Impact of Culture on international business

BEN - Going Global event

Greville ComminsBristol, Entrepreneur in Residence

Overview All business deals are between people The cultures and behaviours of these

people can affect the business deal. Environment & External influences Personal behaviour & style Language barriers

Look at modifying your business strategy To adapt approach to fit cultural differences Be prepared for certain tactics or styles

Cultural differences affecting negotiations is not new

Following the Vietnam war the two parties met in a neutral hotel to negotiate cease fire. The North Vietnamese party booked a floor in

the hotel for two months. The US party booked theirs for two weeks.

Both parties had differing approaches due to their cultures North Vietnamese just getting going as

Americans packing to leave!

Dealing with culture Culture is problematic for business people

Nebulous and difficult to understand. Perceptions are key aspect

You make up your mind about someone in the first 7 seconds Then try to prove that your first instincts were

right! Already made your minds up about me , so

damage already be done!

Cultural gaffs

Accidentally violating cultural norms Without being aware What you say can be misinterpreted Responding inappropriately I’ll give you some Gaffs I’ve made along the

way

These Gaffs could impact the business relationship

Warnings Presentation is based on personal first

hand experience (and Gaffs)

Stereotyping. When studying a culture, one must be careful

not to over-generalize about behaviours. There are often significant individual

differences within cultures. Modern business communications has blurred

many boundaries

Business in China

Chinese names appear in a different order. Speak in short, sentences no jargon.

Avoid English expressions….

Very keen to exchange business cards Observe the routine Gaff: What not to do with a business card

Admire respect, loyalty, harmony and trust.

Business in China

Extremely friendly/open to different cultures English language spoken by many, but rarely

during negotiations, one interface used. Discussions can be quite lively, loud,

expressive and energetic Gaff: Not comfortable with changing positions

Senior decision maker usually keeps quiet. The Chinese will not directly say “no” to you.

5 tips for China

Be patient – you will be respected Eat, sing and drink – you will be observed Save Face, give face Use contacts with existing trust relationships Create trust – forget the NDA

Business in USA Vibrant economy & innovative environment

Gaff: People are friendly but language can still be a barrier

Competitive in their approach to business Energetic, confident, and persistent May come to table with an unrealistic offer Very comfortable with changing positions

during discussions Happy to experiment

Business in USA

“Time is money", Money is a key priority Senior guy key driver in discussions. Concentrate on one problem at a time; Focus on disagreements, not areas of

agreement; Prefer closure and certainty rather than

open-endedness or fuzziness.

Business in Japan People extremely friendly and polite. Ceremony, diplomacy very important Use courtesy titles such as "Mr.", or "san", in

addition to last names. Discussions may start at the top then,

continue lower down Practically anything you say will be taken

literally. Gaff: Don’t say…..

Business in Japan

Acquire a Japanese ally Discussions are quiet, considered,

passive and polite Loud, decisive behaviour distrusted Uncomfortable with changing positions

Think subjectively, feelings rather than empirical evidence. Silence is helpful

Success factors survey(Survey of negotiators)

key indicators of success

USA Japan China 1 Preparation & Planning Dedication to job Persistence & determination2 Thinking under pressure Perceive & exploit power Win respect & confidence3 Judgement & intelligence Win respect & confidence Preparation & Planning4 Verbal expressiveness Integrity Product knowledge5 Product knowledge Listening skill Interesting6 Perceive & exploit power Broad perspective Judgement & intelligence7 Integrity Verbal expressiveness

Business in France

People are friendly and polite. But can be wary of early friendliness Dining an important part of business

In accordance with French business protocol, use first names only when invited.

Organisation structure important Power is intrinsic to French business culture.

Business in France Discussions quiet, considered, passive

Loud, expressive, aggressive behaviour rare Focus on long term objectives. Very direct, questioning, probing. Judge your ability to demonstrate your intellect. Negotiation is an intellectual exercise

Negotiation techniques If reach impasse, they keep restating position. Deal changing, preoccupied with detail. Masters of the “Walk out”...

My personal experience, was it a Gaff?

Business in Italy

Hierarchy is key, especially in larger traditional businesses

Decisions are made in “closed quarters” Final decisions are slow and protracted. Be patient, rushing or putting pressure on

the decision-making process will be only an affront to Italian business protocol.

Business in Italy In business, the individual with authority

rarely has to raise his or her voice. However, they speak loudly, animatedly, and

interruptions are to be expected.

May make sudden, unexpected demands as a way of unsettling the other side.

Italians guided by their feelings.

Business in Germany People friendly and polite.

Titles, ranks, protocols very critical Gaff: Over friendliness can offend

Discussions quiet, considered, passive and polite

Loud, expressive, aggressive behaviour rare Language can be a problem

Organisation structure important Meet at peer levels Expect formal proceedings Fact based, personal feelings not so

important

Business in Germany

Business negotiations German business people do not respond to

the “sell” as North Americans Cautious of new ideas and concepts. Decision-making is slow Do not expect substantial decisions to be

made spontaneously at the table.

Summary Research customer culture in advance

Visit www.executiveplanet.com

Business is still between people Remember the 7 seconds rule Cultures affect the business deal. Honour cultural rituals and behaviours

Beware of generalisations You will meet western educated customers

which will modify the cultural effects

Most are trying to understand you too.

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