Doing business across cultures

Doing business across cultures
17
Jul

5 critical differences you need to know.

The world is the entrepreneur’s oyster. Doing business across borders is easier than ever before and businesses are rushing to take advantage of new international opportunities. While business continues to integrate, however, science has shown that business culture is not merging in the same way. Culturally-based business practices and beliefs remain strong. So, before taking your business abroad, brush up on these five critical differences and ensure you’re ready to meet your new partnership head-on.

Introductions

First impressions count, and understanding how to greet foreign clients and business partners is paramount. Greetings can include handshakes, kisses, gifts, and the exchange of pleasantries. For countries where business introductions hinge on a handshake, the type of handshake can vary. A firm, long handshake is a sign of confidence in the US, whereas in France, Japan and South Korea, a light handshake is favoured. While some Western cultures may use the left hand to touch an arm or support the handshake, many Muslim countries consider the left hand unclean and use it only for bodily hygiene. In Belgium, business introductions are made with three air kisses. In China, the visitor is expected to bring a gift to the first meeting, which will be refused up to three times before it is ultimately accepted. In Japan, business cards are a critical element to any introduction. They are considered a status marker and must be impeccably done, generally with one side in Japanese and the other in English, and are given and accepted with both hands.

Communication

Assuming you make a successful introduction, it’s important to continue to build rapport. An American may open a meeting with a joke to break the ice, but this would be considered unprofessional in Germany where seriousness is critical to demonstrate trustworthiness. Northern European cultures value efficiency over relationships and get right down to business, while Latin American cultures generally spend the first period of the meeting chatting, looking to ensure that they get on well with their future partners. In Mexico, this chit chat largely revolves around family, as strong familial relationships are seen as a reflection of a respectable person. In Arab countries, familial chit chat is also common, but within limits—businessmen are encouraged to ask about children, particularly sons, but it is perceived as highly disrespectful to ask about another man’s wife.

Deference and Hierarchy

Different cultures have different values around organisational hierarchy. In Asian countries, employees show deference to their superiors using a low bow and by lowering their eyes to avoid direct eye contact. Respect is also shown by avoiding any disagreement with a superior’s opinion, to the point where lower-level employees may research the superior’s position on an issue before engaging in conversation. In Indonesia, lower-level employees will often arrive to a meeting on time while managers turn up 30 minutes late. This provides the latter the opportunity to demonstrate status and to ensure he or she does not have to wait.

Punctuality and Schedules

Expectations around punctuality and working hours vary greatly, and can cause tensions between parties if not understood. While Americans, Brits and Germans may consider it highly unprofessional for their counterparts to turn up late to a meeting, in Latin America, Spain and Italy, it is acceptable and often expected. Russians are known to make foreigners wait for long periods of time as a way to test their patience.

Similar differences exist with scheduling. Countries that thrive on punctuality and efficiency also generally value long working hours, believing they are reflective of dedication. Countries that perceive time as more relative and value interaction often interpret long working hours as lack of efficiency or of a deprioritisation of family life.

Contracts and Negotiation

Negotiations take very different forms across cultures. Western European and US cultures are generally straightforward and frank with demands, openly expressing displeasure or even anger when the process is not moving quickly. In these cultures, showing anger is used as a power play to force the other party to up the ante. Many Latin American, Asian and Arab cultures view expressing anger at the bargaining table as disrespectful and indicative of a lack of discipline. These cultures will often avoid expressing disagreement all together, and will soften demands in lots of context and explanation.

The final product of negotiations, the contract, also differs greatly. In many Western cultures, the contract is king. It is a legally binding document drafted in excruciating detail to cover all possible scenarios. Failure to meet the terms of the contract will likely result in legal action. In many Latin American, Asian and Arab cultures, contracts may not be written down at all—they may be as simple as a verbal agreement and a handshake. They are generally perceived as guidelines, and there is often a significant amount of room for interpretation of what each party’s responsibility may be. Failure to comply rarely ends up in court, but rather in an interpersonal dispute.

Your cultural bubble is not a welcome guest at your international business meetings. Do some research and challenge your assumptions to ensure that you can build the right relationships and get the job done.

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