Topic #20: Doing Business Internationally

Talking Points

• The human condition is universal — everyone smiles and cries.

• Strive to understand the culture before you meet

• Learn a phrase or two in the native language

• Remain formal until you get to know people

• Cultures may be different but business is universal

• Always dress professionally and ask locals how to behave

• Speak clearly and refrain from using slang

• Do even more homework than usual before you negotiate a deal

Discussion

The reality of todays world is that we are all connected. When you call customer support, you are most likely getting routed to another country to take your call. If you manufacture anything, changes are, its done somewhere in Asia. To survive in this global business climate, you need to know the culture you are dealing with and how the local laws and customs work.

People are People

Wherever you go in the world, most people share a common condition. The language, food or ethics maybe different but the realties of daily life, love, joy, sorrow and death are all the same. Sure, some places are poor, some rich, some even downright horrible but all places share a common thread. This thread is what binds all of humanity together. When you do business internationally, you need to rely on this thread to make the cultural barriers a little easier to deal with.

Our Common Thread

Since we are all human, we share certain commonalities that transcend culture. Things like happiness, sorrow, frowns, smiles, having children, our desire for food, water, shelter and safety. These commonalities make understanding each other a little easier when we realize that almost all humans desire the same things. The awkwardness comes when our cultural and language barriers get in the way. To better deal with these awkward moments, keep in mind these universal behaviors:

• Always remain respectful: Respect is universal. All cultures understand it and expect it.

• When in doubt, apologize: Sometimes it may be unclear if and how you may have offending someone. If you respectfully apologize for any indiscretion , that will usually be enough to get past it.

• Dress professionally: Cultural norms do dictate that certain attire is considered professional while others are too causal. Business suits are universally considered proper professional attire.

• Refrain from using slang: All languages have slang that is specific to the culture it came from. It’s best to avoid slang since it will be awkward to have to explain the meaning and it may also embarrass the people you are talking to.

• Appear friendly by smiling: A smile goes a long way in appearing open and friendly. Every culture smiles, so try your best to always appear friendly.

• Respect the cultural norms: It can sometimes be hard, but cultural norms do need to be respected or your ability to do business will be in jeopardy. This may be hard for some of you but make sure you understand the norms and either avoid the situations or just grin and bear it.

• Listen carefully: Listening is a particularly important when dealing with accents. Spend more of your time listening then talking since it may take longer to absorb the information you are being told.

• Share a meal or drink: Everyone eats so why not enjoy a meal with your potential business partner. Make it a point to eat a local specialty and if you host someone, take them to your favorite place to eat but be respectful of dietary constraints.

There are many more commonalities so focus on what you have in common then doing business will go a lot smoother.

Hire Locally When Practical

Hiring local is a great way to get the inside track on how a culture works. This is critical if you plan on having a long term presence in a country. Locals understand the culture, speak the language and can build long lasting relationships. Another thing that locals give you is some creditability. In some cultures, the only way to do business is to have a local presence. Cultures that have a strong sense of class will almost certainly want a local, respected “elder” type that they feel comfortable with. Don’t take it personal if they would rather deal with “one of their own.”

Dealing with Gender and Age Issues

In some cultures, both gender and age are handled differently. In many countries, the traditional roles of men and women are strictly adhered too. This can be quite a culture shock to someone that has never been exposed to these cultural norms. To better deal with these issues, you really need to do your research as well as be prepared to adhere to cultural norms. Some of you may have a problem with that but it’s important to be respect of a cultural and not to thrust your value system upon someone else.

In some cultures, the traditional role that women play is strictly enforced. If you happen to be a businesswomen trying to do get stuff done, you many need to think about your strategy and how your style will fit into a culture. It’s extremely difficult to change cultural norms and also get your business done. To this end, the local employee will be an invaluable resource for how to navigate tricky cultural issues.

While gender roles are easily recognized, age issues are more subtle. The typical cultural clash with age has to do with young (or young appearing) people that are in positions of power. In a lot of cultures, the amount of gray hair you have seems to directly relate to your seniority and your competence. Dealing with this situation can be stressful since if you are the younger player, your opinion or decisions may be undermined. The best way to deal with this is to ensure that the other party knows that you are in charge and making the decisions.

Negotiating

All negotiations are tricky but international negotiations are downright complex. Most of the complexity comes from the cultural and language barriers that exist. That’s why it’s important to keep these techniques in mind:

• Focus on long term relationships: Most cultures value the long term commitment and some won’t even talk to you until you can prove you are staying for the long haul

• Figure out the interests behind the positions: Several cultures will say one thing but mean something totally different. That’s why it’s important to understand what motivates a position. Don’t just listen to what they say but dig deeper into why they really want to do the deal.

• Don’t generalize: Just because a culture has a certain trait does not mean the person you are dealing with has them too. Treat individuals as individuals and get to know there style and how they approach things.

• Understand the time line: Some cultures have vastly different time lines than others. You have to respect that sometimes the cultural norms will require a longer time line than you want. Strive to figure out what drives the time line and how you can manage it.

• Remain flexible: It’s always good to remain flexible but it’s especially important when you deal with other cultures. Being flexible also shows that you want to work extra hard to make a deal work.

• Prepare, prepare, prepare: It’s uber important to prepare for any international negotiation since the cultural aspect adds a whole other dimension. Being ill prepared with only amplify contentious issues.

• Listen more than you speak: As we discussed above, your listening skills will be put to the test when dealing with other cultures. Take it all in and listen intently to what is said and what it means.

• Understand the local laws and ethics: Laws vary from country to country as well as their ethical code. Just remember that you should still adhere to your ethical base even when it might be easier to just adhere to the local customs.

It’s Tough But Doable

There is a lot that can go wrong with international business but just remember that people have been trading with each other for thousands of years. It’s challenging but clearly doable if you do your homework and understand the cultures you are dealing with.

Things To Ponder

1. Recall the last time you went to a foreign country. Write a paragraph or two on how you felt about interacting with the locals.

2. Research a large foreign corporation. How would you approach negotiating a deal with them, given their culture?

3. Learn how to say hello, goodbye and thank you in two different languages.

4. Look up a country on the International Business Center Site. Write a paragraph on how you would do business with the selected country.

Exploring Further

• Lee Iwan Blog post about his experience doing business internationality.

• Work Etiquette article on Conducting International Business

• International Business Center site has great resources for cultural differences, among other things.

• The Daily MBA post on negotiating