When doing business across cultural boundaries, it is important to try and understand the cultural differences. If no time is spent on mapping and comparing differences, the negotiations might break down because of basic misunderstandings that could have been prevented. The most prevalent differences are between the western and the eastern business culture. To compare both culture in doing business and put it in a perspective, the western will be represented by US while the eastern will be represented by Japan.
Generally, US company’s decision making is quick. Superiors give some great flexibility to subordinates so that they can decide and make decisions quickly. Unfortunately there are some errors that can come because of that. In contrast, Japanese company’s decision making is in stages following their corporate hierarchy. Their decision makings are very cautious and conservative and sometimes slower than US companies. These stages are supported by plenty of meetings and documentation. This minimizes error and brings consistency at all levels.
The US company’s roles are very individualized. Contribution of individual is very important as linked to company goals. However, Japanese companies require individual contribution to the whole group but recognize that the whole group must succeed otherwise the individual’s contribution has no meaning.
In terms of conducting business relationship, contacting clients by email or on the phone seems to be more natural in US companies but for Japanese companies, they respect meeting each other face to face. It is important to them for conducting business relationships.
US Companies focus on Return on Investment (ROI) or the end result. They don’t concern themselves on how it is achieved and spend less time establishing their process. Japanese also focus on ROI, however, they emphasize the process on how to get there. For example, they evaluate how to create the process for the project so that they regard the cost including the value of establishing the process in total.
Family and personal time is the priority in the US. Work-Life balance is a must. There is some socializing outside of work but not as a group. In Japan, priority is on the work life. It is a given, work is the centre of life. There are many traditions that re-enforce this. A newcomer to the company, hold the place for Hanami to enjoy the cherry blossom in spring for drinking with co-workers. Also, a common after-work event is Nomikai (drinking party) and is used as a very important opportunity to communicate with each other for work.
Culture is just one perspective that can help us to understand more about a business. When doing business with people from other culture, it is advised to prepare oneself before doing so. First, it is essential to know the most important facts about the country itself and then try them out to get an overview of the culture in that particular country. After that, it is advisable to study the local business culture and its etiquettes. Plus, learning the language can be a complementary part. Even though the difference in culture and its diversity can potentially hinders a company establishment in a foreign country, in the end, doing business is the same for every country; everybody wants to make a profit!
Sternberg suggests that to behave ethically, you have to first go through a series of stages of reasoning
1) Recognize that there’s an event to react to, that it has an ethical dimension and that it’s serious enough to require an ethical response.
Ethical drift means that questionable behavior is simply the norm and therefore not questioned at all.
2) Take responsibility for generating an ethical solution.
Even if employees recognize there’s a moral issue at stake, the typical response is ‘it’s none of my business’. We assume that if it’s OK with the boss, it’s OK with us.
3) Figure out what ethical rules apply.
Organizations often develop values statements or charters to support leaders in making these decisions.
4) Decide how to apply those abstract rules to the situation in order to suggest a concrete solution.
This is where it gets interesting as it involves managerial judgment. It’s also perhaps the hardest step, as values statements and credos can quickly become inane platitudes plastered on mouse mats and canteen posters. Instead leaders and managers have to judge the dilemma. In one values project I worked on with a global consultancy we set up dilemmas that the leaders had to resolve.
5) Prepare for the repercussions.
There’s no shortage of whistle-blowers who’ve been ostracized, ridiculed or even attacked.
6) Act.
Of course, for all the chaste codes of conduct, being good is a lot harder in practice than in theory.
Cultural differences can be define as the way the different cultures live, their beliefs, what they eat, their religious beliefs and so forth. Cultural differences also explain emotional expression. What does a smile say about the differences between American and Asian culture ? In business world, communication skill is very important to be success in daily operation of company and of course cultural differences will cause a difficulties of communication in business because of the type of language and the way everyone talk. Understanding every cultural differences and overcoming a language barriers are some of the consideration that people should have to do when dealing business with people of various culture. So, I will give some tips to overcome this kind of problem.
1) Time
Normally meeting schedule will be different for every country. There is country that have a meeting schedule more loose and flexible as in a number of African countries. Firstly, we have to know how time is perceive enables business to prepare and adapt communication to suit. The opinion ‘time is money’ may be interpreted in a variety of ways. To create a good impression and not appear too relaxed, or overly precise, you have to know the cultural values your audience holds of time.
2) Communications
For communication, you have to understand the manner in which cultural communications are structured or styled in every country that will become your business dealer and also you have to know the importance of social hierarchy and etiquette, and what is considered polite and respectful in every country. For example, cultures such as Japan, China and many Arab nationalities will regard social hierarchy and even age as integral to the way business communications and social interactions are conducted. This methods can help transmit message across cultural, social and hierarchical boundaries and will make your business communications to be internationally successful.
3) Dress
Regarding to the way people dress, it must be different between countries. A formal dress of a country is not necessarily be formal dress for other countries. So, the tips that I can give is before you attend a meeting or a presentation with audiences of differing cultures , find out what dress is expected (this may be more strict for women). It is normally better to appear smart, serious and well-presented, no matter your audience, if you are a guest in another culture. In your own culture this may not be as pertinent, but considering your audience’s preference may make a better impression.
4 ) Language
In some countries, like the United States and Germany, it is common for people to speak loudly and be more assertive or aggressive when sharing ideas or giving direction. In countries like Japan, people typically speak softly and are more passive about sharing ideas or making suggestions. When you interacting with people from different cultures, you have to speak in a neutral tone and making a conscious effort to be considerate of others' input, even if it is given in a manner to which you are not accustomed, can help foster effective business communication. The most important ia
you have to use an international language that can be understand by everyone so that, the meeting will not become an awkward meeting.
For the conclusion, preparation and understanding other cultures are very important to international business communications and it will determine whether your business can success or falling down. You can see an awkward between American and Japanese business meeting in this video.
Ethical decision-making can be more challenging for international businesses than local operations. Culture-driven codes of ethics vary between countries, making it difficult for managers to adhere to a strict code of ethics in each market. The textbook ethical dilemma for international businesspeople occurs when a manager must decide whether to commit an act that is unacceptable in the home country, but expected and necessary in the host country. Because of this, international business owners must know how to address differences in ethical standards around the world. Here are a few steps for ethical standards around the world.
Step 1
Keep the unique ethical climate to ensure that it is relevant to the international area. Adherence to the code a priority among executive and management to set an example and post the code of ethics in high-traffic area. Justify ethical decision in foreign markets and it is important to include international employees in the process creating ethic program.
Step 2
Follow local customs and traditions. Decide on a case-by-case basis which local customs to follow and which to avoid. Use code of ethic when dealing with humanitarian and environmental issues. Furthermore, use discretion in issues such as bribery and wage.
Step 3
Apply standards equally in all markets. Respond courteously and respectfully if to turn down an opportunity. Do not act superior or derisive when turning down unethical opportunities. Make sure that all managers and decision-makers understand commitment to ethical standards.
Step 4
Make company-wide ethics training a regular activity. Do administering comprehensive ethics training programs for new hires. Training sessions to highlight actual areas of concern in organization and citing specific examples as often as possible.
Communication
One of the key ways cultural difference reveals itself in business is through communication methods. Each culture has its own approach to communicating and collaborating to solve problems. High-context communication, which is a normal means of communicating in some cultures, relies on previous knowledge and a high level of context for the communication to make sense. On the other hand, low-context communication is common in other cultures and supplies a great deal of information that listeners are expected to interpret as meaningful to the main point of a statement. The meaning of phrases and gestures also varies from one culture to another, increasing the chance for misunderstanding. Finally, work ethics take different forms in each culture, resulting in patterns for work hours and daily routines that vary.
Training and Policies
Businesses that bring together workers from various cultural backgrounds benefit from training that teaches employees about diversity and the value of cultural differences in business. This training can take the form of reading material or group seminars that teach employees about the etiquette, language and taboos of a culture they're likely to come into contact with. Memos explaining cultural holidays that some workers observe create a sense of understanding and tolerance through shared celebration and new knowledge.
Gestures
Hand and arm gestures in business communication can make or break a business deal. Gestures used in the United States often have a common meaning amongst Americans but can be deemed as very offensive to individuals from other business cultures. One example of cultural differences is the use of pointing a finger to signify someone should look at something. This gesture -- especially in Asian cultures -- signifies calling a dog. As a result, this gesture is very offensive. In Asian cultures, individuals point with the entire hand, as opposed to one finger.
Touch
In the United States, you may never have thought twice about shaking the hand of an individual during an important business meeting. However, in many other cultures, this simple act of solidarity or friendship is considered inappropriate. In many Middle Eastern cultures, the left hand is never used, except for personal hygiene. If you were in a meeting with business professionals in the Middle East, you should never use your left hand to touch another individual or to pick up objects. This is deemed unsanitary and unprofessional. Additionally, Muslim cultures frown upon touching the hand of an individual of the opposite gender.
Masculinity and Femininity
In some business cultures, men are seen to be the more dominate force in making business decisions. As a result, men making business deals may lead to more success. In Japan, men are seen as assertive, competitive and ambitious. Men are also designated to by the accumulators of wealth. As a result, men should be making business deals. However, cultures such as that of
Sweden place more emphasis on building relationships, showing a sense of compassion and improving the general overall quality of life in a business partnership. This type of culture is seen as more feminine. As a result, women may be more successful in making a business deal.
Separation of Power
When planning a business meeting or function with certain cultures, you need to be careful about how you mingle. In cultures including Arab nations and Latin American countries, there is a distinct separation of power. Those with high levels of power in a business must be respected. Their ideas should never be questioned, and inferior employees should not mingle with these individuals on a social basis, even if a function is for business. This is the exact opposite of the United States. In America, interaction between superiors and inferior employees is perfectly acceptable. Superiors welcome ideas and can interact with their employees in a social setting.
Time Orientation
A culture's perspective about time can make a big difference in how its people relate to other cultures. While most Europeans and European Americans seem to hold to the notion that time is of the essence, African Americans, Asians and Native Americans view time as a more fluid element with no control over them. This type of cultural difference can make planning an event quite a challenge if there are different cultures coming together.
Individualist or Collectivist Perspective
Cultures are categorized as having either individualist or collectivist traits. In individualist cultures like the U.S., individual achievement and rights are very important. In direct contrast, collectivist traits include putting the objectives of the group first and operating more as a "we" society. Asian cultures are considered collectivist societies.
Role of the Government and Bureaucracy
This is an important factor that is often overlooked by American entrepreneurs, who expect minimal government intervention in the affairs of the private sector. Generally, in developing countries the government plays an important role and as a consequence the private enterprise has to deal with red tape and bureaucracy. In fact, even in case of a few industrialized countries, the government and the private enterprise maintain close ties. For instance, it is a common practice in France, for retired government officials to occupy positions of responsibility in a private company. In case of South American countries, administrative complexity and bureaucracy are common problems that are encountered by an entrepreneur.
Business Meetings
The duration of the business meetings is generally long in Asian and South American countries. Whereas, in the U.S., meetings are short and to the point. Most business decisions in Asian and South American countries are taken after a lot of deliberation. Despite this, strict schedule is rarely drawn and disbursed. In Japan, business ethics demand punctuality; while being well-
prepared and getting the facts right is important in Germany. One should avoid setting up meetings well in advance, in case of South American countries, since there are frequent changes in schedule. Again, French business firms rely on long-term plans; while South American firms prefer short-term plans.
Seniority, Meritocracy and Decision-Making
Seniority is given a great deal of importance in the Asian countries; while meritocracy is important in countries like U.S., Australia and Germany. In France, a combination of seniority and meritocracy determines the promotions and importance of the individual in the organization. One should not assume that the senior-most person has the authority of making business decisions. This is especially true, in case of South American countries, where the decision-making rules are not strictly defined. Even in an industrialized country like Britain, many times, authority and responsibility may be unclear, since the job descriptions are not precise. Gifts and Personal Favors
Gifts and favors are common, in case of Asian and South American countries; unlike the U.S., where there are strict rules regarding exchanging favors within an organization. While Americans feel that gifts and favors affect impartial decision-making capacity, in Asian countries exchanging favors is a way of life.
Language Barriers
In some countries, like the United States and Germany, it is common for people to speak loudly and be more assertive or aggressive when sharing ideas or giving direction. In countries like Japan, people typically speak softly and are more passive about sharing ideas or making suggestions. When interacting with people from different cultures, speaking in a neutral tone and making a conscious effort to be considerate of others' input, even if it is given in a manner to which you are not accustomed, can help foster effective business communication.
Target Audience
When launching a marketing campaign or advertising to members of a different culture, always research the target market prior to beginning the campaign. Levels of conservatism, gender views and ideologies can vary greatly between cultures. Presenting a campaign that is not in line with specific cultural norms can insult the target audience and greatly hinder the campaign. Being aware of cultural norms can also help your company narrow down the target audience. For instance, in Japan and Austria, men usually are in control of decision making, but women make the majority of purchasing decisions in Sweden.
Technology
Due to globalization, people from various cultures and countries increasing conduct business with each other. Technology enables people to easily connect with people around the world in a moment's notice, but there are a few rules to remember before doing so. If making an international phone or video conferencing call, be conscious of the time zone differences and make sure to set a reasonable time for all involved parties to interact. It is important to remember that cultural differences can also affect availability. For instance, just because you schedule a conference call for the middle of the business day does not mean that the time will be favorable for the people you are conducting business with. Many Spanish cultures have longer lunch breaks than Americans are accustomed to, which means there may be a two- to three-hour time period during the day in which the person you would like to meet with is unavailable. Asking for availability prior to making the call is the best way to avoid any confusion. Once you are able to connect, speak clearly and slowly.
Politics
Political influences, both past and present, can potentially affect the way a person or company does business. Some cultures have a very strong sense of nationalism and government pride, and therefore, are more comfortable and willing to purchase from companies with some sort of government backing. Conducting business with those of differing cultures can also impact negotiations if there are on-going political disputes between the involved parties' countries of origin. To avoid conflict, it is best to avoid discussing any political matter that does not directly pertain to the business at hand. This is also true for inter-office interactions.
Lastly, let watch a video about Internatinal Business- Cultural-Cross
Nowadays, many companies and investors have taken interest of China’s fast economic growth. As China’s economy policies have shifted from centrally planned socialist system to a more open market the country economic had growth rapidly for around 10 percent per year. Moreover, this country is considered as the largest market in the world with a population of more than 1 billion people living in that country.
However, despite of China fast-growing economy and its market size and potential here lies a challenge on how can foreign company do business in China more ethically and without violating breaking the international laws. Participants at a recent meeting of Business and Organizational Partnership at Santa Carla University’s Markula Centre for Applied Ethics came up with solutions to answer question regarding business ethic in China. Here are a few question and answer that have been discussed by the participants.
1. Key principles and practices that help to manage global Code of Conduct and business standards in China:
> Make a local Chinese employee as the face of the company code of conduct.
> Make sure that the code is translated into local language and be sure that the translation is correct.
> Find similar value implemented such as importance of family.
> Discuss cases and scenarios that could happen locally in training session.
> Consider to reframe company’s large and international core values to align with local cultural values.
> Focus on company’s sustainability so the employee will understand the importance of the code.
2. “Core values” role in creating in creating ethical culture:
> Although core values are important, but people in other culture may interpret it differently.
> Specify on how core values are implemented as difference culture may have different practice of those values.
> Discuss with both managers and workers overseas regularly on how to best implement the core values.
3. The most effective processes and procedures to detect and compliance problems
> Separate the reporting process of the whistle blower from human resource (HR) and legal departments.
> Allow employee to report about a person misconduct that have direct access to the board of directors.
> Create an ombudsmen position for a senior manager for a year so that this person will help in resolving problem with company practices.
Lastly, I uploaded a video of Kirk O. Hanson, Executive Director of The Markkula Center for Applied Ethics interviewing Stephan Rothlin, General Secretary of The Center for International Business Ethics in Beijing about what we can learn about Chinese culture and value.
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