Understanding Culture in International Business

Robert Carroll

All people are the same, it’s only their habits that are so different, Confucius

Topics•introduction

•role of culture

•etiquette

•presentation

•negotiations

•reference

IntroductionOne dog barks at something, the rest back at him.

Foreword• “only 1 in 5 businesses are involved in international trading” and >1% represent

<70%” US Dept of Commerce

• international business is expensive, difficult, time consuming, complicated, frustrating, and, at times, incomprehensible!

• majority of international business information only local etiquette not cultural awareness

• common mistake is focus on surface cultural differences not awareness

• recent major auditor study found 69% of outsourcing deals fail. Main reason lack of cultural compatibility between vendor and client and poor relationship management.

• understanding the role of culture in international business situations is a critical success factor for global business success.

What is Pictometry

Pictometry’s International Business• reasons Pictometry went global:

• new technology easily internationalized

• reuse R&D investment and increase market reach

• force foreign competitors to use resources internationally instead of domestically

• Kodak may have adopted this strategy by opening a plant in Japan shortly after Fuji began building its first plant in US

• beat competitors to new markets

• using geographically-exclusive technology licenses with regional leading geospatial data and services companies

Role of Cultural Everyone must row with the oar he has. English saying

Behavior and Conditioning• “world-view” is learned as a child from observing immediate family

• behavior becomes unconscious, we no longer think about them we “know”

• influences how we interpret the world around us, how we perceive ourselves, and how we relate to others.

• this world-view varies by country

• leads to assumptions/stereotypes

Cultural Awareness• goes beyond factual cultural knowledge

• based on research and theories by Edward T Hall, Geert Hofstede, and Fons Trompenaars

• requires developing skills to interpret cultural differences

• key global employee skills

• flexibility and adaptability: 24x7x365

• interpersonal: friendly, outgoing people

• entrepreneurial: need to make sound decisions without immediate backup

• technical competence: need to know the business of the company

Ways to Increase Cultural Awareness Skills• continuing education/class (international studies)

• ex-pat assignments, international travel, exchange student program/gap year

• attending cultural events

• networking with international business assoc.

• learn foreign language

• Depts of State (country desks) and Commerce

• research, research, and research

• keep learning

EtiquetteHe who wants the rose must respect the thorn, Persian saying

Meeting/Greeting/Entertaining• greeting: handshake, bow, kiss, touch noses, hold hands, or all of the above

• relation developing: business is done on a relationship basis not transaction

• gift giving: integral to business relationship in Japan/China/SE Asia (How the gift is given is more important than the gift), damaging to business relationships in other countries.

• diet concerns: west vs east, kosher vs treif, halal vs haraam, ahimsa/vegetarianism/veganism

• alcohol consummation: South America, east Asia, and Europe important, Middle East, Africa, and parts of SE Asia none

Relationships• individual vs group

• individual: introduce yourself, state your own views directly and challenge what people say

• group: introduce yourself in relationship to company, speak calmly and slowly, work in large team, real business done over meal or at bar

• flat vs hierarchical power/decisions

• flat: take responsibility for your area, deal with colleagues directly

• hierarchical: communicate to senior management, hold valuable information, high respect to decision-makers, be autocratic

Relationships (continued)• acquired (what you do) vs given status (age, gender, religion, education, race)

• given: respect elders, dress appropriately, bring in older co-worker

• functional (business first) vs personal (relationship first)

• personal: allow plenty of time, small talk, socialize, exchange favors and small gifts

• physically distant vs close

• distant: give plenty of space

• middle: firm handshake and look people in the eye

• close: don’t be surprised or embarrassed if they get too close

Time• West, Japan, China “clock conscious”

• South Africa, south Europe, Middle East, SE Asia no sense of urgency

• North American and north Europeans need to do something useful every second, while less competition emphasis cultures let time “fill itself”

• what year is it? 2008 (Gregorian), 1429 (Islam), 5768 (Hebrew), Heisei 20 (Japan)

• work week: West Mon-Fri vs Middle East Sat-Wed vs Asia Mon-Sat

• work day: US 9-12~1-5 vs Spain 9-2~4-6

• holidays: “everyday of the year is a holiday somewhere in the world”

Time (continued)• serial vs parallel

• serial: book appointments weeks ahead, send agenda before, arrive on time, start meetings at agreed time, keep to schedule, give bad news early

• parallel: short notice appointments, plenty of time between appointments, be prepared to wait, fix agenda at start of meeting, don’t rush meetings, soften bad news

Communications and Presentations

You have two eyes, two ears, and one mouth. Japanese saying

Communications• direct vs. indirect, how something is said is more important that what is said.

• “It would be great if you could ... by end of the week” in Italy means optional but not a problem if they don’t perform

• Japan: “16 ways of saying ‘no’ without saying no, including yes”

• meaning of silence

• British English vs American English vs Global/International English

• “I am going to get English pissed because I am American pissed!”

• different meaning for ‘to table’, turnover, ‘pear shaped’, boffin, diary, pension scheme

• accents, spelling, and pronunciation

• e.g. Northern State Shift, Canadian Rising “rider vs writer”

• Romance verb usage instead of Germanic for ESL audience

• “obtain, examine, install, inform” vs “get, go through, put in, tell”

Communication (continued)• explicit vs implicit

• explicit: take what they say literally, don’t be offended direct disagreement

• implicit: look beyond the words to body language and intent, be patient to grasp the key message

• speak when relevant vs open dialogue

• relevant: listen and don’t interrupt, don’t try to win them with charm, and pause before replying

• dialogue: don’t be offended if they interrupt you, show active listening

• written vs verbal

• written: take lots of notes, lawyers early, agreement is made at signing

• verbal: don’t take many notes, lawyers home, careful on oral promises

Nonverbal Communication• eye contact:

• good: Northern Europe, Americas

• bad: Japan (rude)

• personal space:

• North America 2-3 feet

• South America and Middle East, tactile

• China, 4+ feet

• body language:

• soles of feet, crossing legs, arm position/folding, sitting position

Presentation Style• short vs long term view

• upbeat vs low-key

• upbeat: find an upbeat central message looking forward, conscious effort to sound positive and optimistic

• low-key: support with relevant details, respond realistically, and don’t emphasize your own success.

• short/concise vs long/eloquent.

• short: concise and keep to schedule

• long: avoid oversimplification, support position with facts and data

Presentation Style (continued)• persuade/hard sell vs inform/soft sell

• persuade: give your opinions and recommendations

• inform: allow them to draw their own conclusions and avoid the hard sell.

• creative vs logical

• creative: allow for surprises and intrigues

• logical: well formed and sequential

Distortions in World View• Which is bigger Greenland or Africa?

Distortions in World View• Which is bigger Greenland or Africa?

Distortions in World View• Which is bigger Greenland or Africa?

NegotiationsWith time and patience the mulberry leaf becomes a silk gown. Chinese saying

Negotiation• patience to make right decision vs analysis paralysis

• don’t try to force pace

• future vs past orientation

• future: new solutions, focus on future in relationship to past results

• past: fix old problems, include relevant background even in future proposals.

• team (individual vs group)

• Japan use teams and consensus agreement (newamashi)

• written vs verbal agreements

• West emphasis clear documentation vs diagrams or maps

• personal choice vs destiny

• destiney: how can a document define what will happen in the future? e.g. Muslims use the term Inshallah (God willing) during negotiations

Negotiating Advice• SOPHOP (soft on people, hard on points)

• preserving the relationship highest priority

• avoid using the word “you”

• countering: keep everything conditional

• “if you ...., then we can ...”

• open-ended questions

• “how do you feel about...?”

• allow them to set place and pace.

References, Additional Sources

Time gives good advice, Maltese saying

References• Books

• “Bridging the Culture Gap”, Penny Carte and Chris Fox

• “Kiss, Bow, or Shake Hands”, Terri Morrison and Wayne Conaway

• “Do’s and Taboos Around the World”, Roger Axtell

• “Global Competence”, Jonamay Lambert, Lambert Jonamay, Myers Selma, Selma Myers, George Simons

• Internet

• Executive Planet (executiveplanet.com)

• International Business (cyborlink.com)

• Geert Hofstede Cultural Dimensions (geert-hofstede.com)

• Lonely Planet (lonelyplanet.com)

• WorldAtlas (worldatlas.com)

• World Time with meeting planner (timeanddate.com)

• US State Dept (state.gov/travelandbusiness)

• XE Travel Expenses Calculator (xe.com/tec/table.shtml)