Knowledge of cultural orientations and societal systems helps in understanding cultural differences and provides a solid foundation for researching the culture of a new target market. Research is essential to avoid cultural faux pas.

For example, an organization sending representatives to Japan to meet with a potential trade partner would be wise to research where Japanese culture falls on the various orientation scales, as well as its most valued social and business practices.

The research would reveal that gifts are an important aspect of Japanese protocol. To the Japanese, gift giving shows respect, friendship and appreciation and is a centuries-old ritual with a host of associated protocol. This information will help an international trade practitioner make a good impression when meeting a potential Japanese partner.

When seeking knowledge about a target culture include the following recommended research questions:

• What are the social norms and business protocols?
• What are the definite dos and don’ts?
• What are the key differences between this culture and ours?
• What are the key similarities?
• What stereotypes does this culture have about our culture?
• What stereotypes do we have about their culture?
• What events and trends are currently impacting the target culture?
• What is our shared history?

Know the do’s and don’ts of social norms and business protocols

Social norms and business protocols reflect the way people expect others to behave in particular situations. They are largely based on values and are reflected in cultural orientations and societal systems. Before interacting with an unfamiliar target culture, international trade practitioners can benefit from learning the generally expected behaviours in social and business situations.

Social practices are crucial to know, as many business decisions are made outside of meeting rooms. In addition, cultural differences can be more pronounced in social settings. As an example, the best Indian meals take days to prepare. To decline to eat dishes prepared for guests in such situations would be viewed as disrespectful and could erode any chance of a business relationship.

Some of the norms and protocols listed below are very important to a culture and should be noted as definite dos and don’ts. International trade practitioners should seek information about which behaviours are considered offensive by the target culture and add these to their “don’t” list as behaviours to avoid. They should also seek information about what is considered highly desirable and add these to their “do” list if the expectation also applies to foreigners.

Even when they do not adapt the behaviours themselves, knowledge of important norms provides insight into the other culture’s values, perceptions and behaviours.

For example, if international trade practitioners are hosting business associates from a culture where greetings are formal, the visitors should not be expected to adapt a more informal and personal form of greeting, such as kissing one another on the cheek or hugging.

Social norms: 

• Dress and appearance
• Greetings and goodbyes
• Gender roles
• Food and drink consumption habit
• Nonverbal communication e.g. gestures, personal space, facial expressions, touching
• Holidays
• Humour
• Acceptance of technology
• Freedom of speech and other liberties
• Religious practices

Business protocols

• Language used
• Exchange of business cards
• Greetings and goodbyes
• Introductions
• Appropriate time for and amount of socializing
• Dress and appearance
• Gender roles
• Gift giving
• Meeting protocols e.g. seating arrangements, turn-taking, presentation
• Ethical standards and degree of corruption

Stay on top of recent changes that impact cultures

Culture is changed by events and trends. The amount and speed of cultural change depends on how willing people are to accept it. Many people in the U.S. were motivated by fear to quickly accept an increased level of surveillance following 9/11. The types of events that can impact culture are numerous. Some examples include threats to public safety and property, changes in the type of government and environmental disasters.

There are also numerous trends that impact culture. Examples of these include societal changes in demographics, technology, dominant industries, standard of living, government policy, access to education, and the natural environment. As a result, international trade practitioners research the impact of events and trends in target markets.

For example, a distributor of communication products would investigate technology usage rates and the demographics of users. Such information helps determine if a potential market is viable and how to position marketing efforts. Once in a market, international trade practitioners monitor current events and trends to stay up to date on cultural changes.

Knowing the history can open doors as well

Before entering a new market, it is advisable to research its history, including history that the two countries have shared, particularly when that shared history has had a profound impact on one or both jurisdictions. The nature of the connections influences how a country’s image is perpetuated and how easily the doors of commerce will open for international trade practitioners.

As an example of how shared positive experiences can provide common ground for relationship building, consider the Netherlands and Canada. They share a military history, with Her Royal Highness Princess Juliana of the Netherlands and her family having lived in Ottawa during the occupation, and Canadian forces spearheading the liberation of the Netherlands at the end of the Second World War.

Canada and the Netherlands have also worked side by side in multilateral efforts around the world in support of peace and democracy. In addition, over a million Dutch people have immigrated to Canada, resulting in many business people with a relative in Canada—a great icebreaker for a first meeting. This shared history has contributed to positive trade relations between the Netherlands and Canada.

In 2011, Dutch Foreign Direct Investment (FDI) in Canada totalled CAD 56 billion, making the Netherlands Canada’s second largest source of FDI. The two-way merchandise trade was valued at CAD 8.1 billion in 2012.

The post Avoid awkward cultural faux pas by doing the proper research appeared first on Trade Ready.

You’ve done the legwork and you’re ready to launch your business in a new international market. Now it’s time to get the word out!

To say that “preparing your business to expand into a new market is a lot of work” is an understatement. Now that you’ve done the hard part, it’s time to reap the rewards of your research & development through a marketing plan that will ensure your target market knows about your product or service.

At this stage, you may be wondering:

Do domestic and international markets really differ?

The answer to this question is both yes and no. The basic marketing principles employed in domestic and international marketing are the same. However, there are additional areas to consider when participating in international marketing.

Who are your customers and how can you reach them?

Although the principles of marketing remain the same, international marketing differs from domestic marketing. There are several reasons why this is the case, mostly because:

• Getting and staying close to the customer is more difficult at long range; understanding customers from a different cultural environment with different cultural values is more difficult;
• Surveying and understanding customers in a foreign market may be difficult or even impossible using methods normal for domestic markets;
• Modifying or redesigning products to conform to foreign tastes and preferences could be costly;
• Being perceived as foreign could be an added barrier that companies must overcome when marketing abroad;
• Communicating (advertising, media, sales techniques) may be quite different in the target market;
• Distributing goods over long distances poses an additional set of logistical challenges;
• Providing certain features may simply not be cost effective at long distance;
• Providing after-sales service may be more difficult; and
• Monitoring customer satisfaction may require techniques that are different and more intricate.

Revise your strategy to reflect your market’s environment

All of these factors mean that international marketing is more complex than domestic marketing. It requires commitment, resources, a different kind of market research, and above all, a different set of strategies.

In accomplishing the international market objectives, the international marketer must also develop an understanding and appreciation of:

• differences in industrial, economic and technological levels among countries and their varying standards, expectations, capabilities and skills;
• cultural differences, such as languages, values and aesthetics;
• political and legal differences;
• differences in business practices; and
• varying levels of competitive intensity.

Copy + Paste won’t work, even within segments of one market

Even within Canada, there is sufficient diversity to make it inappropriate to adopt a single, standard approach. Advertising programs that have been successful in English Canada may not work in Quebec. Marketers know that Quebec is different and that Quebecers have lifestyles and expectations that differ sharply from those of Albertans or British Columbians.

Such cultural distinctions are multiplied many times over once a company steps into the international arena. Conducting focused market research can identify these and other issues that impact doing business internationally.

This is not to suggest that a concept or strategy developed for the domestic market cannot be adapted to work elsewhere.

A good idea should be able to transcend borders, and there are numerous examples of successful global marketing strategies.

This is particularly important in an era of gradual reduction of barriers in international trade, emergence of global standards for a number of products, spread of international communication technology, and increasing global tastes and preferences in a number of consumer products such as clothing, footwear and convenience foods. These are possible because technology and globalization are, at least to some extent, homogenizing tastes and preferences.

In certain aspects of their lives, people are growing more alike in their wants and behaviours; for example, in clothes, technology, entertainment and even fast food. However, the language and cultural symbols used to express these wants continue to differ markedly. The international marketer is challenged to become a skilled communicator, capable of addressing both the global as well as the local nuances.

Few international marketing plans will be successful unless they are shaped by local people to reflect local realities and sensitivities. That is why companies seek the advice and counsel of advertising, marketing and communications professionals when attempting to penetrate foreign markets.

The post Is there really any difference between marketing domestically and internationally? appeared first on Trade Ready.

Canadian-American trade is the largest bilateral trade relationship in the world. I’ve written these tips with Canadian businesses in mind. In working with Americans, here are a few cultural tips I can give to make your interactions more effective:

Americans have a special relationship to time

In American business, there is a profound focus on completing tasks as quickly as possible. We have an expression: “Time is Money”. It’s the idea that if we save time, there is automatically a value associated with that time savings. Oftentimes that is true.

There’s even a movement which originated in Silicon Valley called “growth hacking,” or trying to speed up the process of finding new qualified sales leads. While there are sometimes time-saving shortcuts, most of us understand that success comes down to hard work and consistency.

But for other cultures, Americans can seem rushed.

This can lead to the misinterpretation that Americans often don’t understand the trust-building process that genuinely requires time to establish. It can also create an air of suspicion about why the deal needs to be signed so quickly.

My advice to Canadians and others feeling rushed is to confront their American counterpart with the value of what is being overlooked – quality, trust, risk management, etc. Discuss the costs of the relationship failing or needing to replace an implemented system. Faster is not always better.

Silence is the enemy during international negotiations

Americans in business are very uncomfortable with silence. If you stop talking mid-conversation, your American counterpart will be at a compete loss for what to do next.

In Asia, this is often used as a negotiation tactic against Americans. They know that because Americans are desperate to get conversation flowing again, they will start giving away concessions in the negotiated deal. When there’s an extended silence the American normally assumes that they have said something that has not been well received and are trying to return to a state of acceptance.

By the way, silence is a tactic that I have seen work similarly on Israelis too.

Prepare yourself for friendliness on steroids

Canadians only need to visit an American department store to see friendliness used as a business tool. A store sales clerk will likely follow you around asking if you need help. In fact, it is often asked several times in the same store. This overt “friendliness” can be unnerving to international guests to the U.S., but it is a great example of friendliness in business.

Americans are taught from a young age that confidence and friendliness are traits they should cultivate.

This American openness is often appreciated in business settings, at least initially. But it can run the risk of being seen as insincere, especially when Americans talk about “getting together” and then don’t follow through on the expectation they set.

In working with Americans, it is important to set an appointment to follow through on action discussed. And if you trying to sell to American companies, be prepared to follow up with the company’s staff several times to move a step of your selling process forward.

I hope these insights help you to effectively engage and build strong relationships with American business people. If you have a particular situation related to cross-cultural communications and need advice, please feel free to contact me at: info@The-International-Entrepreneur.com.

Best wishes in all of your international business dealings!

The post These tips for working with Americans will make your interactions more effective appeared first on Trade Ready.

However, when you decide to take advantage of the global supply chain to build your business, there will inevitably be challenges along the way. Knowing how to manage your international vendor relationships becomes key to ensuring your international business sails smoothly.

Unlike arm’s length transactions, building international vendor relationships is a long-term strategy that needs to be enriched and maintained on an ongoing basis.

In 2009, my husband and I started our own small international business. Since then we have developed some successful partnerships with our overseas suppliers, yet at the same time we have also had some frustrating experiences.

I would like to share some painful but formative lessons we have learned along the way that could be valuable to your start-up international business.

1. Never underestimate the importance of relationships

First of all, you have to be mentally ready to engage in an international relationship. Being open-minded and understanding of cultural differences is a prerequisite.

As my husband once said:

Understanding culture is not about knowing when to bow or how to eat the food, it’s about appreciating your partner’s worldview enough to anticipate how they might be inclined to perceive you and your actions.

Ultimately you can only put yourself in that person’s shoes if you have some feeling for the life experiences that person has had before they encountered you.

For instance, you don’t have to speak Chinese in order to do business with people in China.

English is an international language and any Chinese companies which trade internationally will have people who can communicate in English proficiently.

The obstacle is not the language; rather, it’s the way people think about business problems and how these ideas influence their conduct.

2. Don’t lose focus as you make your first steps

China is a fast-growing economy and, as such, the rapid pace of business development often brings about problems. Sometimes, people only focus on the final results, while paying less attention to details and quality.

This is especially true for new companies and SMEs that often lack the resources to cope with unforeseen challenges.

So when you first start doing business with Chinese companies, you have to be patient, flexible and forgiving; even though you know the outcome may be less than ideal, you must be willing to give it a try.

It may take multiple attempts to get a product right, but it’s possible for those who are persistent.

3. Take the time to choose your future suppliers carefully

Once you’re mentally ready, it’s time to find the right suppliers for your business. It’s much harder to find the right suppliers overseas than locally.

Sometimes you may need to take an overseas business trip, but even visiting a lot of factories in person will not guarantee success. Conducting plenty of research beforehand is of absolute importance.

Your choice of country shouldn’t depend on your own preference. It should be based on a country’s competitive advantage.

For example, many textile products in North America were produced in China during the 1990s, because of the abundance of low-cost labour and the technological capabilities of China’s textile industry.

However, as labour costs in China have increased in recent years, more and more textile companies have shifted their manufacturing from China to other developing countries such as Vietnam and Cambodia.

This shift means, compared to other countries where labour is less expensive, China no longer enjoys an overwhelming competitive advantage in the textile industry.

When it comes to choosing the right suppliers, it’s important to narrow down your choices and qualify your options based on a set of criteria.

For example, the quality of a company’s website, trade references, product samples, and communication are all important indicators for qualifying a potential supplier.

A third party’s onsite evaluation or factory audit can often save you the expensive costs of an overseas visit.

4. Plan ahead to ensure the quality your customers demand

Finding the right supplier is only the first step towards a successful international vendor relationship. There are also many risks associated with long distance relationships.

One of the biggest risks, in my opinion, is quality control. It’s important to articulate clear specifications and standards to your suppliers.

Equally important is your willingness and ability to foresee and pre-emptively mitigate any problems that might occur.

It’s crucial to insist that pre-production samples be delivered to you prior to production. Hiring a third-party agency to perform a quality inspection during production and/or before shipment is an effective way to ensure products meet specifications.

Be sure to inform your supplier of the inspection before they start production, as this will make them more cautious during production.

5. Reduce risk by diversifying your suppliers, but not at the expense of building trust

As mentioned earlier, building successful international relationships requires a long-term commitment. At the same time, it’s very risky if you only have one supplier for your key product lines. Don’t put all your eggs in one basket.

It’s necessary to have more than one supplier, especially in an unstable economy. Your key supplier could go out of business in a year or even a month.

This has happened to us several times over the years. Each time we had to start all over again to find and qualify a new supplier. Therefore, it’s smart to have at least one other supplier as a backup.

Although having multiple suppliers is important in managing risks, reducing the number of suppliers and focusing on your key supplier will help you build and manage a long-term relationship.

Just as you evaluate your suppliers, your suppliers will evaluate you as a customer. Overseas suppliers often assess their customers based on the importance to their business.

If your business is of significance to your supplier, they will value you as an important partner.

Keeping your promises, such as consistently paying on-time, is one of the ways you prove to your supplier that you are a good customer with whom it’s worth building a relationship.

Although it takes a lot of time and effort, developing and building trust is not only worthwhile ­­­– it’s absolutely critical to your success.

6. A strong contract can help prevent expensive legal disputes

The reality is that disputes can and will happen even with your best suppliers.

To resolve an international dispute through legal means is much more complicated and expensive than with domestic disputes. Most of the time, it’s easier to negotiate and settle disputes privately rather than through legal action.

That said, you should always have some sort of contract in place in order to set clear expectations.

Once a purchase order (PO) is accepted, it becomes a simple but effective form of contract between a buyer and a seller. Any terms and conditions should be stated clearly in your PO to your supplier to avoid the possibility of a dispute.

Again, an understanding of cultural differences plays an important role in avoiding and settling disputes. Sometimes, there is a way to find a win-win solution to minimize the harm for both parties.

There are many more strategies and tactics in managing international vendor relationships which you will learn through experience.

All in all, having an open-minded and understanding approach is essential for small businesses interested in building relationships with international vendors.

What have your experiences with international vendors been like? How can you apply these lessons to your current or future vendor relationships?

The post Six ways you can effectively handle your SME’s international vendor relationships appeared first on Trade Ready.

These individuals are often called diplomats or rainmakers, as they grow the business or help bring understanding where there is none.

Today we all need to be diplomats and rainmakers to thrive in the global marketplace.

To become a skilled negotiator, you need to not only know what your own goal and preferred outcome of the negotiation is, but what your weaknesses and strengths are when interacting with others.

This is instrumental as you stand up for your needs and form a compromise when necessary.

Understanding what motivations and values drive the behavior and goals of your negotiating partner(s) is another important aspect of successful negotiation.

Having an open mind, listening well and being empathetic, while not losing sight of your own goals and values, will help you here.

Breaking down the values that define negotiating styles

Differences in behaviors, values and negotiation style are both cultural and personal. I once worked with a woman from northern Europe who was stationed in Egypt, where she was tasked with collaborating with local businesses and the government.

As a professional with intercultural competence, she knew she had to first research the local culture, communication styles and the view and role of women in the workplace, especially in negotiations.

She also knew that she needed to switch both her behavior and her communication style, to some degree, in order to better interact with the local partners and reach her business objectives.

There are several different experts in intercultural communication and competence and studies that you can consult to learn about a local business partner.

One place to start is to explore the research by Geert Hofstede and Gert Jan Hofstede in their book Cultures and Organizations- Software of the Mind (2005).

Egypt is described as a culture with high levels of accepted inequality (power distance), a stronger trend towards collectivism than individualism, and strong sets of rules and behavioral codes (uncertainty avoidance) when compared to Canada, for example.

You can perform quick country comparisons and also read about the different types of cultural dimensions here.

If we look at communication styles, the Egyptian communication style is described as indirect and high context, as opposed to the more direct and low-context North American communication style. In high context communication, non-verbal communication plays an important role.

Strategize now to save yourself time later

What does all this mean? It means that when you enter negotiations you should understand the cultural background of the other party and make adjustments to your style.  Making persuasive arguments requires knowing your partner or opponent.

Using a very direct communication style, where you get to the point quickly and verbally express what you want, expecting a fast agreement, might not be the best route forward in every situation.

When negotiating in a “high power distance culture” you’ll need to know the status of your counterpart: where in the organizational hierarchy does he or she stand?

Those on the lower rungs will not have the power or authority to make binding agreements. They are the gateway to those with the power to make decisions.

“Younger” women may also encounter added complexities originating from cultural differences in values and attitudes associated with the role of women in society and in business.

In cultures where the role of women in society is strongly associated with their marital status and age, it can be very challenging for a young unmarried woman to earn respect. You will likely need to be accompanied by an older man, perhaps a local, to gain access to the right people and to be considered a serious negotiation partner.

Prepare to be proactive with your negotiating knowledge

But don’t over-adjust and over-accommodate. Cultural differences can also be used as tools in the negotiation process. For example, negotiators from some cultures might stall the process, not want to give a final answer, and use long periods of silence to make you change your mind.

Having a local cultural informant or an experienced cross-cultural negotiator will help you de-code in order to understand when a cultural difference is authentic, or when it is used as a negotiation strategy.

A local cultural informant can also advise you on how to best respond and move your agenda forward.  As someone wise once said, “at this point you just have to demand an answer.”

When you prepare for cross-cultural negotiations:

1. Set your goals and expectations clearly and know your own communication style, strengths, weaknesses and insecurities. Take some time to analyze and understand your preferred negotiation process.
2. Study the culture of your partner or opponent; know the values, customs and communication style. Understand the local business culture, hierarchy and the role of gender.
3. Compare your negotiation process to that of your negotiation partner, looking for similarities and differences. Find ways to develop trust and collaborate.
4. Get a great local expert or informant. Someone who really knows the culture and who can give accurate and useful advice.
5. Don’t over-adjust to accommodate cultural differences, or you will lose your negotiation power. Use it to your advantage.

Which areas in your negotiating style do you consider a strength? What area of international negotiations do you most need to improve on? 

The post Get what you want in international negotiations by adapting to local differences appeared first on Trade Ready.

Who are the “multilatinas”?

They are as varied as they come. A good place to start finding out about these companies is the America Economia Ranking. For 2014, according to this ranking, the top 10 multilatinas are:

• CEMEX (Mexico, cement)
• LATAM (Chile, transport)
• Brightstar (Bolivia/US, telecoms)
• JBS/FRIBOI (Brazil, food)
• CSAV (Chile, marine)
• Tenaris (Argentina, metallurgy)
• Ternium (Argentina, metallurgy)
• Avianca/TACA (Colombia, transport)
• Mexichem (Mexico, petrochem)
• Ajegroup (Peru, drinks)

Cemex had sales of USD 15 billion in 2013, but the rankings are based on a variety of factors, so companies with even higher sales can be found farther down the list. For example, America Movil (no. 14 in the ranking) had sales of USD 60 billion. Not small at all.

Why should they matter to you?

1. Because these companies could be your clients.

Research multilatinas carefully. Find out as much as you can about them. They could be your gateway to real growth in Latin America.

Remember that any of these companies will need everything from staples (we staple and stamp a lot in Latin America, given our huge bureaucracy levels) and washing up liquid through to cables, cars and whole buildings. Is it worth designing a mini marketing plan for some of them?

If you are selling indirectly, for example, through a distributor, do they have access to these companies? Drop the names and they’ll know you are serious about the market.

2. Because these companies are global.

Some could be closer to home than you think. Can you supply them in your home market and then aim for a more global win? Could you supply them in one export market and then accompany them into a new market? Could a regional buyer be the key to more than one market?

3. Because they will have a “multinational” culture.

Although they have a distinct Latin flavour, work practices are likely to be aligned to what’s more familiar to you globally. The cultural gap will be slightly smaller.

And, critically, how to you get in there?

The million dollar question.

It’s not easy. It will take time and contacts. And a good dose of courage. Research is absolutely key to get under their skin, understand how they think and who your keyholder is.

Also, what I find lets exporters down many a time is readiness. You wouldn’t go to Coca Cola unprepared. You shouldn’t either with multilatinas.

You don’t get two shots. Have EVERYTHING ready and make sure you can respond and fulfill orders and requisites.

They are big companies, and they will be slow and full of internal and external paperwork. Do you really have the resources?

If they place an order that is 10 times the size you are used to, can you handle it?

My other key piece of advice is to be really aware of where the balance of power lies when dealing with multilatinas. Again and again I see European and North American exporters coming to multilatinas with the wrong attitude, sometimes borderline rude/pedantic. You need them much more than they need you.

Be humble – these are big companies, and very powerful in their own turf and beyond, and they know it.

Treat them with huge respect and show them that you really want their business.

Finally, when dealing with multilatinas, remember that as “multi” as they are, they are still “latinas”, particularly if dealing with HQ. Personal contacts help and cultural awareness is a must. They might not reply to emails or be extremely punctual. But they are way too big to ignore.

In what ways could multilatinas play a part in your Latin American market entry strategy?

The post Could a multilatina be your big gateway client to doing business in Latin America? appeared first on Trade Ready.

As a former student in a FITT-accredited program and a recipient of the FITT Diploma in International Trade, I know how important socio-cultural factors are in doing business internationally. There is much emphasis in the FITT courses on the cultural dimensions of international trade.

Reflecting on my own experiences, I would agree entirely that being prepared for cross-cultural differences will help with growing your international business more smoothly.

Taking the first step in building cross-cultural bridges

Growing up in China—a relatively homogenous society—I had little understanding of other cultures when I was young. Not having interacted with people from other cultures, my mental universe was largely influenced by China’s mainstream media. In my mind, I clearly divided people in the world into two groups: Chinese and “foreigners”.

As for “foreigners”, they were all the same to me no matter whether they were from Europe, North America or elsewhere in the world. I used to hold stereotypes about “foreigners” being individualistic, capitalistic and somewhat arrogant.

It was not until I graduated from college and got the opportunity to work with some non-Chinese colleagues from Canada, Australia and Japan that I realised “foreigners” were not all the same. I could tell that my Canadian colleagues were different from my colleagues from Australia in many aspects, despite the fact that they spoke the same language.

It was also around this time that I started to break away from my former stereotyped thinking and began to open up my mind.

Being open minded is the first step in breaking the ice of cross-cultural differences.

Every time I get an opportunity to interact with people from other cultures, I listen and observe carefully.

Adjusting  my cultural mindset to a new environment

In 2008, I moved to the United States. It was my first time in North America, and I was amazed by the diversity of American society—no wonder America is called a multi-cultural “melting pot.”

However, soon after I settled in the USA, I realized that within this “melting pot” there was one dominant culture with many sub-cultures, of which people in the dominant culture seemed to have little understanding. Just like myself when I was young, I met many people who tended to have stereotypes toward so-called “outsiders.”

When I lived in the USA, I had a short contract job helping a local American company prepare for a meeting with a group of Chinese prospects. This was a big deal because these were the very first customers from China for the American company, and the main purpose of the Chinese people’s visit was to do a quality inspection. As this was the first time for the American company to do business with China, the American managers were grappling with the cultural differences between America and China.

Cultural concepts and misconceptions can affect business

During the inspection, the American company served tea and donuts as refreshments for the Chinese visitors. Things went well in the morning, and it was time for lunch so they ordered pizza for a quick solution. Right after lunch, the Chinese inspectors returned to their inspection work.

Things became complicated in the afternoon as the Chinese inspectors questioned the specifications and seemed fussy. The American engineer answered their questions thoroughly, but not to the satisfaction of the Chinese inspectors. One of the inspectors said to me that they didn’t feel they were respected, as the company didn’t provide the original engineering drawing.

I soon realized that it was not because of the engineering drawing that made them feel neglected; rather it was the fact that the owner of the American company hadn’t spent much time entertaining them.

From the American company’s perspective, they didn’t want to interrupt the inspection with a lengthy meal, as the managers wanted to finish the inspection as quickly as possible. However, in Chinese culture, business is not just about business, it’s more about people and relationship building.

Especially as a customer visiting a supplier, the Chinese visitors wanted to feel valued and respected.

I explained this aspect of Chinese culture to the American factory owner, and he took my advice with understanding. At the end of the day, he invited the Chinese party for dinner. During the meal, he shook hands with every inspector and made a toast to thank them for their hard work. He even gave them a book written about the history of the factory to better acquaint them with the American company.

I could see that the Chinese visitors were happy that night, and that was the start of a good international business relationship!

Make an effort when it comes to culture, and build positive business relationships

Making efforts to build a good relationship will help establish trust. Business in America is often “just business”.

However, when doing business with high-context cultures such as China, companies should be more aware of the different cultural aspects. It is especially crucial when doing business for the first time.

As a co-founder of a small business importing consumer goods from overseas, I have dealt with many overseas suppliers over the years. Some of our partnerships with suppliers did not last long, while others have persisted from the very beginning until now.

At the end of the day, you can only continue doing business with people you trust.

Here are some rules of thumb we can bear in mind when it comes to doing business across cultures:

• Do not make assumptions or follow stereotypes
• Be open-minded and willing to learn about other cultures
• Do your homework on the target culture
• Respect not only cultural differences but also individuality
• Find appropriate ways to build trust

A trustworthy relationship is built on mutual understanding and, like any relationship, takes time and commitment to get right.

Don’t you think this is the right way to do business anyway? How has cultural understanding helped with growing your international business?

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