How to do business in Colombia

von: Hakime Vanelli

Table of Contents

1. Introduction ... 3

2. Important Factors and Cultural Dimension ... 3

2.1. Important Factors and Value ... 3

2.1.1. Religion ... 3
2.1.2. Business Network in Colombia ... 4
2.1.3. Face and Hierarchy ... 4
2.1.4. Long-Term Orientation / Future orientation ... 4

2.2. Hofstede’s Cultural Dimension ... 4
2.2.1. Power Distance ... 4
2.2.2. Uncertainty Avoidance ... 5
2.2.3. Collectivism ... 5
2.2.4. Masculinity – Femininity ... 5

2.3. PEST Analysi ... 5
2.3.1. Political factor ... 5
2.3.2 Economical factor ... 6
2.3.3. Social Factor ... 6
2.3.4. Technological Factor ... 6

3. Communicating Cross Culturally ... 6

3.1. Language ... 7

3.2. Communication ... 7

3.3. Verbal communication ... 73.4. Non-verbal communication ... 7

3.4.1. Speaking Colombian ... 8
3.4.2. Hand gesture ... 8
3.4.3. Personal interspace ... 8
3.4.4. Eye contact ... 8

3.5. Written communication ... 8

3.6. Problems, tips and hints when communicating ... 8
3.6.1. Translation ... 9
3.6.2. Speed ... 9
3.6.3. Slang and proverb ... 9

4. Teams to Work in Colombia ... 9

4.1. Leaders and Manager ... 9

4.2. Motivational Approaches in Colombia ... 10
4.2.1. Provide Statu ... 10
4.2.2. Feedback /Positive Reinforcement ... 10

5. Negotiating Cross Culturally ... 10

5.1. Protocol in Colombia ... 10
5.1.1. Scheduling a meeting ... 10
5.1.2. Relationship before busine ... 11
5.1.3. Greeting ... 11
5.1.4. The use of titles, names and business card ... 11
5.1.5. Business Dre ... 12
5.1.6. Conversation ... 12
5.1.7. Gift Giving ... 12

5.2. Negotiation ... 13

5.3. Negotiating Tip ... 14

6. Managing Expatriates In Colombia ... 14

6.1. Determining the need of an expatriate in Colombia ... 14

6.2. Selection of expatriates in Colombia ... 15

6.3. Repatriation ... 16

7. Managing Social and Ethical issues in Colombia ... 16

7.1. Civil War ... 16

7.2. Drug ... 16

7.3. Corruption ... 16

8. Conclusion and Recommendation ... 17

Bibliography / Reference ... I

Appendix I Map of Colombia ... II

Appendix II Hofstede′s Dimension of Culture Scale ... III

Appendix III Useful Internet Link ... IV

Appendix IV Endnotes VI

1. Introduction

Colombia is the hinge between North and South America situated on the northwestern end of South America and stretching over an area roughly equal to that of Portugal, Spain, and France put together¹. Colombia is not only country of origin of world known artists (e.g. Gabriel Garcia Marquez), sportsmen (e.g. Juan Pablo Montoya) and scientists (e.g. Manuel Elkin Patarroyo, who discovered a vaccine against malaria and donated it to WHO). The country with the second biggest population in South America (42 millions) is also economically an important player. It′s the world’s largest producer of emeralds and orchids, the second largest exporter of flowers in general, the third largest producer of coffee, women’s lingerie, reptiles and bananas and it′s the fourth largest producer in coal and nickel. Colombia possesses the largest coal reserves, the second largest hydroelectric potential and the fourth largest oil and gas reserves in Latin America.

Although Colombia had and still has some problems with political and social stability², violence³ and drug trafficking, it offers interesting business opportunities to international companies, especially regarding its minerals and energy resources. Colombia underwent a major economic reform in the past decade, which enabled its economy to participate in international trade and investment. This guide, who doesn′t claim to be comprehensive, will provide a collection of primary⁴ and secondary⁵ information about Colombian culture and customs, which are helpful to do business in Colombia and to avoid capital blunders.

2. Important Factors and Cultural Dimensions

The cultural background including basic values and beliefs is essential to understand business related behaviours and decision- making processes of potential business partners. The following paragraphs set out the particularities of the Colombian culture and the values that might have an impact if you as a foreigner do business in Colombia.

2.1. Important Factors and Values

2.1.1. Religion

Colombia is an overwhelmingly Roman Catholic country. More than 95 % of the population had been baptised in the Catholic Church and the Colombian variant is widely renowned as one of the most conservative and traditional in Latin America. Other religions continue to play a small role. There are only around 200,000 Protestants and even far less Jewish people. However, the Colombian constitution guarantees freedom of religion, which is essential to maintain political stability.⁶ Regarding to business this means you should regard catholic holidays and customs, while working in Colombia or with Colombians.

2.1.2. Business Network in Colombia

Studies show that 68% of all enterprises in Colombia are family businesses⁷. The importance of family businesses in Colombia shows that qualities such as trust, reciprocity and harmony are very important for doing successful business in Colombia.

2.1.3. Face and Hierarchy ⁸

Colombians are motivated by maintaining standards and strengthened by a sense of pride. In spite of socio-cultural tensions and the tendency towards change, the Colombian society is characterized by high family and group values, high elitism but also by a relatively high tendency towards gender equality.

2.1.4. Long-Term Orientation / Future orientation

Colombian society is oriented more towards the present than towards the future. Colombian culture is impulsive and spontaneous by nature; its members live for the moment without a serious concern for planning the future. Governmental long-term plans (e.g. regarding universities) are rarely met. Spontaneity is the key word in Colombia: the act of living here and now. For instance it is possible to get tickets to important sports eve nts on the day of the event, because fans only begin to make their purchases a few days before the event. However, the Colombian government and larger corporations tend towards a stronger future orientation.

2.2. Hofstede’s Cultural Dimensions ⁹

The Dutch researcher, Geert Hofstede carried out a formative study about Colombia. The following factors determine the main cultural dimensions in Colombia.

2.2.1. Power Distance

Society’s key characteristic is the concentration of power in the hands of a closed, powerful, elite. Social inequality is part of daily life. It is easy to notice the privileges enjoyed by the top members of any major business organization; these include lavish offices, special parking lots, fashionable clothing (instead of uniforms), and dining rooms that are reserved for the different ranks among the company′s hierarchy. It is common to hear the formal prefixes “don” and “doña”, or “doctor” and “doctora” in recognition of social status.

2.2.2. Uncertainty Avoidance

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1 For more geographic facts see below

2 For a short history of Colombia

3 See Cannon

4 In order to get primary information we interviewed Colombian co-students of Bond University, Australia.

5 Secondary information was mainly retrieved from Internet sources, for current literature on Colombia is hard to find.

6 See www.lcweb2.loc.gov/cgi-bin/query/ or www.kasbah.com

7 http://www.genusresources.com/site/content/global_resources/columbia.asp.

8 www.haskayne.ucalgary.ca/GLOBE/Public/Links/colombian.pdf

9 www.cyborlink.com/besite/hofstede.htm