02 January 2006

Doing business in a cultural minefield

BRISBANE - Despite globalization, cross-cultural differences remain a potential minefield for any company wanting to do business overseas. While in the West the deal is the thing, in the East the onus is on building relationships.

Even among countries with cultural ties to Australia, different ways of doing business remain because of contrasting etiquette, manners and communication traditions. Queensland University of Technology business lecturer Cheryl Rivers says every culture is different and learning the subtlety of these differences can smooth the way forward for business. If not, anger and accusations of deception can sour a budding relationship.

In her studies funded by ENS International, Dr Rivers said research showed 30% of international negotiators believed they were deceived by the other party. She said when an offer of money is considered a token of friendship in one culture and a bribe in another, there is no wonder cross-cultural negotiations break down. "When business negotiators negotiate overseas and the other party does something they think is unethical, it makes them really, really mad," Dr Rivers said. "It makes us mad even if we are both Australian but if it is across cultures it makes us madder, it is almost like it exacerbates the problem."

Dr Rivers, who recently presented her paper, said Australians are generally regarded as being more mindful of other cultures. "Asian business perceives us as being culturally sensitive and that's quite true in comparison to some of the other Western cultures that almost insist on 'doing it our way'. However I still think there is a problem that many businesses simply don't know how people from another culture behave. There remain many companies who fail to train staff in the cultural differences of the country they're dealing with."

She said: "I've spoken to people from leading companies in Australia who have been sent to a country like China to start up a new office and who have had no cultural training at all." A typical cultural difference between Australia and China is the concept of guanxi, which is based on obligations or relationships with others to achieve outcomes. "Australians have a very strong separation between business and friendship, which is a complete contradiction for the Chinese," Dr Rivers said. "Australians are angered by gift money, which they take as bribery. But really it's gift money and they're trying to strengthen the relationship."

In Eastern countries, there are also long-held concepts of collectivism, saving face and status, which are markedly different from the West's individualism and blunt, analytical approach. But Dr Rivers said there are differences within Western countries as well. American negotiators usually turn up as a team at the start of negotiations, while Australians tend to bring in lawyers and others at the end of the process. "If you're going to negotiate in America and go over as the sole rep of your company, find some fellow Aussies, put them in suits and go in as a team," she said. "Americans seem to have more of a sense of hierarchy than us."

But Dr Rivers said a culturally sensitive person can always wriggle out of tight situations. She said a businesswoman she knows with a non-gender-specific first name had been negotiating with a Japanese firm for months by fax and email. "A Japanese buyer was coming out and she went to the airport to meet him. He was an old Japanese gentleman and in the older generation in Japan, they tend not to be comfortable dealing with women," Dr Rivers said.

"Anyway, she saw him and went up to him and bowed because she was culturally aware and said who she was and the gentleman went ashen faced because he had been dealing with a woman. She noticed this and bowed deeper and introduced her husband who, she said, runs the company and she then backed off. But he doesn't run the company, had nothing to do with it. She recognized there was this impenetrable cultural barrier. Apparently in the end her husband did quite a good job," according to Dr Rivers.

1 comment:

michelle sabitsana said...

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