Spain is a country of fascinating diversity, visible in its people, its countryside, and its profound history. The variety of cultures that have influenced Spain are vast, including the Romans, Moors, Phoenicians, and Gypsies. With such a deep history behind the Iberian Peninsula, each region of Spain could easily be considered an independent country.
The history of Spain dates to the Middle Ages. In 1516, Habsburg Spain unified many disparate predecessor kingdoms; its modern form of a constitutional monarchy was introduced in 1813, and the current democratic constitution dates to 1978. By the 16th century, Spain was the most powerful country in Europe because of wealth obtained from its exploration of North and South America.
By the latter part of the century, however, it had been in several wars and its power declined. Spain’s modern history is marked by the bitterly fought Spanish Civil War of 1936-39, and the ensuing 36-year dictatorship of General Francisco Franco. After Franco’s death in 1975, Spain made the transition to a democratic state and built a successful economy, with King Juan Carlos as head of state.
Today most of Spain’s area is in southwestern Europe on the mainland of the country that is south of France and the Pyrenees Mountains and east of Portugal. However, it also has territory in Morocco, the cities of Ceuta and Melilla, islands off the coast of Morocco as well as the Canary Islands in the Atlantic and the Balearic Islands in the Mediterranean Sea. All this land area makes Spain the second largest country in Europe behind France.
Most of the topography of Spain consists of flat plains that are surrounded by rugged, undeveloped hills. The northern part of the country, however, is dominated by the Pyrenees Mountains. Largest city is Madrid, with about a 6.5 million population. The weather of Spain is temperate with hot summers and cold winters inland and cloudy, cool summers and cool winters along the coast. Madrid, located inland in the center of Spain has an average January low temperature of 37˚F (3˚C) and a July average high of 88˚F (31˚C).
Spain has a strong economy that is considered mixed capitalist. It is the 12th largest economy in the world and the country is known for its high standard of living and quality of life. The major industries of Spain are textiles and apparel, food and beverages, metals and metal manufactures, chemicals, shipbuilding, automobiles, machine tools, clay and refractory products, footwear, pharmaceuticals and medical equipment. Agriculture is also important in many areas of Spain and the main products produced from that industry are grain, vegetables, olives, wine grapes, sugar beets, citrus, beef, pork, poultry, dairy products and fish (CIA World Factbook). Tourism and the related service sector is also a major part of Spain’s economy. GDP per capita: $38,116. Inflation rate 1.96%
Politics – The constitution of 1978 enshrines respect for linguistic and cultural diversity within a united Spain. The country is divided into 17 regions which all have their own directly elected authorities. Current political leaders are King: Felipe VI (since 19 June 2014), hereditary.
President of the Government and Prime Minister: Pedro Sanchez (since June 2018), Spanish Labour Socialist Party. Spain is a constitutional monarchy based on a parliamentary democracy. Power is highly decentralized; the autonomous communities have a high level of legislative, executive and fiscal autonomy (Basque country and Navarre, own taxes).
The King is the Head of the State and the commander-in-chief of the army; his role is mostly ceremonial. Following legislative elections, the leader of the majority party or the majority of the coalition is appointed Prime Minister by the Sovereign then elected by the parliament for a 4-year tenure. The Prime Minister is the head of the government.
He is also called the President of the Government. He holds executive power which includes the execution of the law and the management of the routine affairs of the country. The Council of Ministers is appointed by the king on the recommendation of the Prime minister. There is also a Council of State which enjoys the role of the supreme consulting body of the government. But its recommendations are not binding. The legislative power is bicameral. The Parliament, called Cortes Generales
Gender roles – In 1978, the Constitution granted equal rights to women, allowing them, especially women living in urban areas, greater access in society. Men are now required, by Spanish law, to share half of the household chores (Global Road Warrior 2010a) but they can also receive time off from work for parental care
Overview of the business climate (including what makes this country favorable to do business at? What makes this country unfavorable to do business at? What interesting things we should know about when conducting business in this country?) (1000 words, 5 minutes).
To set up a business in Spain, it is essential to understand the business climate of the country as compared to other European countries. Studies have emphasized that Spain has not been as competitive in the information technology market as other countries. These reports highlights Spain would profit by paying more attention to innovations in the fields of energy, mobility, health and environment.
According to Expansión, one of the major Spanish newspapers in the fields of economics and politics, the cost of living has been increasing. Goods are more expensive, petrol prices are up 30% in less than 12 months and all these in addition to higher taxes. According to their study, price of water, bus and taxi fares have increased over 6%. shopping basket PRICES ARE UP by almost 10 percent.
However, salaries have not varied accordingly, both In the public and private sector. 2017 in Spain was marked by the Catalan referendum to achieve secession. Following the “yes” vote and faced with the determination of the Catalan authorities to declare independence, the region was placed under the central government’s control in Madrid. The enacting of this exceptional provision in the Spanish constitution was followed by the calling of early regional elections, in which the central protagonists for independence, despite being pursued by legal action, stood and obtained the majority again. The prolonging uncertainty surrounding this political situation is expected to decrease Spain’s GDP growth to 2.3% in 2018 and 2.1% in 2019/2020 according to Banco de España. In short, the Catalan crisis will continue to shape Spain’s immediate economic future. Banco de España also estimated losses derived from the Catalan crisis at 30 billion euros
Competitive factors in Spain despite the economic crisis are globalization of markets, well-developed infrastructures, and good business strategies. However seems like Spain lacks in research and development investment and flexibility in the job markets. At the moment, income tax favours both foreign and local companies. Special beneficial tax rates apply to companies entering the market.
According to current legislation (Real Decreto Legislativo 4/2004, de 5 de marzo, Ley del Impuesto sobre Sociedades), new businesses and SMEs who have a total of EUR 8 million revenue can apply for a 25% taxation rate up to €120, 000 instead of the standard 30%.
As of 2009, a new incentive to prevent workers from being laid off was established for companies of all sizes. Companies who do not reduce staff in the subsequent 24 months will be allowed to apply for 25% taxation on their business profits instead of the usual 30%.
Big companies may conduct business meetings in both English and Spanish. But the official business language is Spanish. This can be considered as a negative factor for multinationals with a limited number of bilingual or multilingual employees. Cost of education like language classes, new hires with these skills and their training or translators’ expenses can add to the costs of conducting business in Spain.
While conducting business treat everybody with the utmost respect. The position of employees in the company may not define their power and influence within the company and their peers. The people in the lower level of the organizational chart may be more powerful that those at the top.
In Spain the look of the person one is doing business with is very important. Men should wear tailor-made woollen or linen suits in dark colours and white cotton shirts with silk ties. Women should wear well-cut suits of high-quality fabric, and feminine accessories are encouraged. Designer clothes and brand names will be noted with approval for both men and women.
The average full-time working week is just over 40 hours, from 9am and can go on until as late as 8pm, with long lunch breaks between 2pm and 4–5pm still practised in some companies. Work talk starts after coffee, and lunch is considered a time to relax and mix with colleagues, it’s definitely not the working lunch you may be used to back home. However, in larger companies and multinationals, particularly in the larger cities such as Madrid and Barcelona, you will be likely to find the usual working hours of 9am – 5pm and a standard one-hour lunch break.
Local labor laws. These controls working hours, holidays, as mentioned before Spain has 16 official annual holidays, breaks like siesta which can have a great impact on the subsidiary operation along with time zones difference. With headquarters. he normal working hours must average 40 hours per week maximum of actual work, calculated on an annual basis.
The actual number of normal working hours may never exceed nine per day unless a collective agreement or an agreement between the company and workers’ representatives establishes a different distribution of daily working time, which must, in any event, respect the rest time between working days. Employees under 18 years of age may not do more than eight hours of actual work per day, including hours allotted to training, where applicable, and the hours worked for different employers if they work for more than one employer.
At least 12 hours must elapse between the end of one working day and the start of the following working day. When the duration of the continuous working day exceeds six hours, a rest period of at least 15 minutes must be allowed during the day. Workers are entitled to a minimum weekly rest time of one and a half uninterrupted days, which generally include Saturday afternoon or, where applicable, Monday morning, and the whole of Sunday.
In the case of workers under 18 years of age, the rest period is a minimum of thirty minutes and must always be allowed when a duration of the continuous working day exceeds four and a half hours. The duration of the weekly rest time for people under 18 is a minimum of two uninterrupted days.
Language barriers – most locals employees in subsidiaries will be conducting business in Spanish. This can have a negative impact on the communication with headquarters and will increase costs, time and outcome of training and development. Economic factors like the exchange rate flunctuations and inflation are important issues because these require more intervention from HR to maintain comparability in salaries and benefits.
LOcal management culture ‘ managers do not expect to subordinates to make decisions, only the management team will make decisions. For the Spanish workforce the manager is perceived as a guide, employees culturally even discuss personal matters with managers and expect their guidance. Business decisions are solely made by managers. This can be a problem when decisions made by headquarters have to be implemented by subsidiaries and the local managers did not participate in the decision-making process. For this reason a flexible approach from headquarters is more efficient.