Category Archives: Knowledge Management

Cultural Intelligence X: Thailand

This series is edited by Dick Locke, SI’s resident expert on International Trade, author of Global Supply Management — A Guide to International Procurement (which was the definitive guide for almost a decade), and President of the Global Procurement Group and Global Supply Training which regularly gives seminars on International Trade and working with International Cultures.

As highlighted in last year’s post on Overcoming Cultural Differences in International Trade with Thailand, Thailand is is fiercely independent, astutely diplomatic, and a very distinct trading partner to deal with as over 95% of its population declare themselves as Buddhist, with the majority belonging to the Theravada school of Buddhism. As a result, in negotiations, which you cannot rush, you should be prepared to avoid direct confrontations at all costs.

With respect to Locke’s seven key cultural differences (first outlined as six in his classic text on Global Supply Management), power distance is high as they believe that authority and power are natural to the human condition and that hierarchy is good for you. Time is not just polychronic, but cyclical. As a result, there is no rush to seize an opportunity as it will come around again. And while many social researchers indicate that the buyer has a high rank, this isn’t really the case as buyers and sellers don’t have a status in the Thai belief system, only people. As a result, both senior negotiators will be equal, and there will be a desire to work together to create harmony, which is very important. Saving the face of others is very important, individualism is low, and uncertainty avoidance is high. Furthermore, with security before risk-taking and a belief that easy work for sufficient pay is better than hard work for high pay, there is a large reluctance to initiate change.

With respect to verbal communication, they are indirect, even though personal questions may be asked so they may understand where to place you in their hierarchy, as this is essential for them to “harmonize” with you. You must speak lowly and calmly and avoid confrontation at all costs.

With respect to non-verbal communication, your facial expressions and body position are more important than your words. You should keep your emotions in check, avoid waving your hands or making other large gestures when you talk, keep your hands out of your pockets, and never lay your arm over the back of a chair someone is sitting in. Personal space is very important to the Thai, so don’t stand too close, and you should avoid touching them. While limited touching between the same sex is okay between friends and colleagues (but never between strangers), touching the opposite sex is taboo. Finally, eye contact is common, as they want to put you at ease.

Meetings should be well planned in advance, but don’t expect them to get down to business until at least the fourth day, as they want to get to know you first. Negotiations will be slow, as decisions must pass through many levels, but they will progress if you are patient. Meals are also a part of the business culture, and cutlery is more common (although sticky rice may be eaten with the right hand), and the host always pays the bill. And while the Chinese might like it if you play fight for the bill, you should never offer to pick up or split the bill in Thailand.

Finally, greetings follow the wai.

Share This on Linked In

Cultural Intelligence IX: Mexico

This series is edited by Dick Locke, SI’s resident expert on International Trade, author of Global Supply Management — A Guide to International Procurement (which was the definitive guide for almost a decade), and President of the Global Procurement Group and Global Supply Training which regularly gives seminars on International Trade and working with International Cultures.

As highlighted in last year’s post on Overcoming Cultural Differences in International Trade with Mexico, while Mexico is part of North America, there are significant differences in doing business in Mexico when compared to Canada or the United States. For example, as appropriately summed up in Richard D. Lewis’ When Cultures Collide, while the Mexican gives freely to his guest, conducting business and obtaining many social services incur a cost which is normally obviated in U.S. and Northern European societies. Mexican civil servants, officials, and police are paid very little and usually seek to augment their meager salaries by accepting what Americans call bribes to facilitate the granting of permits and other services.

With respect to Locke’s seven key cultural differences (first outlined as six in his classic text on Global Supply Management), power distance is very high with severe power distances between those at the top and those at the bottom. While the modern factory may work on the clock, Mexico is an authoritarian polychronic culture and punctuality is nowhere to be found on their list of priorities. You’ll have a higher rank than the seller if your money “talks” with respect, as long as you don’t bring a lot of uncertainty to the table (as they don’t like too much uncertainty, though some is okay). While harmony doesn’t have the importance it has in other countries, honor, obedience to authority, and group loyalty is very important. On the other hand, due to their exceptionally high emphasis on personal dignity, they need to save face at all costs. Despite their rankings on Hofstede’s individualism scale, they are actually quite individualistic and very personal.

With respect to verbal communication, Mexicans are generally very direct, but like Korea, “no” can be indirect. The volume is usually moderate as their style is toned down, warm, and gracious, but as in India, you can get louder if you are passionate about what you are saying.

With respect to non-verbal communication, facial expressions are common, as they are a passionate people, gestures are normal (but, as always, avoid the US ‘OK’ sign), touching is common (and they commonly hug and backslap each other) and essential between friends and colleagues, and body position is relaxed (just don’t put your hands on your hips or in your pockets). They tend to stand close, make eye contact (and if they don’t, it’s a sign of respect), and show their emotions.

Meetings are generally social, and business is often discussed over lunch. However, business lunches are not power-business sessions. Ideas, concepts and possibilities are discussed, not specifics. The only exception is if the detail has been pre-negotiated and agreed to beforehand, in which case it’s time to seal the deal over a meal. Negotiations are slow, involve lots of haggling, but only after they get to know you. It’s important to always keep your hands visible at a meal.

It’s also important to remember that while it is perfectly acceptable to discuss business over lunch, it is not acceptable to discuss business over dinner (except in very exceptional circumstances, and only if initiated by the host). Mexican people make friendships first (business comes later), and they often do this over dinner.

Finally, people from the United States need to remember the historic “difficulties” between Mexico and the United States. What US Marines call ‘The halls of Montezuma’ is a national monument to the revered Ninos Heroes. Every Mexican schoolchild learns that these six young cadets committed suicide rather than surrender to the invading US military. And the last time the US military invaded Mexico they were chasing Pancho Villa. He went on to become President of Mexico and there’s a street named after him in nearly every Mexican city.

Share This on Linked In

Cultural Intelligence VIII: Korea

This series is edited by Dick Locke, SI’s resident expert on International Trade, author of Global Supply Management — A Guide to International Procurement (which was the definitive guide for almost a decade), and President of the Global Procurement Group and Global Supply Training which regularly gives seminars on International Trade and working with International Cultures.

As highlighted in last year’s post on Overcoming Cultural Differences in International Trade with Korea, while the Republic of Korea has a lot of similarities with the Asian countries that surround it, it also has a lot of differences. Having built the third largest Asian economy in less than half a century, starting with low-cost high-quality export production and then a move into high-tech high-value-add in the 90s, Koreans tend to move at a rapid pace. Also, as (recent) history has taught them that compromise leads to defeat and second place spells disaster, they are extremely competitive. They are always looking for an advantage, quick profits, and a quick sale … which is generally more important to them than the development of solid, long-term, business relationships.

With respect to Locke’s seven key cultural differences (first outlined as six in his classic text on Global Supply Management), power distance is moderately high as they have a vertical society that observes strict protocol, time is very monochronic and punctuality is expected, and your rank as a buyer is moderate. However, while they are quite high on uncertainty avoidance, unlike many Asian countries, they are willing to experiment and take risks if the reward is there. They are strongly influenced by hahn, which describes the build-up of pent-up energies, unrequited yearnings, and general frustrations, so while harmony is important, so is competition. However, kibun (hurting someone’s pride), is a very sensitive issue, and face is more important to them than it is to the Japanese. They are quite individualistic for an Asian country, though not as individualistic as North Americans, and very personal.

With respect to verbal communication, they are the most direct of the Asian countries, except where “no” is concerned, which must always be delivered indirectly or as a “maybe”. You should keep your volume moderate and avoid being boisterous (with the only exception being you are at a club and drunk, but then you must apologize for it immediately the next day).

With respect to non-verbal communication, as with the Japanese, body language conveys respect and you should learn when, and how, to bow. You need to avoid large gestures, bold facial expressions, and maintain a harmony in your emotions. While you need to be close enough to exchange business cards or pour drinks, you must not get too close and you must avoid touching them. With the exception of the handshake, physical contact is inappropriate unless the individuals are peers of the same sex or family. However, unlike some other Asian countries, eye contact is important and indicates sincerity and attentiveness.

Meetings are structured, and its important to provide information, including information on all attendees, in advance. Be sure to avoid writing anyone’s name in red (including your own). While negotiations can take place at the table, deliberations will be made in a group before a decision is made. As with other cultures, meals are common, with the etiquette similar. The major difference being that you should finish everything on your plate, but even if you are still hungry, you must refuse the first offer of seconds. Most Korean businessmen tend to believe that they will get to know a business partner, colleague, or customer better over a few drinks (which should be held with the right hand) and invitations after business hours will be common. Lean what gunbae means.

Finally, modesty is very important. If you are complemented, you should indicate that you are not worthy of such praise.

Share This on Linked In

Cultural Intelligence VII: Japan

This series is edited by Dick Locke, SI’s resident expert on International Trade, author of Global Supply Management — A Guide to International Procurement (which was the definitive guide for almost a decade), and President of the Global Procurement Group and Global Supply Training which regularly gives seminars on International Trade and working with International Cultures.

As highlighted in last year’s post on Overcoming Cultural Differences in International Trade with Japan, the Japanese are very different than anyone else. They were historically isolated, crowded by geography, and their language is pretty much its own language group, despite the fact that they have three writing systems (kanji, hiragana, and katakana). Furthermore, the beginning of Tokogawa rule in 1603 marked the beginning of 250 years of almost complete isolation, until 1853 when Commodore Matthew Perry arrived.

With respect to Locke’s seven key cultural differences (first outlined as six in his classic text on Global Supply Management), power distance is present, as there is a defined hierarchy and no decision can be made without approval from the top, but the power distance is not as great as one might think, as an approval will normally not be granted until a consensus decision has been reached at the lower levels and pushed up. Time is fluid. They are punctual to a tee (monochronic) but will never commit to a decision date (polychronic). The buyer always outranks the seller, but negotiations will continue only so long as their rules on social and business conduct are followed. Harmony is a fundamental foundation of their web society and face must always be maintained. Despite the appearances put on by the younger generation in the big cities (like Tokyo and Osaka), individuality is actually quite low and privacy is highly valued. Finally, uncertainty is to be avoided at all costs.

With respect to verbal communication, they are very indirect, even though, like the Chinese, they will ask you very blunt personal questions in order to determine how to best maintain harmony with you. Communications and negotiations should remain calm and soft, and you should never raise your voice.

With respect to non-verbal communication, your body language conveys your respect, and you should learn how to bow, stand, and even sit (suwari and seiza) appropriately. Despite the large number of gestures used in Japan (which you will not understand for quite some time), your gestures, facial expressions (as smiling and frowning have multiple meanings), and emotions should be reserved and your body position should mirror those around you. You should maintain as much distance as can be afforded, and reduce eye contact which is seen as disrespectful, especially to someone who is seen as your senior. Don’t touch in public, and especially don’t touch someone of the opposite sex. (Or, as indicated in Part II, you might end up with a new girlfriend or boyfriend.)

You should take notes in meetings (as it shows seriousness). It may take several meetings before you get down to business, as they will want to get to know you first. With respect to negotiations, your best offer is expected up front, and concessions are rare. Business is often discussed over meals, but you must wait for them to initiate. At a meal, do not empty your glass or plate as it is a signal to refill it, but do empty your rice bowl, as leaving a small amount is a signal that you want a refill.

Finally, the business card carries a pre-eminent importance in Japan, which has an elaborate custom around giving and receiving, and you should carry no less than a hundred for every week you plan to be in the country (with an English side and a Japanese side).

Share This on Linked In

Cultural Intelligence VI: India

This series is edited by Dick Locke, SI’s resident expert on International Trade, author of Global Supply Management — A Guide to International Procurement (which was the definitive guide for almost a decade), and President of the Global Procurement Group and Global Supply Training which regularly gives seminars on International Trade and working with International Cultures.

As highlighted in last year’s post on Overcoming Cultural Differences in International Trade with India, India, like China, has a long cultural history with roots that go back at least to the Indus Valley civilizations in 3,000 BC. (Recently, archaeologists have discovered abandoned and buried port cities and temples over 6,000 years old, suggesting their culture could be much older.) And while the official languages are Hindi and English, India has 5 languages in the top 20 spread across its 28 states, 6 union territories, and the National Capitol territory of New Delhi. As a result, its society is a bit fractured compared to China (where differences are primarily North/South), with mild to moderate differences in culture and behavior, but there are a number of common threads that, once unwoven, will make your dealings with India easier.

With respect to Locke’s seven key cultural differences (first outlined as six in his classic text on Global Supply Management), power distance is generally quite high as India is based on the caste system (which you must never bring up) and its values and beliefs are still strongly held (despite the movement by some of the newer consulting organizations to abolish the system within their four walls). While they may attempt to be monochronic in their dealings with the west, they are a polychronic culture that does not work by the clock. Buyers and sellers are roughly equal, and any inequalities will be due to any personal relationships that exist between the parties. They are tolerant of uncertainty and even known to take risks and experiment. Harmony underlies almost all of their religions and every aspect of their daily life, and face must always be given. Despite the caste system, and the fact that tasks are collective exercises, they are very individualistic and highly personable (as privacy is rarely indulged in or sought).

With respect to non-verbal communication, it is moderately indirect, as you should not refuse a request outright, but there is a strong history of bartering, so you are free to debate the pros and cons of any situation, as long as your “no”s are indirect and gentle and you tiptoe around delicate issues (such as caste and familial privacy). Unlike some Asian cultures, they can, and you can, get quite loud, but only if you are passionate about what you are saying.

As with any well established culture, there is a lot of non-verbal communication that occurs, and a number of actions that are taboo. For example, while limited touching is permitted (such as same-sex handshakes, and collegial backslapping between members of the same sex, as long as you never touch someone’s head), you should not stand with your hands on your hips, whistle, wink, or point your feet at a person. Hand gesticulations, which many Indians are prone to use when speaking passionately, should only be used if they speak English and you have a basic understanding of their language. You don’t have to be as reserved in your facial expressions as you would with other Asian cultures, but you need to take your cues from those around you, as the degree of expression permitted is situational. While direct eye-contact may be made, it is seen as intrusive by many, so you will again have to take your cues from those around you. Distance, due to crowding in many cities, is minimal, generally only two to two and a half feet. And it is critically important to always maintain an agreeable attitude, even if you don’t agree (as you can always indicate your disagreement indirectly (by indicating that you’ll consider the request, get back to them later, or try). Of course, if dealing with an Indian in North America who is used to your culture, all this goes out the window as they can be very adaptable and will attempt to tune their behavior into your cultural norms in their attempt to maintain harmony and an agreeable attitude.

Meetings, which often begin VERY late, will often begin with small talk and fail to follow a structure. Like other Asian cultures, they will want to get to know you professionally and personally before they get down to business. Remember that time is an expression of eternity in India. Meals are common, and the etiquette is to politely refuse the first offer of food or drink. You will be asked again and again. Just remember not to thank your hosts after a meal. A thank you is considered a form of payment and is insulting. When negotiating, be humble and polite and prepared for concessions on both sides. It is expected. (Although if you were to observe a meeting between two Indian teams, you might find that whoever has the most passion and screams the loudest wins.)

Finally, learn what Namaste is.

Share This on Linked In