This handy guide includes information on South African business culture, hierarchy, negotiations, and etiquette in South Africa.
Hierarchy in South Africa
The South African economy is dominated by large corporations with a relatively underdeveloped small and medium enterprise sector. Consequently, the traditional South African organizational structure is a pyramid, consisting of many layers with a strong vertical inclination. However, due to global management trends of the recent past structures have been flattening. Decentralized decision-making and more responsibility at the lower organizational levels are the results of the globalization process.
Groups within South Africa tend to live side by side rather than merge. For a foreigner, not aware of the strong influences Apartheid still holds for the South African society, this may feel slightly surprising. Nonetheless, South Africans do share a common identity, even though no one is able to fully explain what this South African identity entails. Moreover, there is a strong group orientation, which is noticeably strongest among black South Africans.
South Africa is a collectivist culture, with high priority for family or other group interests. Talking about different groups within society is not uncommon, but political correctness has sometimes had some (unwanted) side effects when strong positive discrimination made it very difficult for white higher educated Sud Afrikaners to find work at their educational level. Currently, this is evening out but sometimes foreigners are taken aback at the still present self-censoring mechanisms.
Planning is short-term (one-year) to medium-term (five-year). Nevertheless, a lot of larger and progressive organizations have developed long-term strategic plans and initiatives covering up to ten years or more. Though the country is growing more business-friendly, a foreigner to South Africa’s complex legal framework and tax system should seek the assistance of local professionals.
Meetings in South Africa
Meetings can be rather informal. Be punctual according to schedule, yet do also plan some time in between two meetings in case the other will make you wait. There will considerable time to engage in small talk at the beginning of a meeting, to greet the participants and exchange business cards. Gift giving in South African business culture is uncommon.
The most important aspect of South African business culture is building stable personal relationships because the majority of South Africans want to trust the person they are dealing with. Direct confrontation is rare. Most South Africans do not appreciate haggling over profit and expenses. Instead, they aim at creating a win-win situation for the mutual benefit of all parties involved.
The responsibility of decision-making usually goes up the hierarchy. Disregarding this tradition would mean to challenge the established order of things, and is not necessarily an advisable move! Trying to avoid any unnecessary delay, it is prudent to negotiate with the person who actually has the authority to make decisions. Note that a lot of the time deadlines are not really perceived as binding commitments but rather as somewhat fluid. It is therefore advisable to include dates when setting up a contract with your business partners.
Time perception in South Africa
Throughout South African business life it is essential to be on time, especially when attending a meeting. And in this case, being on time means being at the given spot, preferably ten to five minutes before the actual meeting starts according to schedule.
Appointments are necessary for South African business life. Regardless of their cultural background, most South Africans clearly prefer a face-to-face encounter to a telephone call or email contact.
Avoid scheduling meetings from mid-December to mid-January or the two weeks surrounding Easter, as these are prime holiday periods.
Dress code in South Africa
At work, people generally dress more or less conservatively. Do not be surprised, however, to also come across people dressed in traditional African garments at work or during business meetings. This is certainly common during evening gatherings and dinners.
Wining and dining
Business lunches and dinners are very common in South Africa. Also, business breakfasts are quite popular. Although actual negotiations don’t generally occur during a meal, business may come up.
It is common to exchange business cards at a meeting. This often happens before or at the very end.