Cultural barriers to doing business abroad

Many companies breaking into the international market underestimate the ever-present barrier posed by cultural differences. Although consumer trends have become more homogeneous around the world, values, language and decision-making methods represent major obstacles for entrepreneurs who try to negotiate or make contact with a partner in another country.

Business people with experience in international trade not only acknowledge the existence of cultural barriers, they use them to their advantage to help bring their business projects to fruition. Entrepreneurs new to the international scene sometimes wrongly assume that behaviour and business practices are the same everywhere in the world. In doing so they increase the likelihood of mistakes and even failure.

Language

The first obstacle to overcome is usually language. Knowing the language of the country you're targeting helps you succeed in business there. You don't have to master every language before breaking into foreign markets, but knowing some key words and forms of address is generally enough to establish a feeling of trust conducive to effective negotiation.

Whether you are fluent or just a beginner, make sure that your company website is translated into the target country's language or gives the country's business people a choice of languages. Make sure that your business cards are also available in the language and form commonly used there. Neglecting these all-important points may be interpreted as a lack of interest in maintaining a long-term business relationship.

Using interpreters and translators can help you better understand local business practices and the cultural specificities of potential clients and partners abroad.

Body language

Apart from verbal language, body language and concepts of personal space can also be important aspects of doing business abroad. When meeting with foreign business people, pay attention to their gestures, which are often full of coded messages. It's a good idea to have a local advisor or interpreter with you to guide you and clear up any misunderstandings as they arise. Gestures of affection or appreciation may surprise you if you are not used to local customs. In some countries, a warm hug is nothing unusual and shying away from such gestures may compromise all your efforts to develop your new business relationship. In other countries, discretion and maintaining physical distance is important and failure to respect this may offend your business counterparts. It is also recommended that you learn about local religious practices and the role of senior business people, the elderly, politicians, leaders and so on to avoid committing a faux-pas. In some countries, for example, you may be considered to be too young to discuss business with an experienced CEO.

Business practices

In certain areas of the world, a simple gift may be interpreted as a bribe, while in others presents are commonly solicited to further negotiations. Playing a game when you don't know the rules puts your business venture at risk. A good knowledge of customs related to the giving of gifts, tips and other types of favours is essential to doing business abroad. You must understand the implications of these practices in order to act appropriately and avoid being caught unawares. Entrepreneurs who lack experience overseas may fail to understand that they have just been asked for a bribe because the request was too subtle, which my hold up a business venture. You not only have to be familiar with but also understand all the various aspects related to the value of a gift, the way in which it is given and when and under which circumstances you should present it to your foreign partners.

Being aware of cultural barriers makes them easier to navigate. Before you try breaking into a foreign market, take some time to prepare. Attend seminars and read about the culture in the countries where you wish to do business. This will help you avoid making incorrect assumptions or inadvertently committing gaffes that could hinder your project. Unfortunately, despite all your efforts to understand a foreign culture, the cultural barrier will remain, at least in part, unless your partners abroad also acknowledge the existence of cultural barriers.

You can count on Desjardins's expertise to help you do business internationally, maintain good relations with your customers and suppliers and manage your business risk. Contact Desjardins International Services