Doing business in Portugal

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Portugal is situated in southwestern Europe, bordered by the North Atlantic Ocean to the west of Spain. Its territorial expanse encompasses not only the mainland but also includes the Atlantic archipelagos of the Azores and Madeira.

With a population of approximately 10.4 million, the majority of inhabitants reside along the Atlantic coastline. Notably, both Lisbon and Porto, the second-largest city, are coastal urban centres. Ethnically, Portugal maintains a predominantly homogeneous composition, with the majority identifying as ethnically Portuguese.

While parallels are often drawn between Portugal and its neighbouring counterpart Spain, it's essential to recognise Portugal's distinct cultural identity. Avoid labelling Portugal or its people as 'Spanish,' 'Hispanic,' or 'Latino,' as Portugal stands apart from Spain in numerous respects. Key differentiators encompass Portugal's unique relationship with the ocean, the Portuguese language, and its closer connections with former colonies.

Portuguese culture, akin to various Mediterranean nations, is characterised as 'collectivist.' This cultural preference favours strong, enduring commitments within familial units, extended families, companies, or organisations. Loyalty is an important attribute within collectivist societies.

For most Portuguese individuals, fostering enduring, trusting personal connections holds great importance. Note that at initial meetings, take care not to rush in without spending some time to talk (and probably repeat this conversation) with several people. It won’t be wasted time.

Portuguese culture values age and hierarchy, emphasising respect for authority figures. While displaying warmth and affability, the Portuguese are equally proud individuals. Upholding personal honour and pride, while diplomatically preserving one's dignity, is pivotal. Diplomatic etiquette, politeness, and tact is key.

Portuguese professionals are productive and willing to invest extra time to accomplish critical tasks. Breaks during the day, whether for coffee or brief conversations with colleagues, are common. Depending on the sector, extended lunch breaks can be common with colleagues socialising together.

According to Hofstede Insights, Portugal scores notably high in 'uncertainty avoidance.' This trait manifests in the Portuguese preference for thorough consideration before embracing substantial changes. When dealing with counterparts hesitant about change or risk-averse, discussing contingency plans and reinforcing additional support can be beneficial.

Encouragingly, the representation of women in senior roles within Portuguese corporations is on the rise, although the progress remains gradual. While men still dominate leadership positions, recent studies indicate that women lead approximately 30% of Portugal's businesses.

Collaborative, team-oriented activities centred on shared objectives are still relatively uncommon in Portugal. Tradition tends to discourage direct challenges to authority, although this attitude is evolving with the younger generation.

Effective management in Portugal entails a balanced approach, combining assertiveness with a genuine concern for employee welfare and dignity. Managers should be authoritative without becoming authoritarian. Given Portugal's emphasis on relationship-driven business practices, conveying control while balancing a warm, personable touch is key.

Initial meetings may not yield immediate decisions in Portugal. Expectations should be adjusted accordingly. Opinions may not be openly expressed at the meeting table, necessitating the observation of subtle cues and leveraging opportunities like one-on-one discussions or business dinners to gain deeper insights.

Portuguese professionals typically embrace a polychronic work style, engaging in multiple tasks concurrently. This approach might involve addressing topics holistically and fluidly shifting between subjects, which can appear perplexing to those from monochronic cultures.

Decision-makers prioritise the group/organisation’s best interests but tend not to delegate authority, underscoring the significance of engaging with senior executives. Decision-making processes may be protracted, requiring patience. Attempts to hasten proceedings, apply pressure, or circumvent the chain of command are counterproductive.

While Portuguese individuals might initially appear reserved, familiarity often leads to more direct communication. Among close acquaintances, expressive and candid exchanges can be the norm. Modesty is valued, boasting about wealth or superiority is frowned upon. Delicate topics such as politics, religion, and finances are best avoided, whereas the production and sharing of food, along with their renowned wines, are enjoyable topics of discussion. Compliments on the beauty of the country/city, and questions about the Portuguese culture are also welcome (Portuguese are proud of their culture and history).

In conversation, many Portuguese tend to speak energetically and audibly. This animated manner typically doesn't denote anger but is a more expressive style. Generally averse to confrontation, conflicts are managed through discussion, negotiation, or avoidance.

When addressing adults, the terms 'Senhor' (Mr.) and 'Senhora' (Miss/Mrs.) are commonly used. Employ formal titles for unfamiliar or older individuals. Standard verbal greetings encompass 'olá' (hello), 'bom dia' (good day), 'boa tarde' (good afternoon), and 'boa noite' (good evening/night).

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