The Unspoken Truth about International Business

Language has been described as the mirror of culture. Language itself is multidimensional. This is true not only of the spoken word but also of the nonverbal language of international business.

Messages are conveyed not just by the words used, but also by how those words are spoken and through such nonverbal means as gestures, body position, and eye contact. These nonverbal actions and behaviors reveal hidden clues to culture.

Five key topics – time, space, body language, friendship patterns and business agreements – offer a starting point from which managers can begin to acquire the understanding necessary to do business in foreign countries.

Understanding national and cultural differences in the concept of time is critical for an international business manager. In many parts of the world, time is flexible and is not seen as a limited commodity; people come late to appointments or may not come at all.

In Mexico for instance, it is not unusual to show up at 1:45PM for a 1:00PM appointment. Although a late afternoon siesta cuts apart the business day, businesspeople will often be at their desks until 10 o’clock at night.

In Hong Kong, too, it is futile to set exact meeting times because getting from one place to another may take minutes or hours, depending on traffic.

Showing indignation or impatience at such behavior would astonish an Arab, Latin American, or Asian.

Perception of time also affects business negotiations. Asians and Europeans tend to be more interested in long-term partnerships, while Americans are eager for deals that will be profitable in the short term, meaning less than a year.

Individuals vary in their preferences for personal space. Arabs and Latin Americans like to stand close to people when they talk. If an American who may not be comfortable at such close range, backs away from an Arab, this might incorrectly be perceived as a negative reaction.

An interesting exercise is to compare and contrast the conversation styles of different nationalities. Northern Europeans are quite reserved in using their hands and maintain a good amount of personal space, whereas Southern Europeans involved their bodies to a far greater degree in making a point.

International body language, too, can befuddle international business relations.

For example, an American manager may after successful completion of negotiations, impulsively give a finger-and-thumb “okay” sign. In southern France, this would signify the deal was worthless, and in Japan, it would mean that a little bribe had been requested. The gesture would be grossly insulting to Brazilians.

Misunderstanding nonverbal cues can undermine international negotiations. While Eastern and Chinese negotiators usually lean back and make frequent eye contact while projecting negativity, Western negotiators usually avert their gaze for the same purpose.

In some countries, extended social acquaintance and the establishment of appropriate personal rapport are essential to conducting business. The feeling is that one should know one’s business partner on a personal level before transactions can occur.

Therefore, rushing straight to business will not be rewarded because deals are made on the basis of not only the best product or price, but also the entity or person deemed most trustworthy. Contract may be bound on handshakes, not lengthy and complex agreements – a fact that makes some, especially Western, businesspeople uneasy.

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Excerpt from Fundamentals of International Business, 3rdby Michael R. Czinkota, Ilkka A. Ronkainen, and Michael H. Moffett

Michael Czinkota (czinkotm@georgetown.edu) teaches international business and trade at Georgetown University’s McDonough School of Business and the University of Kent. His latest book, forthcoming in October 2018, is “In Search for the Soul of International Business”.

 

 

The Case for Cuban Engagement

After six decades of communist rule in Cuba, the island is now governed by someone outside of the Castro family for the first time since the 1959 revolution. The new leader, Miguel Diaz-Canel, was vice president and a provincial party chief.

Many believe that the political and economic status quo of the Caribbean nation is unlikely to change. However, lessons from the business world indicate that any change in an organization’s key leaders ushers in a new era for a company.

Whether it’s an acquisition, merger or the appointment of a new CEO, these transformations usually carry enormous repercussions for key functions.

New priorities are typically manifested by new promotions, new players, new rules and new aims. In turn, this results in shifting financial conditions, new private developments and new service assortments.

When applying such transition effects onto countries, one could argue that there is an opportunity for President Trump to act decisively in formalizing and normalizing trade relations with Cuba if conciliatory and meaningful changes are made.

For example, changes could be made so that there are no longer higher hotel rates for Americans than for Europeans, as well as no more ongoing accusations or regurgitation of historic events that have long passed.

Curative International Marketing, a theory developed at Georgetown University’s McDonough School of Business, directly addresses past errors and focuses on long-term restitution and improvements.

Such a move would advance U.S. businesses and their strategic interests while allowing Cuban citizens to operate in the private sector independent of the communist regime.

So far in the Trump administration, the opposite tactic has been taken by restricting American travel and trade with Cuba, which is a reversal of President Barack Obama’s policies.

A pro-business posture allows for increased commercial relations (beyond cigars) that would be more effective in countering the interests of the Cuban military’s monopoly in business.

This policy would empower private Cuban entrepreneurs by eliminating their dependence on the Cuban state apparatus and open them up to U.S. leadership and influence in the region. Private success over public ventures would speak volumes in favor of new economic and social thinking.

As a first measure, restoring the capacity for U.S. citizens to schedule individual visits to Cuba, which was eliminated in 2017, should be considered.

The potential economic boon for Cuba’s tourist industry could eventually stimulate growth in both the U.S. and Cuban economies. Also, this measure would promote democratization and bolster innovation and an entrepreneurial spirit in Cuba.

The recent promising developments in the Korean Peninsula indicate that diplomacy rather than deterrence can advance American interests in places where ideological and strategic divisions run deep. As the White House approaches a deal in East Asia, it could apply the lessons learned from the North Korean negotiations closer to home in Cuba.

President Trump’s acumen for dealmaking can face an ultimate test in Cuba. Opening conversations — and trade — with the island could mark a vast improvement in the bilateral relationship. Hopefully, the American people can look forward to the use of politics that shapes a future good for all of us.

Michael Czinkota teaches international business and trade at Georgetown University’s McDonough School of Business and the University of Kent.

Lisa Burgoa of the School of Foreign Service contributed to this commentary.

Interview with China Global Television Network on Possible Outcomes for US-China Trade Deal

Here is my televised discussion with China Global Television Network’s Elaine Reyes on the possible outcomes for the US-China trade deal, following the agreement on Saturday. Enjoy!

Georgetown First Year Seminar – Final Presentation

With help of a course specific editorial board, each student in FYS write a draft editorial during the semester, and made it a final public editorial and delivered a 4-minute presentation on the November 29th session of the course. During the session, students showed their innovation and great presentation skills. The editorial board members gave their insightful opinions and suggestions on the topics. Professor Czinkota also prepared a sweet Certificate of Appreciation to all the editorial board members for their generous contribution to the course.

unnamed2Students in FYS develop an editorial which tackles an institutional trade issue relevant to them. These editorials can take any form of dissemination ranging from print instruments, social media, or Youtube films. The work can include an assessment of government and taxpayer expenditure on a trade related measures. Or it can represent the impact of government actions on corporate trade conditions. The first editorial draft is handed in for comment by and discussion with the instructor and the editorial team on Oct. 11. Subsequently, after discussion, the goal is to produce one cohesive, brief and insightful commentary which is postable or publishable for mail-out. Each student collaborated with the editorial board, the coaches and professor.

Editorial Board Members: Thank you very much for taking time sharing your unique insights and experience to the students. Your advice has greatly inspired them to take a deeper view in the subject matter and beyond. Your kind talk would always be remembered by the students.

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Thank you again for the 5 amazing editorialists: (from left to right)

Molly Fleenor
Assistant Director of Communications
Georgetown University McDonough School of Business

Joana Godinho
Guest Producer
CGTN/CCTV News

Nicolette Hurd
Consultant
The McCormick Group

Jennifer Boettcher
Business Information Consultant
Georgetown University

Glenn Morel
CEO & Founder
AVID Productions

 

A NEW OPPORTUNITY

Riad Shams
Demetris Vorontis
Michael R. Czinkota
Invite your submission to a special issue of the Journal of
Business Research on
Innovation management and entrepreneurial development: The antecedent role of stakeholder engagement.
For more information go to the URL below.