Understanding Guatemala’s business etiquette could increase the possibilities of success when you register a business in the country. Like all countries and societies, there are some cultural peculiarities connected to how trade happens. Knowing what to do and how to act will help lead you to success.
There are plenty of reasons to engage with Guatemala’s business etiquette. The economy is projected to continue growing above regional averages throughout 2024. While the country might not be everyone’s first thought for investment, it has plenty of room for further development and has enticing prospects ahead.
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Learn about the most important aspects foreign executives should consider in regard to Guatemala’s business etiquette. Biz Latin Hub is experienced in the region and can help you navigate the waters both in the initial period of company formation and throughout your company life cycle.
Guatemala’s business etiquette by Hofstede
Business etiquette includes the norms and values that shape human behaviour in corporate environments. It involves internal and external communication, social engagement, employee motivation, and, last but not least, economic goals.
The Dutch social psychologist and anthropologist Geert Hofstede is one of the best-known representatives in the field of business etiquette. He created a model of four cultural dimensions – power distance, collectivism vs individualism, masculinity vs femininity, and avoidance of uncertainty – commonly used in the analysis of business culture.
To understand Guatemala’s business etiquette, we will analyze each Hofstede’s cultural dimension and the scores given to Guatemala based on this.
Power distribution in Guatemala
Power distance defines how the less powerful members of organizations expect and accept unequally distributed power.
Scoring 95, Guatemala’s business etiquette has the second-highest power distance worldwide. This means that decision-making processes run from top to bottom and employees are not allowed to contradict these decisions.
In other words, the hierarchy in Guatemala has great importance. Not understanding this could lead to negative consequences. To avoid this, it is essential to keep the cultural power distance in the country.
In some Western countries, expressing opinions and contradicting decisions stands for independence, courage, and initiative. However, this behavior in Guatemala could be seen as rude and disrespectful.
Collectivism in Guatemala’s business etiquette
The more collectivist a country is, the higher priority teamwork and relationships have. Collectivist cultures attribute great importance to their groups, instead of self-realization. Families are usually very large and group ties are quite strong.
Scoring 6 in the dimension of individualism, Guatemala is the most collectivist country in the world. This means mutual loyalty is vital. Furthermore, collectivist cultures demand high-context communication, which means that implicit communication and non-verbal signals are indispensable.
High context communication in Guatemala
The concepts of high context and low context communication go back to the American anthropologist and cultural scientist Edward T. Hall.
In Guatemala’s business etiquette, high context communication is common. This means that people need a significant amount of contextual information about individuals before they can establish private or business relationships. Therefore, business is generally conducted through personal relationships.
Furthermore, Guatemalans convey information not only through words but also through the voice, body language, facial expression, eye contact, speech patterns, and use of pauses in speaking. Likewise, people in Guatemala rely on references to previous encounters, status, and mutual friends.
There are also some significant aspects often seen in high-context cultures you may want to consider:
- Heavy use of non-verbal signals.
- Indirect communication is seen as an art form.
- Conflicts must be resolved before work can begin.
- Business relationships are based on trust and develop slowly.
- Your own identity is rather rooted in the group.
- Thinking patterns are more holistic and deductive.
- There are a few fixed rules.
- Information is mainly acquired through informal networks.
Rules orientation in Guatemala
Uncertainty Avoidance describes how the members of a culture feel threatened by unknown situations or beliefs.
Guatemala’s culture has quite high uncertainty avoidance. Countries with a high level of uncertainty avoidance analyze future plans to make the unknown/insecure predictable and controllable. Order and law are in the foreground.
There is also a high degree of rule orientation and greater concerns about health and money. An important criterion for the business context is a significantly lower error culture as well as various strategies to make no mistakes. Unknown situations create discomfort.
Executives should take this aspect of Guatemala’s business etiquette into account when connecting with partners or hiring staff.
Navigate Guatemala’s business etiquette with Biz Latin Hub
Understanding Guatemala’s business etiquette can become an important part of the long-term success of your business operations. However, we recommend getting support from experts to professionalize your business operations according to Guatemala’s business etiquette standards.
Biz Latin Hub has an international and multilingual team, operating in more than 16 countries in Latin America and the South Pacific. Our expert lawyers and accountants provide tailor-made solutions in market entry and back-office support.
Our vast experience and wide range of backup services ensure quality work when supporting you with legal services, visa procedures, PEO, recruitment and hiring, payroll management, accounting and taxations, and others. Contact us now to receive personalized assistance.
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