When Australian, US and other Western companies come into contact with their Asian counterparts, the experience can be like “communication between the fish that swim and the birds that fly”, says James Chan, a Chinese-born management consultant who has lived most of his working life in the US.
We neglect cultural differences in business at our peril, warns Ron Cacioppe, Managing Director of Integral Development, a leadership development firm based in Perth. Australian businesses need to understand that Asia isn’t monolithic but has many cultures with long and rich histories of achievement, he says.
“There’s a tendency to stereotype Asians, coupled with a naivety about their societies. We don’t ask enough questions to enable us to understand that the cultural framework that we work in isn’t the one that they work in,” says Cacioppe.
Despite the fact that Australia has a growing multinational workforce composed largely of Asian peoples, the country has been slow in getting to grips with the psychology and etiquette of how Asians like to do business – a factor that could, potentially, impact on trading success.
The first step – information exchange – is critical but achieving it is far from straightforward in China or Japan, where reserve and politeness are hard-wired into the psyche and at odds with the emphasis on performance outcomes and the imperative to “get the deal done” in Australia.
Patience, it seems, is the key. Several getting-to-know-you meetings, where business might not even be discussed, typically occur before talk gets down to the nitty-gritty. Cacioppe says with so many family businesses operating in China, it’s important to get acquainted with the family first.
“They think we’re cold-hearted because we don’t ask about their families,” he says. If Westerners grow impatient with the slow pace of business, the Chinese are attuned to it and use that to negotiate the best deal for them.
The concept of “face” in China is paramount, insists Chan, whose company Asia Marketing Management advises on exporting to Asia. “What it means is ‘I don’t make you feel bad and you don’t make me feel bad’. One way for the Chinese to avoid any faux pas or even unwitting mistake is to be extremely vague, extremely superficial and non-committal, and not to tell the emperor he has no clothes.”
We don’t ask enough questions.– Ron Cacioppe, Managing Director, Integral Development
Chan says the Chinese are far more likely to tell their business colleagues what they want to hear than the unvarnished truth. “They say ‘yes’ to everything because they don’t like saying ‘no’.” The Japanese business approach he describes as even more “clinically polite”.
So how are agreements ever reached, deals ever done? Chan says the more truthful, open conversations start to happen over months and not in groups but in private, one-to-one conversations. Stephen Perry, president of the UK-Chinese business network, The 48 Group Club, agrees where there’s a will, there’s a way, and that the Chinese pragmatic approach wins out.
“At the end of the day, if you have something the Chinese want, they'll do business with you no matter whether you can hold chopsticks or not.”
Countries such as Korea, Indonesia, China and Japan place a strong emphasis on collective culture and hierarchy in business.
“Their sense of who they are is related to the group they are in,” explains Cacioppe. “By contrast, Westerners are more independently focused and autonomous.”
For this reason it’s important to honour the group, he says, and acknowledge those with the highest status first followed by the most senior in age.
Australian mining magnate Kevin Maloney recalls doing business with Chinese back in the 1990s when “they were mostly in their 70s and spoke Russian. Now the Chinese are all very smart, very educated and much fitter than us,” he says with a smile.
Business etiquette usually adheres to strict conformity in many Asian countries and can be highly ritualised. Dark suits are de rigeur for men and women in business meetings, as is the presentation of business cards, preferably with your name and position translated into the local language. These are presented with both hands and should be read and then kept visible for a while rather than pocketed immediately or written on, which is considered insulting.
The legacy of British rule and a more cosmopolitan environment in Hong Kong and Singapore put business transactions on a more familiar footing for Australians. However, the Chinese influence in both financial centres remains strong, so hierarchy and formality shape business life. Personal relationships are the key to success and non-verbal communication – facial expressions and body language – are frequently used to gauge reactions.
Dos and don’ts when in Asia
Appointments: These should be arranged well ahead of time. Send agendas and proposals translated into the local language. This shows respect for your foreign colleagues.
Time: In Japan and China in particular, be punctual as lateness can be viewed as an insult.
Greetings: The way you begin a meeting sets the tone and can have a profound effect on subsequent negotiations. In Japan and China, it is better to wait to be introduced, rather than introducing yourself. A handshake is the norm in international business but the traditional form of greeting in Asia is the bow.
Eye contact: Strong eye contact in Western cultures is a sign of sincerity and trustworthiness but in Japan, prolonged eye contact is considered rude. Japanese maintain an impassive expression while speaking and interpret frowning, for example, as a sign that you disagree with them.
Gestures:Crossed legs. In Thailand and Indonesia, it is offensive for the foot of the upper crossed leg to be pointing towards someone, as it is the lowest part of the body. Bouncing your foot while cross-legged and facing someone from an Islamic culture is perceived as threatening or accusatory. It’s generally better not to cross your legs at all. Crossing your arms or leaning back in the chair can also be viewed as adopting a defensive position or a sign of revulsion.
Shaking your head from side to side means agreement in some parts of Asia, whereas it has the opposite meaning in many other parts of the world.
Gift giving: In Indonesia, Japan and China, exchanging gifts is an integral part of business negotiations and should not be seen as a bribe. Reciprocation is important, as is the quality of the gift. Indonesia has the largest Muslim population in the world and as alcohol is forbidden in Islam, only give it if you know it will be appreciated. Equally, food products for Muslims should be halal. A gift should be offered with both hands in China and Japan and with the right hand only to a Muslim or Hindu. Gifts are generally not opened until later.
Superstition: In China, white is the colour of mourning and should be avoided, especially in packaging. Red is the colour of prosperity and authority and is favoured. Never give a clock as a gift as it’s associated with funerals, but a watch is fine. A green hat is also unwelcome as it means a man’s wife is being unfaithful. Chinese believe the number 4 is bad luck, 14 is even worse. Numerals 3, 8 and 9 are good. It’s no accident that the telephone numbers of Western hotels in Chinese cities contain the numerals 8888. They want their customers to feel good.