6 Things To Consider When You Deal With Foreign Business Partners
If you browse the web looking for information about how to deal with your foreign business partners, chances are you will find many posts about business etiquette in various countries. While knowing this is essential, it only represents a small part of what makes intercultural relations in business.
Whether you are having business with a foreign supplier or customer, negotiating a contract or just meeting a colleague from a foreign subsidiary, it is vital that you have an understanding of his culture to be able to interpret properly what he says – or does not say. More significantly, intercultural business is all about understanding your counterpart’s values, how they differ from yours and how you can act in a way that takes them into account.
Interculturality is a mindset; for anyone planning to conduct business abroad, the first step is to be willing to accept that all cultures have different approaches to business and that you should not impose yours. Avoid ethnocentrism at all costs! Conversely, do not assume that everything is determined by cultural factors. Everyone has his own goals and values, and personality has much more influence on our behavior than cultural factors. All the facts featured below only represent global trends observed among specific cultures or cultural groups.
When dealing with foreign partners, etiquette is often considered important. Although everyone does not necessarily have good knowledge of which etiquette rules apply in every culture, most people are at least aware of the importance of adapting one’s behavior to respect another country’s social and professional codes.
Although you can find more than enough materials on the subject online, here are some examples of do’s and don’ts in several countries:
Do’s: Removing your shoes when entering a home; keeping your hands out of your pockets when you are speaking to someone; if you are offered a business card, take it with both hands
Don’ts: Putting a business card you just received in your pocket; blowing your nose in public; tipping; being late at a meeting
Do’s: Planning your business meetings at least one or two weeks in advance; keeping your hands on the table at lunch; keeping a well-groomed appearance at all times
Don’ts: Being late at a meeting; calling someone you just met by his/her first name
Do’s: Preferring face to face interactions over giving a call or sending an email; being patient and not expecting a quick decision from your counterpart
Don’ts: Rushing while greeting people; cutting short small talk to go straight to business
People do not communicate the same way everywhere; language is an obvious example, but more importantly particular attention should be paid to how your counterpart conveys his ideas to make sure you did not misunderstand him. More specifically, you should be aware of these elements:
Explicit VS implicit language: In western countries, conversations tend to be quite straightforward and things are often clearly told. However, this can be considered inappropriate in some cultures where people value harmony and peace and wish to avoid conflicts. This difference sometimes results in frustration as western businessmen feel like their counterparts are not being honest. The Japanese communication style, for example, is often described by the saying “hear one, understand ten”. If you plan to do business in Japan, you should definitely pay attention to what is not said as much as what is said! Non-verbal language is also an important part of some cultures and should be watched closely.
The anthropologist Edward Hall created the concepts of “low context culture” and “high context culture” to describe how explicit the communications in a given culture are and how important the context is. While most Middle-East, Southern Europe and Asian countries have what he calls “high context cultures”, many English-speaking and Northern Europe countries have a “low context culture” which may lead to communication gaps between these two cultural groups.
Informal VS formal language: All cultures do not use formal and informal languages the same way. While in some countries it is very common to call a new business partner by his first name, it may be considered inappropriate or rude elsewhere. Some cultures (e.g. Japan, France) put a strong emphasis on manners and politeness. This cultural aspect also have a strong influence in language itself: Some aspects of language that do not exist in English (e.g. use of a specific grammatical person to create a formal tone, alteration of the verb to show respect) are used extensively in other languages. This shows the importance of being able to communicate accurately when you deal with a foreign counterpart: if you cannot speak his language well enough, you should definitely consider hiring an interpreter (or a translator for written communications) to avoid any misunderstanding or blunder.
PERCEPTION OF THE RELATIONSHIP
One of the reason why businesspeople from different cultures sometimes fail to understand each other is that they see their mutual relationship differently and do not give it the same amount of importance.
In the mind of many Western businesspeople, making a deal is the final goal of any negotiation. Although building a lasting relationship is also an important aspect of business communications, it is generally not as important as the present deal. This is the dominant way of thinking in English-speaking countries.
Other cultures think differently and see the business relationship as a pre-requisite before any commercial deal can be made. This means that in some countries, taking the time to build a good relationship with a potential commercial partner is more important than striking a deal. Countries such as Japan or India use this approach.
Of course, problems arise when these two ways of thinking clash with each other. One side may want to reach an agreement as soon as possible to save time and money. However, the other side of the table might very well wish to take their time to learn more about their potential partner and create a good relationship before making any kind of agreement. In this situation, both sides are likely to be frustrated with the pace at which the other wants the negotiation to go forward.
Some other aspects of the business relationship differ from one culture to another. One of them is about how much business partners are willing to trust each other. In low context cultures, businesspeople tend to use explicit verbal communications and legal documents to protect against any risk. That can sometimes be perceived as a lack of trust by high context cultures.
The buyer-seller relationship is also perceived differently: business relationship in low context cultures is often seen as a “zero sum” with a winner and a loser, supporting the idea that the interests of both sides are opposed. Inversely, high context cultures often seek to establish a collaborative, win-win relationship.
Two distinct ways of thinking can be found concerning the way time is perceived:
In low context cultures, time is money, and everything must be done as scheduled. Businesspeople from low context cultures often plan everything and see time as a commodity that must be saved.
In high context cultures, everything has its time, and time does not belong to us. Change is slower than in low context cultures.
INDIVIDUALISM VS COLLECTIVISM
All cultures do not give the same amount of importance to the group compared to the individual. This has a significant impact over decision-making: in low context cultures, decision are often taken by a single individual. Inversely, high context cultures prefer to take decisions based on a consensus. This is something worth keeping in mind if you meet with a potential customer: is he really the sole decision-maker in his company for the upcoming deal? If not, you might want to find out about who is going to take the purchase decision.
Attitudes towards risk tend to change according to cultural factors. Business people from low context cultures are often willing to take more risks than those from high context cultures. The contrast between Japanese and U.S. companies concerning risk-taking is often given as an example.
This is good to know if you have to create a commercial proposal for foreign partners: how much risks do you think they will be willing to take? Although cultural differences are not the only factors you should consider, they can have a significant impact on how your proposal will be received.
THE BOTTOM LINE
Intercultural relations in business is a very broad subject. Although I did my best to give you a brief overview of the subject, the points I mentioned here could be studied in greater detail – maybe in another post?
Once again, I would like to highlight the fact that the individual factor remains the most important thing to consider if you want to understand foreign business partners. Assuming everyone thinks like you is dangerous for your business; assuming everyone thinks the same way among any culture is not much better, though. Culture is only one of many factors influencing how someone conducts business, and if you really want to understand your commercial partners – or potential partners – nothing works better than a thorough investigation about themselves, their organization and their interests.
What is your experience with intercultural business? Feel free to leave a comment!