Overcoming cultural differences in business

By Ron Cacioppe & Renée Ralph

Recently a group of Australian government and business delegates attended a formal dinner hosted by the Chinese delegation. A junior Australian representative unwittingly dominated the conversation from the beginning. Half way through dinner, the head of the Chinese delegation brought the conversation to a halt when he banged his fist on the table and stomped off. Everyone was stunned and embarrassed. The translator explained the head of the Chinese delegation would have thought it extremely disrespectful of a junior Australian person to dominate the conversation. He should have been respectful of the older and senior people who were present and listened while they spoke. The purpose of the evening was to strengthen the relationship between Australia and China but this behaviour showed lack of maturity.

In another example, an Australian manager flew to China to close a contract that had been going on for 6 months. A number of delays and bureaucratic barriers caused the negotiations to go on for two weeks. The Chinese managers closely watched the Australian’s frustration grow and used this impatience to obtain more favourable commercial conditions.

Today, Australian business is multinational and multicultural. Australia is increasing its business with China, Malaysia, Singapore, Indonesia and Korea and yet a growing number of our workers were born in these countries and most Australians have limited understanding of the cultural and historical factors which shape these countries. Australians also can assume that Asian cultures are very similar which would be similar to assuming that German Europeans are the same as Spanish Europeans. Organisations may find themselves working with Asians and yet they think they can operate in the same way that they do in Australia.

A recent research study showed that the barriers faced by Western companies in China are caused by the neglect of corporate cultural differences. Emotions are embedded in cultural institutions and practices; there are scripts for the proper expressions and experience of emotions as part of their culture norms. In China, for example leaders are expected to maintain social distance between themselves and subordinates. Western managers may interpret this cultural response as a rejection of their leadership style which is not the case; it is to do with the person’s rank and position in their organisation.

Building International Relations
• Take the time and effort to understand the difference in the culture
• Respect the status and hierarchy of the different people you are dealing with
• Learn the etiquette and protocol of the country you are working with
• Be careful not to embarrass or have a person ‘lose face’ in front of others
• Be more humble and listen more to the person speaking to you
• Take time to learn about the family of the person you are will dealing with
• Learn the language (or at least as many words as possible) to show people that you have made an effort to understand them.

While there are considerable risks and costs associated if you don’t get cross cultural relations right, there can be considerable benefits for understanding your Asian counterparts. Your company could have considerable success in Asia if you get things right. Making the effort to understand the complexity of Asian cultures will help your organisation build a long-term and meaningful business relationship with these new emerging countries and contribute to your own company’s success.

ENDS - Published in WA Business News, 5 August 2010, p. 24

Dr Ron Cacioppe is the Managing Director of Integral Development, one of Perth’s most unique and experienced leadership and management consultancies. He is also adjuncy professor at Curtin's Australian Sustainable Development.

Renée Ralph is the firm's marketing and communication coordinator and is currently completing a doctorate in business administration at Curtin University of Technology. Her research focuses on 'Decision Making between Western Australia and CHina within the resourcs and energy industry.

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