March 2008 Franchising World
By studying the local customs and traditions, by adopting a flexible approach, and by following a prospect’s cues, one can avoid costly cultural faux pas and successfully navigate the world’s increasingly global economy.
By Bachir Mihoubi
While many international experts are saying that the world is getting smaller due to the global economy and increasing travel and communication, cultural differences seem to magnify as interactions increase. As companies expand their brands internationally, they will learn that avoiding cultural faux pas can save time, money, and occasionally, a deal.
One of the first things one should consider when planning a trip abroad is the target country’s official holidays. In the United States, most people know how difficult it is to conduct business during the week between Christmas and New Year’s Day. In Spain, do not try to schedule a meeting between Christmas and the second week of January. When traveling to the Middle East, avoid the month-long celebration of Ramadan. In China, do not plan a business trip the week before and after the Chinese New Year. Also, make sure to check the lunar calendar because the timing of these holidays varies from year to year.
Another thing to consider when planning a trip is the business week of the target country. In most Middle Eastern countries, Friday is the Muslim holy day and no business is conducted on Thursday or Friday. In Israel, the Jewish Sabbath begins at sunset on Friday and ends at sunset on Saturday, so the Israeli work week runs Sunday to Thursday.
When conducting business in most western countries, punctuality is a must. In the United States, Northern Europe and China, it is considered rude to arrive late to a meeting. However, in most Latin American and Middle Eastern countries, patience, not punctuality, is a virtue. A Saudi businessman was overheard saying that “unlike westerners, we are not run by the clock, we run the clock.” If one is traveling to an Arab country where interruptions by family members and friends are acceptable, consider scheduling the business meeting at a hotel as opposed to a prospect’s office to avoid being interrupted by phone calls and visits.
Business Entertaining and Etiquette
Most business is conducted during lunch or dinner meetings, and most cultural gaffes occur at the dining table. Understanding a prospect’s culinary customs will go a long way toward building a productive business relationship. In China, for example, it is considered polite to sample every dish, however exotic it may appear. In Saudi Arabia, business negotiations became stalled after an American business person refused an offer of a cup of coffee from a Saudi businessman, which is considered rude and insulting in Saudi Arabia. The French will appreciate enthusiasm about the food and will approve of one’s knowledge of wine pairings. Knowing whether Indian prospects are Hindu or Muslim will determine whether to avoid serving beef or pork to company prospects.
Although it is common for Americans to start discussing business at the beginning of the meal, it is better to let a prospect initiate the discussion to avoid committing a significant breach of etiquette. In American culture, direct eye contact during conversation shows respect, but a Korean may think it is impolite or even aggressive.
Beware of cultural stereotypes. Although many cultural etiquette books advise business travelers in the Middle East to eat only with their right hand, even if they are left-handed, this notion has been exaggerated and does not need to be strictly followed.
Not only do customs vary from culture to culture, but the importance placed on exchanging gifts varies as well. In the United States, Canada, Australia and Europe, gift giving is not expected. In South Korea, China, Thailand and Singapore, it is a good idea to bring a gift to the host. In Japan, where gift-giving is an important custom, one should allow the host to present his or her gift first, and reciprocate with a gift of similar value. In many cultures, including Japan and the Middle East, it is not customary to open gifts at the time they are given or to show too much appreciation about the gift.
In many countries, the type of gift should be carefully selected and should only be given to the appropriate person in the hierarchy of the company. It is important to familiarize oneself with the local custom because what may be viewed as culturally savvy in one culture often becomes a cultural faux pas in another culture. It is also a good idea to be mindful of what product each culture prides itself at best producing: do not give wine to the French, beer to the Germans, chocolates to the Swiss or tea to the Chinese.
Most Americans rely heavily on contractual relationships, sometimes to their detriment internationally. In most countries, people conduct business based on relationships first rather than relying on a contract. Companies should consider a transparency spectrum when determining how to negotiate business transactions internationally. For example, in highly-transparent countries such as Singapore, Australia, the United Kingdom, Switzerland and New Zealand, it is best to focus on the specifics of the contract and provide detailed information when negotiating with prospects or their attorneys. However, in most Latin American countries, the Middle East and China, it is crucial to focus on building a solid relationship.
Legal systems also vary from country to country. The common law system is used in the United States, Canada, Australia, New Zealand and the United Kingdom, as well as most of the commonwealth countries. Civil law is used in Latin America, most European countries, the Middle East and many Asian countries. Contracts in common law countries tend to be lengthy and provide for any contingency, whereas contracts in civil law countries tend to be brief and somewhat broad. For example, commercial agreements in France are concise and many French business people opt to draft their own contracts without resorting to a lawyer.
Be aware that there are also countries governed by Islamic or Talmudic law, which may affect which products will work in which country. The television show “Big Brother” was quickly pulled off the air in the Middle East amid public protests and pressure from religious groups that the show’s mixed gender format was against Islamic principles.
While American legal principles are increasingly permeating international contracts, it is important not to rely solely on the contractual relationship. Understanding that many countries do not have a structured legal environment will help in successfully expanding a brand internationally. A Hungarian businesswoman explained at length how she had painstakingly copied the Cinnabon concept, unaware that she had flagrantly violated American intellectual property law. In countries with a less transparent legal system, one person’s entrepreneur is another person’s trademark infringer.
Although many prospects will speak English, most people prefer to express themselves in their native language, and it is therefore polite to apologize for not speaking the local language. Even within one country, more than one language may be spoken. Although the majority of Chinese speak Mandarin, some Chinese speak Cantonese, Shanghainese and a number of other dialects, so selecting the right interpreter is very important. In most Arab countries, classical Arabic is limited to formal communications and each country speaks its own local dialect. In North Africa, most business people speak French; in the rest of the Arab world, unless one is dealing with traditional Arabs, most executives are very familiar with English. In Latin America, not every country’s population speaks Spanish; in Brazil, for instance, the majority of the population speaks Portuguese, and Japanese is the second most commonly spoken language.
Differences in body language or gestures may be amusing or even embarrassing. The same gesture can have a vastly different interpretation in different parts of the world. In some Eastern European countries, people shake their heads up and down to show their disagreement. The French gesture signifying “two” may look like pointing a gun to an American. One British company had to reprint an entire catalog containing the “OK” finger sign on each page because it is considered an obscene gesture in many parts of Latin America.
To avoid huge marketing mistakes, make sure to ascertain the meaning of a trademark in the targeted country. A number of brands operate under a different name internationally to avoid offending local consumers. Managers at one American company were surprised when they discovered that the brand name of the cooking oil they were marketing in a Latin American country translated into Spanish as “Jackass Oil.”
While the cultural learning curve may seem vast and at times daunting, the most important aspect to remember when expanding a brand internationally is to do the homework. By studying the local customs and traditions, by adopting a flexible approach, and by following a prospect’s cues, one can avoid costly cultural faux pas and successfully navigate the world’s increasingly global economy.
Bachir Mihoubi is CEO of FranCounsel Group. He can be reached at 404-384-3317 or email@example.com.