Cultural differences often exist within the same companies…they certainly exist between different companies. Without question, there are different cultural business practices in different cities or regions within an individual country. These differences are almost exponentially complicated when you start doing business on a global basis. For purposes of this post, we will address how to best blend and manage your internal cultural characteristics with those of your vendors, partners, suppliers, customers, and investors who may be located in foreign countries.
The impacts of globalization are being felt by all of us at some level whether we realize it or not. Moreover, it is likely that businesses that once would never have had to deal with global concerns most certainly will as time marches forward. Every culture has its own unique way of functioning, and if you want to remain competitive in today’s market you will need to develop cultural sensitivity and maturity to your business approach that may not presently exist.
I have been doing business internationally since the mid-’80s. I have traveled to 26 different countries and have done business in Canada, Central and South America, the Mid-East, Europe, India, and Asia. What I have learned in my travels and experiences is being culturally savvy can not only shorten your initial time to market but also help ensure that entry into a foreign market is profitable and sustainable. Learning the language (or at least some common pleasantries), customs, values, and usual and customary business practices are a must for not embarrassing yourself or your company. False starts in a new country can be very costly and often times there a no second chances…
While the basics of cultural awareness mentioned above will get you in the door, it is becoming culturally savvy that will keep you there. I liken international business to acquiring a new company. It is rarely the acquisition that is a problem, rather it is the post-acquisition integration issues, many of which are cultural, that often determine the long-term viability of an acquisition. Similarly, it has been estimated that the mortality rate of international joint ventures exceeds 50% within a three year period of time. It is rarely technical competency that is responsible for the high failure rate noted above, rather the reason most often noted for the dissolution of ventures are the problems surrounding the inability to manage and deal with cultural constraints, barriers, and conflicts.
What works in one culture oftentimes simply does not work in other cultures. In fact, many times what works within one country can deeply offend someone from another country. Let me give you an example of how even innocent things can spiral out of control when you’re on foreign soil. Regardless of what you think about Richard Gere’s acting ability, political beliefs, or religious views, there is much that can be learned by peeling back the layers on the unwitting and very public faux pas he made a while back in India. Mr. Gere who has long been a strong supporter of the Indian, Tibetan and Chinese cultures essentially unwound years work during a public appearance in India in what I’m sure he believed was nothing more than an innocent gesture of public affection. However, his cultural perception of innocence actually insulted much of the Indian public, and in such severe fashion that he had to be rushed out of the country for his own safety and to avoid potential legal consequences. The bottom line is that it pays to do your homework well in advance of doing business abroad. While the incident was later resolved, it should have never occurred, to begin with.
The most effective way in which to ensure your success abroad requires a blending of two key components. The first is selecting the right “in-country” partners and advisors. These should be locals who know the ropes from a political, regulatory, legal, tax, and cultural perspective. The local partners should already have a solid network in place that will help you hit the ground running. A common mistake is to just open an office, staff it up, and expect to get the same results that you would by opening a branch office domestically. This rarely works, and in fact, can be very costly on a number of different levels.
The second component needed to be successful abroad is to hire a consultant to advise and train your domestic staff on the finer points of cross-cultural integration and interaction. You may select the perfect set of foreign partners and advisors, but if your domestic staff doesn’t understand how to communicate and do business with them on a culturally acceptable basis the venture will be very short-lived.
To conduct business successfully in today’s international marketplace requires a commitment to global team building in a multicultural environment. This, in turn, requires that both you and your organization become culturally savvy.
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