The Importance of Understanding Cultural Differences in Business

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I recently read Global Business Negotiations by Claude Cellich and Subhash Jain in which they define culture as “all learned behavior and values that are transmitted through shared experience to an individual living within a society.”  To me the active word here is ‘shared’ which implies that a nation’s culture serves as the common thread among its people.

The description reminded me of a meeting I went to in Beijing during which we were discussing our firm’s capabilities with a Chinese client.  I had spent a lot of time in China at this point and started to ‘share’ some of the experiences.  This was not our first meeting and we had a relatively good relationship with our Chinese counterparts.  There were about 6 people from my team in the room and about the same from the Chinese side.  As was typical of meetings in China, my team sat on one side of the table.  As the highest ranking member of the team, I sat in the middle and was flanked by my second in command.  We sat from highest to lowest rank from the middle to the ends.  The Chinese did the same on the opposite side of the table.

We had a new colleague in the room with us (we’ll call her Karen) who was into her first month of an expat assignment.  While Karen did not work with my team directly, she was going to be part of our in-country support network.

Because Karen was coming from a different location in the city, she arrived a few minutes late and took a seat on the Chinese side of the table, disregarding our gesture to sit on our side.  While this meeting was fairly informal, I was aware that protocol for meetings in China was to sit on opposite sides of the table.  I decided that while an important meeting, it was not worth being disruptive and pursuing an alternate seating arrangement.

As the meeting progressed, though, and we presented our portion of the meeting to the Chinese, it was Karen who asked the most questions of us so she could learn the project.  In China, hierarchy is an extremely important aspect of business and society.  So in this particular situation, in front of the customer, my team was placed in a very uncomfortable position due to one of my own firm’s employees.

We fortunately got a chance to break for lunch.  As we talked at lunch with our Chinese clients, Karen was extremely insistent about her food and tried to customize her order.  When her food finally arrived, she ended up returning it to the kitchen as it was different than she expected.  To top off the morning, as we finished our meal, Karen proceeded to ask some of our Chinese clients if they had siblings.  We were stunned.  Anyone doing business in China should know about the one-child policy and that most people in their low 30s and younger do not have siblings.  There was visible discomfort around the table as one of the Chinese clients explained that China had laws against having more than one child.

After the meal, Karen ended up leaving to go back to the office.  I followed up with her later to teach her some of the basic rules of working in China she needed to learn.  Karen, to her credit, was mortified by her behavior.  About a month later, she left China to go back home and end her expat assignment after just two months.  Fortunately, our relationship with our Chinese counterparts was good enough that Karen’s behavior had not done any permanent damage.  It was, however, embarrassing and distracting to the productivity to our meeting.

I share this story because, while extreme, it highlights the important of knowing and understanding culture when working in a foreign setting.  In China, for example, there are very different forms of protocol when compared with other countries.  The same can be said about working in Milan and New York if you are from China.  It is important to recognize when doing business in a foreign country that you need to adapt and be sensitive to that country’s customs when doing business.  If you are a manager or business leader and are planning to do more business overseas, it’s well worth investing in some cultural training and education for your staff.  This type of education can help teach very basic, but important rules of doing business in your desired country.

For more on doing business in China, take a look at our Doing Business in China 101 post.



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