Conducting Business Abroad
| Posted by admin on July 3, 2010 |
The meeting began unassumingly – a handful of international managers sitting down for a business lunch to hash out a deal with potential investors from the Middle East. Soon, though, it became clear that some of the guests had brought to the table an unexpected recipe of two parts swagger, one part intimidation and a generous dose of posturing.
One executive present at the meeting recounts how the other party purposely dragged the meeting out for over 5 hours, harangued other negotiators over the most negligible minutiae, was appallingly condescending to the restaurant waitstaff, and routinely smashed his fist violently onto the table, startling other diners. “That was one of our toughest cases,” the executive recalls. “Individual personalities always come into play, but part of it is just how they conduct business. The histrionics are par for the course and are not considered bad faith. But for us, it’s really shocking.”
So what are internationally minded managers to do when confronted with such a scenario? How can they gracefully handle the complex situations that arise in international business? And most fundamentally, what are the characteristics necessary for an entrepreneur or exec to keep in mind when launching a new project abroad?
Doing Business in a flat world
The globalized marketplace is here to stay. As growth rates in emerging markets outpace those of a number of established markets, many eyes are turning abroad seeking profits by serving the growing middle classes gobbling up everything from gadgets and gizmos to the glittering cachet of namebrand notoriety.
In this context, many internationally minded executives and entrepreneurs know they need step into developing markets as a way to scale their business or start a new venture in a locale with a promising growth rates. However, savvy managers also know that there is no one-size-fits-all strategy for exporting an existing business. There are a number of things that international entrepreneurs and seasoned execs alike can do to increase the odds of success in a foreign venture.
Overcoming international barriers
One crucial factor is awareness, both of self and of others. Here awareness of self means being cognizant of one’s own cultural programming and how that can affect interpretations of others’ behavior, e.g. having the perceptiveness to see other cultures without assigning mismatched meanings. This goes beyond being merely accepting or tolerant of other cultures to being knowledgeable about them and the historical, social, political and cultural panorama that will shape business interactions in the proposed country of business transaction. True multiculturalism will be an asset to anyone wanting to conduct business abroad.
Despite the widespread use of English in global commerce, the mastery of foreign languages will also be tremendously useful for conducting business in the host country. Not only does it facilitate communication and allows for more nuanced understandings, but it allows business professionals to get closer to understanding the ethos of a people, which affects why they purchase a certain product or service. It is also a way of demonstrating cultural competency and respect toward the local culture.
Flexibility and adaptability are also crucial. Entrepreneurs are known for their confidence but must be modest and able to gracefully navigate situations that aren’t clear cut. It is useful to know that some cultures, such as Mediterranean countries, have much higher tolerance for uncertainty, whereas others such as Germany rank high on uncertainty avoidance. Being comfortable in ambiguous situations will make the entrepreneur infinitely more successful. For example, some cultures value punctuality and lateness can signal disrespect for others’ time, whereas in some cultures, it is customary for higher ranked bosses to arrive later to the meeting. Similarly, in some cultures business meetings can include small talk or banter before meandering back “on topic.” Being flexible will allow people conducting business in other countries to recognize and accept these differences rather than seeing them as a roadblock to getting things done quickly.
All in all, entrepreneurs must incorporate a variety of skills when they transplant their business to a new market. But most of all, they need to bring with them a multicultural outlook and the willingness to be flexible.
http://www.globalbusinessunion.com
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Great post! The point about multiculturalism is spot on. With so much potential for misunderstandings, it’s really important to know as much as you can about the host country and its customs. In fact, there is a whole study about business etiquette in different cultures, and it’s very useful for those doing business in foreign countries. Knowing the protocols for running meetings, business attire, rituals for treating business cards, dining out, etc. can be helpful.
It is great point that there is no one-size-fits-all strategy, when it comes to international business. International entrepreneurs need a unique tailor made strategies which are focusing on a particular countries lifestyle and culture to launch a successful product line or service in every new foreign venture.