Cross-cultural business

p style="text-align:justify">"Oh, nothing for me right now," replied the Egyptian with a smile. The two men conversed pleasantly about sports, music and other mutual interests for a while and then White guided his guest to the buffet table loaded with delicacies Dr. Ahmed was known to especially like. Paul was surprised when Dr. Ahmed once again declined politely, saying that he wasn't hungry.

Puzzled by his guest's lack of interest in food and drink, Paul wondered what the problem might be. Then the Canadian host was drawn into conversation with some of the other guests and did not notice when Dr. Ahmed left the party early.

At the negotiating session next day Dr. Ahmed was cool and distant. No progress at all was made towards an agreement. That afternoon Paul learned that the head of the Egyptian company was complaining vociferously to his colleagues about the "rude and offensive treatment" he had undergone at the dinner party. "I certainly do not intend to do business with such discourteous people," he was heard to say.

With the delegation due to leave Canada in three days, Paul White was desperate to know what was happening. Was this a negotiating ploy - a pressure tactic? Or had his team really offended Dr. Ahmed somehow? If so, what could he do now?

 

The two preceding disaster cases were examples of how not to do business in formal cultures.

Now let's look at an example of how to do it right.

 

Showing Respect in Asia

 

An American consultant with a decade of business experience in South Asia arranged for his Chicago client to meet with the Minister of Textiles in Bangladesh. The Chicago company had asked for a favorable decision on a complex issue involving garment quota allocations but was not optimistic about the outcome. A U.S. competitor who had made a similar request the previous month had seen their application summarily rejected by mid-level bureaucrats in the ministry.

It was a sweltering day in Dhaka and the minister's air conditioner was not in operation. This caused the visitors considerable discomfort because at the consultant's insistence they were dressed in dark wool suits, starched shirts and ties. The two Westerners sat steaming and dripping sweat while the minister chatted away amiably, cool and comfortable in white muslin.

After about an hour and a quarter of what seemed to be aimless conversation the minister stood up and with a broad smile informed the petitioners that he had decided to grant their request.

The consultant learned the next day from a government contact that the minister had deliberately not turned on his room air conditioner for the meeting. The contact hinted that His Excellency may have been 'testing' the Western visitors.

 

Nonverbal Ways of Showing Respect

 

The general lesson here is that when dealing with government officials in hierarchical countries it is important to show proper respect and deference. This advice is particularly important for Europeans, Americans and Australians negotiating with senior officials in countries with a history of Western colonial domination. Bureaucrats throughout South and Southeast Asia can be easily offended by overly casual behavior on the part of Westerners. Informality may be misinterpreted as disrespect.

Wearing a suit and tie to meetings during the hot season sends a positive signal of respect. Moreover. keeping one's jacket on in a non-air-conditioned office signals even greater respect.

Australian, Danish and American managers attending our seminars sometimes complain that they are at a competitive disadvantage globally because businessmen from hierarchical cultures already know all about formality, status differences and how to show respect while those from egalitarian societies may not.

These managers have a valid point. A key rule of international business protocol is that when in an unfamiliar situation, always err on the side of formality at first. That may mean for instance addressing people by their surname and title rather than first name, dressing more formally and following local etiquette when shaking hands and exchanging business cards.

So when calling on prospects in a hierarchical culture, the Japanese or Germans in their dark suit. white shirt, polished shoes and polished manners may indeed have an initial advantage over some of their more informal Aussie or Yankee competitors.

 

Status Barriers

 

However, there are four classes of international business people who have to operate at an even greater disadvantage when trying to sell goods to strongly hierarchical buyers. These are:

- People on the lower rungs of the corporate ladder in their own company

- Young people of either sex

- Women

- Men and women of any age involved in international sales and marketing.

 

The reason is that formal cultures tend to ascribe status according to one's age, gender, organizational rank and whether one is the buyer or the seller. Therefore a woman who is a young export sales specialist potentially suffers under a quadruple handicap when operating in formal, hierarchical cultures such as Japan, South Korea and Saudi Arabia.

Which makes our next case quite interesting. Case 5.3 is about a woman who succeeded as a very young export marketer in all three of above tough markets in spite of her four-fold handicap. As with all the other cases in this book, this actually happened.

 

Case 5.3: Women in International Business

 

In certain hierarchically-organized cultures women rarely gain senior positions in commercial organizations. Especially in South Korea, Japan and Saudi Arabia, men are traditionally accorded higher status in the business world than females. The top positions in most companies are held by men who are not used to dealing with women in business on the basis of equality.

In direct contrast, many women in more egalitarian cultures around the world are successful entrepreneurs as well as executives in major corporations. The two opposing views of the role of women in business can lead to a culture clash when females try to do business in traditional, hierarchical societies.

Despite the potential problems however, some enterprising women refuse to be shut out of promising markets by what they regard as male chauvinist attitudes.

A bright young Danish woman we'll call Tonia is a case in point. Tonia was a tall, striking blonde of about 20 employed by a Singaporean jewelry manufacturer. She was also studying international marketing part time at the Export Insitute of Singapore. Having heard about the gender barrier Tonia asked one of her EIS lecturers, "Which major markets in the world would you say are the most difficult for a woman to do business in?"

"Saudi Arabia, Japan and South Korea," replied the lecturer without hesitation.

The next day Tonia asked for a meeting with her boss, the marketing manager of the jewelry company. She volunteered to undertake a sales mission during the semester break to those very markets, and after some careful preparation left on a two-week trip to Tokyo, Seoul and Riyadh.

The next semester Tonia proudly reported to the class that she had been able to sell her company's fine jewelry successfully in not just one but all three of those particularly tough markets. Not only that, she had even been offered a job as marketing manager by one of her new customers!

As a follow-up to Tonia's enthusiastic report the lecturer asked the class of young Asian export marketers, male and female, for their comments on the complex issue of women in global commerce. The resulting discussion was most interesting indeed.

 

The Gender Barrier

 

Although the gender barrier unquestionably exists in hierarchical cultures, being an obvious foreigner may lower that barrier significantly. For example, while there are millions of Japanese women working for companies in Japan they are almost all 'office ladies' performing clerical duties. Japanese women in a business setting are automatically assumed to be secretaries and treated accordingly by the overwhelmingly male management. So Japanese women generally lack the status necessary to interact effectively with corporate decision-makers.

But those same male executives often see a foreign female as a gaijin first and only then as a woman. Knowing that foreign women sometimes hold managerial positions, many Japanese executives are willing to give them a chance.

 

The Youth Barrier

 

The age barrier is quite a different matter. The most common question from young international marketers and managers of either sex attending our training seminars is, "Since being young is such a handicap to doing business abroad, what are we supposed to do?"

I usually start by reminding the questioner that youth is actually an advantage in some markets - the USA in particular. But without a doubt, a person of tender years will find it difficult to be taken seriously by older business people in formal, hierarchical cultures.

The ultimate solution of course is to grow older. But that is going to happen soon enough anyway. What to do in the meantime? I recommend this three-step procedure for young export marketers. (Remember that because "the customer is king," youth is not such a major handicap for a buyer.)

 

How to Overcome the Youth Barrier with Hierarchical Buyers

 

Get introduced by an older man. Preferably by the oldest male you can find who is still able to walk. This ploy works because enough of his maleness (if you are a woman) and his seniority will rub off on you to get you started.

Be a true expert in your field. This works because just about everywhere in the world today expertise confers status.Once they get over the shock of your youthfulness, customers in hierarchical markets have the very same concerns as their egalitarian counterparts, and your quiet competence gives them confidence that you will provide them with good service.

(One note of caution here. Remember to show them your expertise rather than tell them about it. The only thing worse than a show-off is a young show-off.)

 

Learn the local business protocol. Since you will probably be making your sales presentation to (a) a male, (b) an older male and (c) an older male who is a buyer, you are of course heavily outranked. It's something like a private trying to sell to a general. So you must know how to show proper deference without actually grovelling. (Although here I am reminded of a certain Sears Roebuck buyer who posted a sign for the benefit of his suppliers, "GROVELLING IS GOOD!")

 

Other Status Factors

 

While age, gender, organizational rank and whether one is buying or selling are the key determinants of status and power in most hierarchical societies, other factors such as family background, level of education and knowledge of 'high culture' also confer status in certain markets.

For example, in Latin America and much of Europe a deal-focused business person whose interests are limited to making money tends to be looked down upon. Higher status goes to the individual able to converse intelligently about art, music, literature, history, philosophy and the cinema. Business visitors who would like to be well-regarded in those markets should consider brushing up on such subjects.

How to conduct business in other cultures without offending customers and business partners is such an important issue we are devoting a separate chapter to International Business Protocol. But first let's take a careful look at another Cultural Divide. the one between rigid-time and fluid-time cultures.

 

 

6. Orientation to Time and Scheduling: Rigid-Time vs Fluid-Time Cultures

 

Globe-trotting business travelers quickly learn that people look at time and scheduling quite differently in different parts of the world. In rigid-time societies punctuality is critical, schedules are set in concrete, agendas are fixed and business meetings are rarely interrupted. Edward T. Hall invented the term 'monochronic' for these clock- and schedule worshipping cultures.

In direct contrast are 'polychronic' cultures, where people place less emphasis on strict punctuality and are not particularly obsessed with deadlines. Polychronic cultures value loose scheduling as well as business meetings where many several meetings-within-meetings may be taking place simultaneously.

 

Fig. 6. 1

 

VERY MONOCHRONIC BUSINESS CULTURES Nordic and Germanic Europe, North America, Japan

MODERATELY MONOCHRONIC Australia/New Zealand, Eastern Europe, Southern Europe, Singapore, Hong Kong, Taiwan, China, South Korea

POLYCHRONIC BUSINESS CULTURES The Arab World,  Africa, Latin America, South and Southeast Asia,

 

Alert readers will note a couple of particularly interesting entries in this chart. One is Japan, which was classified as polychronic by Edward T. Hall back in the 1960s. But today the Japanese are as schedule-obsessed and clock-conscious as the Swiss.

The other is Singapore, a polychronic Southeast Asian entrepot just 30 years ago and today a moderately monochronic business culture. Both countries are proof that culture does change, albeit slowly.

Of course, orientation to time varies not only among different countries but often within a given country as well. As we will see below with Italy, there can be regional variations. Another example is Brazil, where temperate Sao Paulo is relatively monochronic whereas Rio is strongly polychronic. Similarly people in the more industrialized southern coastal provinces of China are more clock-conscious than those in the less-developed interior. And your South Korean meeting is more likely to start on time if it takes place in Seoul than in a small town in the countryside.

 

Europe: The North/South Divide

 

For international business people the problem is that contrasting conceptions of time and scheduling cause conflicts. Let's look first at Europe, where the meaning of punctuality for instance varies according to whether you are in the northern or southern part of the Continent.

Suppose you are an export marketer scheduled to meet your Hamburg customer at 9 am tomorrow. Knowing how important P17nklichkeit is to Germans, what time should you arrive at his office in order to be considered punctual? Veterans of the German market agree that 8:55 am would be just about right.

Getting there at nine on the dot would of course be technically acceptable, but arriving five minutes ahead of time shows that you share your customer's obsession with being on time.

But the worst thing would be to show up late. Tardiness signals lack of discipline. Some Germans feel if you are ten minutes late for a meeting you may well be ten weeks late with your delivery. Pьnktlichkeit and Zuverlдssigkeit,8igkeit (reliability) are closely related concepts in this most monochronic of cultures.

Let's say your next sales meeting is in Munich. The laid-back Bavarians are more relaxed about time, so you could arrive right on time -possibly even two minutes late - without destroying your chances for a sale. And you can still be confident that your local counterpart will be punctual.

 

Where the Clock Slows Down

 

But when you hop across the Alps for your meeting in Milan, the rules change. There your customer or contact may well show up ten minutes or so late without feeling obliged to apologize. And as you travel south down the boot of Italy you find that schedules become even more fluid. In sunny Rome your local counterpart is likely to waltz in half an hour after the agreed time and greet you as though nothing at all is wrong.

At this point some of our seminar participants usually ask, "But what about that famous saying, 'When in Rome, do as the Romans do.' Doesn't that mean that in Italy for example we can be relaxed about punctuality as well?"

That's not the way things work in global business. If you are an export marketer the 'When in Rome ..." rule of thumb is trumped by a higher rule we have already invoked more than once: "The seller has to show respect to the buyer." Being on time is a key way of showing respect - even in a polychronic culture.

There is another factor operating when it comes to the use of time. It is as though business people from Zurich, New York and Dusseldorf have the label 'MONOCHRONIC stenciled in capital letters across their forehead when they travel abroad. Polychronic customers, clients, partners and contacts expect that monochronic types will always be on time even when visiting polychronic cultures.

Returning to the north/south divide in Europe, the polychronic approach to time becomes more obvious as you move further south. By the time you reach Naples, 45 minutes' tardiness is considered no big deal. And then of course comes Sicily. According to my Florentine friends, if your Sicilian counterparts show up at all on the day of the meeting they are to be considered punctual.

This European example with its soupcon of exaggeration is meant to contrast the clock-worshipping, schedule-obsessed, rigid-time business cultures found mostly in temperate latitudes with the more relaxed, fluid-time cultures located primarily in hotter climes. For whatever reason, the closer you get to the equator the slower the clock seems to run.

But now dear reader, I'd like to give you a little quiz. just one question: In the example of the north/south divide in Europe did you feel I was Putting down the Italians, criticizing their lack of punctuality? If that was your impression it shows you were probably raised in a monochronic culture where punctuality, tight scheduling, firm agendas, rigid deadlines and uninterrupted meetings are important virtues.

On the other hand, if you did not think I was criticizing southerners you more likely grew up in a polychronic culture. That is, in a society where people spend less time worshipping the clock and more time attending to strong interpersonal relationships.

In polychronic, fluid-time cultures a business person may be tardy for your meeting because they had to help a friend or family member solve a problem. Or perhaps an earlier meeting ended later than expected: In polychronic cultures it is inexcusably rude to end an ongoing meeting just because you happen to have another one scheduled.

The Indonesians have a delightful expression for polychronic time. They call it jam karet or 'rubber time' - flexible, stretchable meeting times, schedules and agendas. Most Indonesians place a much higher value on human relationships than on arbitrary schedules and artificial deadlines.

The contrast between polychronic and monochronic cultures is often magnified these days by the monumental traffic problems found in so many developing countries. One day last year I spent three and a half hours getting from one side of Bangkok to the other for a meeting. Traffic can be even worse in Cairo. Unless you anticipate that degree of traffic gridlock in certain cities and plan accordingly, even Germans and Swiss visitors might occasionally find themselves a minute or two late for a meeting.

Centuries ago when all societies on Earth were polychronic a Roman sun dial was accurate enough to keep track of time. Then some sadistic Swiss inventor had to go and ruin a good thing, developing that cruel torture instrument we know as the clock. Now when the bloody alarm goes off at 6 am we wonder whether worshipping the clock is such a great idea after all.

 

Polychronic Culture Shock

 

Consider the case of a fluid-time person undergoing her first collision with a monochronic culture. Not long ago a Malaysian business woman flew to the USA for an important conference scheduled for 10 am on a Monday. She arrived in Boston late that Sunday evening, had trouble falling asleep because of jet lag and overslept a little the next morning.

On Monday the Malay lady had difficulty finding the meeting location in her rental car, got lost and finally arrived well after lunch - four hours late for her meeting. The Americans she was supposed to meet came out of the conference room to tell her, "Oh sorry, right now we're in the middle of our afternoon meeting. And our calendar seems to be kind of full this week ... Well let's see, can you make it for Wednesday of next week?" But since she had to be back in Kuala Lumpur by that date our Malay lady never was able to reschedule that important meeting.

Not long after her return to Malaysia this charming polychronic woman attended one of our Global Negotiator seminars in Southeast Asia. During the lunch break she related that sad story as an example of how rude and schedule-obsessed Americans can be. "So there 1 was in Boston, having flown half-way around the world just for that meeting. And those people did not even have the common decency to rearrange their schedule for a foreign visitor who was a little late. Can you believe it?"

As we have learned, the meaning of 'a little late' differs according to whether you are in a monochronic or polychronic culture.

 

Monochronic Culture Shock

 

Monochronic people are equally prone to culture shock when doing business in polychronic markets. I often hear northern Europeans and North Americans complain about the 'rude behavior' of business contacts in the Middle East, Latin America as well as South and Southeast Asia. "They always keep me waiting and then continually interrupt the meeting to take phone calls and receive unscheduled visitors."