Why Understanding Cultural Values is Vital for Export Success

As featured in Dynamic Export eMagazine Nov/Dec 2016.

You arrive at your foreign destination and reality hits you. In a different country, particularly one where the landscape is vastly diverse, business engagement – the people to people kind – presents a number of challenges for many.

Whilst English may be the lingua franca of business, you can’t assume that your foreign counterpart’s approach to business will be the same. A lack of understanding of the values underpinning the market culture has the potential to undo the hard work you have put into getting your business ready for export success.  

In cross-cultural situations, cultural values not only matter but dictate business norms. The following themes are just some that impact business interactions. Taking them into consideration when preparing to meet your foreign business partners will help broaden your understanding of the ‘why’ your counterparts approach business differently.

Awareness of these concepts and ability to identify the different approaches in the course of your business dealings will allow you to interact with greater confidence and cultural competence.

Communication styles differ
High context cultures rely on an unspoken understanding of shared knowledge amongst the group of a situation or relationship. There is much that will not be said because it will be deemed as being understood by all. Australians by comparison are considered a low-context culture where communication is more explicit. Some high context cultures are found in Asian and middle eastern countries, Latin America and African nations.

Business may be conducted in a highly nuanced manner, indirect communication preferred and a greater appreciation for protocol may be prevalent.

Approach to and management of time
Within our Australian culture, it would be expected that if you are invited to a meeting that starts at 10am, that said meeting will start on time. We have a Monochronic approach to time – in other words, a structured, systematic approach and see time as valuable.

Many cultures, however, see time as ‘flexible’ and ‘abundant’. It is in these scenarios that you would find meetings that would almost never start on schedule and when they do happen, be subject to constant interruptions by others in and out of the meeting. Agendas serve only as a broad brush guide and easily disregarded. Middle eastern and many Latin American business cultures are notoriously ‘Polychronic’.

For Australian businesses, this means that planning flexible travel and meeting schedules with plenty of room to move is an imperative. Arriving a couple of days earlier than expected and having a flexible return ticket home could be considered best practice.

Personal space
In Australia, we tend to value our personal space and readily apologise if we accidentally brush past someone. For those who have travelled to countries like India and China, they would have experienced the opposite. People stand very close to each other and if someone accidentally bumps into you, don’t expect an apology. It is the norm. Whereas in other cultures, if you stand too close, it could be seen as an unwanted advance or sign of aggression.

Organisational arrangements
In cultures where there is a great respect for hierarchy, you can expect it will impact the when, how and who makes decisions on contracts. Not being aware of the hierarchy may cost you in delays and, worse, a halt in the process altogether. Status cultures such as those found in Asian region would fall within this category.

Status matters
Australians are considered very egalitarian; there are no boundaries with respect to whom you seek to connect with in business. In cultures where status matters, the outcome can be quite the opposite. If you are the director of business development and are expecting to meet with the President of the overseas organisation you should not be surprised if the meeting is granted but find, when you attend the meeting, the person present is a designate.

For Australian exporters it is important to emphasise the need to focus on building long-term relationships within key export markets.

Your own cultural values, exposure and experiences will have an impact in the way you interact. To interact with cultural fluidity, one needs to look beyond ethnicity alone because interpersonal engagement will rarely be black and white.

Just because you are dealing with someone in a particular market will not necessarily mean that person’s values will mirror those of the business culture.

They could be an expat, have worked for multinationals in other parts of the globe or have attended overseas universities – all of which would have moulded their business experience and acumen. Due diligence and thorough research will help in increasing your awareness of these variables and strengthen your ability to adapt to other business norms.

Make this research part of your strategy so that you are in the best position to establish sustainable relationships that will add to your export success.