business events and meetings is an excellent way to highlight Spanish culture, fostering strong relationships with partners. However, it is vital to do this in a culturally sensitive way, showing respect for the local traditions and values.
By showcasing local art and culture, foreign business owners can spark a sense of pride and engagement in their brand, leading to increased customer loyalty and positive word-of-mouth. Moreover, foreign business owners can provide their employees and partners with a unique experience, an opportunity to connect with the local community and build lasting relationships..
Regional Culture
Regionalism: Each region of Spain has its own unique cultural identity, which can raise competitiveness and cultural differences. For example, the Basque region has a distinct language and cultural traditions, while Catalonia has a strong independent identity, which makes it advisable to gain an understanding of the local customs, traditions, and languages of the region and use that knowledge to make informed decisions.
Fiestas: Fiestas, or local festivities, are an intrinsic part of the collective culture, and can impact business schedules and other events. Fiestas are likewise picturesque opportunities for getting to understand local culture and customs, and could be easily integrated into the organization’s plans fostering morale, while impacting local communities.
Dialects: Some Spanish regions have their own unique language, which can significantly differ from the standard Castilian Spanish. Foreign business owners should be aware of these regional differences when communicating with local partners and customers. They should make an effort to learn basic phrases and terms in the local dialects, including Catalan, Basque, and Galician, to show respect and build stronger relationships.
Work Culture
Work-life balance: Spaniards value a healthy work-life balance, and foreign business owners should encourage their employees to take time off and enjoy their personal lives to maintain a positive work culture. They can provide their employees with benefits that include not only vacation time, paid time off, but also flexible working hours, working from home options, or part-time work to promote work-life balance. This can lead to improved employee satisfaction, productivity, and retention rates.
Collaboration: Spanish work culture places a high value on collaboration and teamwork and reacts well to open, communicative work environments, and team-building activities that foster stronger working relationships.
Personal relationships: Building personal relationships with employees might require taking the time to get to know them, engage in personal conversations, and show a genuine interest in their lives outside of work, which will foster a positive work environment and a sense of loyalty and commitment to the business.
Conclusion
In conclusion, understanding the cultural dimensions of a country is critical to inform market entry strategies. Spain and Finland have significant cultural differences that foreign executives should be aware of when entering the Spanish market. For example, they should recognize the hierarchical structures in Spain, prioritize personal relationships, and recognize the traditional gender roles in the country. They should also provide clear policies and regulations to provide a sense of security and stability while emphasizing immediate outcomes over long-term planning.
Lastly, they should incorporate cultural events and entertainment to create a positive work culture while promoting a healthy work-life balance. By implementing these actionable insights, foreign founders and CEOs can increase their chances of success in the Spanish market.
With over a decade of hands-on expertise in business etiquette and cultural nuances, iBerotech leverages insights into the Spanish business ecosystem and builds partnerships to empower foreign firms in skillfully navigating Spain's intricacies while launching businesses.