11_Patterns of Cross-Cultural Business Behaviour Flashcards
2 Iron Rules of International Business Customs
Iron Rule #1
- in International business the seller is expected to adapt to the buyer
Iron Rule #2
- in international business the visitor is expected to observe local customs
Deal-Focus
vs
Relationship-Focus
Possible Conflicts
Greatest Divide between Business Cultures
Deal-Focused People
- task-oriented
- relatively open to do business with strangers
- export marketers can normally make direct contact with potential buyers in these markets
- marketers can make initial contact with prospective buyer without any previous relationship or connection
- e.g. Northern Europe, North America, Australia, New Zealand
Relationship-Focused People
- people-oriented
- preferring to deal with family, friends and persons or gorups well known to them
- uncomfortable with business with strangers
- marketer cannot make initial contact to prospective buyer without any previous relationships
- first contact can be done at international trade show, by joining international trade mission, by 3rd party introduction (business partner, embassy oficcials, bank officials, friend)
- e.g. Arab world, most of Africa, Latin America, Asia/Pacific region
Informal
vs
Formal Cultures
Formal Cultures
- value status, hierarchies, power, respect
- formal ways of addressing people as a way of showing respont to persons of high status
- e.g. most of Europe and Asia, Mediterranean Regio, Arab World, Latin America
Informal Cultures
- value status equality
- e.g. Australia, US, Canada, New Zealand, Denmark, Norway, Iceland
Showing Respect in Europe
Informal vs. formal cultures
- age conferes status
- academic distinction confers status -> including title when addressing such a person
Showing Respect to the Customer
Informal vs. formal cultures
- customer is king
- seller has to show respect to the buyer
4 Status Barriers of International Business People who have to operate at an even greater disadvantage when trying to sell goods to strongly hierarchical buyers
Informal vs. formal cultures
- people on lower rungs of corporate ladder in their own company
- young people of either sex -> youth barrier
- women -> gender barrier
- men and women of any age involved in international sales and marketing
How to overcome Youth Barrier with Hierarchical Buyers
- get introduced by older man
- be a true expert in your field (expertise covers status -> all over the world)
- learn local business protocol
What are other status factors?
Informal vs. formal cultures
- family background
- level of education
- knowledge of “high culture”
Rigid-time
vs
Fluid-time Cultures
3 items regarding Perception of Time
Monochronic Business Cultures
- schedules are set in concrete, agendas are fixed, business meetings are rarely interrupted
- clock-obsessed, puncutality is critical
- e.g. Nordic and Germanic europe, North America, japan
Moderately Monochronic
- e.g. Australia, New Zealand, Russia, most of East-Central Europe, Southern Europe, Singapore, Hong Kong, Taiwan, China, South Korea, South Africa
Polychronic Business Cultures
- less punctual, not obsessed with deadlines
- loose scheduling, meetings-within-meetings
- Arab world, Most of Africa, Latin America, South and Southeast Asia
3 Practical tips for rigid-time business travellers
- Find out in advance which of the markets you are going to visit are in fluid-time cultures. Forewarned is fore-armed.
- Come armed with a well filled briefcase. Instead of wasting time in the reception area twiddling your thumbs, compulsively looking at your watch and muttering curses, catch up on all that paperwork you never seem to have time for.
- Above all: BE PATIENT!
Expressive
vs.
Reserved Cultures
3 Items
Very Expressive Cultures
- uncomfortable with > 2s silence during conversation
- conversational overlap [interruption another speaker] is normal part of conversation
- e.g. mediterranean region, Latin Europe, Latin America
Variably Expressive
- US, Canada, Australia, New Zealand, Eastern Europe, South Asia, Africa
Reserved Cultures
- at ease with longer silence
- turntaking; conversational overlap regarded rude
- East and Southeast Asia, Nordic and Germanic Europe
Expressive Cultures…
- value strongt, direct eye contact
- engage in more physical contact in poublic
- engange in close distance behaviour (20 to 35cm vs. 40 to 60cm)
Ambiguous Gestures
Examples
Expressive vs Reserved Cultures
- use of left hand
- showing sole of your shoe
- Fist in Palm (Southeast Asia)
- Index finger pointing
- Index finger beckoning
- tapping your head [meaning varies]
- Thumbs up
- Peace Sign
- A-OK -Sign [Ok in US; money talk in Japan’ 0 in France; Latin america vulgar sexual insult]
Characteristics of Relationship-focused Business Cultures
Summary
- reluctant to do business with strangers
- make initial contact indirectly: at trade shows, on official trade missions or via intermediaries, introductions and referrals
- At meetings, take plenty of time to build trust and rapport before getting down to business.
- It is important to maintain harmony, avoid conflict and confrontation during discussions.
- Negotiators tend to be sensitive to issues of face, dignity, self-respect
- A preference for indirect, high-contact communication to avoid offending others
- Effective communication and problem-solving require frequent face-to-face contacts
- Lawyers are usually kept in the background during negotiations
- A reliance on close relationships rather than contracts to resolve disagreements.
Characteristics of
deal-focused business cultures
Summary
- An openness to talking business with strangers.
- Though introductions and referrals are always helpful, it is generally possible to contact potential customers or business partners directly
- At meetings, people get down to business after just a few minutes of general conversation.
- When communication, the priority is clarity of understanding. Little thought is given to maintaining harmony with counterparts during negotiations.
- Little attention paid to issues of face.
- Expect direct, frank, low-context communication most of the time.
- Much communication and problem-solving handled via telephone, fax and e-mail rather than in face-to-face meetings.
- Lawyers are often seated at the negotiating table.
- A reliance on written agreements rather than personal relationships to resolve disagreements.
