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The International Entrepreneur – Tips for Working with an In-Country Business Agent

BrazilAnyone can go to a country like Brazil and try to set up business operations and sales channels, but to truly make the most out of Brazilian business opportunities, it is best to hire the services of a “Despachante”. Despachante is a word derived from efficient in the Portuguese language, but it normally translates to business or customs agent. This person has many industry and government connections. Without this person’s help all business tasks can slow down to a glacial pace. This role may have different names in various countries and languages, but in Africa, Latin America, Asia and parts of Europe, a local business agent can help make your business interactions with government agencies and other vital business transactions run more smoothly.

Before Americans go running for the hills in fear of being arrested for corruption under the U.S. Foreign Corrupt Practices Act, much of what a business agent does is legal. They know how business is done, which lines to stand in, what permits are needed, which lawyers are honest, etc. Here are tips for working with an in-country business agent:

Hire Only Intermediary Agents that Come Recommended from Trusted Sources

This is important. Be wary of business agents approaching your company at trade shows and through direct mailing/calling campaigns. While there may be reputable agents in the mix, you can just as easily put your trust in the wrong agent who could actually be working directly against your interests.

Instead, contact your country’s consulate for referrals for that market or else the local chamber of commerce. Check more than one source to validate the reputation of a particular business agent BEFORE starting to work with them in the new market.

Keep Clear Accounting Records for Transparency

In countries like Brazil and China, the business agent may operate in a “gray” set of business practices where government officials and key business contacts expect to be bribed for expediting your company’s paperwork, bank transaction, etc. If you are American or any other nationality that has strict anti-corruption laws, your company cannot directly OR indirectly bribe officials in any country. The best way to make sure that your in-country business agent does not act in a way that could leave you vulnerable to criminal or civil indictments is to require full transparency of how your fees are spent. It may be difficult to get this information from your business agent, but you will sleep easier at night.

Keep in Regular Contact

While working with a business agent, it helps to keep regular contact. Some companies make the mistake of signing an agreement and then rarely reaching out to follow up on tasks that the business agent should accomplish. Regular contact helps keep a business agent focused on moving your business interests forward and brings process and information bottlenecks to your attention sooner for resolution.

Provide Enough Product and Company Information to Understand Your Business

A business agent might not have extensive industry experience and so may not be well-versed in what you sell. Be sure to provide product and company information, preferably in the agent’s language, in order to avoid misunderstandings. This information should include how your product works, who it is normally sold to, company history and key company policies (ex. Anti-corruption). Do not be surprised if this material is not initially read, but refer back to it as a resource for your business agent if you hear discrepancies between what the agent has said compared with the written information.

If you would like more information about setting up and managing business agents abroad, please contact me. I wish you the best of success in all of your international business dealings!

The International Entrepreneur – Tips for Avoiding Chinese Bribe Requests

BribeThe issue of Chinese corruption has been making headlines again lately. According to Transparency International, China is seen as a moderately corrupt country compared with the likes of places like Afganistan and Paraguay. But corruption is still an issue for Westerners wanting to enter the Chinese market. Steve Barru of China Business Hand recently wrote about Xi Jinping’s Anti-Corruption Drive and that while China’s leadership will likely continue to round up various corrupt officials, corruption won’t really change since this campaign doesn’t address the root causes of the issue, including the lack of checks and balances. Steve also shared insights from his 25 years living in China about the Culture of Corruption in China. It is vital that international business professionals in all disciplines understand the complexities of corruption issues and in particular, how to handle bribe requests.

Like many American entrepreneurs, I find the U.S. Foreign Corrupt Practices Act overly stringent. I feel like my own government does not trust me to be honest and ethical. It leaves no room for cultural traditions of gift exchange in business relationships. Most cultures do not appreciate the American government judging business traditions dating back before the United States became a sovereign country. Michael Black recently wrote a blog post about Gifts, Guanxi and Corruption in China that’s definitely worth reading on this subject. Given the severe penalties, it is vital to know the FCPA and understand how to avoid any violations. Here’s what I recommend:

Expect to Hear Bribe Requests in Their Many Forms

Bribe requests come in many forms and at various points in the relationship. Oftentimes a bribe is asked for during initial negotiations. It is done normally in one-on-one conversations. It is often delivered as a strong suggestion instead of a direct request. The request could be for money or for a special favor like admissions to a prestigious school for a son or daughter. It can also come at a key point of a working relationship to help expedite a certain action. Government officials are often the most common bribe requesters, promising either a faster process, a permit, etc. or plenty of red tape if the bribe is refused. Do not be caught off guard by a request without having time to counteract. The risk is accepting the bribe request without thinking or else rejecting the bribe outright and derailing a key relationship. You can buy time with “I will consider what you ask”.

Do Not Delegate Bribing to In-Country Partners

This used to be the preferred way around direct bribing by American companies. A special “consulting fee” would be given to the local partner to carry out bribes on behalf of the American company. The American government now tracks these types of payments very closely and if caught, the American managers will serve time in prison. It’s not worth the risk.

Here’s a Way to Turn Bribing into a Legitimate Opportunity

American companies and others following stricter corruption laws are at a disadvantage in a sales process when others bribe without great risks. To successfully compete takes some creativity. Is there anything that your company can legitimately give to sweeten the deal without significant cost to your company? For instance, there may be previously developed online product training modules that you normally charge for. Could it be given away to counterbalance the bribe? Could your company donate children’s playground equipment at a nearby school in honor of your business relationship with the local Chinese government? Look for high-value/low-cost giveaways and goodwill-building opportunities that keep you free and clear of any FCPA violations. Keep in mind that the rest of the world understands American businesses’ restrictions and this may be a test to see what you will offer in lieu of the bribe.

The International Entrepreneur – Cultural Tips on the Netherlands: an Interview with Dutch Business Coach, Roland van Leusden

Roland van Leusden

This week’s interview is about one of my favorite business cultures – the Netherlands. Experienced sales professional, business coach, and entrepreneur Roland van Leusden shares his perspective of how the Dutch business culture helps make the Netherlands such an international business powerhouse despite its relative size.

What do you see as unique cultural characteristics of the Dutch people that are reflected in the Netherland’s business culture?

With a rich history in globetrotting around the world to explore and trade and therefore used to adapt to other cultures, I think that Dutch people inherited characteristics from all over the world. However, there are some deeply rooted Dutch traits worth mentioning:

  • Direct communication – the Dutch are very straight forwarded and direct. A direct style is considered open and transparent, while being too subtle or diplomatic is a sign of hidden agendas or being untrustworthy.
  • Freedom the Dutch culture values not only freedom of speech but especially freedom of opinion. With that comes a strong separation between work and a person’s private life outside of work.
  • Equality Dutch people feel passionately that all people are essentially equal in value. Factors like socio-economic status, university alma mater or country of origin do not elevate or downgrade a person’s status in society. Everyone deserves respect, including children.

 

In your opinion, what are the Netherlands’ most competitive industries in world markets?

Besides the well-known Dutch companies like Philips, DSM, AkzoNobel, ASML, TomTom, Heineken, I encounter small-and-medium-sized Dutch businesses in many international markets.

But in my opinion these are the most competitive ones:

  • As the main ocean port of Europe (Rotterdam Harbor), the Netherlands is a leader in trade and logistics.
  • Dutch companies are highly competitive in creative high-end and precision engineering in both pure technical as well as agricultural (food). The area around Eindhoven has been called the Silicon Valley of Europe. There are also clusters of innovative companies near cities with universities like Nijmegen, Delft and Utrecht.
  • Because of our continuing fight to keep the sea from flooding our lands, the Dutch are experts in all areas of water management and civil engineering.
  • The Netherlands is famous for its production and auctioning of cut flowers and flower bulbs.

 

What’s the best way to find potential Dutch business contacts?

The great news is that Dutch business people are open to making new business contacts without an intermediary’s introduction. The other plus is that Dutch business people are normally very comfortable communicating in English!

To start, I recommend doing an Internet search for “Dutch Chamber of Commerce” or “Chamber of Commerce Netherlands” or “doing business in the Netherlands”. A more official route is through our Ministry of Foreign Affairs, we have more than 150 embassies and consulates all over the world http://www.minbuza.nl/en/services/trade-information/trade-information.html

 

What do you wish people knew about doing business in the Netherlands before they arrive in country?

The Dutch has many contrasts which make it seem almost contradictory. We are liberal in many ways, but conservative in others. We are proud of our accomplishments, but don’t like bragging. We like to give our opinions, but we don’t want to be told what to do. Before making big assumptions about an aspect of Dutch culture, be aware of its limits and a balancing characteristic.

Even though the Dutch are some of the most direct communicators in the world, people must say their opinion in a way that still shows respect for the other person and their opinions.

Business decisions are usually made after everyone on the team has had an opportunity to express their opinion. Everybody wants to be heard and have the feeling that his opinion does matter in decision making. This process will take some time, don’t be hasty!

In the end, the most important factor amongst gathered facts and figures in making business decisions is the cost or better: estimated value for money. After the decision is made or the deal is done things will go fast and efficient.

Do not present yourself or your company with too much emphasis on titles, achievements, dazzling figures to make an impression. It will likely be seen as arrogant and pretentious.
We have a saying: act normal, then you’re crazy enough. This means that while people have a right to express themselves, there is still an expectation of a certain amount of normalcy.

The Dutch want to be appreciated for their expertise. Given the fact that they want to keep business and private matters separate, offering at first a lunch, dinner or other gifts are more likely to be seen as a form of bribery or at least give an uneasy feeling that the favor has to be returned some way or the other way. When a business relationship has been established then these kind of things are accepted.

From your perspective, what’s the business climate like for entrepreneurs (supportive vs. unsupported, culturally accepted profession vs. not accepted, etc.)?

In the Netherlands, it is easy to start a company but much harder to deal with the regulations and tax pressures that come after. Entrepreneurship is growing into a more accepted profession. But traditionally successful entrepreneurs were seen negatively for showing off their wealth publicly (not socially acceptable in Dutch society). Another contradiction is in staffing. In most cases it is easy to find qualified Dutch employees and to hire them, but is very difficult to terminate employment. This may be an issue that the Dutch government eventually addresses in order to allow Dutch employers to compete better in world markets.

 

About Roland van Leusden

Roland helps small and medium-sized companies to grow in their markets. He offers business coaching and in-company training with special emphasis on operations and sales. Roland is based in the Rotterdam area and while his client base is mainly Dutch companies, he has recently begun to look at global markets. Roland has a Bachelor’s Degree in Technical Business Administration and professional background both in (production) logistics and sales/account management. Since 2006 Roland has owned and managed his company, SaleXperience, started because of his passion for small-and-medium-sized businesses who form 97% of all businesses and therefore are the engine of the economy. Roland offers sales training, as well as organizational and general business coaching, complemented with testing services for internal analyses and external hiring. In June 2010 he co-founded an international real estate classifieds website: http://khusan.com . Roland sees the Internet as a gateway to international business and entrepreneurship. He nicknamed himself “Dutch Roland” because his last name might be hard to pronounce in other languages. As with Dutch culture, Roland finds himself balancing his business between his Dutch business coaching clients and his new international business ventures, and of course his private life. For more information about Roland and how to connect, please visit:

http://dutchroland.com/

http://nl.linkedin.com/in/rolandvanleusden

http://www.facebook.com/dutchroland

http://twitter.com/dutchroland

The International Entrepreneur – How to Handle Cross-Cultural Conflict

When doing business internationally, at some point you will encounter an issue with your supplier, partner, or client that needs resolution. This is challenging because every culture operates under a different set of Values, Assumptions, Beliefs and Expectations[1], leading to plenty of misunderstandings. On top of that, every culture handles conflict in a different way. Does this mean that you should avoid international markets altogether in order to stay clear of cross-cultural conflict? Actually, it’s the opposite. Here’s what I mean:

Conflict Can Be Healthy and Beneficial to Both Sides

Conflict is normally a reflection of real issues in the relationship. If your software development team in India is having trouble understanding the product definition, then this issue will manifest itself as coding issues, testing issues, and basic communication issues between the Indian and product marketing teams. Ignoring real issues just prolongs them. Issues often worsen over time. Especially when teams are virtually located across thousands of kilometers (miles), a basic misunderstanding can lead to trust issues. The Swedish product marketing staff may stop trusting the Indian development team to write software code because they mistakenly think that the team is incompetent. The Indian team may feel that the home office is remote and does not care about their efforts because in the same situation an Indian executive would likely and very openly scold the team’s manager for a poor effort. The best scenario is to work through the issues. As long as conflict leads to a deeper understanding of the issue on both sides with a plan to move forward to solve the issues, then the conflict has served a very useful purpose.

What’s It REALLY About?

The first objective is to figure out the real issues. These may be a mix of cultural issues, business issues and individual motivations. I think it’s best to start with questions to better understand the situation. If possible, meet with the person or team face to face. The next best way is to conference call with Skype or another tool. When something does not make sense, ask even seemingly simple questions. For instance, in Sweden teams are very egalitarian and everyone generally has a right to speak. In India, this is less likely to be the case. An Indian subordinate would not question the decision of a manager above them in rank sometimes even if that manager was making a big mistake.

Individual motivations can play a crucial role. A common motivational challenge is when someone is concerned about losing their job. This can cause a person to be motivated by fear and not out of the best interest necessarily of the company stakeholders. Making choices that improve success for the whole team are optimal choices.

After clearly understanding the issues, you can then work to jointly solve the problems. If the cultural component is hard to understand or the issues complicated and difficult to unravel, you can also use the services of a cross-cultural specialist. Please contact me for a referral.

Please comment on this article. I would love to hear reader perspectives on your experiences!

Onwards and Upwards,

Becky Park

 


[1] James Clawson, Level Three Leadership.

The International Entrepreneur – Cultural Tips from France: an Interview with Omar-Pierre Soubra

This week’s business cultural interview takes us to France! Omar-Pierre Soubra shares his insights on how to navigate parts of French culture.

What do you see as unique cultural characteristics of France’s culture that are reflected in France’s business culture?

I will sound obvious by saying “French food”! You can talk to any French businessman or businesswoman around the world, if you start talking Bordeaux wine, escargots, cheese, you have a head start. Food, lunches and dinners are very important place to do business in the French culture. Whether you’re in France or you host a French person in the US for business, you should pay extra attention to the restaurant and the wine list you choose. Although they will tell you it does not matter, it actually does.

The second aspect may sound a bit elitist, but it is not easy to access the right people to do business with in a company (especially large ones). Well educated people compete during their studies to be accepted into a prestigious school (referred as Hautes Ecoles: Engineer Schools or Commerce Schools). Most schools are accessible only through a competition for which you prepare at least two years after your Bachelor’s Degree. Once you are admitted to one of these schools, it almost guarantees a great high-paid position in a French company. These positions usually come with privileges like having an assistant who, unfortunately, is not business savvy. But the assistant may be your only entry point if you’re trying to get an appointment with their managers. Breaking the barrier of the assistant is an art!

In your opinion, what are France’s most competitive industries in world markets?

There are three major industry revolution France is extremely competitive:

  • Renewable energy, sustainability, clean-tech. There are amazing labs, clusters and companies in France that are very advanced and propose solutions to these issues.
  • Digital assets and programming. The French engineering school system has been creating and continues to develop excellent programmers and software designers. For years it has been part of the engineering culture. In the early 1980’s almost every home in France had a computer connected to a network and accessing online services. This was done through Minitel, a French invention, which was the equivalent of the Internet (almost two decades before it reaches what we know today!). Also, next time you watch a blockbuster movie, stay until the end and look at the credits to see how many French names are in the visual effect section.
  • Pharmaceutics and Cosmetics. The French cosmetics industry is probably known by 80% of the population on Earth, with popular brands like Loreal. These international successes have driven a savoir-faire (know-how) almost everywhere in France. A few days ago, I met with a young, energetic entrepreneur who is starting a cosmetics distribution of French creams and lotions for athletes in Colorado. In less than a week, this entrepreneur managed to get the doors opened to major sport retailers in the US as his cosmetic products were made in France and extremely innovative!

What’s the best way to find potential French business contacts?

The best way to find potential partners in France is to rely on your French-American Chambers of Commerce (visit the Rocky Mountains site at www.rmfacc.org if you live in Colorado, New Mexico, Utah or Wyoming). These international non-profit associations promote and develop commercial exchange, trade and investments between France and the United States. Even if your local Chamber does not have direct contacts in the industry, the French-American Chambers of Commerce are all connected and can get you to the right person. The Chambers have connections with the advisors and institutional structures as well as members who probably went through the same process and who can share their experience with you.

France has developed a unique network of successful French entrepreneurs, businessmen and businesswomen based around the world: the French foreign trade advisors.

Finally, supporting structures developed by the French government help foreign companies start operations in France: “Invest in France” is one of them.

What do you wish people knew about doing business in France before they arrive in the country?

I usually start this conversation by You won’t sell with Superman. Let me explain. From branding and budgeting perspectives, most companies start by promoting their brand in France by using the same advertising campaigns and brand image that they use in the US. There was a company trying to promote its product with a Super Hero in their trade magazine ads. It worked very well in the US, but in France it was automatically associated with arrogance and domination. This company’s objective was to get emotionally connected by the pride its customers have when they used the products. My advice is to start with the objective of your campaign (including emotions as this is one of the most universal way for humans to communicate), then work with a local French advertising agency to reflect this and trust them (or ask you French-American Chamber partner if the proposal from the agency works!).

From your perspective, what’s the business climate like for entrepreneurs in France (supportive vs. unsupported, culturally accepted profession vs. not accepted, etc.)?

Entrepreneurs need to keep a low profile while doing business in France. One clear example is with customers’ or prospects’ visits. You can use existing customer testimonials and references. But forget about visiting a customer with the latest German-engineering high-end car that you can afford because of your success! It will immediately result in pushback from the customers with a reply like “with all the money you make on us, you can give me a larger discount!”. If you like expensive cars, keep it at home, for the weekend, but drive to your customers with a low profile car.

About Omar-Pierre Soubra,

Omar is the Director, Techno-Marketing Innovation Manager at Trimble Navigation and also the President of the French American Chamber of Commerce, Rocky Mountain Chapter. Omar is a French native and has been developing a team of professional marketers in different parts of the world. He has been with Trimble Navigation, the leader in positioning solutions, for over 13 years, in various roles from European Sales manager to Portfolio/Market Manager. Omar holds an engineering degree in LASER and Photonics from Polytech Orleans, France, a Bachelor’s in Engineering, Electronics and Electricity from the University of Dundee, Scotland and a Master of Art in Sales and Marketing from the Chamber of Commerce of Versailles/Yvelines, France. You can read more about Omar’s career on LinkedIn at http://www.linkedin.com/in/omarsoubra. In addition to his marketing communications responsibilities, Omar is an innovator at heart and holds several patents that have been developed and used in current products and solutions. Omar has been living in Colorado since January 2005, with his wife Melanie and three lovely boys: Quentin, Lucas and Gaitan.

The International Entrepreneur – Young CEOs: Overcoming Age Discrimination in Global Markets

In countries like Australia and the United States, entrepreneurial success can come at any age. But many business cultures associate age with experience and responsibility. This week’s question is: how does a successful entrepreneur bridge the age gap and be taken seriously in international markets?

World renowned business culture expert, Fons Trompenaars describes how cultures assign status as being some mix of Achievement and Ascription. Some cultures (ex. Sweden, New Zealand) see status as something that is earned through a person’s actions. If an entrepreneur is successful financially, then they have a higher status in business culture. Now many cultures assign status based on other factors, such as age, gender, family name, or the university a person attended. For instance, France and Japan both assign great importance to the university a person attended. Parts of Asia, Africa and Latin America generally give men a greater status than women. Asian cultures often assign status based on a person’s age. For instance, in Thailand you may be asked your age. This determines who is younger and needs to greet the other first. As a young entrepreneur, you may encounter age discrimination in international markets. Rather than to just ignore lucrative markets, here are some ways to combat this issue:

Ignore Age Discrimination

For minor infringements, I highly suggest ignoring slights and other insignificant references to your age. The thinking is that this is not your issue, but an issue relying on ignorance that a younger person can be successful. Your actions as CEO can speak volumes about your competency and challenge other peoples’ assumptions that a young person cannot be successful without decades of experience.

Seek Out Contemporaries

Oftentimes your company will be looking for partners in international markets. There may be several choices of with whom you partner for a given market. You can always choose the most globally-minded company, one that would be less likely to question your leadership abilities based on age. A word of caution on partner selection: choosing a partner based solely on what makes you comfortable as a CEO may ignore other important compatibility criteria. Seek out the larger picture when building relationships.

Give Them an Older Leader

If the interaction with a given foreign partner or customer will be very limited, you can elevate an older manager to take lead in a negotiation. This may sound crazy, but I have heard of situations where this has worked. I only recommend doing this when the deal at hand is very important and age discrimination is already evident. By setting up one of your older staff members as lead, it could make your counterpart/client feel more comfortable in a shorter amount of time and with less effort. Be sure to give an honorary title to this new lead since business cultures that assign status based on age also assign more importance to a person’s title.

If you have questions about age ascription, please comment below!

Onwards and Upwards,

Becky Park

The International Entrepreneur – Cultural Tips on New Zealand: An Interview with Kiwi International Business Development Expert, Ray Underell

This week’s business culture interview is about New Zealand. While New Zealand shares some cultural traits of its neighbor, Australia, this country is definitely unique and important in up-and-coming industries such as outdoor gear and high technology. New Zealand is an island nation that is always ready to stand up to international challenge. There are approximately 4 million Kiwis (New Zealanders) with a very diverse cultural make up, including citizens of European, Maori, Asian, and Pacific Island decent. The Auckland metropolitan area has two-thirds of the country’s population. New Zealand is also considered the Polynesian capital of the Pacific. Here is what International Business Development Consultant; Ray Underell had to say about his native culture:

 

What do you see as unique cultural characteristics of New Zealander’s that are reflected in New Zealand’s business culture?

New Zealanders share a similar mindset and character to our Australian friends and neighbors yet enjoy their distinction as being more conservative and perhaps even shy. That is of course until they are demonstrating their renowned capacity in the International Sports arena. Check out Rugby World Cup 2011, and or America’s Cup sailing. In New Zealand, the same competitive resilience and independent thought holds true in business culture and in particular their robust appetite for international trade. For instance, in 1984 New Zealand refused entry to the nation’s ports to American nuclear-powered and nuclear-armed ships. This was to demonstrate that New Zealand was against the use of nuclear materials and the country was dutifully punished by the United States with trade restrictions. As a result, New Zealand was forced to quickly establish other export markets that included Asia. The New Zealanders tend to be internationally minded and a well-traveled society with approximately 3/4 million Kiwis living abroad.

 

In your opinion, what are New Zealand’s most competitive industries in world markets?

Recognized internationally, the New Zealand wine industry has expanded significantly over the past 20 years. Grape producing area has tripled from just 10,197 hectares in 2000 to 33,428 hectares in 2010. Vineyards now cover more than twice the surface area of any other horticultural crop in New Zealand. Reflecting the industry’s reputation as a provider of super-premium cool climate wines, exports have jumped from just US $88 million in 2000 to US $788 million in 2010. While the sector is still dominated by small wineries and relatively small growers, there has been a significant amount of international investment. The six largest companies account for approximately 55% of total wine production and 19% of total grape production.

New Zealand is strong in the agriculture, horticulture, forestry, fisheries, wood and paper products industries. New Zealand is also renowned for biotech research & development, particularly as it relates to agriculture.

What’s the best way to find potential New Zealand business contacts?

Making business contacts in New Zealand does not require an intermediary like it would in many other countries. Here are several organizations and website which can help you find business contacts in your industry:

What do you wish people knew about doing business in New Zealand before they arrive in country?

  • If you are traveling across the International dateline, try a night time flight so you can get a good sleep during your flight. You might otherwise suffer time loss in adjustment and lose a productive day’s business.
  • The majority of New Zealanders are approachable and extremely helpful/friendly assisting with directions.
  • New Zealanders are known for their humour!
  • Respectful straight-forward communications from the beginning of any business negotiations is essential.
  • Researching organizations is mostly www.company name.co.nz.
  • Companies and Trade associations ‘industry specific’ are an easy search via www.google.co.nz.

From your perspective, what’s the business climate like for entrepreneurs in New Zealand (supportive vs. unsupported, culturally accepted profession vs. not accepted, etc.)?

I think that New Zealand business culture is extremely supportive of entrepreneurship. This is a leading base for tax revenues. But it is challenging for entrepreneurs in early stages especially for those without capital- just as it is in other countries.

 

About Ray Underell

Ray Underell

Ray Underell is from Auckland, New Zealand. Born with an entrepreneurial and competitive spirit, his first sales and marketing position was working for New Zealand’s first pirate radio station, known as Radio Hauraki. “We broke the NZBC Broadcasting monopoly — the backbone of NZ radio at that time”. Ray sold advertising and promoted Shopping Centre shows.

At age 21 he arrived in London England and worked as an Insurance Agent for an American insurance company, CICA. During his 3 years he was a top producer in London. Ray traveled extensively from Moscow to Turkey and Morocco during that time. He immigrated to the US and received US citizenship in 1980. Ray has lived in Denver & San Diego since.

Ray owned and operated several businesses, particularly in the telecommunications industry. He is currently consulting with business alliances, strategic partnerships and new business development. He seeks opportunities both nationally and internationally. Ray particularly likes working with start-ups. He adds extra value from his experiences in the bio-tech research, technologies alliances & investments; as well as oil & gas partnering and investments. Ray helps with American EB-5 investment; and commercial real estate and land opportunities. He can also provide corporate mentoring and guidance for foreign companies entering USA. Ray can be reached via Linkedin, Facebook and email: [email protected].

The International Entrepreneur – Cultural Tips on China by Dr. Jeff Wang

This week, we resume our series about business cultures around the world with an interview with Dr. Jeff Wang of Poetica LLC.

What do you see as unique cultural characteristics of Chinese people that are
reflected in China’s business culture?

The long history, distinguished business and social cultures, different consumer value structures, and dramatic different regional contexts- all these and more make doing business in China a unique experience.

What I’d like to point out as the most significant variable in doing business in China, is how

Shanghai – old & new

much and how fast everything is changing in China. China has been going through an industrial revolution, information revolution, and green revolution almost simultaneously, compressing some 200 some years of world history into a few decades. It brought about 600 million people out of poverty in about 25 years. It is in the mist of the greatest urbanization in human history. The development of infrastructure includes a leading highway system and high speed railways, the three year US$121 billion healthcare reform, etc. The astonishing changes include changes in virtually everything, including business environment, people’s mind set, and social and business cultures.

China still has the vast inland area yet to be developed, or fully developed. And all the changes, including in business cultures, are on-going.

What do all these changes mean to us? First, it means opportunities and more opportunities. Second, any opportunity will not stay as an opportunity for long. And finally, what you learned/heard about China a year ago, even assuming they were accurate then, are probably not applicable any more.

In your opinion, what are China’s most competitive industries in world markets?

China has had significant development in many sectors. The efforts and results in clean tech fields are among many examples. Last year, China identified seven strategic emerging industrial sectors:

  1. Energy efficiency and environment protection
  2. New generation info tech
  3. Biotech
  4. High-end equipment manufacturing
  5. Renewable energy
  6. New materials
  7. New energy automotive

Favorable policies followed, including structural changes and financial incentives. I expect China become competitive, if not already, in all those sectors.

What’s the best way to find potential Chinese business contacts?

If you could afford the budget and time, visit China first, hire locals with real networks, and start building relationships. If you cannot afford doing that, find a firm/agency that does have extensive networks in China and acquire their services. You might want to make a trip with them to China, meet and have discussions with some of their contacts yourself. You can get first-hand feeling of business environment there and a good sense of the quality of the networks they have.

Be aware: just because someone speaks Chinese or was born in China does not mean he/she can help you doing business there.

What do you wish people knew about doing business in China before they arrive in country?

China represents potential markets, potential partners, and potential capital sources. The
opportunities are abundant, the rewards *could* be enormous, but it is not easy. Get help and be prepared.

From your perspective, what’s the business climate like for entrepreneurs (supportive vs. unsupported, culturally accepted profession vs. not accepted, etc.)?

China’s business tradition goes back a few thousand years. An interruption of a couple decades has long been a thing of the past. Nowadays, China is one of the most entrepreneurial places
in the world.

Some of my relatives and friends are among the first entrepreneurs after China re-opened and reformed. Most of them became successful in various fields such as manufacturing, IT, and legal. For example, brothers Chen Dan and Chen Tong started their logo design firm, Zhengbang, in a little department back in the early 90’s. Now Zhengbang http://www.zhengbang.com.cn/) is the most famous and sought-after logo design and branding management firm in China. Walking down any major street in Beijing or Shanghai you can spot logos designed by Zhengbang.

Last summer, China issued the 8th revision of “Classification Standard for Small and Medium-sized Enterprises” and defined micro enterprises. For industrial sectors, micro enterprises are those employ less than 20 people or with annual revenues less than RMB 3 million. For other sectors such as restaurant and catering, information transmission, and accommodation micro enterprises are those employ less than 10 people or with annual revenues less than RMB 1 million. For software and IT, micro enterprises are defined as having less than 10 people or less than RMB 0.5 million. Small and (newly defined) micro enterprises have become a policy support focus in China.

On January 8, 2012 in a financial planning conference in Beijing, Chinese Premier Wen Jiabao pledged to provide more loans to entrepreneurs in order to help them sustain growth in the negative global economic environment.

About Dr. Jeff Wang

Dr. Wang is an adjunct professor at Colorado State University’s College of Business and a member of the Executive Advisory Board of Colorado State University-Denver Executive MBA Program. He received his B.S. degree from Beijing University, Ph.D. from University of Rochester, and MBA from Colorado State University.

Dr. Wang has worked at various companies ranging from startups to IBM. He started on the technical side and moved into management and business. As Director of Operations at Click Commerce and Merge Healthcare, he oversaw business development and vendor management in North America, Europe, Australia, and Asia.

Dr. Wang is passionate about bridging social and business cultures. He founded Poetica LLC, a consulting firm that specializes in market analysis, market entry and partnership management for business enterprises and educational institutes in U.S. and China, and in connecting U.S. companies with Chinese capital sources.

To contact Dr. Wang with questions about business in China or to engage his services, call 720-319-8887, email [email protected] or tweet him at http://twitter.com/@isleinnisfree.

For more information on doing business in China, please go to www.poetica-llc.com and visit Dr. Wang’s profile on the ECO network: http://www.entrepreneurcommunityonline.com/ECO-Advisor-Bio/jeff-wang-phd.

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The International Entrepreneur – Cultural Tips on the United States by Becky Park

This week, I am featuring my home business culture, the United States.

What do you see as unique cultural characteristics of Americans that comes out in the United States’ business culture?

There are many cultural characteristics that color American business. First, Americans are the most individualistic culture on the planet. In business, this surfaces when Americans seek individual achievement instead of group success. Individuals are responsible for their own actions, including how we evaluate an employee’s job performance (Management by Objectives). Second, Americans have a special relationship with time. Most of the world views
Americans as very rushed in all activities, including closing sales. This view of time causes Americans to seem highly directed and single-minded. And third, Americans extend trust to others early in a relationship and then typically watch to see if that trust is well-placed. Most other cultures are slower to trust, but then continue to trust long-term. The risk with an American is to lose their trust. It is hard to regain once lost.

What are the United States’ most competitive industries in world markets?

There are a lot of different ways to measure, but from my perspective I would say aerospace/defense, high tech (software, bioscience, alternative energy, etc.), professional services (finance, accounting, legal, etc.) and higher education. Now that said, competition in all of these industries is growing stronger. Without government support I fear that the US may continue to comparatively drop in some of these fields.

What’s the best way to find potential American business contacts?

American businesspeople are often approachable in a variety of settings. I suggest going to in-country industry trade shows, if possible. In this environment, businesspeople are looking for new contacts and meetings are easily arranged. Unlike in many business cultures, Americans do not require an introduction from a trusted source. In fact, many business relationships are forged after one party contacts the other after finding them in an Internet search. If you do this, make sure to include information about who you are and why you are contacting this person. Introductions can also be made through your country’s official consulate or trade organization with an office in that location.

What do you wish people knew about doing business in the United States before they arrive in country?

I wish that people understood how diverse we are as a people. There is not one business culture, but many. I find that especially Africans and Middle Easterners expect that all Americans live a lavish lifestyle with many servants and lots of disposable income. In fact, only a very small fraction of Americans have employed servants. And while Americans may proportionately have more disposable income than many other populations that does not mean that they spend it in similar patterns to especially Africans and Asians.

Lastly, American business expects a larger than normal amount of record keeping, especially of financial data. This means that Americans also expect foreign partners to track similar information and be able to provide that information in reports.

From your perspective, what’s the business climate like for entrepreneurs (supportive vs. unsupported, culturally accepted profession vs. not accepted, etc.)?

American flag

Image via Wikipedia

The United States has a relatively friendly and open business climate towards entrepreneurship. There are many university, government and non-profit programs supporting entrepreneurship. Entrepreneurship is particularly prevalent in population segments that traditionally have had a difficult time getting fair treatment in more established companies (women, minorities, etc.). Americans tend to idolize highly successful entrepreneurs like Steve Jobs, Bill Gates, and Meg Whitman. While the American government is trying to figure the best ways to encourage and support entrepreneurship, it often has policies that inhibit it. Countries like Israel have government programs which are much more effective.

The Cultural Tips Series has now been to Israel, Uruguay and the United States. Where would you like us to explore next? Please comment and let me know!

Onward and Upward,

Becky Park

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The International Entrepreneur – Cultural Tips on Uruguay: Insights from Uruguayan & International Business Consultant, Gabriela Castro-Fontoura

This week, I am featuring enterprising Uruguay. This is a country often overshadowed by its much larger neighboring countries: Brazil and Argentina. As entrepreneurs, we are always looking for opportunities overlooked by larger competitors. Uruguay is a member of of free trade organization MERCOSUR and has a stable economy and government. This country may be a smart choice for your future Latin American offices. Here are insights from Gabriela Castro-Fontoura. Gaby is Director at Sunny Sky Solutions, supporting businesses at different stages of expanding into Latin America www.sunnyskysolutions.co.uk.

What do you see as unique cultural characteristics of Uruguayans that comes out in Uruguay’s business culture?

Uruguayans are probably one of the most conservative yet liberal countries in Latin America. They are conservative in the way they dress for business (very formal), for example, but very liberal compared to other Latin Americans. For example, men and women enjoy probably more equal rights and opportunities than in other parts of Latin America. Uruguayans are a lot more like Europeans in the way they think than most would expect. This becomes apparent in their business dealings.

What are Uruguay’s most competitive industries in world markets?

The country still relies heavily on commodities, but things are changing. Uruguay is now excelling for example in IT and other services. Uruguay is a country of 3 million people located between two larger countries: Brazil (240 million) and Argentina (40 million). We have known for a long time that it is quality and not quantity what will make us competitive. This is why we focus on niche markets. For example, we can’t compete with the volume of wine exports from Chile but we can compete in very specific high-end varieties, such as tannat. Tourism is a key industry, with Punta del Este being the most luxurious seaside resort in Latin America. I am convinced that with our talent and passion, Uruguayans can compete well in world markets.

What’s the best way to find potential Uruguayan business contacts?

Find a way to be introduced through existing contacts. Personal relationships are key and they take time to build. You will find Uruguayans open to do business with the world and very welcoming. The Internet is a good starting point but you MUST make those calls. Emails are not very often read and often left without reply. Face-to-face is the best way of establishing a long-term relationship.

What do you wish people knew about doing business in Uruguay before they arrive in country?

The pace of doing business is slow. Things take a very long time, by North American and European standards. Don’t get frustrated if you feel you aren’t making progress, keep trying. Persevere.

From your perspective, what’s the business climate like for entrepreneurs (supportive vs. unsupported, culturally accepted profession vs not accepted, etc.)?

Uruguay is extremely supportive of entrepreneurship. Historically, Uruguay is a nation of immigrants from all over the world. You will find fellow entrepreneurs willing to share ideas and listen to what you have to say. There is a big generational gap, however, with those who have been working in the same job in the same company for decades. They are less willing to embrace entrepreneurship than the younger and more global-looking generations.

Gabriela Castro-Fontoura, Director at Sunny Sky Solutions and Uruguayan National

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