Business Etiquette & Protocol to Note
April 11, 2011
Adapted from Africa Business Pages
One of the keys to successful business with Africa is a good understanding of African business culture. How does African business culture differ from the Middle Eastern business culture?
How should Middle East companies introduce themselves to the African buyers?
These are important questions for the local entrepreneur because success or failure in Africa will depend on the ability to understand and adjust to Africa s dynamic market. The complex and changing African environment requires businessmen to have a degree of flexibility.
The potential for turbulence requires businessmen to monitor and assess the political risks in the countries with whom they are doing business.
Here are some examples of what you should note:
i) People are sensitive about how you pronounce their names
ii) They do not want you to be patronising or to show prejudice,
bias, or stereotypical beliefs
iii) You should avoid condescending behaviour.
Among the Wolf of Senegal and in Ghana, children are trained not to look adults in the eye since this is considered an act of defiance or a total lack of respect. This means that eye contact, considered a mark of trust or truthfulness in the Middle East, may not occur when some Africans are talking to their superiors. In many African countries, using the left hand to receive or give a gift is considered impolite and therefore, unacceptable.
In most African cultures, greeting is very important, so it is not unusual to see the same greeting, such as welcome, repeated several times. Handshaking is very common in Africa, but it could range from simple handshake to prolonged, and sometimes vigorous forms.
It is not unusual to find younger people, women, or subordinates offering both hands as a mark of respect. In most cases, women are expected to accept a handshake, not offer one.
Africa's considerable cultural diversity, if understood, is not an impediment to successful business. To manage these cultural differences, one must understand the need for personal relations and the role that connections play in African business and the African respect for hierarchy, titles, and age. One must also comprehend the concept of African Time and recognise it in arranging business meetings, as well as ensure that there is considerable follow-up.
The UAE entrepreneur needs to realise that certain practices that are not tolerated or permitted in the UAE may be rampant in Africa and must draw a line, making a decision from the start and sticking to it. The rule of thumb is to do what is legal and avoid what is illegal. He needs to know how the rules operate and that often laws are openly broken because of lack of enforcement.
Further, the entrepreneur must understand that although African workers have a positive work ethic, they may lack the motivation and the skills for high productivity and that Africans tend to be communal, emphasising collectivism instead of individualism. Likewise, the UAE businessman must note that there is often a clear definition of gender-based roles.
The tendency to take decisions more slowly, looking for unanimity before acting, creates a reluctance to contradict or challenge the system. Inter-cultural business is always a challenge; African business is no different. But with the cultural knowledge presented here, the UAE businessmen, if they keep an open mind, should be able to proceed with confidence that they will reap the many profitable rewards the dynamic African market offers.
March 2, 2011
Posted on NZ Herald - 28 February 2011
- A very useful read for NZ businesses wanting to do business with China and Chinese Businesses. It incorporates key principles of Chinese culture in how to conduct business relationships with business people. In fact, it usefully reduces business relationships down to one involving people, a sometime forgotten reality! Simple yet insightful I believe.
A few key principles make for better relationships.
The globalisation of business, advances in internet technologies, New Zealand's Free Trade Agreement with China and the Closer Economic Partnership with Hong Kong are some of the key drivers for New Zealand businesses to tap into the growth of Asia.
Establishing a business in New Zealand is fairly straightforward. That may not necessarily be the case when it involves a developing market economy like China. Each city has different interpretations of guidelines, and businesses find the levels of industry and segmentation maturity in different-sized cities translate into the need for regional strategies. The challenges are compounded by language differences.
Mindsets has often been approached about issues relating to doing business in Asia. Not surprisingly, most concerns are "non-financial" issues, as everything else on the balance sheet would have been thoroughly examined during due diligence.
One of the most perplexing issues noted by Western businesspeople, including those with years of China experience, is the impact of Chinese cultural nuances in business negotiations.
Most of the feedback in this area includes concerns about the lack of a clear agenda, the inefficient negotiating process, with the need for numerous stretched-out meetings, and a lack of accountability.
With trade between the two countries poised to increase, is there a way around this?
First, let's take a step back and examine the evolution of China.
* China has one of the longest recorded histories, spanning more than 5000 years. Its trading history with the world economy, however, started largely after the introduction of the Open Door policies. This was less than four decades ago.
* While the metropolitan cities of Shanghai, Beijing and Guangzhou now boast some unique architecture, the fact remains that two-thirds of China is rural.
* The teachings of Confucius and Laozi are beliefs practised for over 2000 years and are heavily embedded in government policies and social expectations. While regulatory policies in China are frequently amended, cultural values and beliefs are difficult to influence.
With the emphasis on surviving and maintaining a livelihood in China's communal societies, Confucianism and Taoism are centred on harmony and group co-operation. As such, the means (or process) is more important than the end (the result). Translating this into business negotiations, achieving group consensus was more important as an objective and this was usually at the expense of innovation and efficiency.
The rest of the world needs to develop patience. China has come a long way in a short time and, as with any economy, growth and consolidation take time. The world needs to see China through the Chinese lens and to recognise there are layers of consumer behaviours in China.
Contrary to what many believe, business negotiation in China can be straightforward. Knowledge makes navigation easy. Likewise, familiarity with Chinese cultural nuances and their implications in business protocols is likely to lead to a more positive experience.
Mindsets recommends the PANS principles - for position, attitude, network and scope - when negotiating with the Chinese.
Position, or rank of the lead negotiator, is central in any meeting with the Chinese. Regardless of whether the lead negotiator is empowered to make the decision, a disregard for seniority suggests disrespect. In an environment where social status is highly valued, senior management who front up to meetings demonstrate sincerity and a willingness to take ownership.
Attitude is pivotal in any business environment. In establishing relationships with Chinese stakeholders, general business etiquette is not enough. There is the need to understand the social capital of face (mianzi) so negotiations can take place at the same level, without appearing patronising or awkward.
An extensive network of contacts is invaluable and not to be underestimated. Networking takes on a new meaning in China but the rationale is that the wider the network, the more likely an introduction. Confucianism advocates the concept of benevolence and loyalty toward family members first, followed by extended clan, then outsiders. As such, contacts can help open doors and in the process negotiations are more straightforward.
Scope relates to how the finer details of negotiation are approached. Research shows Westerners adopt a linear approach, where success is measured on the robustness of separate modes. This contrasts with the eastern holistic thinking, where success is measured on how well the project fits into the wider context of business and environment.
Familiarity with the scope of business, including competitors of business partners, historic links between trading nations, market intelligence and regulatory framework presents a more unified approach.
Boardroom negotiation with the Chinese may be confusing but is not a minefield. Familiarity with Chinese cultural diplomacy is a skill that showcases the rules of engagement.
By incorporating aspects of Chinese cultural values, PANS is a framework that is likely to engage the Chinese.
Arthur Chin is managing director of Mindsets, an Auckland-based cultural consultancy.
May 30, 2010
Posted on NZ Herald - 24 May 2010
by John Drinnan
by John Drinnan
The hazards that a New Zealand firm faces in doing business in China are well known in the wake of Fonterra's Sanlu disaster.
There may be a pot of gold at the end of the rainbow for New Zealand exporters, but old hands know there are obstacles along the path.
Hill & Knowlton Asia-Pacific director Viv Lines says increased Chinese investment into New Zealand raises other public relations challenges.
"How does a New Zealand company 20 per cent owned by Chinese investors come to understand and communicate with its new stakeholders?" he said.
The differences between Chinese and Western business are well known. Some are about structure.
"Structures were easy to fix and it was the cultural things that were harder," he said.
Lines is a keynote speaker at this week's conference for the public relations industry. Having worked in Asian and Middle Eastern markets for the past 25 years, he will focus on the growth opportunities in those markets.
He says New Zealand is relatively advanced in China but there are a lot of opportunities in India.
With the growth of sovereign funds looking at investment in Western markets - sometimes seeing share prices as cheap - Chinese investors needed to take PR advice on their new markets - including New Zealand.
Haier - which took a 20 per cent stake in Fisher & Paykel - had a global footprint and was aware it had to understand this country. "They will bring a different perspective to marketing and employment.
"They come from a different environment - there is a lot more centralised control for these companies back in China, that can affect the approach to local investors when they go overseas - whether that is imposed on the local operation, or whether they are left to get on and do what they do best.
Richard Grant, the executive director of the Asia New Zealand Foundation, agrees that public relations advice is important. Beyond the specifics of Chinese manufacturing deals for New Zealand products there was a case for intermediaries, he said.
"It depends on the size of the company, but public relations is a major issue for understanding the culture," he said.
"It is not an option to take on a business and rely on Chinese partners to deliver the local expertise, especially in some regions, they are going to play to suit themselves, but it may not suit you," he said.
"You need someone who is on your side."
The major issue for Chinese companies investing in New Zealand to understand was its small scale.
"They need to realise that they are not just dealing with a company but with the public ..."
July 19, 2009
Posted by NZ Herald - 17 July 2009
by Lincoln Tan
by Lincoln Tan
The Auckland business community is failing to maximise the economic potential of the Chinese community which has become an important part of the city's retail landscape and provides a link to trade with Asia, a study found.
The Asia New Zealand report, entitled Chinese Businesses and the Transformation of Auckland, will be one of the papers discussed at the Rising Dragons, Soaring Bananas Conference at the University of Auckland Business School tomorrow.
"It appears that many local institutions have yet to realise the importance of Chinese business development," the study by Paul Spoonley and Carina Meares from Massey University said.
"These activities are a major source of interest internationally, as Chinese immigrant communities play an important role in business innovation, entrepreneurial activities and international trade.
"It was therefore surprising to see that these relatively new - but still very important - dimensions of Auckland's economy were not given more attention in the royal commission's report on the governance of Auckland or the Government's initial response to the report."
Researchers interviewed 39 Chinese business people - 10 local-born, 11 Asia Pacific-born and 18 China-born - to look at how different Chinese communities have responded to the challenges of setting up businesses in Auckland.
"The royal commission's report and the Government's response both acknowledge the cultural diversity of the city, but do not explore what this means for the contribution of such businesses to Auckland's productivity, innovation or future growth," the report says.
It said Chinese businesses are an important source of innovation, and contribute to the city's cultural and economic diversity and are important contributors to international trade. But because of a lack of local networks, and English language difficulties, many depend extensively on other Chinese for employees, suppliers and customers.
Many business owners make regular trips to maintain relationships with overseas contacts, especially in China.
A feature of Chinese businesses is the development of ethnic precincts in Auckland, such as Dominion Rd in Auckland City, Northcote on the North Shore and Meadowlands in Manukau City.
Only 22.2 per cent of the China-born participants said they spoke English "well", and 94.4 per cent said Mandarin was their main language, although 63 per cent of Asia-Pacific born claimed to be conversant in English.
All local-born participants, claimed they had experienced discrimination in New Zealand. But while 25 per cent of New Zealand-born thought there was "a lot of" discrimination against them, none of the China-born saw this as an issue.
"One possibility is that the locally born were more attuned to the language, including body language, that signalled distaste and hostility."
Local Chinese business owners often expressed frustration in dealing with local institutions, such as banks.
The report said New Zealand business organisations should increase its understanding of the Chinese business community, and more opportunities should be provided for Chinese business owners to establish links and networks with non-Chinese businesses.By Lincoln Tan
August 7, 2007
Posted on NZ Herald - 05 August 2007By Bo Li of Bananaworks Communications
Q. Are NZ companies just really too small to compete with the rush of global giants into China?
A. Nothing is too small, nothing is too big. The China market can accommodate anyone and everyone. Being a global giant has its advantages, but small businesses can still find a niche.
Q. What are some common mistakes companies make when looking to expand into China?
A. It's easy to think of China as a single market, whereas there is a vast range of markets. One pitfall is lack of research and market intelligence into local Chinese resource acts or reliable agencies in China. Another factor is New Zealand businesses' lack of preparation to deal with and/or live in a foreign country.
Q. Are people's fears about the security of intellectual property justified?
A. Yes, no one can guarantee that your IP is not going to be copied, but businesses should see this from the flip side - if your IP has been copied, this means it is a great idea, thus creating competition.
Q. Are there cultural sensitivities NZ companies should be aware of when starting out in China?
A. Knowing Chinese culture and traditions is important. Bananaworks has consistently helped New Zealand businesses understand Chinese business culture.
Q. Do we need deep pockets to commercially compete in China?
A. It depends on the type of business and sector in which it is located. If you don't gain the market share straight away, it becomes harder and harder in the future.
Q. Are some of the early fears about corruption justified? Is there good local support on the ground should things go wrong? Is the local legal system good to deal with for Kiwis?
A. Corruption prevails everywhere. China is not exempt. The best solution is reconciliation and negotiation if anything goes wrong. This is certainly seen as the Chinese way to resolve it. Seek out your Guan Xi (connections) to assist. The Chinese believe once an enemy, always an enemy. The legal system is complex.
Q. What sort of local support in China will we need? Lawyers, accountants, other advisers?
A. All you need are Guan Xi. See it as a toolbox that will open up myriad resources, skill-sets. Or seek foreign firms for professional services, although these are costly.
Q. Is it really the land of plenty? Are the increases in standards of living we hear about happening?
A. Not really. China is a vast territory, but it has limited land resources. There have been significant increases in the standard of living in the past 10 years, especially in cities where property prices soar year by year, brought on by demand for increased living space, modern kitchens within homes and the rise of the interior design market.
Q. What sort of business opportunities will the Beijing Olympics bring? What sort of changes in China?
A. All eyes will be on China. They will take centre stage and, and this platform will be used to project a dynamic and new Brand China.By Bo Li of Bananaworks Communications
* Doing business with China is being discussed at the Bananas NZ Going Global international conference in Auckland later this month. Check it out at www.goingbananas.org.nz