Internet technologies are blurring borders, but the diversity of cultures and approaches to doing business persists. International communication has a significant impact on the company’s financial performance: 49% of businessmen admit that the lack of mutual understanding prevented them from concluding important international transactions and led to significant losses as a result. Executives claim that improving international communication skills increases revenue (89%), profits (89%), and helps increase market share (85%). What should be considered when working with business partners from China, Europe and the Middle East?
Conversation.
China is one of the most attractive markets, but it is difficult to get a proper start on it. Negotiating with the Chinese is not easy: they are very pragmatic and stand on their own, not taking the arguments. However, there is still a loophole in the “Chinese wall”. The discount will help you get the favor of a businessman from China. During the negotiations, find out what benefits attract him, and give him advantages in these aspects of cooperation, of course, without prejudice to their own interests. The Chinese play by their own rules, and they are good actors: they can behave demonstratively tough or even start shouting. You need to be able to hold the punch in an emotional duel and not pass.
For European companies, the law-abiding nature and professionalism of the partner are important. First of all, Europeans value the company’s reputation, stability and long-term presence in the market, the transparency of the economy, and the willingness to accept the rules and work according to them. The innovation of products, processes, and long-term commercial benefits are also important for them. Negotiations with the Europeans are easier to conduct — you can discuss options for solutions, make mutual concessions and come to a common denominator.
Due to our geographical location, not only China and Europe, but also the Middle East is an organic and promising market for us. However, he lives by his own rules: business is based on strong friendship, family ties and a man’s word. Personal relationships in business practice come first. Therefore, when establishing a business relationship with a partner from the Middle East, it is important to demonstrate the intention of long-term cooperation and the ability to lend a shoulder in a difficult moment. The arguments for cooperation with you will be stories about your experience of long-term work with other companies, facts about how you and your partners went through critical situations. Your willingness to give additional bonuses to your children, relatives and friends, or an offer to introduce your children, will help you win the heart of an Eastern businessman. If you receive a business guest, then invite him to dinner at a restaurant, introduce him to one of the male colleagues, for example, a long-time business partner, tell about your family, showing photos. In the Middle East, it is customary to rely on the family clan in business relations. Therefore, if you come by invitation to a particular country in this region to sign a cooperation contract, prepare to communicate not only with the head of the company, but also with the male half of his relatives, and also, if you happen to be among Muslims, to observe all local customs and religious rules (despite the fact that you are of another religion).
Contract and transaction processing.
For representatives of the Middle East, it is important to agree on everything verbally, and the documents are secondary, and they consider their signing as a necessary formality.
For Europeans, the signing of documents is not just a ritual. To agree on all the details and put them on paper is an important business practice in the EU, the basis for protecting the rights of the parties and guaranteeing compliance with the obligations of the partners. Each clause specified in the contract must be observed or corrected by the parties in time — the principle of “observe or explain” is one of the basic principles for business turnover in Europe.
Chinese businessmen are guided by their pragmatic interests, revising them as the situation changes. In addition, due to the great difference in cultures, the same thing between us and them can be understood and interpreted in different ways. Therefore, in negotiations with the Chinese side, the risk of “agreeing, not agreeing” is high. In order to avoid negative incidents with Chinese partners, it is important to prescribe everything in detail, step by step, and sign the most detailed documents.
Values and working moments.
In the European business culture, there is a lot of freedom and delegation, and control is very often reduced to the self-control of the employee. European companies rely on the individuality, talent, qualifications, unique knowledge and experience of people. Creativity and a non-standard approach to solving problems are highly appreciated. For example, in the R&D (research and development) departments of European companies, you can find the practice of working with star engineers with the highest qualifications. One such star can replace a department of 10 ordinary engineers and single-handedly solve a problem in a day that a department of ordinary engineers solves in a week. Hundreds of star employees create a powerful innovation potential of European companies. The desire to constantly learn and learn something new is an organic part of the European corporate culture. The same standards are followed by Europeans in their daily business relations with partners.
While the individualistic culture of Europe puts the value of the individual and his private life at the forefront, the collectivist culture of China does not focus on such “little things”. Human robots are their ideal: complete discipline, speed in processes and communication. For the Chinese, the system is very important, and a particular person is not as valued as the structure as a whole — everything is subordinated to the staffing table. Control is a very important function when interacting with Chinese colleagues. For example, if you have to assemble a conveyor at a factory in China, it is not enough just to explain something, show it, organize the work. Despite their high qualifications, their Chinese colleagues will work conscientiously as long as they are looked after. But once you stop controlling every operation, they start to screw up the screws incorrectly.
When the boss gives an order, the employee in the Chinese company clearly follows the instructions. The chief instructed to collect reports, the Chinese does not understand why the partner did not send the report immediately, despite the answers and explanations of foreign colleagues, he continues to write letters, demanding to send the necessary information. The Chinese carry out standard tasks without thinking about improving-they work and hope that in a few years they will get a small increase. In a Chinese company, it is difficult to imagine an R&D division consisting of hundreds of star engineers, and in principle, it is impossible to have a “one-in-a-field warrior” situation, as it happens in European companies. Perhaps that is why interaction with the Chinese corporate machine is difficult for Europeans, including us.
Solving complex situations.
In contrast to China, the business culture of companies from the Middle East is more similar to that of Europe. Colleagues working in this region do not need to be strictly controlled, they are actively interested in global trends, strive to improve their skills, approach the problem in a non-standard way. The second point that is important to keep in mind is the culture of dealing with difficult situations. And if the Europeans, following the principle of the “round table”, are ready to listen and perceive all the positions, weigh all the pros and cons, and even accept someone else’s point of view, but in the East, the discussion is a complex process. The Chinese will defend their position to the point of absurdity, their arguments are not very impressive, and there are two ways to influence the situation. The first is to go over your head, to the higher management. The second is to clearly demonstrate the failure of the Chinese side’s position. That is, to show colleagues the potential result: “If we do what you want, we will not do it in any way.”
In the Middle East, it is not arguments that will be used, but emotions and personal relationships. “We are friends, we work well together, you know my family, so do a little more for me, help me” – it is difficult to argue with such arguments! In case of force majeure, our partners from Europe and the Middle East are ready to accept non-fulfillment of deadlines for good reasons and are even ready to work together with you to ensure that this does not happen again in the future, but our Chinese colleagues will not accept explanations and will demand the impossible.
Taboos and reasons for breaking up relationships.
The Middle East is a region of many cultures, which is not easy to get along with, so it is not necessary to discuss politics, leaders of countries with Middle Eastern business partners. The Chinese are not inclined to discuss the personal — family-related issues, ambitions, career expectations. Europeans are not inclined to answer questions about personal finances, salary. At the corporate level, if a business partner has broken the law, then whatever benefits it brings, Europeans will prefer to distance themselves. As long as the partner is profitable, nothing will force the Chinese to break off the relationship. If a person does not keep his word, shows disrespect for culture — these are reasons to break off business relations for business partners from the Middle East.
Business results.
64% of companies believe that language and cultural differences limit their international development plans. The most serious threats to harmony in international relations lie in different cultural traditions (51%), different norms of corporate behavior (49%) and the language barrier (27%). At the same time, the leaders of Chinese companies are more acutely aware of this problem than their colleagues from other regions of the world: 61% of Chinese businessmen admitted that due to misunderstandings when communicating with potential foreign partners, their companies suffered financial losses, having failed international transactions. 79% of Chinese CEOs believe that differences in language and culture make it difficult to win foreign markets.
When building relationships with foreign partners, take into account the nuances of cultures and business traditions adopted in their countries, and then your global business ties will be strengthened.