How to understand Croatia’s business culture

coffee
Croatian do business and have meetings in cafe bars

Croatia does not have a developed global business sector, still relying heavily on tourism. However, this is changing with a younger, highly skilled workforce attracting new cutting-edge industries like IT and green energy.

Croatia’s business culture is informal, relying on large social networks, with little formality in terms of chic offices, impressive marketing materials, or strategic approaches to business.

A Croatian will use this network to work miracles for you, but you must know the game’s rules. Ignore the basics, and you will land at the bottom of a Croatian’s to-do list. Understand the rules, and you will get more than you ever hoped for.

In this article, we cover:

The facts are these…

Understanding Croatia’s business culture

What is a national business culture?

Is there such a thing as a national business culture? Yes. The way we work and do business has to do with the value systems we were brought up with. They influence our behaviors in a systematic and predictable way.

Why is that? As children, we were rewarded for doing what our culture regards as right. So when we experience something we were taught was not right, our gut reaction is, “This is wrong!” When, in fact, it is just different.

An American child, for example, is encouraged to talk about their achievements. “Tell Aunty Vicki about that goal you scored in football!” Americans do not have a social net and must fight hard to get to the top. They admire people who succeed “against all odds”. To do so, Americans need to market themselves aggressively and say how wonderful they are.

Now imagine an American meeting a Swede. In Sweden, a social welfare state, modesty is valued. Children are taught not to think they are special, but to think of their contribution to the greater good. So a Swede may not be impressed by an American trying to show how successful he is. And an American may judge a Swede who is not upfront about what they have achieved as an underachiever.

Even though we live in a global world, we will almost always respond negatively to behavior we were conditioned to believe is wrong. As a Briton who has coached intercultural communication in Germany for 20 years told me: “Germans are direct, and even though I know this is because they value honesty, the Briton in me, brought up to be polite, still finds this honesty hurtful.”

How values affect business behavior

Our values guide ALL  our business behavior: how we promote ourselves; how we motivate workers; how we organise our working lives; our meetings; how we relate to business partners; how ready we are to take risks; even down to small things: table manners (important for that first business lunch!); courtesy – do you call someone by their first or last name?

So even if you are dealing with a young Croatian who has worked and studied in other countries or with an expat who has lived in Croatia for years, you still need to be aware of the underlying value systems that guide their behaviors.

And if you are doing business in Croatia because you fell in love with the country on holiday, remember: our holiday selves are very different from our work selves. Foreigners come here to enjoy a different culture. Equally, Croatians welcome them as guests. But when foreigners and Croatians work together, they are guided by business values.

Quick ways to understand Croatian entrepreneurs

Obviously, it takes time to learn all of Croatia’s values. But using these three tools, you can quickly work out how to adapt to any new culture.

  • Be aware of the main areas where business cultures differ – this gives you a framework to understand how value systems affect work lives
  • Identify areas where your business cultures may potentially clash
  • Troubleshoot!  – if you experience negative signals, check them out

Key areas where business cultures differ

The framework developed by the father of intercultural communication, the Dutchman Geert Hofstede, is very useful in understanding the key areas that influence our cultures:

  • Do we avoid uncertainty?
  • Are we individualistic or collective?
  • Are we feminine or masculine?
  • Are we short-term or long-term oriented?
  • How do we relate to power?
  • Indulgence versus restraint

I am a South African who has lived in Germany for 30 years but has a holiday home in Croatia. This is where Hofstede’s framework tells me I need to take extra care:

As a South African, I share the ability to deal with uncertainty with Croatians, meaning we both know how to “think on our feet”. However, the German and South African part of me is individualistic. This could potentially clash with the Croatian collective culture. As my accountant once told me: “We Croatians think as a group.” By contrast, all my actions have to do with building my life and that of my close friends and family. I have an underdeveloped sense of community.

As a South African, I am also a short-term thinker, used to the quick translating of plans into action and then moving on to the next big thing. This is an area where I could clash with Croatian, who like to develop long-term business relationships.

Where do business cultures typically clash?

#1 Dealing with uncertainty

Croatians are used to uncertainty, so they are good at improvising, taking risks, and trying out new things. They use gut feeling to decide whether to trust someone or a business idea. And if an idea appeals to them, they may jump in without a concrete plan. They will also change plans as they go.

Let’s contrast this to Germans, who avoid uncertainty. They plan, research thoroughly, and do not make any decisions until they are sure no uncertainty remains. They do not trust gut instinct or “feelings”. To prevent any chance of the unexpected, they do a lot of groundwork and only act on something they feel is 100% secure.  And once a plan is made, it is not changed, even if, by Croatian standards, the situation would require it.

#2 Indulgence versus restraint

This can be described in one example: Germans feel guilty about indulging. (They are the ones swimming lengths across the bay rather than sunning themselves!) Croatians enjoy life to the full with no guilt. So Croatians don’t do overtime. They are not over-achievers. Life, family, and recreation is top priority. This does not make them less professional, just more chilled about how they work.

#3 Image

Croatians rely on strong social networks to do business. Their status has less to do with projecting some kind of image than being seen as contributing to their networks.

They often work out of their homes or scruffy offices, which do not reflect their professionalism. This is even true of architects, who may design state-of-the-art houses but work out of gloomy offices in unrenovated buildings.

In Germany, by contrast, image is everything. You have a chic office. You have designer furniture and the latest model coffee machine. You have presentation material: a brochure, maybe, or at the very least, a website. It is all about showing that you are professional, competent, and efficient.

This relates to issues of trust.

#4 Building trust

In South Africa, we build trust by impressing our business partners with our achievements. We will even talk openly about how much money we have made. In Germany, people value knowledge and expertise above money, so they will not be impressed by a big car, but rather by your title as a doctor or professor. No amount of expert knowledge helps. You need to have some kind of paperwork to back up your claims at expertise. And of course, your image radiates trustworthiness.

A Croatian will measure you against the value systems that underpin Croatian social networks. Are you good company? Are you warm-hearted? Are you open to joining the network? Do you have a family? Will you share some personal information about yourself? Do you bring gifts and also accept gifts from your Croatian business partner? In a word, before a Croatian will do business with you, they want first to “read you”. Only then can they build trust.

Also, boasting is a no-no in Croatia. Having to show expertise through qualifications and papers is not part of the Croatian DNA, though this is changing with the younger, more highly qualified, and global generations.

#5 Too friendly? Not friendly enough?

Learning to read social signals is essential. For example, Americans call each other by first name. They are very friendly. But this is not a promise of friendship. It is just how Americans communicate. They may even say, “Let’s get together sometime”, but they don’t really mean that.

Croatians are very social. So when they hear “let’s get together” it is for them a fixed invitation, possibly even for that day. They may also read the American’s friendliness as an offer of friendship. But when they invite them to a meal or any other typical Croatian warm-hearted open-house move, they could make that American uncomfortable. Most likely he or she wants to keep the business relationship professional and not make it personal.

A Croatian may then decide to drop the idea of working with the American, no matter how good the conditions seemed to be. While Americans live to work, Croatians work to live and so good relationships are essential in business.

#7 Formal or informal address?

In Croatia, the formal address is used for strangers. And if a first name is used then it is with a “Mr” or “Miss” or “Mrs”. In Britain and its former colonies, there is no polite form of addressing people. Most of us would find it surprising that you could offend a Croatian by addressing them informally. We also would use “Ms” and not “Mrs” or “Miss”, terms long rejected by feminists because they stigmatize the unmarried.

#8 Small talk

Younger, more global generations in all cultures have less strict rules about this. But baby boomers may be more traditional. Germans typically do not do small talk in business. No jokes. No personal questions. This is regarded as frivolous. The British will talk about the weather or something similarly harmless. But they place value on putting others at ease, so they will joke. South Africans are drama queens and love to share their latest crises, even with strangers.

Croatian small talk is more “real”, more revealing about themselves, and more personal. But they do not discuss crises like we South Africans do! Insider tip: Croatians can come across as cold until you unlock that first smile. There is a trick on how to do this.

[Read: 10 brilliant things you can say to make a Croatian smile]

#9 Written communication

In more formal economies like Germany, the US, or Britain, everything is put in writing and agreed upon. This means there are no debates about what was agreed and what was not. So they email a lot. But Croatians avoid emails, preferring direct communication, the best being over a long coffee in a cafe bar or on the telephone.

A Croatian lawyer once told me that he rarely reads his emails! So imagine a German sending a proposal to a potential Croatian business partner and getting no response. He understands: “The Croatian is not interested.” Whereas, in fact, had the German organized to meet the Croatian face to face, he would have got the desired response.

#10 Motivating staff

Global business theory, which mostly comes from America, is that you praise staff. However, ideas from America do not necessarily suit all cultures. Take the Chinese, who are a collective society. If a Western singles out one team member to praise, that person will be humiliated. Why? In Chinese culture, work is a communal effort and if one person is singled out, the whole team loses face.

And Americans use superlatives: “Thank you for raising the bar!” “I was so excited to receive your report…” An intercultural expert once told me that if an American calls your idea “interesting”, they don’t value it.

A German, Brit, or Croatian would be much more reserved. So imagine if an American pours their heart and soul into a job for a German or Brit or Croatian, and their feedback is that it is “good”. (A Croatian may simply say “It’s OK”!) The American understands: “This is not good enough”.

How do you motivate Croatians? By “seeing” them as people, with the warmth you use for friends. After an interaction, you should let them know how happy you were to meet them and how much you liked their ideas.

#11 Giving criticism

Criticism is also a cultural matter: A German is direct. “This does not work. Please fix a,b,c…” A Briton is very polite: “This is really great, but I just wonder whether we need to add…” And a Croatian will most likely laugh in your face as in “Really? You must be joking!” or tease you. “Vicki really thinks…” So take note of how your Croatian business partner gives feedback, and then try to be as Croatian as you can.

Beware of direct accusations or any signs of aggression. Croatians take offense easily and will drop all association with you if you cross a line. And if you do, you won’t have a second chance.

#12 Meetings

I am always startled by Croatian spontaneity. If I call and say, “I want to discuss this with you” or “let’s meet”, I mean within the next three weeks. But almost always, my Croatian partner will say, “I can’t do it today, but what about tomorrow?” It catches me unprepared every time because I am expecting to have a week or so to prepare! However, as I have learned, if I repeatedly put a meeting off because it is too soon for me, my partner may lose complete interest in doing business with me!

Then there is the long coffee. My first business meeting took place on a glorious summer’s day in a cafe full of people in Rijeka. My expectation was we would discuss what needed to be done, record it for both of us to agree on decisions taken, and then, with a written plan in my hands, I could proceed. Instead, the conversation moved from the personal to business; we were interrupted and distracted by those around us; there was no way to record decisions; there was no agenda being followed, and while I had a good feeling about my business partner at the end of the meeting, I had nothing to go on. No real sense of what he wanted from me, nothing written, but an expectation from him that based on the “meeting” I would bring immediate results. In Croatia, deals are done in cafes. And Croatians work miracles this way!

Troubleshooting with Croatian business partners

If your Croatian business or work partner does something you do not understand, check it out. Is this typical Croatian behavior? How do I react to it? Did I do something wrong?

There is little information online on the Croatian business culture. So ask locals or expats who understand the culture; check our blogs on how Croatians think; or simply say to your Croatian partner: “I may have done something very South African / German / South African here. I hope I did not offend you….”

Because if you unknowingly break one of the Croatian business culture rules, you could lose that business partner, or get less than good performance out of them. So, you also need to know which of your behaviors a Croatian may not approve of.

View our other business posts

Please note: Information provided by Expat in Croatia is only for the purposes of guidance. It does not constitute legal or financial advice in any form. Croatian laws and bureaucratic rules often change, and each personal case is individual, so different rules may apply. For legal advice, contact us to consult with a licensed Croatian lawyer. For financial advice, contact us to consult with a licensed Croatian tax advisor or accountant.

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