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Portuguese Business Culture: Impact of Cultural Differences

By Bernardo Barbosa

Published on 9 January 2024

7 mins read

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There's more to the Portuguese economy than just stats and numbers. To successfully start and run a company in Portugal, it's essential to go beyond merely economic factors and embrace the fascinating particularities of its culture.

To explore Portugal's booming economy to the most, entrepreneurs and business owners need to be masters at building relationships. But they can only do that if they understand the Portuguese business culture first.

In this article, we will dive deep into this topic, empowering you with all the information you need to boss meetings, inspire employees, make friends, and ultimately find success in the Portuguese business environment.

History and Traditions

The westernmost country in the Iberian Peninsula, Portugal has a rich history and vibrant cultural traditions that have greatly influenced its business practices. Portuguese culture values personal relationships, respect, and hierarchy, and these values often translate into business relationships where trust and personal connections are highly regarded.

Portuguese tend to do business with people they know and trust. That's why there are so many family-owned businesses in Portugal, and that's why foreign entrepreneurs looking to expand into the country should strive to build relationships with Portuguese businessmen. These relationships should be personal and authentic, not merely professional.

Despite this focus on interpersonal relationships, though, Portuguese prefer to work in a setting in which hierarchical structures and business etiquette are taken into account. Portugal has a counter-establishment past, best represented by the Red Flowers Revolution, but is generally more respectful of rules and hierarchical norms than other European Union countries such as Spain and France.

Communication Styles

In Portuguese business culture, communication styles can vary depending on the context and relationship. Directness is valued, and it is common for people to express their opinions openly. However, it is also important to be respectful and maintain a polite tone in a business setting.

Non-verbal communication also plays a significant role in conveying messages, so pay attention to cues such as gestures and facial expressions to ensure smooth interactions with business colleagues.

Finally, Portuguese tend to value personal relationships and may prioritize establishing a rapport before starting to discuss business matters. Listening actively and showing interest in others' perspectives can help build trust.

Work-Life Balance

Work-life balance is a crucial aspect of the Portuguese business culture. Portugal is a lively and sunny country, and Portuguese prefer not to live just for their working hours, regardless of their job title and social standing.

If you want your staff members to be happy, it's advisable to respect their personal needs and give them enough time to rest. In Portugal, every person feels entitled to have a life beyond work. Being aware of this will not only help you fit into the Portuguese business culture but also boost the productivity of your staff members and close colleagues.

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Business Etiquette in Portugal

How can you express gratitude in a professional setting? How should you act in business meetings? And is there such a thing as a company dress code? These are some of the things you can learn by understanding business etiquette in Portugal.

Business Meetings Formalities and Greetings

  • Handshakes are the most common form of greeting, and it is customary to shake hands with everyone present when entering business meetings. In initial business meetings, it's considered polite to state your name and exchange business cards.
  • In more formal settings or negotiations, it may be appropriate to address individuals using their professional titles, such as 'Dr.' or 'Engenheiro' ('Doctor' and 'Engineer').
  • Portuguese business culture respects age, so be extra polite to older people.
  • To show respect and interest for your business colleagues, maintain eye contact.
  • Engage in gift-giving, especially when dealing with clients or closing a deal with a new partner. A small gift is enough to show some sincere appreciation, and a thank you note can be equally as effective.
  • Mutual contact with partners is essential, so follow up on any important meeting with a message of appreciation or an invitation.

Dress Code

  • Portuguese business attire is typically formal and conservative, with men wearing suits and ties and women opting for dresses or suits.
  • In a more social event, long-sleeved shirts are often okay.
  • In Portuguese creative industries, dress codes can be more liberal (not all creative companies are the same, though).

Professionalism

  • Avoid discussing highly controversial topics, as Portuguese tend to be lively and opinionated. Stay away from politics and other divisive discussions.
  • Most people value punctuality in Portugal, so it is essential to arrive on time for business meetings and appointments.
  • When writing, respect grammar and syntax (especially in a formal setting). Portuguese associate poorly written e-mails and documents with unprofessionalism.
  • Portuguese hosts never shy away from the responsibility. If you're the host of a business meeting or social event in Portugal, be extra generous and resourceful.

Building Relationships in the Portuguese Business Environment

Gift-giving will only take you so far in Portuguese business culture. Networking events are arguably even more important than business meetings for your career progression in Portugal.

These simple rules can help you network with a Portuguese counterpart like a pro:

  • When networking and socializing in the Portuguese business environment, it is important to be respectful and maintain a professional demeanor.
  • Building personal relationships is highly valued, so take the time to engage in small talk and get to know your colleagues and business partners.
  • Portuguese people appreciate directness and honesty, but it is also important to be mindful of cultural norms and avoid being too informal or chummy.
  • Remember to listen actively and show genuine interest in what others have to say.

Overcoming Cultural Challenges in Business

As we've seen, building relationships in Portugal comes with a hefty set of challenges! This is how you can overcome some of the most common:

Building Trust and Rapport

Building trust and rapport is essential in the Portuguese business environment. Portuguese culture values personal relationships and trust is seen as the foundation of any successful business partnership.

To build trust, it is important to establish a personal connection with your Portuguese counterpart. Taking the time to get to know a person on a personal level and showing genuine interest in his or her culture and traditions can go a long way.

Finally, maintaining open and transparent communication is crucial. Portuguese business professionals appreciate honesty and directness in their interactions, so remember to be patient and respectful of the hierarchical structure in Portuguese organizations.

Hierarchy and Decision-Making

In Portuguese business culture, hierarchy plays a significant role in decision-making processes. Seniority and status are highly valued, and decisions are often made by those in higher positions.

However, not all people in a higher hierarchical position have the same demands, so make sure to know your Portuguese counterpart before being too formal or too friendly.

Language Barriers

When conducting business in Portugal, it is important to be aware of potential language and communication barriers. While English is widely spoken in the business world, it is still beneficial to learn some basic Portuguese phrases to show respect and make progress with local partners.

Additionally, it is important to be aware of cultural differences in communication styles, such as the use of indirect language and non-verbal cues. To overcome these barriers, it is recommended to hire a local interpreter or translator when necessary.

Time Management and Punctuality

In Portuguese business culture, time management and punctuality are highly valued. It is important to arrive on time for meetings and appointments as a sign of respect for others' time.

At the same time, though, it's also common for meetings to start a few minutes late, so be patient with your employers and sympathetic with your employees.

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Frequently Asked Questions (FAQ):

What is the work culture like in Portugal?

The work culture in Portugal is generally laidback, but it nevertheless puts great focus on formal aspects such as hierarchy and business etiquette.

How should you dress in Portugal's business environments?

Different companies have different dress codes, but you can never go wrong with a suit (for men) and executive dress (for women). Remember the motto: "Dress for success!"

What is the management style in Portugal?

Most Portuguese companies are highly hierarchical, but all managers in Portugal are expected to be respectful of the needs of their employees. Being above someone in the chain of command doesn't give anyone the right to treat another person poorly.

Is it okay to give gifts to business colleagues and clients?

For sure! Gift-giving is seen as a sign of respect and genuine appreciation in Portugal's business setting. Popular business gifts include product samples, wine, and food.

What should I not do during business negotiations in Portugal?

Speaking out of turn, not waiting for someone else to stop talking, insulting a host, and engaging in controversial discussions are definite don'ts during business negotiations in Portugal.

I have several meetings in Portugal: what's advisable to do?

Inform your business colleagues in advance in case you're getting late for any of the meetings, as Portuguese tend to value punctuality. Show some politeness by learning one or two greetings typical to the country, such as 'Olá' ('Hello') and 'Tudo bem?' ('How are you?'). Shake hands with every single person in the meeting to introduce yourself. To make a really great first impression, consider bringing gifts from your country of origin. When speaking, be calm but assured. Finally, maintain eye contact when talking with someone else at meetings.

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Written by Bernardo Barbosa

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