April 11, 2011

NZ Culture & Customs to Note in Doing Business

Business Etiquette & Protocol to Note

Relationships & Communication
. New Zealanders can be somewhat reserved, especially with people they do not know. 
. Once they develop a personal relationship, they are friendly, outgoing and social. 
. Do not appear too forward or overly friendly. 
. They respect people who are honest, direct, and demonstrate a sense of humour. 
. They trust people until they are given a reason not to. 
. If this happens in business the breach will be difficult to repair and business dealings may cease or become more difficult.

Business Meeting Etiquette
. Appointments are usually necessary and should be made at least one week in advance by telephone, fax or email. 
. It is generally easy to schedule meetings with senior level managers if you are coming from another country if the meeting is planned well in advance.
. It can be difficult to schedule meetings in December and January since these are the prime months for summer vacation. 
. Arrive at meetings on time or even a few minutes early. 
. If you do not arrive on time, your behaviour may be interpreted as indicating that you are unreliable or that you think your time is more important than the person with whom you are meeting. 
. Meetings are generally relaxed; however, they are serious events. 
. Expect a brief amount of small talk before getting down to the matter at hand. 
. If you make a presentation, avoid hype, exaggerated claims, hyperbole, and bells and whistles. New Zealanders are interested in what people 'can do' not what they say they can do. 
. Present your business case with facts and figures. Emotions and feelings are not important in the New Zealand business climate. 
. Maintain eye contact and a few feet of personal space.

. The negotiating process takes time. 
. Do not attempt high-pressure sales tactics. 
. Demonstrate the benefits of your services or products rather than talking about them. 
. Start your negotiations with a realistic figure. Since this is not a bargaining culture, New Zealanders do not expect to haggle over price. 
. Kiwis look for value for their money. 
. Do not make promises you cannot keep or offer unrealistic proposals. Kiwis do not generally trust people who have to oversell!
. They are quite direct and expect the same in return. They appreciate brevity and are not impressed by more detail than is required. 
. Agreements and proposals must state all points clearly. All terms and conditions should be explained in detail. 
. Stick to the point while speaking. 
. Kiwis appreciate honesty and directness in business dealings.

Kiwi Society & Culture
There can be marked differences between Maori and NZ European (Pakeha) societies and culture. This is particularly apparent when moving in tribal (Iwi) circles. Due to colonisation and tribal differences, there can also be subtle but important variations in protocols. The following sections outline aspects most likely to occur when doing business with tribal groups but can also equally apply to any group that includes Maori.

Kiwi Demeanour
. New Zealanders are friendly, outgoing, somewhat reserved initially yet polite, and enjoy extending hospitality. 
. They are quite easy to get to know as they say hello to strangers and will offer assistance without being asked. 
. Because they do not stand on ceremony and are egalitarian, they move to a first name basis quickly and shun the use of titles.
. Kiwis dress casually, but neatly.
. Most restaurants do not have dress codes and except in business, dress is decidedly casual. 
. Business dress is conservative, although jackets may be removed and shirtsleeves rolled up when working.

Maori demeanour
. Maori are generally friendly and reserved and place great value on hospitality.
. They will generally offer (often to the point of going without) assistance to their guests and will attempt to hide the inconvenience as much as possible.
. Maori will spontaneously launch into speech and song. Even though they may not have met each other, they will know many songs they can sing together and often use these to close or enhance speeches.
. They will often call for visitors to do the same and it would be wise to have 2-3 practised songs from your own country to reply with.

. Kiwis are environmentally concerned and have a strong desire to preserve their country's beauty. 
. One of the major local issues is the importing of predators. 
. Border controls are very tight and there are huge fines for importing food or other natural products such as wood, cane etc.
. The local attitude towards the environment is largely influenced by the viewpoint of the indigenous population, the Maori. 
. They believe that all things have a 'mauri' - a life force. 
. Damage to this life force, or human attempts to dominate it, result in the mauri losing its energy and vitality, which affects the lives of people as well as the resilience of ecosystems.
. Maintaining the mauri of the environment and ecosystem resilience are equally important for sustainable development.

. The country has no formal class structure. 
. Wealth and social status are not important to Kiwis. 
. They take pride in individual achievements and believe that opportunities are available to all. 
. As a 'welfare state' unemployment benefits, housing and access to health is all available free of charge to those who can't afford it. 
. Maori have a hierarchy especially apparent in formal situations.
. For example, the elder (male or female) is seated in a specific area and will be asked to open or close a meeting. Mostly they are men but not always.

Etiquette and Customs

Meeting and Greeting
. Greetings are casual, often consisting simply of a handshake and a smile. 
. Never underestimate the value of the smile as it indicates pleasure at meeting the other person. 
. Although New Zealanders move to first names quickly, it is best to address them by their honorific title and surname until they suggest moving to a more familiar level or they call you by your first name.

Maori meeting and greeting
. Maori stand on ceremony and have distinct protocols regarding how visitors should be welcomed and seen off.
. If the business dealings are with a tribal group (Iwi) the welcoming protocols may be practiced through the process of Powhiri – a formal welcome that takes place on a Marae. 
. A Powhiri can take between 30 minutes to 2-3 hours depending on the importance of the event. 
. It begins by calling the visitors onto the area infront of the traditional meeting house. Visitors should walk as a group and in silence expect if they have a responding caller to reply to the home peoples’ caller (usually an older woman). 
. A Powhiri dictates where people sit, in what position in their group, and who speaks. 
. In most cases, but not all, you will notice the men are seated forward and only males speak. There is a tension between the men and women on this matter and in a few places this has been resolved and you will see both genders stand to speak. In the interests of not causing friction in your business dealings, always follow the lead of the home people. 
. The welcoming speeches are given by the agreed speakers of the home people and always end with the most revered speaker or elder. 
. Speeches are given in the Maori language and each one accompanied by traditional song. You may not understand what is being said but you can rest assured it is likely to be from the best orators in the group and often very complimentary. 
. The visitors are expected to have at least one speaker reply on their behalf. 
. If possible, the speaker should prepare a learned opening in Maori – it is critical that he/she focus on the pronunciation. Mispronounced words often result in whispers and sniggers and is considered disrespectful. It is better to have a very short opening said well, than a long one said badly. 
. The speaker’s reply should never be about the detailed purpose of the visit nor should it be to self-promote as this would be considered arrogant. 
. The speaker should use the opportunity to briefly show respect to the place that they stand (ie. the location), to the houses (the traditional carved meeting house and dining room are named after ancestors and so are greeted accordingly), to greet the home people, and to explain where his/her group have come from (place is important to Maori). This should be followed by a song from the visitors’ country that the visitors’ group should sing together. 
. The Powhiri can be daunting to visitors and can be fraught with traps that may offend. This is why most visitors seek the assistance of a Maori person to ‘guide’ them. 
. Once the last elder of the home people has spoken, they will gesture the visitors to come forward in a line to shake hands, kiss (once) on the cheek or hongi (touch noses) with the home people. 
. Following this the kitchen is ready to call people in to eat. 
. Following the food, the meeting proper can begin. 
. While this seems to be a set routine, I have been to many a Powhiri where variations of this occur. It pays to be vigilant and to follow the lead of others, or to discreetly ask questions if unsure.

Gift Giving Etiquette
. If invited to a Kiwi's house, bring a small gift such as flowers, chocolates, or a book about your home country to the hosts.
. Gifts should not be lavish. 
. Gifts are opened when received.

Dining Etiquette
. New Zealanders are casual as is reflected in their table manners. 
. The more formal the occasion, the more strict the protocol. 
. Wait to be told where to sit. 
. Meals are often served family-style. 
. Keep your elbows off the table and your hands above the table when eating. 
.Table manners are Continental -- hold the fork in the left hand and the knife in the right while eating. They will not look askance, however, if you adopt American table manners. 
. Indicate you have finished eating by laying your knife and fork parallel on your plate with the handles facing to the right.

Maori Dining Etiquette
. Following a Powhiri, the visitors will be asked to the dining room (a separate building to the carved meeting house) to sit to eat at long tressle tables.
. They should not eat until the food has been ‘blessed’ or an acknowledgement said by an elder of the home people even if the food is getting cold. 
. Visitors should try to enable the home people to sit amongst them to chat and get to know them while eating. 
. Often, younger people will be serving and older people will be working in the kitchen. 
. It is important to realise that in most cases they are working voluntarily and it is appropriate to formally and publicly thank them near the close of the meal before leaving the dining room to begin the meeting. As a result of this, the visitors may be light-heartedly asked to sing. 
. To sing a song from your home country would show respect and thanks.

Culture & Doing Business in Africa-Lessons from UAE

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

Arthur Chin: Doing Business with China

Posted on NZ Herald - 28 February 2011

Sai's Comments:
  • 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.

By Arthur Chin

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.
Negotiation methods
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

Good PR Crosses Cultural Barriers

Posted on NZ Herald - 24 May 2010
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

Time to Bridge Business Gap with Chinese Community

Posted by NZ Herald - 17 July 2009
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

Top tips: Breaking into Asian markets

Posted on NZ Herald - 05 August 2007 

Bo Li, executive director of Bananaworks Communications.By 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