Category Archives: Knowledge Management

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.

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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).

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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.

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Cultural Intelligence V: Germany

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 Germany, Germany, which is one of the most influential nations in the EU, has a very distinct culture that is simultaneously easy and hard to sum up. About the only way to do it is to quote one of their favorite sayings — Alles lief wie am Schnürchen. (Everything went like clockwork.)

With respect to Locke’s seven key cultural differences (first outlined as six in his classic text on Global Supply Management), while the power distance is very low in German society due to the strong push for social equality, hierarchy is mandatory in a German company and this often results in exaggerated deference to one’s superior or CEO. Time is monochronic as German’s believe in punctuality to a tee, buyers and sellers are of more-or-less equal rank (though the buyer will be treated with great respect if the rules of German business are followed), and uncertainty is loathed. While harmony is a must with respect to business decisions, as a consensus must first be reached, they will likely be the most frank, direct, and blunt people you encounter in your international dealings. Face is important within their culture (so while they will openly disagree with you, they will only air their internal disagreements in private meetings), which is highly individualistic and private.

Verbal communication in Germany is extremely direct. The tone of the conversation will be reserved in a business setting, though they may be loud and boisterous in public. The volume will be low to moderate, so you should avoid raising your voice — it’s about the facts, not the emotions.

Non-verbal communication is relatively low compared to some of the other cultures we’ll cover, but body position is very important. It’s rude to have your hands in your pockets while talking or to shake with one hand in your pocket. Also, keep your gestures to a minimum, don’t use the OK sign, and don’t point to your head. Be reserved in your facial expressions, as the Germans are suspicious of emotions, but do maintain eye contact when speaking or being introduced (and use a firm handshake). Finally, keep roughly the same distance as you would with your North American counterparts. Depending on where you are from in North America, you’ll find that the German’s are either a little closer or a little further, but there will not be much of a difference either way (except in a supermarket or bakery, where they might literally be breathing down your neck). With respect to touching, European greetings are reserved for friends.

As per our last post, to them, business is serious. It’s not a joke, and jokes in a business setting will not go over well. Meetings are to start on time, follow the agenda, and finish on time between buyers and sellers with representation of equal rank. (Pay attention to titles. They are very important.) Negotiations, which are to be honest and straight-forward, are hard and concessions should be expected on either side. Meals are common, but they are not the affairs you’ll find in Asia. Germans want to get home to their families, so don’t plan on sticking around too long after dinner. Also, be sure that you don’t drink before the host.

Finally, the Germans believe in giving a detailed factual rendition of their own capabilities. Don’t mistake this for arrogance.

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Cultural Intelligence IV: China

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 China, China is one of the most developed cultures in the world, with a long history behind their well establish social order, which requires an inequality between any two people to maintain stability. (That’s part of the reason that the Chinese generally believe that all foreigners — who are traditionally inferior, corrupt, decadent, disloyal, volatile, barbaric, and devils-in-disguise — are inexperienced in matters of business even if they are technically competent.) As a result, dealing with the Chinese can be very difficult for an outsider, and a North American in particular.

With respect to Locke’s seven key cultural differences (first outlined as six in his classic text on Global Supply Management), China has an implicit power distance between any two individuals (which is higher in the North than in the South), a monochronic approach to time in business, and a strong distaste for uncertainty. Maintaining harmony and face is of utmost importance, individuality is not, but privacy is deeply respected. They may ask blunt questions about your personal situation and beliefs, but that is only to understand what may offend you (so they can avoid doing it). After all, they praise virtue to the point that two mutually exclusive answers can both be true if both are virtuous.

Verbal communication in China is very indirect where business is concerned. Since harmony and face must be maintained no matter what, all answers are soft, there are no admissions of a failure to understand, and direct “no”s are effectively taboo. That’s why you can’t ask them a yes/no question. If you want to know if they understand a request, you have to ask them what they are going to do. Thus, you should be calm and polite in negotiations and avoid getting loud. However, the opposite holds true in social encounters. Socially, it’s okay to be boisterous, and it is expected at meals (at the appropriate time). And you can be quite loud, especially if laughing at yourself.

Non-verbal communication is effusive in their society, hard for an outsider to read, and even harder to master. As a result, you should avoid large gestures, as many are taboo (including the pointing of the index finger, finger snapping, and whistling), and maintain an impassive facial expression during business (as frowning is a sign of disagreement and smiling can be simply a polite way to mask uncertainty or uneasiness). Eye contact should be avoided in greetings as almost everyone is unequal and respect must be maintained, emotions should be reserved until you know the right times to display them, and you should allow them to dictate the distance between you, which is usually at most 3 feet (and just enough to respect your privacy in accordance with their cultural norms) as they will often speak quietly to avoid disturbing others who may be nearby. Finally, you must avoid personal contact (unless they touch you, at which point you may reciprocate in kind) as the Chinese generally don’t like to be touched. As with many Asian cultures, touching is reserved for (close) friends and peers.

As per our last post, meetings primarily exist to gather information (and decisions will be made back at the office). Once they get to know you, negotiations will get progressively detailed to the point where the questions are so precise that it will be almost impossible to answer them without disclosing your IP. This is common practice to make sure you are truly interested in a mutually beneficial long-term business relationship and not just looking to exploit cheap labor. It has nothing to do with your IP (although IP theft is a serious problem in China and you have to invest equal effort to insure that they are also interested in a long term business relationship). And meals, while they may last hours and get loud and boisterous later on, are formal. You must not discuss business until the host brings it up. A few other pointers is that he who extends the invitation always pays (but you can pretend to fight over the bill to gain points), you must eat hearty to please the host, but you must leave some food on your plate when you are full.

Finally, one other point that you should remember is that the Chinese will often disparage their own accomplishments and there is a social protocol to this. Specifically, you are expected to respond with a complement. For example, if a Chinese person says that he may not have chosen the best restaurant for you, do not say something along the lines of “we’ll manage“. Instead say that you’re sure the restaurant choice is impeccable and/or that he outdid himself in its selection.

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