Making Deals Overseas? Then Brush Up on Your Etiquette

Editor’s note: “International Business Corner” is a weekly column written by Joan Keston that provides information for people involved in or considering international operations. Keston is an international business consultant. Over the next several months she will be writing about important issues that international businesses face as they compete in the 21st century global business environment. This article discusses the importance of business etiquette when doing business internationally.

RALEIGH - There is not a lot to say about business etiquette when doing business entirely in the U.S. Depending on the character of the business or corporation, or event, we basically act as in most social settings. Even business attire has become very relaxed over the past decade with a few exceptions mostly centered in the financial world and big cities. In most entrepreneurial settings, almost anything goes.

Part of that lack of structure and rules emanates from a mindset that encourages brain-storming, creativity and free-thinking with the objective of solving a problem or inventing a new product or service. There is no line of hierarchy that can not be crossed when it comes to an idea that makes money, reduces costs or eliminates risk. From a very young age we are encouraged to think and challenge.

Why Is Business Etiquette Important in International Business?

Business etiquette is the conventional requirements as to the proper social behavior in a business setting. What makes business etiquette important to discuss in an international setting goes back to the fact that business in the rest of the world is relationship-based and not contract-based as in the U.S. In a relationship-based business culture the relationship is a vital element in a transaction or business dealing. Social behavior is the fist step in developing relationships.

Although we should not seek to change our business culture to copy other cultures (it is the reason for our success), we must be able to not only function comfortably in other cultures, but to avoid the faux pas that may result in failure. The strongest incentive to adopting this attitude is the fact that globalization is here to stay. There are and will be increasingly more alternatives to doing international business that does not include the US.

How to Begin

Every foreign business culture will be different, especially among different regions. As much as is possible, you must learn about the specific country or region where you are working. Following are general guidelines:

• Accept the idea that the US way of doing business is not the exclusive or superior way of doing business (even if you believe that it is).

• Learn the social etiquette of the culture, and within those parameters find out about your contacts. If you have not been able to do this, be conservative and observe how others act. Ask questions about family, the country, culture etc. that cannot be seen as judgmental, controversial, intruding or offensive. Show an interest in learning about your contacts and their country. Get them to talk.

• Avoid discussions about salary or money.

• Learn some history about the country.

• Take the time to include social events.

• Check with your legal counsel as to the type of token gift allowed that represents the US or your state.

• Be respectful and careful with humor.

• Avoid being arrogant, unless it contributes at some point to your negotiating strategy.

• Observe the hierarchy in the group. Often the decision-maker is not the active voice. In certain cultures the hierarchy is extremely important.

• Do not fly into a country and expect to immediately sign a contract and fly right back out. Take the time now; it will save time and money in the long-run.

About the Author: Joan Keston is the Managing Principal of Keston & Associates, Ltd., an international business consulting firm located in Raleigh, NC, and a Partner at Paladin and Associates, Inc. She has 25 twenty-five years of experience with mature as well as entrepreneurial companies, domestically and internationally, coupled with an executive managerial and legal background. Her firm facilitates international business transactions, and assists companies establish, grow and integrate their international operations. She can be reached at (919) 881-7764 and jkeston@kestonassociates.com.