Going Global An Introduction to the Cultural Aspects of International Trade

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Going GlobalAn Introduction to the Cultural
Aspects of International Trade
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What Is Culture?

• a system of shared values and norms
• values are shared assumptions about how things
  should be
• norms are social rules and guidelines that
  prescribe appropriate behaviour
• serious cultural mistakes can negatively affect a
  relationship

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Key Cultural Concepts

• High-context Cultures
• the context in which a conversation occurs is as
  important as the words spoken
• greater value placed on interpersonal relations
  in business affairs
• Low-context Cultures
• speakers words explicitly convey message to
  listener
• rely less on relationship building and non-verbal
  cues

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Dimensions of Culture
Filters Affect on Business Age Behavioural Body C
aste Systems Conceptual Education
Expressions Influence on Government
Language Religion Social Status Speed Volume Weal
th
Values and Attitudes
Communication
Dimensions of Culture
Language
Religion
Social Structure
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Issues Pitfalls Body Language

• It is an important part of the the communication
  process, particularly where language barriers
  exist
• It is important to understand the mannerisms
  common to your foreign market

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Issues Pitfalls Gender

• The culturally appropriate manner in which men
  and women relate with each other differs around
  the world
• An issue for foreign businesspeople, particularly
  women seeking to compete in certain environments

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Issues Pitfalls Gift Giving

• Challenge is to know the gift-giving customs of
  your target market
• Giving the wrong gift at the wrong time can have
  serious consequences
• Different protocols for presenting and receiving
  gifts

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Issues Pitfalls Humour Time

• Humour
• As a general rule, humour does not transfer well
  between cultures
• To appreciate humour, listeners need an
  understanding of the culture from which a joke
  originates
• Time
• Time and its use are seen differently around the
  world
• Canadians view time as inflexible - meetings must
  start on time or we get frustrated
• Other cultures treat time more flexibly

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Issues Pitfalls History Business Card
Etiquette

• History
• History often influences a cultures perceptions
• Even within culturally similar regions, cultural
  events will be viewed differently by different
  people
• Research the target markets history, but avoid
  discussing sensitive issues
• Business Card Etiquette
• Business card handling is a ritual in some
  countries
• Japanese view business cards as representative of
  the owner - shoddy treatment of the card is
  disrespectful

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Communication Role of Words

• In different cultures words play different roles
• In Canada / US we say what we mean
• In other countries, such as Japan, no is rarely
  used - to avoid embarrassment
• Well see or perhaps may mean no
• Silence or the absence of words can have
  different meanings

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Communication Written

• Written communication in two or more languages
  presents special challenges
• use of slang / idioms
• ineffective translations
• interpretation of written contracts
• Back-translation is a useful tool to ensure
  message is received as intended
• Effective translation is always critical,
  particularly in contractual agreements

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Communication Written
Original Document in English
Translated into Spanish
BACK TRANSLATION PROCESS
Original Meaning Verified or Adjusted
Translated Back into English
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Communication Non-verbal

• Recognizing that a large part of communication is
  non-verbal in order to
• understand how our message will be received in a
  different cultural environment
• avoid misunderstanding because of body language
  messages
• avoid feeling uncomfortable because of cultural
  differences such as silence in conversations or
  lack of personal space

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Communication Face

• Face is basically your image it is how you
  are perceived by the outside world and, more
  importantly, by co-workers and associates
• It is perhaps one of the most important and
  misunderstood cultural concepts
• Preserving face becomes more important in
  cultures that highly value image or face

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Communication Business Meetings

• Chairing meetings in multicultural environments
  requires some planning.
• Issues to consider when planning a meeting
• In cultures that are hierarchical in nature, do
  not insult participants by seating a subordinate
  in a higher position than his or her superior
• Participants of equal rank should be treated
  equally
• Look at the space too tight will be
  uncomfortable for cultures that do not like close
  proximity between participants
• Gender issues can also come into play when
  arranging seating

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Communication Business Meetings

• Ensure that greeting of participants is
  appropriate to their cultures
• Scheduling of meeting agenda should allow enough
  time for everyone to arrive, greet, get
  refreshments and be seated without being rushed
• Refreshments must be appropriate to the culture
  and its customs
• Be sure that room décor is appropriate with
  respect to colours, flowers and so on

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Communication Presentations

• Making a presentation to a group of foreign
  businesspeople has some additional challenges
  that are not always faced in the domestic market.
  
• Presentations should be S.M.A.R.T.
• Specific
• Measurable
• Achievable
• Results-oriented
• Timely

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Cultural Differences International Marketing

• Cross-cultural marketing involves learning how to
  adapt marketing strategies and communications to
  cultural differences
• Knowing cultural differences is fundamental for
  market research, strategy development, planning
  and implementation
• Local guidance essential to avoid costly
  marketing blunders

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Cultural Differences International Marketing

• Issues
• the desired meaning of a product name does not
  always survive translation
• solutions include nonsense names and multiple
  names for multiple markets
• marketing materials will differ from market to
  market, depending on education, gender and so on
• packaging and marketing materials will differ to
  satisfy different aesthetic tastes
• education profiles will determine level and
  quality of professional / support services in
  target market

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Cultural Differences International Marketing

• Issues
• Design product modifications may be required to
  meet regional needs
• Colour colours used in packaging / marketing
  materials must be appropriate to target market
• Music maintain cultural sensitivity when using
  music to deliver marketing messages

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The Art of Negotiation Across Cultures

• We negotiate constantly in one form or another
  throughout our lives
• Negotiation should not be a matter of winning all
  you can at the expense of others
• Win-win negotiations are preferable
• Negotiating in a multicultural environment is
  more challenging than in a domestic environment

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The Art of Negotiation Four Phases
Four Phases of Negotiation
Concession Agreement
Relationship Development
Information Exchange
Persuasion
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The Art of Negotiation Relationship
Development/Information Exchange

• Negotiating parties need to develop respect and
  trust for each other
• More time is required in high-context cultures
• Develop common goals as a benchmark in future
  negotiations
• An initial exchange of information helps build
  trust
• Ask questions in such a manner that they do not
  seem aggressive

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The Art of NegotiationPersuasion

• Questioning phase should identify areas of
  potential agreement, as well as potential discord
• Now begin trying to persuade your counterparts to
  agree to your terms
• Avoid I-centred statements and focus on
  we-centred ones
• Persuasion tactics need to take into account the
  cultural environment
• Strong-arm tactics will not work in a
  high-context culture

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The Art of Negotiation Concession and Agreement

• Negotiators can now move on to the final phase
  concession and agreement
• Both sides may make concessions they feel they
  can live with to obtain the required agreement
• It is common to attach a concession to a
  counter-concession using if language, e.g I
  will assume responsibility for insuring the cargo
  if you agree to assume the costs of customs
  duties
• Not all cultures view contracts as stringently as
  Canadians do for some cultures they are merely
  road maps

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Relationship Building in an International Context

• How much of a relationship is required?

Low Context
High Context
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Relationship Building in an International
Context

• Business Socializing
• as simple as lunch or as complex as a catered
  event
• socializing sometimes involves social visits to a
  family home
• extent is dictated by level and importance of
  relationship
• host organization usually responsible for social
  events
• you are often expected to reciprocate for
  hospitality in some manner, perhaps by hosting a
  function or presenting gifts

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Relationship Building in an International Context
Excellent Chance to Meet and Network
Welcoming Event
City / Cultural Tour
Important to Host
Informal Sessions Discuss Business
Small Lunches / Dinners
Formal Gift Giving Cultural Issues
Invitation to Hosts Home
Opportunity to Thank Host Gift Giving
Departure Function
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Relationship Building in an International
Context

• Costs
• Conducting international business is more
  expensive than operating domestically
• High-context cultures can be more expensive at
  first
• Business relationship arrangements, if long term,
  can be more cost-effective than they first appear

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Relationship Building in an International
Context

• Nepotism (good or bad)
• In Canadian culture, nepotism is generally
  considered unacceptable and, at times, unethical
• Many organizations, especially those that are
  publicly funded, have specific policies
  concerning hiring relatives
• For some societies it is natural to trust family
  members more than outsiders

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Relationship Building in an International
Context

• Ethics
• Many activities that Canadians consider corrupt
  and unethical occur on a regular basis throughout
  the world
• Even if an activity is illegal in a foreign
  destination, laws may not be enforced or may be
  enforced unfairly
• If you engage in an activity that is perfectly
  legal in the foreign market but considered
  unethical by the majority of your consumers, it
  could adversely affect your business

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Intercultural Effectiveness Competencies

• Concept of culture
• Modesty and respect
• Target market and its culture
• Adaptation skills
• Intercultural communication
• Relationship building
• Personal commitment

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Intercultural Effectiveness Concept of Culture

• Culture is learned through study and experience
• To determine understanding in this area
• describe the main factors used to compare
  cultures, such as authority systems (e.g.
  autocratic and democratic), social stratification
  (e.g. caste systems), and attitudes to time and
  gender issues
• describe how culture influences business aspects,
  such as negotiations and relationships

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Intercultural EffectivenessModesty and Respect

• Refrain from judging foreign cultures or trying
  to impose your own beliefs on other cultures
• Remain modest about your own culture
• Avoid comparisons that attempt to show your
  culture as superior.
• Always apply the belief that its not better or
  worse, just different

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Intercultural EffectivenessTarget Market and
its Culture

• Knowledge of the target market will allow you to
  avoid cultural pitfalls
• People competent in this area demonstrate a
  desire to learn more about the foreign culture
  by
• reading extensively
• socializing with people from the local culture
• sampling local cultures tastes in food
• considering a diversity of sources (written,
  people, networks) and points of view before
  drawing conclusions
• developing an understanding of how a countrys
  history and socio-economic conditions might
  affect the business venture

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Intercultural Effectiveness Adaptation Skills

• Adaptation skills may require changing the way we
  manage our lives
• You may have to abandon long-held beliefs and
  practices
• Often international business takes us away from
  family and other support networks and exposes us
  to greater levels of stress

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Intercultural EffectivenessIntercultural
Communication

• Good intercultural communicators exhibit a
  willingness to engage in communication in
  culturally diverse environments and recognize
  that mistakes will be made and that they can
  learn from them

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Intercultural EffectivenessRelationship Building

• Successful relationships are developed over time
  and need to be continually strengthened
• Relationship building is closely associated with
  knowledge of the foreign market and effective
  communication
• Success or failure of a venture is linked to
  ability to foster good relationships

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Intercultural EffectivenessPersonal Commitment

• International business practitioners must develop
  and maintain realistic expectations of what they
  wish to accomplish
• Obtaining all of the competencies required to be
  successful in international markets takes a great
  deal of personal commitment