Italian Culture in Business and Daily Life: What Global Businesses Need to Know?
Written by: pTranslate Contributors
A GLIMPSE OF CULTURE | CULTURE
“I will make them an offer that they can’t refuse” – Vito Corleone from The Godfather
Italy is well-known for its rich traditions, iconic cuisine, fascinating culture, and breathtaking tourist destinations. We all know the glorious Roman Empire – the era that had given inspiration to hundreds and thousands of artworks for centuries. In a way, Italy is comparable to France in its contribution to the world of art. It is truly a fascinating and unique country, both in the past and in today’s world.
Nowadays, Italy is among the leaders of the global economy. Its geographical location is highly strategic for economic development and global trade. Being the 8th largest economy by GDP, Italy seems to be an attractive business destination. However, Italy actually ranks among the hardest country to start a business in the EU and the world, according to the World Bank. This is because of its bureaucracy, complex social hierarchy, and, most importantly, the Italian attitude towards entrepreneurship.
1. Italy has high corporate tax rate and a lot of bureaucracy
Italy has the 4th highest corporate tax rate in Europe (about 27.81% in 2021). Such a high tax rate created a lot of challenges for start-ups and small businesses that haven’t had enough financial strength. The more a business scales, the higher the tax, and it discourages a lot of businesses from expanding. The process involved in tax collection and calculation is quite cumbersome. It can take Italian businesses months to file tax-related papers and have them approved.
In addition to that, Italy is a notoriously bureaucratical country. Starting a business already takes a lot of time and effort, and Italian authority makes it even harder. Entrepreneurs have to go through endless, unnecessary red tape only to open a company.
More importantly, there’s a start-up fee that entrepreneurs have to pay. The fee varies by region, but in general, you need an initial amount of capital to register a business before making any profit. This inefficiency makes entrepreneurship in Italy extra risky and not worth trying.
When we compare it with a business-friendly country, like the US, we see a vast difference. The US allows people to open up businesses at almost no cost. There is a low corporate tax rate, and it’s much easier to understand the legal obligations you have to go through. In Italy, you have to wait for an entire morning to have your papers approved. Sometimes, it can take months, and how many opportunities could you have missed during that period?
Sometimes, you may run into financial difficulties, and you want to find an investment. Italy is a pro-investment economy, but it’s not easy to get credit there. Once again, the bureaucracy is prevent businesses from finding financial support. Italy ranks 105th in “getting credit” according to World Bank statistics.
On a global scale, start-ups in Italy lost their competitiveness against start-ups in other countries because of this complex law system. Instead of focusing on the products or marketing campaigns, start-ups have to spend a lot of time and money to work through the legal requirements. In the process, they may get discouraged and abandon the project.
Those who carried on can face even more legal issues in the future. This can be a factor affecting the high number of SMEs (Small-to-medium enterprises) in Italy. Small-sized businesses are much more prevalent in Italy, and it makes sense. The small-sized business model allows for easier management and is less likely to get involved in legal issues.
This unfriendly environment towards entrepreneurship left young, aspiring Italian entrepreneurs with 2 options. Either they work for an existing company, or they follow their family trade. Interestingly, their culture also encourages these 2 options. The Italian society is hierarchical, which means that they have a system of ranking. Each person is categorized into different rankings, and they have to behave accordingly. This system encourages people to follow the group and be in a community, instead of expressing individuality. This culture also discourages entrepreneurship, which is highly individualist in itself.
2. Hierarchy in Italy
Italian culture places a strong emphasis on the family and relative bonds. They are really connected with their home life and their childhood foundation. Lots of grown-ups live with, or not far away from, their parents. However, family-oriented cultures tend to develop a stronger sense of ranking in their society than individualist cultures. In Italy, there are clear-cut rankings for each person, and they are expected to show appropriate behaviors of their ranks. Respect the superiors, know your place and treat people under you well. This is a nice tradition to have in a small community. However, when this culture goes into the workplace, there can be some troubles arising.
Like any other hierarchical business model, it can take a lot of time to reach decisions. This is because people in the lower ranks don’t have the power to make decisions. Usually, key information and decision-making falls into the hands of higher-rank people. The information then flows down the ranks, until it reaches the people in need. This creates a centralized organization, and it slows the workflow down, a lot. It’s another reason why Italy ranks low on the global competitiveness scale.
There’s almost no difference between the family hierarchy and the business hierarchy. In fact, a lot of businesses in Italy are family-owned. Statistically speaking, up to 60% of the Italian shareholding market comes from family-owned businesses. Even some of the biggest companies there are run by powerful families who have strong political ties and influence. This is one of the most iconic features of Italian culture.
3. Communication with Italians
Italians are well-known for their extremely expressive non-verbal communication. If you go to Italy, you’ll notice how expressive the language is. Italians can tell what the other person means by just looking at their hand gestures. Italian uses so many non-verbal gestures in their communication that it has become a signature of the Italian communication style. You can tell an Italian standing in the crowd by looking at their hand gestures. It is an interesting stereotype, and it’s actually true. There’s even a joke about Italians: if you want to make an Italian stop talking, just grab their hands.
When communicating with Italians, try to use a lot of non-verbal gestures. Try to copy the Italian way of communication. You may not be as expressive as an Italian, but at least it makes you more “lively’ in their eyes. Acting too “robotic”, to the Italians, means that you are not using enough hand, facial, and body gestures to get your messages across. If you decide to come to Italy, take some time to learn their non-verbal language besides just learning Italian. Non-verbal language is much easier to learn and use, and sometimes that is enough to get your ideas across, without having to learn any Italian.
Italians are also quite direct. The expressive body language makes its way into their communication style. They tend to be honest about their emotions, feelings, and will not try hard to conceal their thoughts. Kisses and embraces are common when greeting. Being intimate is common in the Italian culture.
The Italian language is slowly falling in popularity. Italy is more of a tourist destination than a business destination, so they have to use tourist language. French, German, and English are common there, especially in attractive tourist sites. Professional translation is also a common service in such a linguistically diverse region.
4. Business communication and culture in Italy
If you enter an Italian company, you will see how connected people there are. They work to establish a strong sense of community among the employees. The atmosphere is quite casual and relaxed, and you will probably feel at home there.
Coworkers in general try to develop strong bonds and connections to each other. The closer your ranks to each other, the stronger your bond will usually be. It is not good to be disrespectful to people in the higher ranks, no matter their age, and vice versa. In other words, you will be welcomed, but know where you are, or else you will be punished.
The social hierarchy is also a good measure of how powerful and respected a person is. People generally pay a lot of respect to those at the higher ranks, because they believe that only those who deserve it can assume such a difficult role.
Knowing this can be beneficial when working with Italians. Try to establish a connection with them before getting into the deal. Show an interest to develop a long-term bond with them. Show that you want to be their friend, their partner, their connection. The general rule of thumb is knowing what they prioritize and then act accordingly.
Like any other hierarchical culture, Italians have a rich system of titles. Try to address them using appropriate titles. You can use Signor(e) (Mr.) or Signora (Mrs.). Show respect for people of high authority or professional titles, too. Establish a sense of hierarchy when communicating is necessary, and try your best to maintain that. Once the business partners want to establish a closer, more casual, and deep connection, you can start addressing them by more informal titles.
5. Attitude towards schedule
That’s not to mention that Italians have quite a relaxed attitude towards schedule. They don’t rush with whatever they’re doing. They take their time to think through it, and the decisions are made outside of the office.
In contrast with the timely Germans or the hasty Americans, Italians have a much more laid-back demeanor. They want to make their schedule, and even then, they still don’t follow it strictly. They believe that time is plenty, unlike the American’s belief that every minute is golden. If you work with Italians, expect them to be late (about 15 to 30 minutes). During rest hours, such as lunch break, or night time, they will not work, at all. Violating rest hours is not acceptable, so it’s better to wait until the afternoon shift, or the next day, comes to discuss business with them. As we have mentioned above, Italians value their family, so family life has to be separated from the work life. Do not rush with the Italians.
6. Attitude towards work of Italians
Once again, the hierarchical culture presents a challenge for Italians to express their thoughts fully at work. Because it is against the “rule” to speak up against the boss, they will not want to say hard things to the higher-rank people. Innovation and creativity is less valued in the corporate world. All of this combined has created quite an oppressive attitude in the workplace. This is another reason why Italy is not a great place for business. Innovation and out-of-the-box ideas are crucial for business development. The pyramid management style crushes all of that.
The notion of “family” and “loyalty” plays a role here, too. It is not good to take sides against the “family”. In other words, if the people of the higher ranks decide on something, you have to follow. Americans working in the Italian environment can find this frustrating and suffocating. But it’s their social rule, and they accept it. In America, you can argue with your superior, calling them by their names, and they will not pat an eye. If you do that to an Italian superior, you are likely to have a bad time soon.
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