Document View

Selling is the first step to forming relationships in international markets. Many corporations begin with international selling in order to become familiar and make contacts with the market they are trying to penetrate. It is important to look at the motivation of sales persons from within each country. International selling provides many benefits. Companies frequently see lowering costs through international production as the most compelling benefit to forming international relationships. However, there are some challenges when dealing with international relationships. Many countries have completely different customs when approaching business relationships and/or transactions. The following are ten basic guidelines for forging successful cross-cultural business relationships: 1. Understand culture. 2. Look at product. 3. Research business norms. 4. Be careful with assumptions. 5. Make a serious time schedule of goals. 6. Establish a code of ethics. 7. Know partners. 8. Understand needs. 9. Have a clear communications. 10. Have patience.

Enlarge 200% Enlarge 400%

SELLING IS THE FIRST STEP to forming relationships in international markets. Many corporations begin with international selling in order to become familiar and make contacts with the market they are trying to penetrate.

"The world is not broken down ideologically like it once was," said H. Stephen Gardner, Director of the McBride Center for International Business at Baylor University. Companies are no longer limited to just a national market. Any product can be sold in any place around the world.

It is important to look at the motivation of sales persons from within each country. A study co-authored by John F. Tanner and noted researcher Georqe W. Dudley at the Behavioral Sciences Research Press attempted to find the motivation behind having a sales career in different countries around the globe.

"Their motivations form a colorful and vastly more complex tapestry than superficial stereotypes allow," said Dudley. The study found that 33 percent of U.S. and 36 percent of U.K. salespeople primarily work to earn substantial incomes. Dudley added that "U.S. salespeople often shun advancement into management because they can usually make much more money in sales."

On the other hand, only nine percent of Norwegians and 11 percent of New Zealanders value working in sales because of the income. In both countries, sales persons tend to value their ability and their freedom from a specific office routine. Many other countries frequently view a sales position as a temporary step on their way to a management position.

Dudley conducted another study looking for which country had the most honest sales persons. The most honest sales persons were in New Zealand, followed by Singapore. Australians ranked somewhere in the middle. U.S sales persons were significantly more likely to exaggerate than sales persons in other nations This might be why some countries are timid about working with the U.S.

BENEFITS

International selling provides many benefits. Companies frequently see lowering costs through international production as the most compelling benefit to forming international relationships.

Daniel Rajaratnam, Baylor associate professor of Marketing, and Gardner both agree that global competitiveness is an important component of our national economic strategy. If the U.S. wants to maintain its standard of living, U.S. businesses must build a bridge to the global community. If more companies in the U.S. begin to actively participate in global markets, then cultural barriers can be easier to cross in the future.

Also, if a company is truly interested in investing in the international trading market, then one of their main goals should be diversifying investments. Spreading investments over several different opportunities lowers risks significantly. This is even beneficial to smaller businesses or individuals.

Globalization is occurring throughout different industries and businesses. The U.S. is only five percent of the global population. China and India are on the rise with their economic growth patterns. The economic growth rate of these two countries is three times the growth of any other developed country in the world. These countries are now demanding goods that were not available to them in the past. While the U.S. has only five percent of the global population, Rajaratnam noted that demand from both China and India is increasing because of the sheer number of people and the opening up of their markets for foreign goods.

CHALLENGES

However, there are some challenges when dealing with international relationships. Many countries have completely different customs when approaching business relationships and/or transactions. This is why it is important to truly understand the culture before trying to make a business deal in their country.

Time must be added to socialize with business partners before any business decision can be made. Rajaratnam said that in Asian, Latin American and Middle Eastern areas, people are seen as much more important than any type of deadline. Many business people want to create a working friendship before they begin trading or engaging in business transactions. It is important to not discuss business matters until the host instigates discussing business topics.

Rajarantnam, Gardner and Dudley boil down their expert advice for forging successful cross-cultural business relationships to the following ten basic guidelines.

1. UNDERSTAND CULTURE

Culture shapes who we are and what we desire. Simple customs can be misinterpreted by ill-advised foreigners. Eye contact, colors and phrases can easily misinterpreted or offensive.

2. LOOK AT PRODUCT

It is essential to understand the product beinq sold and its ultimate use and to clearly convey that point to the consumer. Sometimes it is helpful to compare similar products in the foreign markets to observe different campaigns or techniques used to sell the product. For example, Japanese companies do not sell items in packs of three, a number they deem unlucky.

3. RESEARCH BUSINESS NORMS

Business etiquette can make or break a deal. In Eastern cultures, the host is the only one who can initiate a conversation about business. Many hours will be devoted to making a business person feel comfortable through socializing to create a solid connection before any business transaction is even brought to the table.

4. BE CAREFULL WITH ASSUMPTIONS

Personal assumptions can lead down the wrong road. "There may be significant differences in the use of language, desiqnations and procedures," according to Dudley. Always research both professional and legal issues, before international meetings.

5. MAKE A SERIOUS TIME SCHEDULE OF GOALS

International business deals take time and should not be taken lightly. Even if everything is set before making the deal with another country, the odds are that the other party will have a different perspective on how to approach problems.

6. ESTABLISH A CODE OF ETHICS

Make sure that there are a set of ethical guidelines to follow before making an international deal. Never comprise ethics.

7. KNOW PARTNERS

In a joint venture or even traveling to meet perspective associates, make sure to understand their background. Doing your homework and knowing something about their situation and environment is always impressive, no matter the longitude and latitude.

8. UNDERSTAND NEEDS

Make sure that everyone involved comprehends the ultimate goals before making an international trip. When all parties begin discussions on the same page, the relationship will operate much more smoothly and efficiently.

9. HAVE CLEAR COMMUNICATION

Clear communication is one of the most important aspects of a business. When drawing-up contracts, clarify ultimate cause-and-effects for everyone. Poor communication can and will ruin any hopes of a future deal or relationship.

10. HAVE PATIENCE

It does take time to understand different cultures. Also, many countries take longer to foster relationships than the U.S. If each side acts with patience, then the relationship has the potential to be strong and productive.