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COMMUNICATING IN COSTA RICA

Lanier

Lanier

BUSINESS COMMUNICATION IN COSTA RICA

Prepared for John Doe Head of International Sales ABC Financials LLC

November 20, 2012

Prepared by Glenn Lanier International Sales ABC Financials LLC

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INTEROFFICE MEMORANDUM
TO: John Doe FROM: Glenn Lanier DATE: November 20, 2012 SUBJECT: Requested Report on Business Communication in Costa Rica

The purpose of this report is to inform and educate ABC executives on how to properly communicate with Costa Rican business professionals. The report will delve deeper into multiple important factors that should be observed strictly to prevent accidental offence or disruption of any progress in the business transaction. It will discuss the importance of communicating, techniques on how to correctly go about communicating, along with social and cultural norms. Thank you for giving me the opportunity to report on this topic. I hope that this report meets your expectations and is an aid to the success of your Costa Rican business relationships.

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TABLE OF CONTENTS
EXECUTIVE SUMMARY iv CHAPTER I. INTRODUCTION 1 Background..1 Problem1 Purpose 2 Scope... 2 Limitation 2 Research...2 Organization 2 CHAPTER II. CULTURAL CHARACTERISTICS OF COSTA RICA4 Religious Influence in Costa Rica... 4 Cultural Mannerisms... 4 Costa Rican Characteristics. 5 CHAPTER III. NONVERBAL CHARACTERISTICS OF COSTA RICA... 6 Expressions.. 6 Personal Proximity.. 7 Greetings. 7 CHAPTER IV. VERBAL CHARACTERISTICS OF COSTA RICA... 9 Communication Formality...9 Speaking.. 9 Verbal habits..10 CHAPTER V. BUSINESS PRACTICES IN COSTA RICA11 Business Attire...11 Business Itinerary.. 11 Business Negotiating. 12 Business Faux Pas. 12 CHAPTER VI. REPORT SUMMARY.13 REFERENCES.. 14

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EXECUTIVE SUMMARY
ABC Financial LLC is a financial group that provides financing for retail properties. Because of its credentials and pristine services, a Costa Rican company, Princeton Properties, has requested its services. Exporting ABCs services has never been done; however ABC Financial LLC realized this to be a huge financial opportunity. To achieve this goal, ABC executives must be willing to adapt to the Costa Rican business cultures to ensure the success of its international business relationships.

This report is to inform ABC executives of the business communication differences between the people of the United States and Costa Rica. The information used in this report came from the Internet, books, and videos, along with the interviews of two experienced Costa Rican business men and one American business man experienced in Costa Rican business culture. This report includes information regarding Costa Rican business culture, verbal and nonverbal communication techniques, and business practices; this report excludes geology, climate, and federal laws regarding corporations. Costa Rican natives, also called Ticos, are relational people. A majority of the communication queues should be observed through nonverbal interactions, including: expressive facial features, preferred personal proximity, and initial greeting norms. The traditional business language is English; although, their national language is Spanish. They often conduct business in a more informal environment, such as over meals. Most meetings will begin with lite conversation. Typically conversation topics are of family, personal lives, or casual interests. Ticos are typically a more relaxed culture and, consequently, are less punctual; this lax attitude toward time is a cultural norm.
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Americans need to treat Costa Rican business professionals courteously. Imposing American standards and expectations can cause a large disconnect between parties, and, if Americans need to improve their policies, they should state that clearly at the beginning of a transaction. Ticos are a giving people, including in business. Negotiations should be to benefit both parties.

To ensure a favorable business relationship with the people of Costa Rica, ABC executives need to know proper communication and business techniques. Although the Costa Rican business culture is similar to the American business culture, Americans need to address the few differences. If ABC executives observe and apply the information in this report, seamless communication and transaction with the Costa Rican business professionals should occur.

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CHAPTER I
INTRODUCTION
ABC Financials LLC is a well-known financing company asked a Costa Rican company to finance its project. ABC has never financed outside of the United States. ABC realized that many opportunities exist outside of the states; ABCs executives have considered expanding their operations into Costa Rica beginning with this prospective client.

Background
ABC Financials LLC, established in 2005, has gained market share in over 25 districts including New York, Dallas, and Los Angeles. ABCs credentials have roused the interest of many clients, including Princeton Properties in Costa Rica. However, ABC has never considered the possibility of expanding its services outside of the United States. ABC Financials believes the companys best interest is to include clientele outside the United States.

Problem
Companies need to consider many obstacles when expanding internationally. A cultural disconnect between business parties may cause unintentional conflicts. For example, inappropriate conversational topics may be a problem. If the executives lack of knowledge continues, they can expect to encounter many issues that can result in severe consequences.

Purpose

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The intention of this report is to understand the Costa Ricans business practices and culture, along with nonverbal and verbal communication habits, so the executives may transact business appropriately in Costa Rica. With a full understanding of Costa Ricans business cultures, practices, and communication techniques, the executives can effectively market their services in Costa Rica.

Scope
This report was written explicitly for the purpose to inform the executives of the verbal and nonverbal communication, culture, and business practice expectations accepted in the Costa Rican business environment. This report will exclude issues pertaining to Costa Ricas government, climate, and geography.

Limitations
Although the information provided is second hand, all information given in this report is of professional quality. Had the team had the chance to visit Costa Rica, the report would have been more complete.

Research
The research team utilized information from the Internet, books, and videos. It also interviewed two Costa Rican business men and one American business man experienced in Costa Rican culture.

Organization
The report will first address the Costa Rican business culture and how it differs from the American business culture. Then, the report will expand on cultural characteristics of
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Costa Rica. Then, the report will describe verbal and nonverbal communication techniques used by Costa Ricans. Following, the report will educate on key business practices used by Costa Ricans. Finally, the report will summarize the major key points.

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CHAPTER II
CULTURAL CHARACTERISTICS OF COSTA RICA
Christopher Columbus discovered and baptized Costa Rica as a Spanish territory during his fourth voyage in 1502. Consequently, much of Costa Rica is influenced by the Spanish culture. Costa Rica has since represented itself, according to the Thunderbird International Business Review, as a model for Central American economies because of its strong democratic institutions, political stability, and open economy. (Mirchandani 335)

Religious Influence in Costa Rica


Although Costa Rica has diversified itself over the previous four hundred years, many aspects of the Spanish culture continue to be evident in their culture. Costa Ricas national religion, like Spain, is Catholic. The Costa Rican government practices religious freedom, but as observed, Catholicism is revered by many of the locals. A majority of Costa Rican immigrants, including: Jewish, Chinese, and Africans, have maintained their own beliefs.

Cultural Mannerisms
As John Lanier (2012) mentioned in his interview, [Ticos] are willing to work hard with you even if theyre not being paid. One notable trait of the Costa Ricans is their determination and hard work. An equal amount of effort should be exerted on both sides of any interaction with a Tico. Ticos are consequently recognized for being servant-like. Receiving treatment that may be viewed as servant-like could be expected in casual

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interactions with Ticos. As mentioned later in the report, Costa Ricans are very relatable and personable people. Some relatable topics include: family, sports, art, music, and other recreational topics.

Costa Rican Characteristics


A well recognize characteristic among the Ticos is integrity. This is observed regularly in their business interactions, but it also extends into their personal interactions as well. As mentioned by John Lanier (2012) Their word is their bond. What may seem as casual agreements should be considered as a more formal agreement. Much of the Tico culture suggests that words have stronger meanings. Ticos tend to analyze more deeply into what was said, or what theyre saying. John Lanier (2012) also stated in his interview that [Ticos] are a very polite and proper people that always exude extreme graciousness. One noted distinction between Costa Ricans and Americans is that gifts are more frequently exchanged on special occasions. Unlike in America, business gift exchanges are encouraged.

Much of the characteristics observed in Costa Rican culture are favorable. The Spanish historical influence has paved a way for a more giving, generous, and sensitive culture group. If ABC executives respect and imitate the cultural and social values of Ticos there will be little awkwardness.

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CHAPTER III
NONVERBAL CHARACTERISTICS OF COSTA RICA
Nonverbal communication has as large effect on a business interaction and can potentially cause unwanted noise between ABC executives and those at Princeton Properties. As mentioned to the team during an interview with John Lanier, Costa Rica is very Americanized, as the US is the main import/export country. There is an active Trade Agreement in effect. For the most part, communicating with Costa Ricans, or Ticos, is the same as with Gringos. They are a very polite and proper people and are always extremely gracious (2012). Nonverbal communications covered in this report are expressions, personal proximity, and greetings.

Expressions
As John Lanier stated, Costa Rican Natives, or Ticos, have adapted to an American way of business (2012). Americans should notice the differences in gestures as Costa Ricans will rely on the context of their nonverbal cues to help convey the message.

Posturing can convey different attitudes; Americans should consider this. For example, hands on hips or arms crossed portray hostility. To avoid any confusion among parties, an appropriate posture for an ABC executive would be to cross hands behind the back or hold them in a relaxed position to the side. These slight differences speak a lot to Ticos.

The Ticos are expressive people, often showing eccentric eye brow and hand motions. ABC executives should appropriately match the expressions of the Ticos. In a

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web article, Cultural Information Communication Styles, the author expands on the importance of eye contact: Eye contact means that you are being truthful. However, some people could be shy and avoid eye contact, especially those from rural areas and those who have very low level of education or are very young. In business, eye contact it is very important to show honesty (2009). Maintaining a good standing with the Ticos is important, and the reputation of the executives can ride on something as small as good posture or constant eye contact.

Personal Proximity
ABC executives should be aware of their proximity. One of the exceptions to John Laniers earlier statement that Costa Ricans are very Americanized is the distance that Ticos prefer. Ticos are a friendly people, but, as far as personal space goes, they require more than Americans.

Proxemics is the study of the comfortable distance between people while communicating. This obviously is contextual; as far as business interactions go, Americans should maintain a distance greater than an arms length to ensure a comfortable interaction with a Tico. Ticos are independent-thinking: they value their space and their autonomy. Breaching a Ticos personal space may communicate intimacy or inferiority.

Greetings
Greetings in Costa Rica are similar to those in America. A traditional handshake is the most common greeting. A substitute for a handshake could be the one-hand-clasp-toback-pat gesture. Firmly gripping the Princeton Properties executives hand will portray

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professionalism and confidence. In the case of greeting those of superiority or subordinate position, the superiors hand should be on top of the subordinates while shaking. This will show those meeting who is in command. Americans should be aware that too abrasive of a grip can cause an uncomfortable first impression. John Lanier (2012) outlined an additional cultural norm for casual. For women, you greet them with a light kiss on the cheek. This is only once you have a casual relationship with them. You would not do that on your initial meeting, but may on your second.

Gestures communicate; ABC executives should use gestures carefully. They should maintain the integrity of ABC Financial by exuding honesty and confidence through the nonverbal gestures examined in this chapter. If executives are unsure of their gestures tact, they should mirror the gestures of the Ticos. As the saying goes, mimicking is the highest form of flattery, a truism throughout the Costa Rican culture.

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CHAPTER IV
VERBAL COMMUNICATION
Costa Rica, being one of the largest tourist locations, regroups with many nationalities. This chapter is unlikely to cover all languages spoken in Costa Rica. The Costa Rican national language is Spanish, although many dialects exist. Executives can expect to speak English as it is the language of business. However, they must observe some of the Costa Ricans habits and formalities to avoid confusion or offense between transacting business parties.

Communication Formality
Ticos are proud of their accomplishments; therefore, titles are important in business communication. When speaking with people of seniority, executives need to place the word Don in front of their surname. Executives should avoid using the title Senior, as locals use it to refer to a non-educated Tico. Executives should greet Ticos with a college degree with the title of Licenciado(a), which indicates that the individual has a licenciatura, or degree.

Speaking
Spending extra time familiarizing with Spanish terms will go a long way to build an executives reputation with the Ticos. If executives choose to speak Spanish, they should abide by Spanish speaking formality during the first few introductory meetings. They should use the formal conjugation, usted, if they speak Spanish. However, speaking Spanish is likely to be optional. One term used to greet, say goodbye, or show appreciation is Pura Vida, which literally means pure life.
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Verbal Habits
John Lanier (2012) stated that Ticos are somewhat slower paced than Americans.
Executives should be aware that they cannot rush Ticos to get to the point of a topic. Executives should rather be patient in awaiting a response. At the beginning of a meeting, the executives should expect to spend at least 15 minutes having casual conversations, showing their interest in the Ticos personal lives. Ticos generally avoid talking about religion, politics, or anything that could cause an argument. Maintaining agreeable and lighthearted conversations will provide for an easy transition.

Typically Costa Ricans communicate in an informal fashion, but only after establishing a relationship. If the executives follow the verbal communication guidelines described above, their communications should be without hiccups. Obviously, each individual communicates differently, so these guidelines may be imperfect. When in doubt, executives should mimic the Costa Ricans behaviors and mannerisms.

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CHAPTER V
BUSINESS PRACTICES IN COSTA RICA
Contrary to the nonchalance expressed in the Costa Rican culture, Costa Rican business professionals expect a sense of formality in business interactions. Although the executives may be more familiar with this style of business, there are still some differences that should be observed in order to avoid offense.

Business Attire
Similar to the American standard of business attire, Costa Ricans wear dark suits and ties. However, once a business relationship has been established, business casual is appropriate. ABC executives should dress conservatively. Business men should dress in a neutral colored suit, and women should wear a conservative dress suit, or knee length skirt.

Business Itinerary
As explained in the interview with Julio Cedeno (2012), typical meetings can be expected to last from 1 to 3 hours. Any meeting scheduled longer should allot time for a food break. Morning meetings are to be held no earlier than 8 a.m. Lunch meetings occur between 12:30 p.m. - 2:30 p.m. and can be held over a lite meal. Any afternoon meeting can expect to be held between the times of 2 p.m. and 6 p.m. Dinner meetings are not out of the ordinary and can be held between 7 p.m. and 10 p.m. Avoid going over the time youve scheduled with the Tico. As reiterated by Julio Cedeno (2012), Sharpness is not one of our best values. Fifteen minute delays are still acceptable. The executives must be patient with the Ticos.
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Business Negotiating
John Lanier (2012) brought to the attention that Ticos are not nearly as money driven as most U.S. businesspeople. Executives should keep this in mind when negotiating a price agreement. Swinging far to either side of a negotiation can cause severe relationship tension. Ticos may relate a monetary disagreement to being exploitive, and lacking a favorable relationship. The executives prices should be well thought out and should reflect an easily perceived benefit for both parties. Costa Rican business culture exemplifies benefiting both parties to the fullest extent.

Business Faux Pas


Some international business casualties can be linked to simple mistakes that elsewhere may be accepted. Some of the mistakes shared by Julio Cedeno (2012) may help in avoiding such unfavorable results. Executives should be aware of their opinions. If not closely monitored, they can often be perceived as imposing. As stated earlier, Ticos are very independent and should not be unreasonably pushed to believe or share any opinion. Meetings should not be summoned in short notice; Executives should allow for at least a day in between planning and meeting. Being courteous of local costs; long distance calls should only be seldom made and should be made on personal phones. Avoid using parcel services to send goods or samples out of the country. Lastly executives should be patient and understanding of Ticos email response time. Julio Cedeno (2012) humorously put [Americans] pretend that everybody uses a Blackberry or that emails should be answered immediately.

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CHAPTER V
REPORT SUMMARY
Through the research of Costa Rican culture, the executives can observe a significant contrast to the American business culture. ABC executives can rest assured that all differences were covered sufficiently. The executives must be aware of these differences. If the guidelines explained through this report are exercised correctly, the executives should move smoothly through their Costa Rican business transaction.

A majority of the communication queues should be observed through nonverbal interactions, including: expressive facial features, preferred personal proximity, and initial greeting norms. They often conduct business in a more informal environment, such as over meals. Ticos are typically a more relaxed culture and, consequently, are less punctual; this lax attitude toward time is a cultural norm. Imposing American standards and expectations can cause a large disconnect between parties, and, if Americans need to improve their policies, they should state that clearly at the beginning of a transaction.

The ABC executives must acknowledge all of the cultural and social differences between Costa Rica and the United States. If ABC executives meet all points in this report, communicating and interacting with the Ticos should be seamless.

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REFERENCES

Aguilera, L. (2012, October 14). Interview by G Lanier [Video Tape Recording]. Business communication in costa rica. Costa Rican Business Professional, Costa Rica. Cedeno, J. (2012, October 12). Interview by G Lanier [Web Based Recording]. Business communication in costa rica. Costa Rican Business Professional, Costa Rica. Lanier, J. (2012, October 6). Interview by G Lanier [Personal Interview]. Business communication in costa rica. International Business Professional, Dallas, Tx. Luecke, M. (2004, May 16). Nonverbal communication. Retrieved from http://acad.depauw.edu/~mkfinney/teaching/Com227/culturalportfolios/Costa_Ric a/nonverbal.htm Mirchandani, D. (2005). Doing business in costa rica. Thunderbird International Business Review, 47(3), 335. Retrieved from http://libproxy.library.unt.edu:7125/docview/202785817 N/A. (2009, October 15). Cultural information - costa rica. Retrieved from http://www.intercultures.ca/cil-cai/ci-ic-eng.asp?iso=cr Premarathne, G. (2009, October 10). Costa rica culture. Retrieved from http://www.tourism.co.cr/costa-rica-art-and-culture/costa-rica-culturalheritage/costa-rica-culture.html

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