Principles of International Management
Situated in south-western Europe, Spain’s geographical diversity embraces landscapes that range from deserts and coastal beaches to snow-covered mountains. Spain’s diverse and unique regions are not only geographically and climatically different, but form a multifaceted compound of personalities and identities. Spain has a population of approximately 41 million. With Madrid being the capital, Spain consists of 17 autonomous communities and Castilian Spanish is the official language.
It is the first language of over 72% of the population. English is less widely spoken than in other major European countries and it is gauged that around one in four Spaniards have a good command of English. With the democratic transition after 1975, the joining the European Community in 1986 and the participation in the European Economic and Monetary Union Spain has established a base for a long-term economic boost. Its economy is the eighth biggest worldwide and the fifth largest in Europe.
Spanish economy has experienced good economic growth and proved itself to be one of the best exercising economies in the European Union. Growth arose from good economic management, lower taxes, employment growth and low interest rates. The country’s economy has created more than half of all the new jobs in the EU over the five years ending 2005. During the last four decades the Spanish tourism industry has grown to become the second biggest in the world. Furthermore companies are among the largest investors in South America.
In Spain the family is the fundament of the social structure and includes both the core and the extended family, which sometimes provides both a social and a financial support network. However, familial networks have become less tight. The structure and the size of the family diversify, but in the main people have less children than before, and fewer people live in their homes with extended family. Today, university education is common and it is less usual than in former times for family members to work in a family business. International management and estimation of cultural differences among countries is inevitable.
It provides individuals with the ability to communicate efficaciously with suppliers, business associates, customers and partners in other countries, hence creating an effective working climate when groups are not similar in their cultural perspective. Appropriate and effective business etiquette in Spain can only be efficiently applied through an apprehension of this well-developed and highly elaborate culture. Before understanding Spanish businesses, it is essential to know how they interpret themselves and their environment.
There are different interpretation models, which are contingent on the national character. Cross-cultural divergences in managerial behaviour arise from a variety of historical, political and cultural factors. Therefore, if these differences are ignored the results can be fatal, especially in a business scenario. Renowned culture scientists such as Geert Hofstede, Hampden-Turner ; Fons Trompenaars and Fukuyama have developed major theories about different cultures in different countries suggesting that national culture and values of a country affect the work environment and management of that country.
The several dimensions of national culture and in what manner they have impact on the business culture of the country are outlined below. Culture and its Impact GEERT HOFSTEDE Spain’s attitude towards power distance is considered to be high. Up until not so long ago the Spanish have been under a dictatorship, which had a huge impact on the power distance of the country. Today, Spain has a democracy. However, the distance between the employer and the employee is still high though slowly changing due to the fact that when making a decision advice from employees is more likely to be accepted.
The business culture in Spain, still being very hierarchical and centralistic, only the boss [known as el jefe] has the authority to make decisions; employees are only allowed to give a certain amount of input in a decision depending if they have been given the power in first place. As for negotiations, Spaniards usually expect the people with whom they are negotiating to have the authority to make the final decision. Another factor that creates a high power distance is how the employees see their employers as superiors.
In general, subordinates are required to respect authority, follow orders, and to deal with any problems in such a way that they do not require a lot of attention of their superiors. Furthermore, it would be condemned if you spent a lot of attention on somebody of lower rank than you. Therefore, it is advisable to concentrate on those who would be considered your equals and revere those you declare as key players in the decision-making process. Uncertainty avoidance is a vital element of Spanish culture. Spain’s attitude towards rules, regulations and career security are important for upholding a sense of control in an uncertain situation.
In the business culture, managers in Spain usually prefer to have accurate answers to questions and give precise instructions in order to minimize conflict which is seen as threatening. In addition, Spanish managers will rarely be convinced by other people’s arguments during negotiations. Confrontations with Spanish managers should be avoided at all times, for the Spanish regard publicly admitting a mistake as one of the worst faults. In that case it would be better to “agree to disagree” and take the point in later.
Even though, in Spain, individuals tend to avoid ambiguity, they often accept a familiar risk situation. In 1986 Spain joined the EU, after establishing itself as a member of NATO. Despite the conflict and the terrorist attacks resulting from Spain sending troops to Iraq, the Spanish reinforced their decision by sending more troops in. This simply agrees with the theory that if Spanish managers make a decision nobody will convince them of the contrary. On the other hand this also agrees with Hofstede rating Spain as a country with high uncertainty avoidance.