Doing Business in Peru free essay sample

Cultural Aspects of Doing Business in Peru Chuck Hamilton Saint Leo University Table of Contents Abstract3 Peru Facts4 Peru Business Statistics4 Appropriate Business Attire5 Meetings and Greetings5 Language and Conversations6 Religion6 Dining Etiquette and Facts7 Role of the Family8 Gift Giving8 Hand Gestures9 Resources10 Abstract This paper will explore and discuss the business environment in Peru. The cultural aspects will be examined and facts and statistics about Peru will be given. Cultural aspects to be discussed will be how meetings are conducted, how to greet and address potential business partners, the appropriate business attire, language and how it relates to business, religion, role of the family, and gift giving, and dining etiquette. Peru is a great country to start and run a business. The purpose of this paper is to research doing business in Peru and to realize the culture differences, and once this culture differences are realized, be able to apply the knowledge learned to run a successful business in Peru. Peru Facts Peru is a country located in South America. The capital of Peru is Lima. Peru is the third largest country in South America. The US dollar is widely accepted in most areas of Peru; however, the official currency of Peru is the Nuevo sol. According to the Central Intelligence Agency, the estimated population of Peru in July of 2011 will be 29,248,943 people (The World Fact Book: Peru, 2011). The official language of Peru is Spanish. Peru is divided into three regions that consist of the coastal region, the mountainous region, and the jungle region. Peru has geography just as diverse as its population. Peruvians are known for their friendliness and hospitality and go out of their way to make foreigners feel welcome (Doing Business in Peru | Peruvian Social and Business Culture). In Latin America, Peru is the number one producer of gold, silver, zinc, and tin. In 2008, Peru’s GDP grew by 9. 7% in the first quarter and 11% in the second quarter when compared to the previous year’s corresponding quarters (UHY International Ltd, 2009). According to the U. S. Commercial Service website, the Peruvian economy continues to out-perform other regional economies and many economies around the world (U. S. Commercial Service, 2011). Peru Business Statistics Peru is considered to be a great country to conduct business. According to the Doing Business website, Peru is ranked fairly high in several key categories important to doing business there. In ranking 183 economies around the world, Peru ranks 36 in ease of doing business. In regards to starting a business, Peru ranks 54th out of 183. In regards to getting credit, Peru ranks 15th out of 183. Peru ranks 53rd out of 183 in regards to trading across borders (The World Bank, 2011). Appropriate Business Attire When conducting business meetings, business attire is extremely important. For men, it is standard to wear a well-tailored business suit. Any other type of casual business attire is not considered appropriate. For women, the appropriate business attire is considered to be a suit or dress. Tuxedos for men and evening gowns are required for invitations to official parties (Business Etiquette Peru: Merca Trade). Meetings and Greetings Peruvians look at the time in a very relaxed and flexible manner. This is called â€Å"la hora peruana†, which is translated to Peruvian time. This means that many times business meetings might be delayed. The visitor in no circumstance should be late, so always arrive on time. Appointments should be made two weeks in advance and confirmed one week in advance. The work week in Peru is typically six days a week, Monday through Saturday. Business hours are usually 8:00 am until 6:00 pm. Peruvians take longer lunches and many offices are closed from 1:00 pm until 3:00 pm. With that being said, business meetings during lunch are common and appropriate. Important to note is that many Peruvians take holidays during the months of January until March, so no meetings should be scheduled during these months. Unannounced business calls should never be made as Peruvians do not expect this nor are they appreciated. The Peruvian business organizations tend to be hierarchical and therefore when meetings are scheduled, they should be done so with top level managers. When greeting people, the introductions are informal and the person you are greeting should be addressed using Senor or Senora and their last name. (Doing Business in Peru | Peruvian Social and Business Culture). It is also expected that the person be greeted in regards to their profession. For example, if the person being greeted is an engineer, he would be greeted using Senor Ingeniero and the last name. First names are not to be used until the visitor is invited to do so. If business cards are to be given, the business card should be in Spanish and an English translation on the back of card. Language and Conversations Spanish is the official language of Peru. In the business setting, Spanish should be used as much of the business in Peru is conducted in Spanish. It is advised that to do business in Peru, the visitor should learn Spanish to be able to communicate. If this is not an option, an interpreter should be brought along to aid with the communication. There are topics during conversations that should be avoided and some that are recommended. When having conversations, topics to avoid are those about politics, the Peruvian government, and the ancestry of the person, especially if he/she is of Indian descent. Topics that are favorable are Peruvian culture, the history of Peru, cuisine and restaurants, and of course the national drink that is called a pisco sour (Ore. Luis, 2009). It is also important to note that you should not be surprised if the person you are speaking with is invading your personal space. It is the Peruvian culture to be in close physical proximity when communicating with one another. Religion Religion plays an important role in the lives of Peruvians. The Catholic religion is the most prevalent as more than ninety percent of Peruvians actively participate in the Catholic religion. Catholic traditions are at the base of many festivals and holidays. It is important to know how important religion is to the Peruvians and how this might affect business relationships. Dining Etiquette and Facts When dining, it is proper to keep your hands on the table or above at all times. It is considered bad manners to place hands in your lap (Rushton, 2011). As previously stated, lunch is the time that most business meetings take place. Lunch is also the largest meal of the day. Dinner is basically a social event and tends to be very late in the evening. It is not uncommon to have dinner as late as ten or eleven o’clock in the evening. When eating, it is customary to pass food with the right hand. For the most part, business is not discussed during dinner. If the visitor will be sending invitations to dinner, it is suggested that the time to meet be set at 9:00 pm. This is a common time for dinner invitations; however, dinner will most likely be served around 10:30 pm. In a formal function, the host will always be seated at the head of the table. If there is a hostess, she will be seated opposite the host. The most senior female guest will be seated to the immediate right of the host. Likewise, the most senior male guest will be seated to the immediate left of the hostess (Business Etiquette Peru: Merca Trade). It is common to be offered an alcoholic drink during a business lunch or dinner. If a toast is made, it is customary to propose one in return. This can be done by simply raising your glass and saying â€Å"Salud! . Also important to note is that the knife always stays in the right hand and the fork in the left hand. These utensils are never switched. In the Peruvian culture, it is also customary to eat everything served to you on your plate. Role of the Family Peruvians place a high emphasis on families. So much emphasis is put on families that they put families first before the needs of the business. This also relates to relationships. Peruvians will take time to get to know who they are dealing with before making any deals. Trust and familiarity are what business relationships are based on. To be successful in the business world of Peru, it is a good idea to develop friendships. The fact that Peruvians place such emphasis of families and relationships, it is not uncommon for them to inquire about your own family or personal life during the beginning of the relationship. Although some things might be considered private to you, it is simply that Peruvians combine their personal and professional lives together. Gift Giving There are many things to know about gift giving in Peru. There are many items that should never be given. If you receive an invitation to a home in Peru, it is recommended that you bring a gift with you. The host’s wife might appreciate chocolates from your country or if there are children, they might like some toys typical of what kids play with in our own country. Knives should never be given as a gift. This symbolizes the severing of a friendship. Also, it is not good to give any gift that comes in odd numbers. Odd numbers are considered bad luck. Suggestions of gifts that are good to give are wine, name brand or a quality set of pens, desk accessories, or something that is relevant to your home region. For example, some type or native folk art or book would be advisable (Business Etiquette Peru: Merca Trade). Gifts that should be avoided are thirteen of anything, purple or black objects as they may have some connotations of religious ceremonies, handkerchiefs which represent mourning, or any type of letter opener. Just like a knife, the letter opener represents the severing of a friendship. Hand Gestures Hand gestures should be thought about before using in any country. In Peru, this rule is no different. Hand gestures have different meanings in different countries and some could lead to trouble if the person making them does not understand what they mean. In the United States, to use the index finger to ask someone to come closer is common practice. In Peru this is considered rude. It is better to turn your palm downwards while moving all your fingers in a motion towards yourself. Again in the United States, when a person gives an ok sign by making a circle with the pointer finger and thumb and the other fingers up in the air, this has no bad meaning at all. However, in Peru, when a person makes this sign, they are saying that they are gay or that the person they are talking to is gay. To give the ok sign in Peru, a person would make the same circle with the pointer finger and thumb, but, the other fingers would be pointing down. In conclusion, Peru is a great place to start a business. Having identified many cultural facts will be a great asset in starting and running a successful business. Resources The World Fact Book: Peru. (2011). Retrieved June 2011, from Central Intelligence Agency Web site: https://www. cia. gov/library/publications/the-world-factbook/geos/pe. html Business Etiquette Peru: Merca Trade. (n. d. ). Retrieved June 2011, from Merca Trade Web site: http://www. mercatrade. com/help/business-etiquette-peru Doing Business in Peru | Peruvian Social and Business Culture. (n. d. ). Retrieved June 2011, from Communicaid Web site: http://www. communicaid. com/access/pdf/library/culture/doing-business-in/Doing%20Business%20in%20Peru. pdf Ore. Luis. (2009, July 3). Your Guide to Peru. Retrieved June 2011, from Executive Planet Web site: http://www. executiveplanet. com/index. php? title=Peru Rushton, C. (2011). Business Etiquette in Peru. Retrieved June 2011, from E-how Web site: http://www. ehow. com/about_5279932_business-etiquette-peru. html The World Bank. (2011). Doing Business 2011 Peru. Retrieved June 2011, from Doing Business website: http://www. doingbusiness. org/~/media/FPDKM/Doing%20Business/Documents/Profiles/Country/DB11/PER. pdf U. S. Commercial Service. (2011). Doing Business in Peru. Retrieved June 2011, from Buy USA website: http://www. buyusa. gov/peru/en/boing_business_in_peru. html