Looks at
Cultural mindsets - historical perspective
Culture - related problems

Playing the International Game Locally

Most businesses are founded on human relationships and friendship and hence relationship-building is basic to successful business management. Even more so in global markets where every country is an amalgam of languages, traditions and cultures. While business strategies may ensure direction, such direction acquires smoothness when a foreign entrant endeavors to become an "insider" in the chosen country. Culture has its roots in years of evolution of a people in a defined climatic, geographic, historic and economic environment and includes the socially transmitted beliefs, value systems and behaviour patterns.

Understanding cultural differences is useful in global deal-making. As culture lends meaning to words and actions, a skilled negotiator must learn the culture of the country he has chosen in order to prevent foul-ups.

 Cultural Responses

Temperament is one sub-set of culture and should be taken into account during negotiations. For example, the American impatience (progressiveness) and the Japanese fastidiousness (precision) could create difficulties in business talks if the respective cultural responses are not understood. The Japanese tend to be reflective, and negotiations with them are likely to be punctuated with periods of silence, which could agitate an American. Very often, the silence is misunderstood and the American is likely to fill the contemplative moments with more words. The reflecting Japanese, in turn, feels rushed and confused. In the case of an American company trying to win a contract with a South American firm, disregard for the importance of the relationship lost the deal. The American company (with a superior product and lower price) made a slick, well-conceived presentation, period. Its Swedish competitor, however, took an entirely different course, spending a week in getting to know the customer, discussing everything except the product, which was introduced only on the last day.


SONY: Concern for others vs. Concern for self

Sony's chairman, Akio Morita, conceived the idea of the Walkman by his desire to listen to music en route to work without disturbing others. The Walkman is popular in America for the opposite reason - it cuts off disturbance from the outside world to the listener!

Status consciousness: Cultural symbolism

Hierarchical differences can also cause problems. Perceptions of status are often made on the basis of some status symbols. A British general manager in Bangkok preferred to drive a small car which is more maneuverable in Bangkok's traffic. However his Thai team found it impossible to agree to his request, because if he drove a small car they would be obliged to ride bicycles! Hence he was forced to drive a Mercedes-Benz.

Importance of Age

In some traditional cultures, when people are asked to deal with someone who is ten to twenty years younger than them, they feel offended, even though the younger person may be well-qualified, competent and experienced. For instance, the Greek, the Italians, the Japanese and most Asians would be offended dealing with very young Americans or Europeans.

Past, Present, Future: Cultural Mindsets

The outlook towards the past, present and future varies in different cultures. Depending on their history, different cultures emphasise different periods of time. For instance, older civilisations like the Chinese and Indian, which have existed for thousands of years, tend to focus on the past and hence their history, tradition and cultural heritage is important to them. Thus an understanding of these is important in dealing with them more effectively. On the other hand, future-oriented people with short civilisation histories like the Americans, emphasise freedom and opportunities for the employees and the company in the future.

TIME: ATTITUDES AND APPROACHES

Time is viewed in a variety of ways in different cultures. The Americans, for example, are sequential in their approach, doing only one activity at a time, keeping appointments strictly, scheduling in advance and not running late. In contrast, the South American or Middle Eastern approach is one where appointment times are approximate, meetings may start late and telephone calls and other visitors upset schedules.

We have discussed in earlier chapters how the choice of country can be made through analysis, evaluation and comparison of various countries. Similarly, we have seen the importance and complexities in the search for a partner and have developed formats and approaches to partner evaluation. Understanding cultural differences is important in determining the success of a business deal.

However, equally important is the size of the project - proper feasibility studies should be carried out by professionals. The size of the project should be determined after consideration of all factors, including the all-important aspect of extrapolation of future demand which takes into account market, competition, government policies, environmental factors, etc. Often "gut feeling" is depended on to determine project size. This could cause great difficulties, risking the viability of the project. The other important aspect in considering project size is available funds. Companies frequently embark on projects beyond their means. Hence, the right balance in terms of project size and funds availability should be ensured.