This helpful guide contains information on the business culture, hierarchy, and etiquette of South African businesses, as well as details on how to conduct negotiations.
The South African System of Hierarchy
Large corporations are the primary drivers of the South African economy, which also features a small and medium business sector that is only moderately developed. As a consequence of this, the conventional organizational structure of South Africa is in the form of a pyramid. This structure has a great number of layers and is strongly oriented vertically. The structures, on the other hand, have been flattening as a result of global management trends over the recent past. The process of globalization has led to the decentralization of decision-making as well as an increase in the amount of responsibility held at lower organizational levels.
It is more common for South African groups to coexist than for them to combine their societies. This may come across as somewhat surprising to an outsider who is not familiar with the significant legacy that apartheid continues to have on South African society. Despite this, South Africans do have a shared identity, even though no one can sufficiently describe what this South African identification entails and what it consists of exactly. In addition to this, there is a robust group orientation, which can be observed to be at its most pronounced among many black South Africans.
Building solid personal relationships is considered to be the most crucial component of South African business culture. This is due to the fact that a large number of South Africans want to be able to rely on the person they are doing business with. Rarely does one directly confront another person. The vast majority of South Africans don’t value the practice of haggling over matters of profit and expense. Instead, they work toward the goal of establishing a situation in which all parties involved can emerge victorious and come out ahead.
The time horizon for planning ranges from one year to three years out (five-year). Despite this, many larger and more forward-thinking businesses have devised long-term corporate strategic plans and initiatives that cover up to ten years or even longer. Even though the country is becoming more friendly to business, visitors from other countries should seek the guidance of local professionals when navigating South Africa’s complicated legislative structure and tax system.
Various get-togethers in South Africa
The atmosphere of meetings can often be quite casual. Maintain punctuality in accordance with the agenda, but make sure to leave some space between the two meetings just in case one of them will keep you waiting. A good amount of time will be allotted at the start of a meeting for participants to introduce themselves to one another, engage in small talk, and trade business cards. It is not common practice in South African business culture to give gifts.
Taking responsibility for making decisions typically moves up the organizational hierarchy. To ignore this tradition would be to question the way things have always been done, which is not always a wise course of action. It is in everyone’s best interest to enter negotiations with the individual who is in charge of actually making decisions so that any unnecessary delays can be avoided.
It is important to keep in mind that deadlines are not always understood to be legally enforceable obligations but rather as being somewhat malleable. When establishing a contract with your trading partners, it is essential to include dates for the duration of the agreement.
The Way That Time is Perceived in South Africa
Being punctual is essential in all aspects of doing business in South Africa, but it is especially important when going to a meeting. In this scenario, being punctual means arriving at the designated location with a minimum of ten and a maximum of five minutes to spare before the start of the actual meeting as per the agenda.
Appointments are essential to the functioning of the South African business world. It is abundantly clear that the vast majority of South Africans, irrespective of their ethnic backgrounds, favor face-to-face interaction over a phone call or an email contact. It is best to avoid scheduling meetings between the middle of December and the middle of January, as well as the two weeks surrounding Easter since these times are peak travel times.
South Africa Has Its Dress Code
People tend to dress in a manner that is more or less conservative when they are at work. However, you should not be surprised if you see people dressed in conventional African garments while you are at work or in a business meeting. This is something that occurs frequently during get-togethers in the evening and dinners.
Wining and Dining
Lunches and dinners dedicated to conducting business are extremely prevalent in South Africa. In addition, business breakfasts enjoy a lot of popularity. Even though formal bargaining doesn’t typically take place during meals, a business may very well be discussed.
Cards for Business Use
During a meeting, exchanging business cards is standard practice. This typically occurs either right before or right after the very end.