It is very important to have knowledge about the cultural differences that may be on the international market. This knowledge is more important today than ever before, because companies have got endless opportunities of distributing their products on many foreign markets. Knowing the culture of the chosen market is vital in order to make a business succeed. Cultures can be divided in man categories such as deal-focused vs. relationship-focused, formal vs. informal and monochronic vs. polychronic cultures. Having a knowing about these variables is very important when dealing with foreign markets.
For example, conflicts can easily occur when a company from a deal focused country as USA having plans on launching a product in India, which is a relationship focused country. In the states, businessmen are very determined in what they want. The keyword for deal-focused cultures is directivity. Deal-focused people use direct contact, direct language and are comfortable in making contact to strangers. This will not be accepted in India, where people don’t make business with strangers and where the communication is indirect. This means that everything must be “decoded” in order to get the real message.
Relationship-focused people may even answer a yes, even if their real answer is no. They will never say anything that may offence you. Therefore, a conflict in communication can easily occur. For example; during a business meeting with a possible customer from India, you offer him something to eat. The customer politely says no thank you. Later in the meeting you offer something again, and the customer again thanks with a no. You are not bothering to ask again because in western culture, which is deal-focused culture, a no is a no. But in India a no can be a yes. The customer only said no because Indian people want to avoid to be too direct.
However it was expected, in relationship-focused cultures, from the host of the meeting to ask many times and insist on the customer to have some food. This deal will most possibly flop, because the customer probably was offended by the treatment he received. Conflicts may also occur when a formal culture meets an informal culture. In formal cultures status plays a huge role when doing business. The status in these cultures can be determined by gender, age or position. In formal cultures, women have less status than men. Age is also a status indicator; the older you are the more wisdom you have, and ergo a higher status.
If a person from Middle East were to have a business meeting with somebody from Scandinavia, many things could go wrong. A worst case scenario would be a Scandinavian company sending a young female assistant to meet with a manager in a Middle Eastern company. This will be seen as a very rude and disrespectful act. Another “pitfall” you must avoid when dealing with many different cultures is the understanding of time. There are two ways in which people understand time; monochromic and polychromic. These two are opposites, and can create a lot of frustration and confusion, when two people from different cultures meet.
In a monochronic culture time is rigid. This means that monochronic people prefer that one thing happens at a time, and interruptions are not accepted, as they are a source of frustration. While monochronic people prefer order in their way of doing things, polychronic people are straight opposite. They perceive time as something fluid. If a meeting is arranged at 7pm in a polychronic culture, it wouldn’t be abnormal that the actual meeting will start at 9 or even 10pm, because the people are late. It is especially many African countries that have a polychronic culture.
The lack of understanding of the polychronic time culture is something that can create huge frustration, when doing business in for instance Africa. A company from Denmark can send a business agent to live in Africa for 3 month to make some contacts. The agent’s job is to arrange meetings with different businessmen in Africa. If the agent doesn’t know how Africans understand time, he will think that nobody wants to do business with him. He will experience that all of his appointments will be delayed by hours. This may result in frustration, which leads to poor working results.
This agent will probably request to get moved to another district within the 3 month. It is generally mostly important to know the above described intercultural differences. If you know whether a culture is deal-focused or relationship focused, formal or informal and polychronic or monochronic, you would easily avoid the biggest pitfalls in doing business on a foreign market. That’s why it is vitally important to know the two simple rules of cross-cultural business behavior; before entering a market, understand the customs/culture and it is your job to adapt to the culture because the customer is the king when it comes to business.