Business America, August 13, 1990 by M. Katherine Glover
DO's & TABOOS
Cultural Aspects of International Business
Never touch the head of a Thai or pass an object over it, as the head is considered sacred in Thailand. Likewise, never point the bottoms of the feet in the direction of another person in Thailand or cross your legs while sitting, especially in the presence of an older person.
Avoid using triangular shapes in Hong Kong, Korea, or Taiwan, as the triangle is considered a negative shape in those countries.
Remember that the number 7 is considered bad luck in Kenya, good luck in Czechoslovakia, and has magical connotations in Benin.
Red is a positive color in Denmark, but represents witchcraft and death in many African countries.
A nod means "no" in Bulgaria, and shaking the head side-to-side means "yes."
Understanding and heeding cultural variables such as these is one of the most significant aspects of being successful in any international business endeavor. A lack of familiarity with the business practices, social customs, and etiquette of a country can weaken a company's position in the market, prevent it from accomplishing its objectives, and ultimately lead to failure.
As business has become increasingly international and communications technology continues to develop, the need for clearly understood communication between members of different cultures is even more crucial.
Growing competition for international markets is another reason that companies must consider cultural distinctions. As Secretary of Commerce Robert Mosbacher indicated. "American companies have to rely on all available tactics for winning in the global marketplace today. Learning international business diplomacy should be the first step they take."
Business executives who are not alert to cultural differences simply cannot function efficiently overseas. They may not even understand something as basic as what signifies closing a deal in a particular country--a handshake, a written contract, or a memorandum of understanding.
Taking the time to learn something about the culture of a country before doing business there is also a show of respect and is usually deeply appreciated, not to mention rewarding for the company. Those who understand the culture are more likely to develop successful, long-term business relationships.
Customs vary widely from one country to another. Something with one meaning in one area may mean the opposite somewhere else. Some of the cultural distinctions that U.S. firms most often face include differences in business styles, attitudes towards development of business relationships, attitudes towards punctuality, negotiating styles, gift-giving customs, greetings, significance of gestures, meanings of colors and numbers, and customs regarding titles.
American firms must pay close attention to different styles of doing business and the degree of importance placed on developing business relationships. In some countries, business people have a very direct style, while in others they are much more subtle in style. Many nationalities value the personal relationship more than most Americans do in business. In these countries, long-term relationships based on trust are necessary for doing business. Many U.S. firms make the mistake of rushing into business discussions and "coming on too strong" instead of nurturing the relationship first. According to Roger Axtell in his book Do's and Taboos of Hosting International Visitors (see list of publications on p. 5), "There is much more to business than just business in many parts of the world. Socializing, friendships, etiquette, grace, patience, and protocol are integral parts of business. Jumping right into business discussions before a get-acquainted interlude can be a bad mistake."
Charles Ford, Commercial Attache in Guatemala, cites this cultural distinction as the greatest area of difference between the American and Guatemalan styles of doing business. The inexperienced American visitor, he claims, often tries to force a business relationship. The abrupt "always watching the clock" style rarely works in Guatemala. A better informed business executive would, he advises, engage in small talk about Guatemala, indicate an interest in the families of his or her business associates, join them for lunch or dinner, and generally allow time for a personal relationship to develop. Solid business opportunities usually follow a strong personal relationship in Guatemala. This holds true for Latin America in general.
Building a personal rapport is also important when doing business in Greece, according to Sondra Snowdon, President of Snowdon's International Protocol, Inc., a firm that trains and prepares executives in cross-cultural communications. Business entertaining is usually done in the evening at a local taverna, and spouses are often included. The relaxed atmosphere is important to building a business relationship based on friendship.
Belgians, however, are the opposite, Snowdon says. They are likely to get down to business right away and are unusually conservative and efficient in their approach to business meetings.
Attitudes toward punctuality vary greatly from one culture to another and unless understood can cause confusion and misunderstanding. Romanians, Japanese, and Germans are very punctual, while many of the Latin countries have a more relaxed attitude toward time. The Japanese consider it rude to be late for a business meeting, but it is acceptable, even fashionable, to be late for a social occasion.
In Guatemala on the other hand, according to Ford, a luncheon at a specified time means that some guests might be 10 minutes early, while others may be 45 minutes late.
When crossing cultural lines, something as simple as a greeting can be misunderstood. The form of greeting differs from culture to culture. Traditional greetings may be a handshake, hug, nose rub, kiss, placing the hands in praying position, or various other gestures. Lack of awareness concerning the country's accepted form of greeting can lead to awkward encounters.
The Japanese bow is one of the most well-known forms of greeting. The bow symbolizes respect and humility and is a very important custom to observe when doing business with the Japanese. There are also different levels of bowing, each with a significant meaning. Japanese and Americans often combine a handshake with a bow so that each culture may show the other respect.
Handshakes are the accepted form of greeting in Italy. Italians use a handshake for greetings and goodbyes. Unlike the United States, men do not stand when a woman enters or leaves a room, and they do not kiss a woman's hand. The latter is reserved for royalty.
The traditional Thai greeting, the wai, is made by placing both hands together in a prayer position at the chin and bowing slightly. The higher the hands, the more respect is symbolized. The fingertips should never be raised above eye level. The gesture means "thank you" and "I'm sorry" as well as "hello." Failure to return a wai greeting is equivalent to refusing to shake hands in the West.
According to Snowdon, American intentions are often misunderstood and Americans are sometimes perceived as not meaning what they say. For example, in Denmark the standard American greeting, "Hi, how are you?" leads the Danes to think the U.S. business person really wants to know how they are. She suggests that "Hi, I'm pleased to meet you" is preferable and conveys a more sincere message.
People around the world use body movements or gestures to convey specific messages. Though countries sometimes use the same gestures, they often have very different meanings. Misunderstandings over gestures is a common occurrence in cross-cultural communication, and misinterpretation along these lines can lead to business complications and social embarrassment.
The "OK" sign commonly used in the United States is a good example of a gesture that has several different meanings according to the country. In France, it means zero; in Japan, it is a symbol for money; and in Brazil, it carries a vulgar connotation.
Assistant Commercial Attache in the United Kingdom Thomas Kelsey advises that American businessmen should never sit with the ankle resting on the knee. They should instead cross their legs with one knee on top of the other. He also suggests avoiding backslapping and putting an arm around a new acquaintance.
In Thailand, it is considered offensive to place one's arm over the back of the chair in which another person is sitting, and men and women should not show affection in public.
The use of a palm-up hand and moving index finger signals "come here" in the United States and in some other countries but is considered vulgar in others. In Ethiopia, holding out the hand palm down and repeatedly closing the hand means "come here."
Proper use of names and titles is often a source of confusion in international business relations. In many countries (including the United Kingdom, France, and Denmark), it is appropriate to use titles until use of first names is suggested.
First names are seldom used when doing business in Germany. Visiting business people should use the surname preceded by the title. Titles such as "Herr Direktor" are sometimes used to indicate prestige, status, and rank.
Thais, on the other hand, address each other by first names and reserve last names for very formal occasions, or in writing. When using the first name, they often use the honorific "Khun" or a title preceding it. In Belgium, it is important to address French-speaking business contacts as "Monsieur" or "Madame," while Dutch-speaking contacts should be addressed as "Mr." or "Mrs." According to Sondra Snowdon, to confuse the two is a great insult.
Customs concerning gift-giving are extremely important to understand. In some cultures, gifts are expected, and failure to present them is considered an insult, whereas in other countries offering a gift is considered offensive. Business executives also need to know when to present gifts--on the initial visit or afterwards; where to present gifts--in public or private; what type of gift to present; what color it should be; and how many to present.
Gift-giving is an important part of doing business in Japan. Exchanging gifts symbolizes the depth and strength of a business relationship to the Japanese. Gifts are usually exchanged at the first meeting. When presented with a gift, companies are expected to respond by giving a gift.
In sharp contrast, gifts are rarely exchanged in Germany and are usually not appropriate. Small gifts are fine, but expensive items are not a general practice.
Gift-giving is not a normal custom in Belgium or the United Kingdom either although in both countries, flowers are a suitable gift if invited to someone's home. Even that is not as easy as it sounds. International executives must use caution to choose appropriate flowers. For example, avoid sending chrysanthemums (especially white) in Belgium and elsewhere in Europe since they are mainly used for funerals. In Europe, it is also considered bad luck to present an even number of flowers. Beware of white flowers in Japan where they are associated with death, and purple flowers in Mexico and Brazil.
Yue-Sai Kan, host and executive producer of a television show about Asia--Looking East--and of a new four-part series on Doing Business in Asia, points out that customs toward the exchange of business cards vary, too. Seemingly minor in importance, observance of a country's customs towards card-giving is a key part of business protocol.
In Japan, it is particularly important to be aware of the way business cards should be exchanged, according to Yue-Sai Kan. The western tradition of accepting a business card and immediately putting it in your pocket is considered very rude there, she contends. The proper approach is to carefully look at the card after accepting it, observe the title and organization, acknowledge with a nod that you have digested the information, and perhaps make a relevant comment or ask a polite question. During a meeting, spread the cards in front of you relating to where people are sitting. In other words says Yue-Sai Kan, treat a business card as you would treat its owner--with respect.
When presenting a card in either Japan or South Korea, it is important to use both hands and position the card so that the recipient can read it. In any country where English is not commonly taught, the data should be printed in the native language on the reverse side of the card.
Negotiating can be a complex process between parties from the same nation. Negotiating across cultures is even more complicated because of the added chance of misunderstandings stemming from cultural differences. Negotiating styles differ from nation to nation. In addition, a host of cultural variables must be dealt with all at once.
For example, it is essential to understand the importance of rank in the other country and to know who the decision makers are. It is equally important to be familiar with the business style of the foreign company. Is it important to be direct or subtle? Is it necessary to have an established relationship with the company before beginning negotiations? Executives negotiating with foreign companies must also understand the nature of agreements in the country, the significance of gestures, and negotiating etiquette.
These cultural variables are examples of the things that U.S. executives involved in international business must be aware of. At times in the past, Americans have not had a good track record of being sensitive to cultural distinctions. However, as business has become more global, Americans have become more sensitive to cultural differences and the importance of dealing with them effectively. Still, some companies fail to do their homework and make fatal or near-fatal mistakes that could have easily been prevented. A number of firms have learned the hard way that successful domestic strategies do not necessarily work overseas and that business must be adapted to the culture.
Failure to research and understand a culture before entering the market has led to many international business blunders. They run the gamut from forgivable to disastrous. Some years ago, for example, a leading U.S. golf ball manufacturer targeted Japan as an important new market for golf. However, sales of the company's golf balls were well below average. The firm, as it turned out, had packaged the balls in groups of four--the number of death in Japan.
David Ricks, in his book Big Business Blunders: Mistakes in Multinational Marketing (see list of publications on p. 5), cites a number of other blunders that resulted from cultural oversights. One concerns a telephone company that tried to incorporate a Latin flavor in its commercial by employing Puerto Rican actors. In the ad, the wife said to her husband, "Run downstairs and phone Mary. Tell her we'll be a little late." The commercial contained two major cultural errors: Latin wives seldom dare order their husbands around, and almost no Latin would feel it necessary to phone to warn of tardiness since it is expected.
Another company experienced headaches caused by poor translation. A Mexican magazine promotion for an American-brand shirt carried a message stating the opposite of what had originally been intended. The advertisement, instead of reading "when I used this shirt, I felt good," said "until I used this shirt, I felt good."
A toothpaste company tried to sell its product in regions of Southeast Asia through a promotion which stressed that the toothpaste helped enhance white teeth. In this area, where some local people deliberately chewed betel nut in order to achieve the social prestige of darkly stained teeth, such an ad was less than effective. The slogan "wonder where the yellow went" was also viewed as a racial slur.
Mistakes of these types can at the least reduce sales, and at the worst, give the company and the product such a bad name that it closes out the market entirely. To avoid blunders like this, a company ultimately must not only have a sensitivity to other cultures but also must have a good understanding of its own culture and how other countries see American culture.
M. Katherine Glover Writer, Business America International Trade Administration