The Italian Business Culture

By optilingo

What Is It Like to Do Business in Italy?

Before you begin working your way to foreign language fluency, it helps to understand the culture behind the language you’re learning. After all, language exists to help a group of people express their ideas and beliefs. Italy is an old country with a rich history and culture. As you begin your Italian language program, gaining a strong grasp on this history, the values, and the etiquette will help you rapidly achieve success. In particular, if you want to do business in Italy, it helps to understand the business culture before you begin talking to any potential partners.

The Family Owned Businesses

Most businesses in Italy are family owned firms that are small or medium-sized. In most cases, when the father retires, the son or daughter takes over running of the business. The productivity of these businesses is much higher than that of corporations and businesses in the state sector. In addition, such companies have a tendency to pay cash to their employees, hire friends and family, and outsource tasks to avoid taxes, unions, and banks. Such enterprises are now faced with serious competition from both international and national conglomerates, as the latter have lower costs, a higher output, and extra resources to spend on new innovations in technology.

Additional obstacles to competitiveness include the inefficiency of public institutions, and low investment in development and research. Approximately 90% of all Italian companies are S.N.C., with 15 or fewer employees. The South, referred to as the “Mezzogiorno,” begins just below Rome–although some are of the opinion that it includes Rome. Northerners are primarily viewed as being concerned with money, while those in the South are thought to be more interested in the good life and power.

Unemployment in the South is 22%, while the North boasts an unemployment rate of only 5. Southerners are frequently criticized by Northerners for grabbing state handouts and subsidies.

A Different Approach to Keeping Shop Hours

If you are planning on doing a little shopping in Italy, you are going to have to plan accordingly the store hours, just as you do in most countries. For the most part, hours in Italian shops aren’t that different from what people have become used to in the United States and Great Britain. Most Italian shops are open around 8:30 a.m.and close at 6:00 p.m., 7:00 p.m. or 8:00 p.m.

If there is one big difference between shopping in Italy and shopping in other parts of the world, it is that the stores in Italy tend to shut down for long lunches. While in the United States, employers tend to stagger work schedules so that someone is always working over the lunch hour, Italians take the lunch break quite a bit more seriously. Sometimes these breaks will be a couple of hours and will see the stores shut down around 1:00 p.m.and won’t open against until 3:00 or 4:00 p.m. They will not leave any employee behind to work just so the business can make a little more money.

Once employees are back from their extended lunch break, the stores will stay open until they are ready to close for the night. There are also quite a few shops that will close down for a weekday afternoon to make up for forcing employees to work on Saturday. Because it is difficult to know which businesses will do this, you really need to plan your shopping ahead of time. If you are traveling with children, it’s going to pay off to check and double check that your favorite stores are indeed open when you want to go shopping with them.

You’ll also want to make sure that the store you are going to is one that carries the items you seek. Because of the weird hours, compared to North America, you don’t want to find yourself out of luck if you have a rather picky eater in tow when you go shopping.

The Italian Business Mentality

The Italian economy primarily consists of three distinct sectors that are their own entities, yet work together to comprise the country’s economic presence in the world. These are small and medium-size enterprises, the Italian government, and other conglomerates, such as prominent families in the business field.

Italy’s government still maintains a highly visible, yet indirect role in Italian businesses, even though there has been a major movement to privatize public corporations. The Italian government has one of the highest GDPs in the European Union, and this is largely due to government spending. Therefore, Italy is somewhat unique with regard to its economy and how corporations and businesses interact with the state. For example, one in five individuals is employed by the public sector, which accounts for most of the funding of businesses.

The private sector is essentially dominated by several prominent families, which have cross interests and control major industries: these are De Benedetti, Pirelli, Agnelli, and Berlusconi. Their conglomerates include famous household names such as Olivetti, Armani, Versace, Bennetton, and Fiat. The latter are large-size corporations; however, with deaths and retirements of many of their founders, their interests are dwindling and new companies with stalwart management teams are rising to follow in their footsteps, such as Bulgari.

August Is Mostly Work Free

Each year, in August most family-operated business (except for those involved in the tourist trade) close down for a monthly vacation. The firms that do operate in the tourist trade usually take their vacations during the Christmas and New Year’s holidays, so for tourists, many desired destinations may not be available for service. August is considered the official vacation month in Italy, but many businesses will begin to slow down during July, before slowly picking back up around September. The week of August 15, which is known as “Ferragosto,” or the Feast of the Assumption of the Virgin Mary, is a very popular time for vacationing in Italy. Many of the most popular restaurants and shopping areas are closed, which leaves many of the towns in Italy largely deserted compared to other times of the year.

As a result of “campanilismo,” or the strong sense of local identity, many of the local saints garner their own unofficial holiday’s, such as the feast of St. Hilary, which takes place in Parma on January 13. In celebration of this patron saint, many of the locals in Parma will reserve a vacation day. In Rome, additional holidays include the establishment of the city of Romulus, as well as celebrations for the city’s patron saints, St. Peter and St. Paul. These celebrations take place on April 21st and June 29th respectively. Italy also has a myriad of local festivals including Siena’s “Palio” and “Carnevale.”