Weonomics. Noun. The study of peculiar Chilean economic behavior in business dealings.
There are some clear cultural difference between doing business in the US and in Chile. I’ve taken to calling it Weonomics. (Gringo readers, weon is the ubiquitous Chilean word meaning anything from dude to asshole.) Clearly not all Chileans subscribe to the principles of Weonomics, but I run into enough Weonomics experts each week that I felt I had to write about it. I have a feeling that most foreigners in Chile will identify with this post, but I’m also interested to see the response from Chilean friends. Please enjoy.
Negotiation
A typical US negotiation.
- Seller asking price $45,000
- My offer price: $37,000
- Seller counteroffer: $43,000
- My counteroffer: $39,000
- Final price: $41,000
Pretty simple, right? A sales price, a counter offer and meet somewhere in the middle. You’d think negotiation would work similarly in any part of the world, but not with many Chileans.
Weonomics:
- Seller asking price $45,000
- My offer price: $37,000
- Seller counteroffer: $48,000
- My counteroffer: See ya!
Seriously? Who in their right mind thinks they’ll close a deal counteroffering by RAISING their initial price? But this is a principal tenant of Weonomics. The worst case I’ve seen was when a friend was trying to purchase a house. The opening price was $140,000. My friend bid $120,000. The counter offer? $210,000. Weonomics at its finest.
Lowball/HighBall
Someone’s first offer is rarely close to a real offer. It’s almost always a borderline insultingly lowball offer, or a pie in the sky number that only an idiot would pay. A friend closed a deal with a major Chilean company that pays him $20,000 per month. Their first offer? $500 per month. Many Chilean real estate prices are listed above market value in hopes that someone will come along and just buy it. You’ll rarely find a business deal that’s priced to get a deal done quickly.
Meeting Cancellations and No Shows
I’ve been stood up more in the past six months that I ever have been in my entire life combined. I had a string of five meetings on monday and tuesday that all cancelled less than 30 minutes before the meeting was supposed to start. Two didn’t even show up at all. One of the no shows told me it was my fault because “maybe I didn’t understand spanish fully.” The only problem? She’d emailed me the day before explicitly setting the meeting. It was impossible to mistake. That’s Weonomics.
No/Yes
You rarely ever hear a true yes or no in Chilean business. Each answer can mean multiple things. See chart:
One time I ordered sushi for delivery on a national holiday. The person who answered the phone told me I shouldn’t order because it would be an hour and a half wait for my food. I thought about it, but put the order in anyway and made myself a small snack to tide myself over. 20 minutes later, my sushi arrived, just as I was finishing my snack. Her no, it’ll take too long, was simply trying to get out of more work. Weonomics at work.
So what do you think? Am I right? Do you notice any of these too? Or any other ones? Do you do them yourself? Or am I just un gringo que no cacha nada?
Hat Tip: Skinner Layne for originally coining the phrase.
27 Comments
Life in the Chilean jungle
It happened to me when I found an apartment last december. The owner seemed really nice and commited to close the deal, I was ready to sign but suddenly she started to ask a lot more, and I was less than a month away from being homeless. Fortunately I found another one a few days later at the same price (and bigger!) and closed the deal in a few days, but as you said, it’s rare.
The inability to say no is one of the worst things about our culture (I don’t know if it’s latam or just chilean). Video related: http://www.youtube.com/watch?v=OBSkLfVp2fQ
Hahaha, glad to know its not just us foreigners who deal with weonomics. Love the video.
I was really surprised reading your comments. I don’t know how many cases you are taking into consideration for making thoses statements. To be honest, I cannot completely agree on that, since I rather base my statements on objetive statistical data. I have never had an experience like that, but that doesn’t mean that many cases like that may occur. I have had very crazy experiences in the US, but would never make a generalization of that to the rest of North Americans naming it the “Gringo way” or other not so friendly denomination.
I’d be interested to hear what part of the post you don’t think is accurate. The yes/no is in most of the travel books about chile, a chilean who posted below had the same experience with negotiating and chileans are known for not showing up for meetings.
The post is based on my own experience living and working in chile for the past two years. Other friends, both chilean and foreign, have seen similar behavior. I clearly state not all chileans behave this way, but a high enough percentage do that makes a post like this make sense.
I would be completely happy if you wrote a post about your experience in the US. There’s all sorts of behaviors I take issue with that happen in my native land. I invite you to write something here in the comments. Feel free to call it the gringo way.
Yes, that is Chile at its finest. I’m a Chilean and I think your comments while being on the humorous side, are sad but true.
It’s a difficult question. Certainly not everyone in one particular place is one particular way. Nevertheless, there are certain patterns of behavior that are more common in one place than another…
While your observations may be quite right (I have more experience from other parts of Latin America where similar things happen), I think there is a general tendency of everyone to believe that their own way of doing things is “natural” and “straight-forward”. But if you take individual cases, you will notice it’s not always like that.
For example — take the clock. Many Northern Europeans get angry when they are other places when people don’t show up on time and say things like “Why can’t things be as they are in Britain/Germany/Denmark/Sweden/Norway where 5 o’clock is 5 o’clock and no-one is ever late (without an excuse)?”
Well… they may think it is that way, but it really isn’t. First of all there are many regional differences. In Denmark you send a text message when you are 5 minutes late for a meeting. In Berlin on the other hand, you can be 15 minutes late before you send a message. And the nature of the meeting is important as well. Business meeting: 5 minutes acceptable lateness. University (in Germany and Norway): 15 minutes. Meetings of voluntary organizations: 20 minutes. But while the 1 minutes at uni are 15 minutes exactly, the 20 minutes of organizations are more flexible: people attending for the first time can come early to have a word or two with the organizers. If the meeting is a party at night, one can be 5 hours late (if with friends) or 1-2 hours late (if business related), etc. etc. . It turns out that what seemed like a very easy and straightforward way of doing things to the European ends up being an extremely complicated set of conventions… that most foreigners will have some difficulty adapting to.
Something to think about next time getting angry at Chileans doing things “all backward” 🙂
I don’t think Chileans do things “all backward” and its certainly easier to understand things if you grow up in a culture, but some things are empirical facts. For example, the yes/no, the negotiation don’t help anyone get things done.
For sure, but…
1. After having been in Latin America for a while, I can feel some of that uneasiness about saying no myself. It has happened a few times to me now that I say “yes” to participating in something when I really didn’t want to. I don’t think it’s just me. We can all take in cultural traits from other areas, whether we want it or not. It’s hard to resist.
2. “Yes” does not mean “yes” in the US. 🙂 Not always anyways. As an exchange student in the South Carolina and later when living in Arizona, I discovered that a phrase such as “Let’s meet next week!” can mean things such as “I don’t have any time next week for you.” Or “I’m great!” can often mean “I’m miserable.” Especially the part about not being able to rely on appointments would drive me nuts… but that’s just culture I guess…
as a Chilean, I find this offensive.
Not really, this is so true.
well , about the negotiation, I think that in Chile, most of us start with our final price, so if the other part make an offer , we piss off about it or we’ll decide play their game, so we’ll set another price, for that kind of negotiation… No/Yes is totally right XD.
Exacto! mentalidad chilena. Soy chilena, by the way
The No/Yes chart it’s so accurate
Negotiation is related to No/Yes
The increase in the seller counter offer means “No, it’s not negotiable, if you wanna change the price, you can only go up”. But as you said we don’t give straight answers, hence the illogical counter offer.
Very interesting and makes sense, thanks for commenting!
You are so right dude. I am a Chilean, and it doesn’t make sense at all. It is a very inefficient/rude part of our culture which we should aim to change ASAP. By the way, great about the “The Best Thing a Chilean Can Do is to Leave Chile”, which is very accurate.
Cheers!
SI WN! TODA LA RAZÓN jajaja saludos
Reading your article I had the thought that it is the first time that you were living abroad, or at least in a developing country. Many of the things that you describe as ridiculous ways to do something could be just because you didn’t understand a culture that is slightly different than that in the US. I say “sligthly” because Chileans grew up watching US TV only. Try to make business in China or Sudan and I wonder your post about their business dealing way. Also from your lines I can feel that you, like most USA citizens who I met, think their way to do the things is THE way that everyone should. Take those into consideration the next time you recall a conclusion about other country that you are so sure about, give a second thought, and probably you will get a different conclusion. For example, about the rising price in negotiation, your description is incorrect. In Chile the negotiation is just like in your US example. Or how do you think that Chile became from poor to 1 of the best in Latinoamerica so fast whith such an absurd negotiation pattern that you describe? I can think in 1 thing of why that was happening to you, and probably Argentinians could tell the same experience. It is because when showing an arrogant attitude, Chileans get pissed off, as someone else was quick to theorize in the comments. Be gentle negotiating and you will wonder how a Chilean can just accept your first offer without pushing any further. But be rude (and that is the tricky part, because while a “normal” attitude in some countries in Chile it could be considered “arrogant” or “offensive”) and you will see how easy a Chilean gets pissed off and then I think that rising the price could be a common reaction, as it would happen in the US if you behave like this: “Hey assh**, I want to buy your f*** product, I think this is the right price for that sh*** so let’s do the thing” and throw the dollars in his face. As you can imagine, the US citizen will negotiate in a weird way then, most probably like: “Ok, now if you want it, you’ll have to pay twice for it, you motherfu***r ! ” So as you see, it is not about economics but your lack of understanting of the culture. In the same way the Yes/No table could be enlarged. There is so many things in this life that makes a person to say Yes when meant NO, or the opposite. The same happens in the USA, the differences mainly two: 1.You do know your culture, so you are not confused, and get quick answers of what really happened. 2. As chauvinism blinds many citizens, probably you are not seeing in US citizens the very same flaw that you are so able to see in Chileans. I can agree with other things you explain though, like the meetings cancellation. Or being late. But, just telling these facts without explaining why reveals that you are still confused of it and therefore that you never really understood the culture. Again, “They are wrong because in the US we are different, and of course we are right”. Now to explain, I have to recall another of your discoverings about Chile, that is the big gap among social classes. You get so different treatment depending on your (supposed) class, that everyone is pretending to be important. Being late for an employee is normal, just because being on time is not big deal. He is not going home at 17:00 eather, probably 1 or 2 hours later, non paid. To be fair, rather than stealing minutes from the boss is more likely the opposite. In the other hand, a businessman showing up late or not showing up is just telling you “how important and busy he is”. Many do it intentionally. Being 5 minutes late in Sweden is taboo, a clear signal of disrespect, since they expect you to be on time. Not in Chile, the other is expecting you to be late no less than 10 minutes. “Meeting at 11:00? Hmm .. that means the guy will come around 11:15, so I can do something else before …” The way to know if a meeting is really going to happen is through confirmations. If you sent a message earlier that morning “So, see you at 15:00 ?” you had 1 of 2 answers: “Sure, I’ll be there”, meaning the other is interested in the meeting. Or: “No, you know what? Something came out and .. (polite excuse)”. Probably this person was never interested in the meeting and said “Yes” as a shortcut to prevent being insisted. Instead replying angry to this person because “In the US we respect agreements” better learn that the USA’s rules apply only inside the USA. There’s no such a thing like an agenda in Chile, it is more likely to be dynamic, removing or relocating events on it as prorities change. The respect for the other’s agenda is something not existent. The business environment is very agressive and disrepectful if we take the European style as pattern, where the harder guys get success and the softer and polite got eatten. There’s many other things that I dislike of the culture, that ended up with me leaving the country. Now I live in Scandinavia 5 years already, and I dislike many things from here also. But I try to focus into understanding why people behaves different instead thinking that they are stupid because they don’t behave like in my culture, a society is a complex system where any behavioural pattern is linked to others, and climate, and laws, morals, etc. So I think that the key to have success in another culture, in business and also personal life, it is to have an open mind and try to understand why things are done so differently. And lot of tolerance for the things that I will never understand and really bother me. At the end, it is my choice to be abroad, I can always come back to the comfort of my culture which I already understand. And I agree with you that the best thing a Chilean can do is to live abroad a couple of years, as I would recommend to every single citizen of this world.
I think you really read WAY more into this post than I actually wrote.
After being in Chile for awhile, it’s fairly easy to figure out why people do the things they do, but that doesn’t make them efficient or good for the business climate in general. Of course there’s cultural difference and you need to figure out how to navigate them if you want to have success but you’re just assuming that I negotiated arrogantly, responded angrily and think the US way is best. As you can see from other comments, there’s plenty of things that chile does better than the US and plenty of things the US does better than chile.
homo chilensis classic behavior doing business…
(I’m Chilean too…).
Please share the note.