7 Ways Western and Eastern Business Relationships Differ

Something that always surprises Westerners about Asian, South American, and Middle-Eastern (or “BRIC”) business culture is how deeply relationship driven it is. Westerners tend to think business in the East is much like business in the West, and that a good sales pitch makes a good sale. After they try this approach, we hear those same business people saying, “We’ve made so many trips to India, and it seems like there’s a lot of interest but nobody is closing the deal!” Sometimes we hear, “They don’t seem to want to spend any money, but they keep meeting with us and nobody commits to anything. We should pull out, there’s no market here.”

Eastern Business Relationships

The fact is, BRIC culture will not engage in business until a strong personal relationship has been built. It takes months, if not years, to build these relationships. In China, for instance, it is assumed about half a dozen dinners, over many months, is about right to get to know each other. During these largely social experiences, conversation is about life, children, philosophy, the arts, and a host of other topics that have nothing to do with business (a few things that should be avoided include politics, and anything related to business). Only after a potential partner gets to know you, and trust you, will the door be opened to discuss business.

Relationships are so close in many Asian cultures that the distinction between “business” and “personal” becomes blurred. For instance, Indians are welcome to drop by the home of a potential partner to get to know them better, and it would be rude not to invite them to stay for dinner or even to spend the night if they have travelled far. This holds true in many countries across Asia and the Middle-East.

Years ago I hadn’t done my research before making my first Indian business trip (there wasn’t much information available at the time). That first trip was difficult, not only for me but also for my Indian business partner. My brusque American nature and “let’s get it done” approach didn’t fit well with local culture. Twenty years later my trips around Asia are far more successful. I know the importance of slowing down my “American clock,” and of building those strong relationships. I focus on building strong business connections that are much more resilient than Western ones. On my last trip, I spent every evening having dinner with different groups of people, or spending some time at their homes. It was during these social periods that I learned important things about our project: Who we could trust implicitly, what problems we might run into, and where the political lines lay. These things aren’t discussed in the office because it’s too formal a setting — so if you don’t build the personal connections, you miss out. By the end of the trip, we knew each other better — and that means today we know how to do business together.

Eastern cultures, at least in comparison to Western norms, place higher value on strong relationships, saving face, and long term planning. Of course, ascribing the same attributes to all of the BRIC and all of Asia would be misguided. Keep in mind that the following is a list of core cultural traits that Easterners will generally value more highly than Westerners.

  1. Relationships are emphasized more than the “letter of the law”
  2. Aspiration and intentions matter strongly, not just measurable performance
  3. The good of the group outweighs the needs of the individual
  4. Face-saving tact is absolute (I’ll post an article on this complex topic soon)
  5. Long past history and achievement matters, often more than recent history
  6. Rewards should be consistent with effort, not just results
  7. Long-term thinking (years ahead, not just this year) versus short-term gains

Of course, jumping in with both feet and no preparation is the worst thing you can do. Take the time to prepare. Something as simple as talking over your plans with someone from the target country can go a long way. And if you really want to know how well your team will do, consider a cross cultural assessment or workshop.

Surviving The Asian Dinner Ritual

Westerners frequently miss the importance of the Asian dinner ritual. In fact, some Western business cultures, like the United States, keep personal relationships and business relationships so completely separate that the idea of one influencing the other is taboo. In Asia, the lines between business and personal relationships are very different. Misunderstanding this important cultural shift can lead to unrecoverable missteps.

Tips To Survive The Asian Dinner Ritual

Most Asian cultures place tremendous importance on building a strong relationship before entering into business together – or even before discussing business. Relationship building is an important precursor to developing a business relationship, and one of the best ways Asian business people get to know each other is over dinner and drinks.

Unlike in the West, the dinner ritual is not a celebration of a “done deal.” It’s part of the relationship-building in which Chinese, Japanese, and other Asian cultures invest so much importance. This is an opportunity to get to know your hosts, and vice-versa, but it’s definitely not about talking business. Expect to discuss everything except business, from the weather, to your family, to kids and hobbies. If your partners love American baseball or golf, the conversation will definitely go there. Women will often find themselves being faced with topics that are inappropriate in countries such as the United States, like what their plans for raising children are. The more open, honest, and genuine you are, the better to cement trust. This is where personal relationships are built, and business in Asia doesn’t happen without a strong relationship as a foundation.

Chinese Dim Sum in bamboo steamer
Chinese Dim Sum in bamboo steamer

Most of my clients ask about gifts. They are appropriate, usually after signing a business deal or finishing a tough negotiation or project together. As your relationship grows, it’s likely the gift giving will become more expensive. Start with rice wine (bai jiu), a good red wine (from your home region, if you live in a wine producing state), or expensive Chinese or U.S. brand cigarettes (most Chinese professionals drink and smoke). Remember the importance of “face.” If no one else brings a gift, give yours to the host privately so that you don’t embarrass the other dinner guests.

Heavy drinking is very common, but don’t overdo it. I recall one situation where an American employee got a little bit too drunk, and ended up being too straight-forward in his opinions about the project the team was working on. What he said was not complimentary to the team, and the next day I received a formal request to remove him from the project. While dinner parties can be a lot of fun, remember you are still building a relationship. Your host will be finding out who you really are, and decisions about your future business relationship will be based on the personal connection made, or not made. Let your host lead the toasts, and don’t think you’re in a drinking competition. Saying “I’ve had enough” helps your host gain face.

When it comes time to pay the bill, if you’ve been invited your host will pay. Your thanks will be welcome and appreciated. If you do feel the urge to pay, let your host know well ahead of time and avoid fighting over it at the table.

Also, if you have any special dietary requirements, let your host’s assistant know ahead of time. Your host will be very happy to accommodate your requirements, but keep in mind that events are usually planned days in advance, and you may be meeting new faces at dinner. Be considerate, and allow plenty of time to prepare.

Speaking of new faces, be sure to bring plenty of business cards. Exchange of business cards is an important ritual throughout Asia, and not having cards can be construed as disrespectful. When receiving or presenting a card, do it with two hands, thumb and forefinger grasping the corners of the card, and orient the card toward the person receiving it. A bow will often accompany receipt of a card, and you should always take time to read the card. This demonstrates respect for the person presenting it, and gives you the opportunity to find out who at the table is due the most respect.

Above all, be genuine and forthcoming, and get to know your host. By building a strong personal bond, you can look forward to a long and successful business relationship.