Business practices differ in every country, and even from region to region in larger nations. However, there are some patterns and trends across cultures that can be identified.
In North America and the rest of the English speaking world, business generally comes before pleasure. Personal relationships are usually formed after business has been conducted and the contracts are signed.
In much of the rest of the world, the opposite is true. Firm leaders will not do business with you until they get to you know you personally, and they feel like they can trust you. If this approach feels strange to you, it’s something you will need to get used to if you want to do business in a vast majority of markets.
The building blocks of successful professional relationships will be built over long dinners, drinks, afternoons on the golf course, or through informal gettogethers. With this in mind, visiting your target market regularly is crucial if the business culture there is based on personal relationships.
The practice of gift giving is also common in many corners of the world. Usually these gifts are inexpensive and promotional in nature. Expensive gifts can be misinterpreted as bribes in some cultures, and this can cause great offence.
The art of handing out business cards is another ritual that needs to be given attention. In some countries, there is a specific way the card needs to be presented which needs to be precisely executed and timed. In other countries, eye contact and a strong handshake are all a business card needs to accompany it, but this all varies.
Regardless of where you happen to be, if the first language is not English, printing your business cards in the native tongue is an appreciated courtesy (and sometimes a necessity).
When it comes to negotiations, cultures where haggling is common will approach negotiating contracts doggedly. Individuals in these countries may drive hard bargains, needle your firm on issues of price and be incredibly patient. Therefore, you need to be patient. Being ready to extend your stay to accommodate a long negotiation process will go a long way towards success.
You will also want to avoid hard sells or aggressive tactics if that isn’t the common practice in your market. It can scare off or offend potential buyers.
The concept of face is also very common in much of the world. Face is essentially the respect that an individual garners both personally and professionally, especially from their subordinates.
In cultures where face is important, disagreeing with or openly contradicting a senior leader in front of their employees can cause them to lose face, and you to lose business. Greeting senior members of a sales team first is also important in some countries, and not doing so can cause great offence. To help your potential customers or partners gain face, say complimentary things about them in front of their subordinates and give them praise for novel and interesting ideas in meetings.
When you are negotiating in certain countries, like China, sales people won’t offer you a direct no to ideas or offers they aren’t impressed with. Phrases like “we will have to think it over” and “that will require further consideration” can often mean no.
Bribery and Corruption
It goes without saying that you shouldn’t involve yourself or your firm in corrupt behavior when engaging in international business, but this is especially important when dealing with public officials in foreign countries.
Offering a government representative expensive gifts, or favours (such as connecting their children with a good school) to induce that person to do something they wouldn’t normally do is bribery, as is accepting such an offer from someone in a position of power. This activity carries serious consequences, legal and reputational.
Bribing a foreign official can result in hefty fines and even jail time, and if your firm’s brand becomes associated with a corruption scandal, it can take a very long time to shake it.
While offering a gift or favour for something in return is a clear case of bribery, it isn’t always that cut and dry.
If you are going to dinner with another CEO, picking up the bill isn’t a big deal, but be very careful when purchasing a meal or drinks for a government employee. What you consider treating someone, that person’s supervisor might consider a bribe. When in doubt, consult a lawyer.
Corruption levels differ from country to country and across different industrial sectors, but corruption is prevalent everywhere.
Transparency International publishes an interactive Corruption Percentions Index every year, measuring countries based on the strength of their public institutions and the prevalence of corrupt behaviour.
If you are doing business in a country that ranks low on this index, there is a good chance you will be exposed to or offered to take part in questionable activities.
In some cases, if corruption is particularly pervasive, taking part in illegal activity may seem like the only way to get anything done. In these situations, use your best judgement, and always be aware of the potential consequences of your actions. Closing a deal through dubious means could come back to haunt you in a big way.