Multi-Country Culture Guide

Business Culture Guide
Argentina, China, France, Germany, India, Italy, Japan, South Korea, Mexico, Poland, Russia, Saudi Arabia, Spain & Sweden.
Contents
Introduction Argentina China France Germany India Italy Japan South Korea Mexico Poland Russia Saudi Arabia Spain Sweden
02 03 10 22 34 45 58 66 77 87 97 103 114 125 133
Introduction
This Culture Guide is the culmination of 5 years field work into the business cultures of 13 export markets. These countries were chosen as they were those for which companies had consistently requested information after encountering above average cultural barriers to trade. Although there is a plethora of information on the internet and in other published sources, the aim of these field reports was to gather data informally through interviews with companies, UKTI staff and other business support organisations in the target markets. In order to guide the questions we were to ask, a series of culture workshops was first held in the East of England through which these questions were identified. Following the visits to market & the development of these reports, a further series of culture workshops was held to test their relevance and usability. The final amalgamation of these 13 individual reports into one combined document has been financed through UK Trade & Investment East of England and the 2009-11 EUfunded Transfer of Innovation Decipher project. In total, almost 200 informal interviews and 30 culture workshops have been held to inform this publication supported by the attendance of over 180 companies in the workshops. Some of the information from these reports dates back to 2006, however for the majority we have endeavoured to update the information they contain through ongoing discussions with companies and business support staff. In this publication you will find information on the following markets: Argentina, France, Germany, India, Italy, Japan, S.Korea, Mexico, Poland, Russia, Saudi Arabia, Spain & Sweden. We are aware that information on other markets is also required by companies, and we are working on developing further resource in this area. In all cases, we recommend that companies refer to the UKTI staff in-market and to their international trade advisors for the latest cultural and market information on these countries. We are conscious that economic and political circumstances vary over time, and for this reason where possible we have focussed on generic business-related culture gathered through experience and anecdote. My own experience over the years, both from working in a multinational enterprise and a small business and from working in international government projects, is that to possess a knowledge of the culture & language of our commercial or project partners helps demonstrate commitment to the working relationship and ultimately makes doing business that much more efficient. David Owen
Director, RLN East UK Trade & Investment East of England
ARGENTINA BUSINESS CULTURE
This report is designed to support and complement existing cultural information available through the UKTI posts in Argentina (see www.rln-east. com/culture). It adds value in that it provides evidence and information from discussions and interviews with those out there in the field with regard to Argentinean business culture. Its primary purpose is to help better prepare UK businesses for approaching the Argentinean market for the first time.
The report focuses solely on Argentinean language and business culture, and has been written in an informal style to reflect the comments made by those we met. To provide a range of views and establish consistency, a total of 18 meetings, interviews & discussions were held with individuals from a broad range of business backgrounds. These included senior staff from both large companies and SMEs (mostly Argentinean), business support staff from UK & Argentinean organisations, and UKTI staff in Argentina. Our visit was predominantly to Buenos Aires, Cordoba and central Argentina. Contact details and general remit of these organisations are provided in the report. As a first port of call we would recommend the UKTI post in Buenos Aires (www. britain.org.ar). The report was based on client requests for information relating to the business culture of Argentina. The original project in 2006, financed by UK Trade & Investment East of England and supported by Coca Cola and several Argentinean businesspeople, focussed on 6 questions we have been asked by our UK clients. These were:
1. How much Spanish do I need to learn to deal efficiently with the Argentinean market, and how much English is generally spoken by the business community in Argentina? 2. To what extent should companies adapt their existing Spanish marketing and web materials into Latin American Spanish, and is there much difference between the Spanish spoken across Latin America? 3. What do Argentinean businesses perceive to be the strengths of UK companies and their managers? 4. How have companies been affected by the cycle of boom-bust which has characterised the Argentinean economy, and is this still a barrier to trade? 5. What are the main barriers which companies may face when coming to Argentina for the first time? 6. What are the top 4 tips you would give to a British business coming to Argentina for the first time?
The combined wisdom of those we met is outlined below. We would like to express our thanks and deepest gratitude to all who contributed to this project, and above all to Marisa Leoncini of UKTI Argentina, Oscar Guido Lucca of Argentine Customs and Ines Patricia Macpherson of Coca Cola, who put together a professional programme and provided all the support we needed.
Questions
How much Spanish do I need to learn to deal efficiently with the Argentinean market, and how much English is generally spoken by the business community in Argentina?
The most experienced exporters will cope with everyday business English. In general many of the smaller SMEs, however, do not have a command of English, necessitating either the services of a local interpreter or drawing on the Spanish language skills of the UK visitor. In the medium- sized companies we visited a knowledge of the Spanish language was needed to converse with the owners of the business, although some staff, including frequently the owners children running parts of the business, could speak English. A distinction was made between the basic Spanish or English required for general business discussions, and that required to convey more detailed technical or administrative issues. A knowledge of basic Spanish could therefore be very useful in establishing the beginnings of a relationship with business owners. UK companies dealing with the public sector should be aware that many state officials do not possess a command of English. UKTI staff in Argentina have a list of a number of interpreters, and although rates for these can vary depending on the type of discussions to be held, the UK visitor should be expected to pay at least 65 per day (the rate we paid with ETS www.englishtsystem.com). Further information is also available through the publication Commissioning Interpreting Services (www.rln-east.com/resources/how-to-guides). In the food and drink sector more local businesses than average find it difficult to negotiate in English, and the use of contract translators and interpreters is high. Importers usually have representatives who speak other languages, especially English. Second and third foreign languages spoken in the capital are Portuguese and Italian. Two companies we visited confirmed that a knowledge of Spanish could help in up to 50% of negotiations. One company we visited felt that language skills on both sides facilitate business and have enabled us to become market leader in our field. Another described as good practice the support they had received from a Spanish-speaking call centre acting on behalf of an American supplier. It is advisable that the UK visitor acquire some Spanish language skills before entering the Argentine market, as this will enable dialogue with the wider business community and a broader range of staff in the businesses visited. Generally speaking, Argentines in their 30s are more adept at English than those in their 50s+ who form the backbone of ownership of Argentine SMEs. UKTI SME clients can have short-term Spanish language training match-funded through the EEDA-funded Beyond 2010 management skills programme up to March 2011. Further advice is also available through the UKI publication Foreign Language Training get your messages across in the global marketplace (www.rln-east. com/resources/how-to-guides). A wide range of Spanish language training materials are also available on www. rln-east.com/materials under the General Business Language link. There is huge growth in the number of private English language lessons, and there are systematic English lan-
guage training programmes in many larger overseas corporations. 98% of pupils in private schools now learn English, and 35% of schools in Buenos Aires city are private, this figure reducing to 15% in the outlying region. British English is predominantly taught. Private language schools are working at full capacity, and there is a clear difference between generations in the amount of English spoken. A recent British Council survey of English language skills amongst Argentinean businesses found that 62% possessed no knowledge of the language, with a further 26% possessing English some skills which were insufficient for the world of work. Only 21% felt that they had sufficient English to conduct effective business, and of these over 80% were under 40 years old. We can therefore deduce that only 4% of the 40+ generation of business staff speak sufficient English. In the survey French was the second most popular language, followed by Italian and Portuguese.
To what extent should companies adapt their existing Spanish marketing and web materials into Latin American Spanish, and is there much difference between the Spanish spoken across Latin America?
Several sources quoted there being around a 20% difference between spoken Latin American and traditional Spanish. Where Argentina is a market for more medium-term trade rather than a one-off small-scale sales opportunity, literature needs to be translated into Latin American Spanish. Most countries will accept other Latin American translations. Although Argentines readily understand traditional Spanish, translating into Latin American Spanish as opposed to traditional Spanish shows commitment to the market. We noticed during our visit the use of the term castellano rather than espaol when referring to the Spanish language. Where Argentina is the only country sold to, literature should be translated into Argentine Spanish, although where a UK business is selling to a number of Latin American countries, Colombian Spanish was recommended by a number of sources as being a good starting point for generic material across Spanish-speaking Latin America. There are a number of differences between the Spanish spoken in Spain and that spoken in Argentina and Chile (such as the word for car which varies from auto to carro to coche, or computer which varies from computadora to ordenador; another example is vos as opposed to tu in Spain for you). We do not recommend the use of on-line translations for e-mails, as these often provide entertainment for the recipient at the expense of the senders credibility (one example encountered was a mistranslation of fly to Buenos Aires). Two useful dictionaries are the Longman Dictionary of UK/US English and Latin American Spanish (ISBN 0582-511550) and the Oxford Dictionary or Riverplate Spanish covering the Spanish of Argentina and Uruguay. The broadcaster CNN also have a manual of Latin American Spanish aimed at Hispanic communities in the USA. The differences between the Spanish spoken across Latin America are more evident in spoken Spanish. Localisation (and not mere translation) of literature is recommended, as Argentina is a culture which favours local reference points. Given the availability of broadband across the country it is recommended that companies localise their websites to reflect Argentinean interests. Where a flag system is used, the Argentinean flag should be displayed, rather than the generic Spanish flag.
Further advice is also available through the UKI publication Adapting Materials for International Markets (www. rln-east.com/resources/how-to-guides). UKTI East of England also run a series of workshops on website localisation (www.rln-east.com/news).
What do Argentinean businesses perceive to be the strengths of UK companies and their managers?
Key positive facets of the British were reliability, punctuality and good quality. Although British prices were generally seen as high, they were also seen as a reflection of the quality of goods and services provided. There can be a sense of disappointment if a British visitor does not come true on a promise made. Argentine businesses will usually be punctual for a UK visitor, although not necessarily punctual for other Argentine contacts. UK businesses are also considered to be transparent in their dealings. With the exception of the Falklands, Argentines have a positive image of the British, and there are many historical reference points to British-Argentine cooperation, such as the architectural and railway infrastructure. There is also a substantial British community living in Patagonia in the south of the country dominated by agriculture. We were surprised by the frequent mention of the Falklands War(las Malvinas) during our visit, although this was more centred around curiosity as to the reasons for the UK entering the war rather than any particular hostility. The Falklands came up as a point for discussion in around 60% of discussions amongst the businesses and the general population rather than the business support organisations, and our advice would be to prepare an educated response to these questions rather than treat them as negative. References to the political environment on both sides seemed to create a sense of understanding between us.
What are the main barriers which companies may face when coming to Argentina for the first time?
Most of the barriers to trade with Argentina which we encountered can be overcome by local representation together with support from UKTI Argentina, and one of the purposes of this report is to reduce the impact of these barriers by raising awareness for our clients that they exist. Many of these are generic to several parts of Latin America and not just Argentina.
How have companies been affected by the cycle of boom-bust which has characterised the Argentinean economy, and is this still a barrier to trade?
The key barrier which companies in Argentina face is the cycle of economic boom to bust which has beset them in recent times, exacerbated by strong central political influence on the macro business environment. Argentine companies we visited showed a remarkable resilience to this changing economic environment, and many of those businesses surviving events such as the 2001 crisis have maintained a conservatism in business which would help them weather any future downturn. UK companies doing business with Argentine companies established before the 2001 crisis can be encouraged that they are dealing with managers who have demonstrated the flexibility and resourcefulness to overcome even the most serious barriers to trade, and they are accustomed to dealing with cycles of turbulence. Although UK visitors need to be aware of the effects of the 2001 crisis, it is advisable not to dwell on the past or concerns over when the next downturn is likely to be (traditional cycles lasting an average of 10 years), but
rather focus on maximising the opportunities created by the size of Argentina as a potential market and generating plans to ensure stability of trade. Argentine businesses are under pressure not to lose sight of the domestic markets due to the constantly changing export environment. In recent years Argentine businesses have become more open-minded towards international trade, although this can at times be hampered by both frequent changes in import/export taxes & other tariffs and by central political attitudes to particular strands of international trade, including the food & drink sector. Argentine companies are not encouraged to export to the extent that those in the UK are, and do not receive substantial support from government to do so. This remit is held by private organisations such as the Chamber of Importers (CIRA www.cira.org.ar) and the Cmara de Comercio Argentino-Britnica (CCAB www.ccab.com.ar), who are useful contacts for navigating through the current international trade system. Good relationships with organisations such as these can often help speed up both importing and certification processes. The Chamber of Importers represents Argentine buyers, and works together with both the local European Information Centre and the UKTI post. CIRA provide tariff and customs services to local importers, and have links to government trade ministries. Membership of the Argentine British Chamber (CCAB) can be either overseas (250/yr), local ranging yearly from 170/yr to 800/yr, and the Chamber has bilateral arrangements with other Chambers for visiting UK businesses. Another export support organisation is the Chamber of International Trade of Cordoba CaCEC (www.cacec.com.ar) which offers technical support for international trade and works closely to Europe through Eurocentro CaCEC. Lead times for product registration can be lengthy, and even though corruption can occasionally be an issue, local representation can help avoid or overcome this, and it is not of a scale to warrant avoiding Argentina as a potential market. Pricing can be an issue due to fluctuating exchange rates, although high-value products and services seem to be more immune to this. VAT (IVA) for many products is higher than the UK, at an average of 21%. More foreign companies are now investing in Argentina, raising local business confidence. On the whole, however, there is not much government support for exporting, and in some cases, particularly agriculture, retention fees are levied to discourage exporting. It is not uncommon (for example) for companies to receive shipment of some machinery but await longer periods of time for associated components needed to operate the machinery. Broadband is accessible across many parts of Argentina, and the recent privatisation of the telecoms industry has opened up opportunities here. There is a strong sense of nationalism amongst Argentine businesses, combined with some social unrest as manifested by frequent but small demonstrations. The government is very protective towards domestic manufacture, and import barriers may not be restricted to tariffs but include others such as inspections. At this juncture it is worth outlining the general health of the economy and the state of wealth distribution in Argentina. The economy continues to grow at just over 9%, and the country is in the process of renegotiating
its foreign debt. The total IMF debt was cancelled in January 2006. Both imports and exports reached a 20-year high in 2005. In 2005 Argentina ranked 4th in terms of UK investment in Latin America, accounting for 7% of trade, after Brazil (33%), Mexico (26%) and Venezuela (10%). Argentina has emerged from the 2001 crisis with marked differences between the wealthy and the poor. The wealthy are purchasing expensive imported goods, giving UK companies with high-value products opportunities to make inroads into these markets. 10% of the countrys elite now own 40% of its total income, and 70% of the population are classed as either impoverished middle class or lower class. The elite include those possessing savings in foreign currency whose purchasing power has trebled after the 2001 devaluation, in addition to many export and import-related business owners.
What are the top tips you would give to a British business coming to Argentina for the first time?
A key recommendation for UK businesses entering the market would be to use a local representative who would have an understanding of the above issues and how to operate within them. Although Argentine businesses place much emphasis on social relationships, it is still advisable to have written agreements. It is also advisable to visit a contact or potential clients premises to assess their resource and capability, in preference to meeting in hotels, and to avoid Mr Fixits who promise more than they can deliver. It is advisable to back up any partnership with a legal framework to provide added protection. Bear in mind that it may take up to 6 months to build a confident relationship with an Argentine partner. Where interpreting services are required, it is advisable to provide any relevant documentation and brief interpreters in advance of meetings or presentations. It is also recommended to clarify any technical vocabulary which may be used. Personal relationships are very important, and the visitor may be invited to late meals and may experience close physical contact, usual practice in Argentina. Trust in the family often takes precedence over trust in other business contacts. You will need to allow extra time in-country for follow-up meetings. Allow time for long meals and family introductions, and remember that Argentineans prefer doing business with you as a person less than as a company representative. Try not to change the company representative visiting the market, but allow for consistency of contact. Make sure that your potential client is aware of associated import costs. Argentine businesses do not always adhere to plans and methods set by their UK visitor, and UK businesses need to allow for a certain flexibility. There can occasionally be a tendency to flout rules, and it is advisable for the UK visitor to ensure whether a rule may in fact be a recommendation. Planning for these cultural differences will help the UK visitor work within the system. Allow Argentine business more time to adapt to UK expectations, and you will need to allow the flexibility to accommodate domestic fluctuations.
CHINA BUSINESS CULTURE
This report is designed to support and complement existing cultural information available through the UKTI posts in China (see www.uktradeinvest. gov.uk). It adds value in that it provides evidence and information from discussions and interviews with those in the field with regard to Chinese business culture. Its primary purpose is to help better prepare UK businesses for approaching the Chinese market for the first time.
10
The information contained in this report is based on a number of sources, including the UKTI China culture workshops held in Cambridge (2007 - 10) which included discussions with companies and business support agencies in China, information from the UKTI China pod cast, an interview with David Owen (UKTI) and Chris Cotton (CBBC), discussions with Simon Rodwell of the company Hunter Rodwell; and several visits by RLN East project staff to China between 2006 & 2010 as part of its UKTI activity. Thanks also goes to Tom Fairley of Taylor Vinters, Joan Zhou from EEDA, and Amy Tan from Encocam for their valuable contribution of information which can be found in this report. The report complements the comprehensive information already available on China (see UKTI, BIS, CBBC and British Consulate websites) in that it aims to answer some of the more practical questions that arise when travelling to China on business for the first time, as well as providing an insight into Chinese business culture. This report is divided into five parts part 1 is the combined wisdom of those we met in Shanghai and Beijing back in 2007 and supplemented by information from the 2010 workshop in relation to the questions immediately below, and part 2 is an interview with Chris Cotton of CBBC. Part 3 contains generic information on manufacturing & the environment in China. Parts 4 contains specific questions asked by businesses from the East to a panel of experts.
FACTS And FIGURES

1. China has the 2nd largest economy 2. Largest Asian market for UK exports Projected GdP growth: 11.9% in 2010 and 9.9% in 2011 3. Exports from Britain = 5,129 billion in 2009. 4. 44% increase in exports of goods in first 8 months of 2010 to 4.5 billion. 5. Shift from export led economy to domestic demand
Good PRodUCT oR SERvICE

Clear requirements / design build in flexibility for localising Build relationships with partners understand them Plan on committing the resource Allow time Consider your IP and how to protect it Use best practice business tools but be aware of cultural differences and ensure you are understood
TREAT IT AS A ConTInEnT, noT A CoUnTRy

Guangdong Province 85 million people Sichuan Province 83 million Jiangsu Province 74 million Zhejiang Province 47 million Chongqing 31 million Shanghai 17 million Beijing 14 million
11
Part 1
The following questions were asked those we met in Shanghai and Beijing back in 2007. These have then been supplemented with responses from the companies and organisations present at the workshops. There were also discussions which arose from the panel at the 11 Nov 2010 workshop, held north of Cambridge, and discussed in more detail at the advanced workshop in Bury St Edmunds workshop on 9 Feb 2011. The panel comments and reflections are incorporated into the below questions and answers. 1. What was your first impression of doing business in China? 2. What in your experience are the main barriers or frustrations that UK companies face in China? 3. What top 3 tips would you give companies wishing to do business in China for the first time? 4. Is there a difference between generations in terms of how business is done? 5. What are the key cultural issues companies face when working in China for the first time? 6. What is the general perception of the British in China? 7. From your experience, is English widely spoken by those in the business community that you deal with? 8. Have you ever learned Chinese and, if so, did you find it difficult? 9. To what extent should companies adapt their marketing and web materials to the Chinese market?
1. What was your first impression of doing business in China?

The Chinese market is very large and very complex. There are many opportunities in China, but also lots of potential pitfalls. On one side, there is extreme wealth, on the other side extreme poverty. China has a population of 1.3 billion, but only 250 million have any disposable income. Business in China centres around relationships and people. It takes time to get to know each other and to build up a relationship of trust which is the basis for any business. This can be rewarding, but also very frustrating at times. Things move at a different pace and patience is required. Complicated government rules and paperwork can make a start very difficult.1 Despite the communist structure, the society, particularly in Shanghai is mainly money-driven.
2. What in your experience are the main barriers or frustrations that UK companies face in China?
The barriers that companies face can vary according to whether a company is setting up its own presence in China or whether they operate through an agent/partner. Whether you set up your own company or operate through an agent, Chinese business culture is very different from UK business culture. It is important to understand how the machine works. For instance, in Western culture we expect instant action and results. In China, things work at a different, much slower pace. Projects can take 3 times as long and cost 3 times as much than in the UK/Europe to get off the ground. Deadlines have a different meaning in China! Also, and most importantly, in Chinese culture personal rela-
12
tionships are paramount and come before business. The concept of face can also be a major obstacle. It means that situations should be avoided where your Chinese partners are put in a situation where they lose face (for example by contradicting them or exposing them publicly). Chinese culture is based on the principle of shame (Confuncianism) as opposed to the Western culture which is based on the principle of guilt (Christianity). When there is a problem or something goes wrong, your Chinese partners are very likely not to tell you as this would bring shame upon them. Laws and regulations are generally complex and difficult to understand/interpret. Chinese law is advisory only. It is often down to the local authorities to interpret and apply them. This can lead to great uncertainty. This problem affects particularly those companies who are setting up a presence in China. They also face the problem that business activities can be very restrictive. Companies need to apply for a business license and must not operate outside that license. There are many levels of regulations and permits and industry restrictions. Although the problem of IPR infringement seems to be improving gradually (WTO obligations are starting to take hold), there is still a major problem with copyright and intellectual property. Companies are strongly advised not to transfer any know-how without having their copyright registered locally and before having signed a contract. If in doubt, seek professional advice! Corruption is still wide-spread, although the government is starting to crack down. For large foreign companies it is less problematic, but for small companies it is much more difficult to resist. Those companies with offices in China indicated to us that there was a considerable staff retention problem. Talented and qualified (and at the same time loyal!) Chinese individuals are very sought after. They are constantly being head-hunted and do not hesitate to change jobs after a short time if a better paid alternative presents itself. Whilst in the Western culture frequent job changes can have a negative impact on a CV, this does not seem to be an issue for Chinese employees.
3. What top 3 tips would you give companies wishing to do business in China for the first time?
Do your homework and have a strategy: China is vast and complex market. Carry out a thorough analysis of your business case. Make sure that your products/services are suitable for the Chinese market and adapt your business model if required (China is not a single market). Apply the same good business principles that you would apply for a project at home. (In other words, dont leave your business sense at home!) Start small and depending on success build up from there slowly. Set yourself a target and do not lose sight of it. Invest time and money: Be prepared that things take longer. Be patient, diligent and invest time and money in your Chinese venture. Understand the culture and invest in relationships: Be polite and show that you understand the culture. Find a reliable partner to look after your interests. Sometimes you can be lucky and that person will be bilingual and understand both Chinese and Western culture. Yet the language factor should not be the decisive element. It is more important to find the best partner for the Chinese market. The language barriers can be overcome by using translators.
13
Show interest and commitment by visiting your contacts/agents frequently. Take nothing for granted and try to stay on top of things at all times. Where manufacturing is concerned, it may be a good idea to get a 3rd party involved for quality control in order to ensure that the products comply with the expected standard. If you build a presence in China, localise at the right time and firmly establish your company culture. Networking is very important, therefore participate in as many events as you can. And carry plenty of business cards with you in Chinese! These are always exchanged and this should be done with two hands, as a sign of respect. You need to visit China to do business there. You cannot expect to do it all from the UK. Paying attention to culture and the Chinese way of doing things pays dividends. For faster progress, try looking for a good Chinese business partner and/or employ a local manager
4. Is there a difference between generations in terms of how business is done?

Yes, there is a difference. The younger generation which has been raised in a society where China is increasingly opening itself up to the rest of the world, is more and more outward looking. Thanks to the availability of the internet and the modern media the younger generation is also extremely well informed. They are generally well attuned to Western life. The downside though is that having grown up after the Cultural Revolution during which the old values, including religion, were widely abolished, younger people have generally embraced money as their new ethics. Employers deplore a lack of morals which can manifest itself in low levels of trust, lack of community spirit, lack of loyalty and greed. The government, having realised this trend, is now trying to re-introduce traditional values. However, there is still deep rooted respect for the older generation which still embraces the more traditional values and is not as profit orientated. Senior people are paraded at official events as grey hair symbolises influence and respect. Consequently, it is advisable to send senior staff to important events. This also gives face to the hosts by demonstrating that they are being taken seriously.
5. What are the key cultural issues companies face when working in China for the first time?
Communication issues concept of face. Throughout my meetings and discussions, the main recurring issue was the concept of face. One should be very careful not to expose or challenge someone in public. This applies particularly to the older generation. This does not mean, however, that differences of opinion or dissatisfaction can never be expressed. There is a fine balance to strike between being perceived as being weak on the one hand and causing someone to lose face on the other hand. Confronting someone does not necessarily mean insulting him or her. There are ways of doing it, for example behind closed doors and in a polite manner and mixing criticism with praise. At the end of the day, the rules of good behaviour apply like everywhere else! Particularly for those dealing with staff in China, it is a fine but necessary art since poor performance sometimes needs to be addressed. The impact of the shame principle (Confucianism) has been explained above. People will not admit mistakes or problems for fear of shame. It is important to encourage honesty and communication and also to keep staff motivated.
14
Guanxi: The principle of Guanxi (connections) is very important in China. It runs like a red thread through a persons life, starting at family level and continuing through school, university and employment. It is a system of favours and relationships that is hard to duplicate! Rather than trying to reproduce Guanxi, try to be polite at all times and to treat people courteously. Also, dont forget to mix business and pleasure. Celebrations and banquets are important! If you cultivate your contacts and make an effort to understand the culture and your partner, your connections will develop automatically. It is also important to remember that Guanxi influences a Chinese persons decisions. There are situations where social acceptance is more important than individual desires. For instance, an offer may be declined because accepting it would mean to upset the family or social circle. Bribery and corruption: unfortunately, these still seem to be part of the business culture. Whatever the circumstances, stick to your principles and dont be bullied into compromising your business ethics.
6. What is the general perception of the British in China?

The British are generally very well liked and respected in China. They are admired for their technical expertise and organisation skills. They are perceived as efficient, yet sufficiently laid back! Chinese people are intrigued by the Royal Family and English traditions. The British are also acknowledged for their investment into China. There also seems to be a strong affinity with Germany. Apparently, German companies were one of the first Western companies to invest in China approx. 10 years ago.
7. From your experience, is English widely spoken by those in the business community that you deal with?
Young people generally start learning English at primary school. However, their reading and writing skills tend to be far better than their spoken English. The main reason for this is a lack of practice. Those companies I met seem to be able to operate in English without too much of a problem as it is widely spoken among the Shanghai business community. This is also due to the fact that the ability to speak English greatly increases career prospects. The local Chinese customer outside the big city, however, is unlikely to speak English. All companies have emphasised to me the importance of learning the language, at least to some degree, particularly those living and working in the country.
8. Have you ever learned Chinese and, if so, did you find it difficult?
It is extremely difficult and time consuming to learn Mandarin and one should be realistic about reaching any real degree of proficiency. All of our contacts in China at the time of the interviews were learning Mandarin and most of them can get buy in every days life. All agreed that it was essential to learn the language in order to understand the culture, particularly when living in China. Only one contact spoke Mandarin fluently in a business context and was able to liaise with his production manager in fluent Mandarin. We were told however, that if you speak Mandarin fluently, it is quickly taken for granted and your Chinese partners may forget all too easily that you are not operating in your mother tongue. This can lead to misunderstandings. A common problem that does not only apply to the Chinese language. At any rate, speaking the language to some degree shows interest and commitment and will be very positively received by your Chinese contacts. For those living in the country, it is a necessity on a personal and a social level.
15
9. To what extent should companies adapt their marketing and web materials to the Chinese market?
Translation and localisation of brochures and websites is very important. Chinese people are extremely keen on the internet. They are generally very well informed and know exactly what is what. When translating the website into Chinese, it is also important to make it look Chinese. That means that the entirety of the available space should be used so that the page appears very full. If you can, get your Chinese contact to check the translation.
Diversity & Characteristics of Areas of China

The following generalisations were taken from the workshop in Nov 2010.They provide an interesting insight! Beijing & Tianjin: straightforward Guangdong: decisive & full of stratagem Shandong: forthright & generous Hubei: open & direct yunnan: unhurried Shanghai: clever & farsighted Fujian: honest & sedate Jilin: reasonable & loyal Sichuan: upright Tibet: warm hearted
Discussion between David Owen (UKTI) and Chris Cotton (CBBC)

This interview was conducted by David Owen, International Communications Manager for the East of England, on 2 August 2006, however despite the fact that this was some time ago, items from this interview have been updated during the course of writing this report. It aims to provide East of England companies with a case study of experiences of supporting companies looking to establish themselves in the Chinese market, and of taking UK companies on market visits to China. It should be read in conjunction with the PowerPoint presentation of Negotiating with the Chinese available on www.rln-east.com/culture.
In your experience of taking companies to China, what is generally their first impression?
That would have to be the scale of the place with much being different to the UK. There can be a danger of feeling disorientated and somewhat overwhelmed when you first visit China. If you are in that frame of mind - and you are jetlagged too we have come across instances of company representatives who seem to abandon their usual sound commercial principles. In other words, they have agreed to things with Chinese partners which they might not have agreed to elsewhere. China is still a tremendously exciting place to visit, though.
Is English widely spoken in the business community?

The level of English varies hugely. Many people will have some knowledge of English but can often be shy or reluctant to use it, as they are concerned at the possibility of losing face if they get it wrong. If you dont speak Chinese, we always recommend hiring a competent interpreter for business meetings. There are definite advantages to being able to speak some, or even a lot, of Chinese, as it shows you have a level of
16
commitment and indicates respect. The language can be difficult for foreigners to learn, but if you can say a few things in Chinese - offering a toast, for example - that goes down very well. If a company is really serious about developing its business in China, I would encourage its representatives to make an effort to learn some of the language. In the main commercial centres in China there will be signs in English and there is a huge effort to get things into English. There is also a growing interest by people to learn to speak English.
What about East of England companies learning the language?

Mostly it is Mandarin which is spoken, as it is the official language of China, but there are numerous dialects. Business meetings are usually conducted in Mandarin, but can be heavily accented. I have talked with representatives of companies trying to learn Chinese, and I can honestly say they have felt it to be a positive experience - particularly once they have had the chance to use it with the Chinese themselves. Their pronunciation may not be perfect, but it has always gone down very well and all those I have met have benefited from the experience. Chinese grammar is simple compared to German, for example, but where it gets complicated is when you start to learn the characters to read and write. The actual structure of the language is easy, but it is a tonal language, so if you get the tone wrong you can be saying all sorts of things!
Some people say that China as a market is more suited to the bigger players, and that it can be too large for an SME to enter. What would be your take on that?
The bigger UK companies are certainly likely to be there, but if your product or service is right for the market you can succeed. We work with companies large or small - even two-person operations - which provide a service the Chinese are prepared to pay for. However, all companies that are successful in China have recognised the need to devote significant time to the market. It is not a market for a quick win, and you need to build into your business plan time to establish & nurture your contacts. The rewards are there if your product or service is right and you persevere. To help with this there is a lot of support from a whole host of different organisations. We work closely with the UKTI international trade teams and CBBC carries out most of the OMIS reports for UKTI in China. We are constantly encouraged by the large number of delegations we host from China, and, all other things being equal, Chinese companies still have a willingness to work with British companies. The British seem to have an affinity with the Chinese, and we still tend to have a good reputation in China. We are admired for playing by the rules, and certain aspects of UK culture are similar to Chinese for example, the reluctance to blow your own trumpet; not wanting to embarrass people in public - and we tend to understand the concept of saving face better than some other nationalities.
What are the main barriers or frustrations that UK companies face in China?
Frustrations can occur when companies travel a long way to get there and spend a not insignificant amount of money, and then there is an over-eagerness to get results quicker than is likely to happen. For example, negotiations tend to drag on or stall, or follow-up doesnt happen as quickly as you would like. Relationships are the key - you need to persevere with relationships, and not lose your cool. Devote time to this & accept the different pace of things. Sometimes you wonder where its all going when suddenly the pace will pick up for no obvious reason. There are different cultural niceties, but
17
theres really very little that you can do that will really cause offence. Correct behaviour is expected during interactions Education is celebrated Businessmen expected to behave responsibly in the community Reluctance to resort to formal legal proceedings Chinese very sensitive to western criticism in politics and business.
And what about the system of guanxi?

Yes, guanxi sometimes termed as value-laden relationships - which means the building up of a network of contacts to help you succeed in all aspects of life in China. This is something that harks back to ancient Chinese beliefs and ways of doing things and it can be a complicated concept for Western people to grasp. Its a moot point as to how much real guanxi Westerners can build up themselves.
do companies you deal with stick mainly to the larger cities, or do they venture out into the provinces?
As costs continue to rise in the major centres, companies are starting to go into the provinces, but there is still a keenness to focus on the main cities such as Beijing, Shanghai, Guangzhou etc. However, our role is to help familiarise the company with the best possible options for its business. Setting up a facility elsewhere may have better tax breaks or may be a cheaper, more effective option. It is important to remember, however, that you are not dealing with a single marketplace or cultural identity in China and there are often subtle differences between cities, regions & provinces.
What top 3 tips would you give companies travelling to China for the first time?
Keep a business head on, and dont be overwhelmed by scale and the obvious differences. Sooner rather than later you will encounter a Chinese banquet and these are great fun - eating all sorts of interesting things! - and the banquet is a crucial element of doing business in China. It is a ritual that you need to go through and, hopefully, enjoy although it is a bit of theatre. It used to be something of an endurance test, but now they follow much more of a pattern with a steady procession of dishes, with toasts at various points. Dont drink too much! It can be easy to get carried away and get drunk especially if drinking the local firewater such as mao-tai. You also dont have to empty your glass when you ganbei. If you really dont want to eat something, say so politely but dont make song and dance about it. If you have been invited to a banquet and you are a vegetarian or have specific dietary requirements, do let your hosts know in advance. It is polite and will avoid any unnecessary embarrassment. At the meal, you dont need to finish everything on your plate, as your hosts may think you havent had enough. They assume that you are still hungry and that they havent done their job as a host to feed you adequately.
What are the Chinese like with telephone communications?

The Chinese telephone manner can be confusing, as there are various aspects to it. Mobile phones are always on, and are always being answered, and this is not regarded as being rude in any way. If youre back in the UK trying to call Chinese partners we recommend that if you have got someone who can speak Chinese to use them - it can be frustrating trying to get through, being put on hold, or people just not coming back to the phone as they dont fully understand who you want to speak to or what you want to discuss.
18
In my experience there has been the occasional exaggeration of competence or scale when Chinese company is presenting ones business have you ever come across this?
There can sometimes be the odd exaggeration or over promise in a keenness to get your business. But it can also work the other way.
Is IPR (Intellectual Property Rights) still a problem in China?

Yes, there are problems. China actually has some of best IPR laws in the world, but there can be problems with enforcement. There are growing instances of Chinese companies having their IP stolen by other Chinese companies, and there is a growing eagerness by the Chinese to sort this out. Companies must build the danger of IPR infringement or theft into their risk assessment before going into China. You need to have a game plan in place to protect yourself as far as you can before it becomes an issue. With other legal issues, if a dispute arises, our suggestion is that you try to resolve it without recourse to the courts, but there will be occasions where this is not possible. It is common for disputes to be resolved without going to court, and this is where the whole guanxi thing comes into effect, with mutual contacts acting as mediators.
Chris any final comments?

Our top five tips for doing business in China can be summarized as: 1. do your homework. Before anything else, carry out proper, in-depth research on the market for your product or service in China. 2. Gain an appreciation of the cultural niceties of doing business in China. Try and learn some Chinese. 3. visit the market. See firsthand the opportunities for your company in China. 4. Cultivate the best contacts you can in China and take time to develop and nurture this network. 5. With the right product, all small or medium sized companies have as much chance of success in China as the big organisations.
Chris, were very grateful for all your input, and thank you once again for your time.
David Owen and Chris Cotton between them have 45 years experience of working in China and dealing with Chinese business culture.
19
Part 3
Manufacturing and the Environment in China
China has selected thirteen sustainable cities which are showcases for sustainable and environment projects. Geographically, the programme should target locations which are included in the thirteen sustainable cities list and also have a local automotive industry. There is a need substantially to increase Chinese understanding of UK skills and capabilities in new-energy vehicles and these cities are identified as open and interested to hear from UK manufacturing companies. Most promising Business opportunities: November 2010. The most promising business opportunities are to be found thorough: The provision of technology and engineering expertise to support Chinese customers development programmes. The current low volumes and the pressure to manufacture within China makes component supply a less plausible option Working with those larger Chinese VMs identified as leaders in this report who have long-term, adequately financed new-energy vehicle programmes Focusing on mainstream hybrid and pure electric technologies. Chinese companies are less interested in more radical or long term new energy solutions Begin able to offer proven solutions, and to demonstrate a record of proven success. Chinese customers are reluctant to act as a new technology test bed Addressing areas of specific Chinese weakness e.g. engine and battery management systems, integration systems and software, advanced transmissions. China has not yet found a solution to the extra costs associated with new-energy technologies UKTI China Manufacturing report 2010.
China consumers generally prefer products that have a proven track record of reliability, and secondly they will want re-assurance that new-energy vehicles can be maintained and serviced as easily, and economically, as their conventional rivals. Concerns are also expressed about the unproven safety of NEVs and the potential for fire within battery systems. The Chinese will make decisions on what to buy based on economic grounds rather than through altruism or the desire to be seen as a trendsetter. Full information and details on the automotive sector in China can be found at UKTI website: http://www.ukti.gov.uk/export/countries/asiapacific/fareast/china/sectorbriefing.html UKTI has published report on China and the manufacturing sector, the report is very detailed and extensive and covers topics such as, doing business guide, FCO updates, sector information, country information, overseas security information for businesses. It also includes a general introduction, preparing to export tips and information, how to do businesses, what the challenges are and business etiquette and tips on how to invest in China. The report is available for free at: http://www.ukti.gov.uk/export/countries/asiapacific/fareast/china/doingbusiness.html In recent years, the government in Beijing has become increasingly vocal in its support of clean energy. China has expended vast sums of political and economic capital to ensure that it dominates the global clean energy sector. To that end, in 2009 China invested $34.6billion, almost twice as much as the US, ranking it for the first time number one for overall finance and investment into clean energy.
20
Part 4
At the workshop held in Cambridge in Nov 2011 there was a Q&A session for businesses to question a panel of experts. The results of these discussions are below: 1. There is no official UK government payment protection scheme to protect companies from bad debt in China, however there are the usual export credit guarantee schemes which financial organisations run. 2. The Chinese are very brand hungry, and there is a sufficiently large urban population of wealthy families who can afford to buy branded goods. It is a status symbol which sets them apart from everyone else. However, brands would need to be focused on those geographical areas which are more economically advanced. IPR and brand infringement cases are more Chinese-on-Chinese than overseas business driven, and enforcement is becoming tighter. 3. There are few shortcuts to doing business in China, although the combination of oMIS and EMRS (UKTI core services) are helpful in developing a structured and informed approach to the Chinese market. Most UK exporters the panel had come across experienced clients exporting via a local agent or partner rather than directly to the customer. 4. It is highly recommended to visit China, preferably more than once, before committing to the market. It is worth considering towns further inland from the coast, as cities in these areas are of interest to the Chinese government in terms of development and investment. CBBC has started to establish offices outside the traditional favourites such as Beijing, Shanghai & Guangzhou. For instance, there are now offices in Hangzhou, Wuhan, nanjing and Chengdu. 5. Honest and open dialogue occurs at all times, in particular however once relationships are build with Chinese counterparts and they feel more confident in their dealings with others. Chinese may first wish to develop a sense of friendship before feeling confident in business. This is demonstrated in the use of former classmates or family connections in business.
21
FRANCE BUSINESS CULTURE
This report has been adapted from the UKTI field culture report written in dec 2007 and had been updated with current information following the France business culture workshops held in Cambridge in April 2010.
22
This report is designed to support and complement existing cultural information available through the UKTI posts in France. It adds value in that it provides evidence and information from discussions and interviews with those in the field with regard to French business culture. Its primary purpose is to assist UK businesses in their dealings with the French market and to help understand its business culture and etiquette. This report was written originally by Lia Mulholland for UKTI East of England, and adapted by Trudi Harrowven of Dialogue Language Services. It also has up to date information from leading business experts from France who visited the UK to run a workshop in April 2010 with local businesses from the East of England. The information contained in this report is based on a number of sources, including discussions with both English and French businesses. Thanks also goes to our guest speakers, Annie de Luca business experts from UCO Brittany and Sylvie Brichet, ADIT Bretagne. The report focuses on French language and business culture. It is designed to sum up the comments made by those we met. Several meetings, interviews & discussions were held in the UK and in France with French and British professionals, SMEs representatives and business support staff based in France or trading/working in France. We would also like to express our thanks and our warm gratitude to all who contributed to this project. We are particularly indebted to Chris Fitzsimons, John Gearing, Chris Cox, Sarah Parker, Isabelle Agostini, Marie-Hlne Gouon, Mme Irmgard Franois from CCIP (Chambre de Commerce et dIndustrie de Paris) and the staff from UKTI. The following remarks represent a synthesis of their views. The project, financed by UK Trade & Investment East of England and Leonardo focussed on 8 questions we have often been asked by our UK clients. These were: 1. Is it important to speak French to do business in France? 2. What are the differences between France and the UK in a general business context? What are the opportunities for UK business operators? 3. France has a reputation for red tape 4. What should one expect in meetings? 5. does French practice differ in terms of working hours and holidays? 6. How does France position herself in relation to Europe? How are British business people seen in France? 7. Are there significant regional differences in France? Should marketing material be adapted accordingly? 8. What points of business etiquette should a newcomer be aware of? 9. The business market in the Region of Brittany
23
Is it important to speak French to do business in France?

There was a unanimous agreement on the importance of speaking French. As one of our contacts put it: If you cant answer the phone in French and write a simple letter or even say hello and how are you in French then forget it. However, once you have struggled to say a few words in French, often they will then warmly greet you with their good English. Like the UK, France is a former colonial power which has had to deal with the dismantling of its empire. It is therefore proud of its civilisation and language and resents the English language, often seen as a post-war symbol of American cultural domination. A few years ago, a reader of Le Monde, wrote in to complain that you come across more English words today in Paris than you did German words during the German occupation! In consequence, speaking French is a central issue, in particular with reference to English. France is a multicultural society, yet immigration is not always integrated into the fabric of French society. Recent economic stagnation has engendered an atmosphere of general pessimism and social volatility and unrest in many banlieux (inner cities). France keeps close links in the world with French speaking people (as a first or second language) which constitute la francophonie (the French speaking people and areas, 49 countries) and endeavours to promote French language (Ministre de la Francophonie) and preserve its purity (Acadmie Franaise).(see Annexe 4) French multinational companies insist on using French, even if the broader language context is English: for example, a prominent French bank demanded that all its internal communications be in French, even if they took place between its staff in Germany, Australia, or the US. Most French multinationals use French as their internal business language, while their German, Spanish or Italian counterparts would use English as theirs. It is essential to speak a little French for social niceties, and you certainly get credit for speaking French at a social level. However, be sure your French is fluent before using it in negotiations, as your language weakness could be held against you, especially if the negotiation is confrontational. The French are not as understanding as other nationalities of mistakes. If you are unsure of your French, start with social French then ask for the meeting to be held in English or use an interpreter. How much English do the French know? In multinationals or government at management level, fluency in English is becoming a must. However, You cant do business outside Paris without a good level of French, as one of our interviewees put it. Most French people will have done some English at school, but the majority are no linguists, and will not be keen to use it (though they might understand more than you expect). Some, on the contrary, after investing years of hard work in learning the language, will be enthusiasts and will use any opportunity to practice their English. In medium or small companies, or in the provinces, this is less true, and you find plenty of people who are unable or unwilling to speak English. To deal with France, it is therefore crucial to learn the language. It will generally be possible to find a person who can read printed material in English, especially in some sectors like IT, however the French will expect you to produce material in French if a
24
long term working relationship is to be established. As we were told in no uncertain terms: Make sure your website has at least a summary page in French, and /or employ a French agent or distributor. Translate the brochures on your most profitable items or the ones you think should sell in France into French and have it checked by a French person with some knowledge of your market. Above all, dont feel too daunted by this. French is not a difficult language to learn and all of those people we spoke to stressed how much they enjoyed working in France. Further information and guidance can be found in the How-To-Guide Foreign Language Training available from your international communications advisor (www.rln-east.com/resources/how-to-guides). Useful topics to cover in a beginners workshop would be the basic pleasantries, giving and understanding opinions, dialogues with taxi drivers, and some basic information about the company. For details of support in Yorkshire and Humber for language & culture training contact RLNYH Limited (www.rlnyh.com). In the East of England check www.rln-east.com/funding, as there are several support projects currently run.
What are the differences between France and the UK in a general business context? What are the opportunities for UK business operators?
France prides itself on its history, and sees itself as a Latin country, heir of the rational Graeco-Roman civilisation, but do not expect it to be too Latin. Business-wise, it is no olive belt country. It is closer to Britain or Germany in its no nonsense business attitude. The business style in France is fairly similar and compatible with that of the UK. You can expect the country to be well organised, good at time keeping, reliable. The stress is on results. What often first strikes British businessmen , is bigger government. France is closer to Italy or Spain as far as state intervention is concerned. The French government is well organised and efficient. The centrality of government is omnipresent: from the imposing Arc-de-Triomphe, a bold statement at the very heart of Paris, to the French tricolore that you see hanging in every government building. France also appears more left wing, more socialist to post-Thatcher British people brought up on the principles of a free market economy. Social issues are central to both leftwing and right-wing governments. Equally, state intervention is not questioned by either. This general attitude can be summed up in the slogan of the French Parti socialiste (roughly comparable to the Labour party in Britain) Accepter lconomie de march, mais non la socit de march (accept market economy, but not a market society). The French believe the state represents them. From the revolution onwards, the French have seen themselves as citizens rather than subjects. They are much more conscious of the state and its role, and of their rights. France is the country of La dclaration des droits de lhomme et du citoyen, the first prescriptive codification of human rights. The French revolution (1789), better known abroad for the excesses of the Terreur, the guillotine, and as a forefather of Communism, is celebrated and commemorated in France with Bastille Day (14 juillet, Fte Nationale). The French national anthem, La Marseilleise is a revolutionary song. It was a momentous change that marked French values: republican virtues, rigour, meritocracy, intellectualism all stem from it. One consequence is the eagerness for change, the readiness to tear the pavement up, if need be. The country is prone to robust industrial action. The omnipresence of revolution appears in marketing as well. A recent advertising campaign ran with the slogan the Music revolution (MP3), the technological revolution.
25
You might expect such a society to be very egalitarian. The opposite is true: France is more hierarchical than the UK and in business you need to be very aware of this. However, hierarchy in France is not determined by birth, but by intellectual achievements, technical preparation, diplomas and so forth. The importance of study and certificates cannot be overstated. The top echelons of state and business are educated in the same top Universities, called Grandes coles such as E.N.A. (Ecole Nationale dAdministration) , HEC, (Haute cole de Commerce) or cole Polytechnique. There, they make valuable connections & forge useful alliances. There is therefore a jobs for the boys network at play that favours French companies and services (le piston, les rseaux). We were told: we lost an order to a company from Lyon whose apparatus was much bigger than ours and which therefore did not fit inside the relative humidity chamber so it sat around unused for several years before they did buy ours. The head of purchasing went to the same school as the head of our competitor in Lyon. France values experts & technocrats. The decisions are taken from the top down. So, dont be daunted. Insist: if your case has merit, if you can bring savoir faire (Know-how), technologies, if your product is sound, you will make a success in the end, as did the company cited above and many others among our contributors. Napoleon is another landmark in French history. An outstanding general with a robust legal mind, he pacified and organised the country after the roller-coaster period of the French revolution. He created a strong central government, firmly led by Paris, and 96 administrative districts, (Dpartements), in alphabetical order (see annex 3). The Napoleonic code, where every aspect of life is examined and regulated, is still the basis of the French legal system. This is the root of French dirigisme, or centralised power, applied in business as much as politics. This centrality of government has never been challenged in France. The current president Sarkozy was elected on an institutional reform ticket. He is declaredly pro American and pro business. He is undoubtedly active and energetic. He is a moderniser. However, it is doubtful that France will ever go for less state.The French government supports French enterprises, acting to keep them under French control. France has a protectionist bias, tempered by its membership of the EU. In France there are many multinationals and not so many SMEs, except in the food and drink sector. New companies are encouraged, but the majority of French people prefer the safety of a secure job (fonctionnaires) to the risks of starting a small business (petit entrepreneur). As a whole, French society tends to be conservative and risk-averse. Rationality is an important national characteristic. You will be expected to be logical, and your arguments will be expected to be rational. Britain is more pragmatic. France is a more intellectual and a more formal society. It has a penchant for intellectual debate and intellectual pursuit. Culture is at the forefront of peoples interest: France has the highest budget for culture in the world (1% of GDP). There are plenty of opportunities for UK professionals and enterprises, in many fields. Pragmatism will give an edge to UK businesses in many situations. Perhaps surprisingly there is scope in catering, and more predictably in the IT, technology, science, retailing, health, construction, real estate and finance sectors. If you intend to move there or to start a company in France, get the proper background research and informa-
26
tion first. UKTI, the British consulate and French chambers of commerce will be your first ports of call with a wealth of fundamental information. The French generally think of the British as the English (les Anglais) The feelings are mixed: the English are seen as eccentric and difficult to fathom. The Celts are in Brittany: the Scots, the Irish , the Welsh, the Bretons appear as closer relatives, due to the Celtic languages. Breton is used in education, with about 5% of all pupils in Brittany being taught at bilingual schools. All Breton universities teach some courses in Breton. If you have any Celtic blood you may find that this tends to go down well with your French contact Financial support for training in French in the East of England is available via the ESF-funded Beyond 2010 project, which provides 70% funding. For more details see www.rln-east.com/lace.
France has a reputation for red tape

To UK business people, France can seem obsessed with obstructive red tape. There is certainly more bureaucracy & more lengthy procedures to be respected, the infamous paperasse (the heaps of bureaucratic papers and forms to fill in). This can tax anybodys patience (including that of the French themselves). The Napoleonic code mentality is at play again: there are rules and regulations that apply for every single situation. However, this has positive as well as obviously negative aspects. It is confusing for foreigners. On the other hand, if the procedures are followed scrupulously, the machine proves effective. The French state is well organised and on the whole efficient. There are higher taxes (particularly hypothecated charges, akin to Britains National Insurance), but excellent public services: health, education, transport etc. The French love credit cards, numbers, codes. You need a door code to enter a block of flats or to open your hotel room door. Cash is very seldom used in any commercial transaction. Residents own a Health Card (carte dassurance maladie) that contains all the information about the holder (from blood group to health history, allergies, drugs taken), all you need to do is to hand them to the chemist to be given exactly the drug prescribed. No one is worried about the compulsory carrying of I.D. (Carte didentit). It is also useful to know that the French love qualifications, so if you have a degree or doctorate make sure that you convey this to your French colleagues as educational achievement is still linked to hierarchy within the workplace. Before you engage with French bureaucracy, get all the facts you need, and double check them. Plenty of help and support is at hand. Play the system. It works. It is important to also acknowledge the red tape of the legal elements of business. you must be aware international law does not exist in France, the country runs following national laws. In France the civil law is followed In UK the common law based on judicial precedents is followed It is important to choose the correct law in the business contract In international contracts the French will often go to arbitration in order to settle disputes (confidential, neutral)
27
What should one expect in meetings?

Meetings are to the point. After a little small talk (possibly in French, it does help!), people get straight down to business, much as they would in the UK. At this stage, insist on switching to English or use an interpreter as appropriate, if your French is not really fluent. It is important to dress appropriately & smartly. It is as statement of position, power, hierarchy, all important to establish in France! Dont expect to speak in turn, or to be asked your opinion. Fairness, political correctness, team spirit are not strong themes in French business culture. Life is expected to be unfair (cest la vie). Business women found business gentlemen charming. Paying personal compliments to a woman is accepted as a due by French women, and not found discriminatory. The best advice with all of these tendencies is to be prepared for them, and go with the flow; getting yourself wound up will simply create hostility. Remember that this is the French way, rather than an anti-British or sexist attitude. In particular, a robust exchange between professionals in France is not personal. Dont expect too much give and take. People are not necessarily ready to meet half way. Expect a logically structured debate that examines all sides of the question. Be well prepared for negotiations, ready for questions from experts. Expect a grilling, with in-depth questioning to gauge your preparation and reliability. The French are meticulous when it comes to examining information and proposals. Bring plenty of information in written form for your French counterpart to examine. Hard sell tends to backfire. Presentations should be factual and well-organised, and having an eloquent argument will lead nowhere if it is not supported by logical, rational and proven evidence. In France a meeting is seen as chiefly informative, a statement of positions, rather than a decision making forum. Issues are not necessarily resolved in one session. The negotiation process can be longer, and require many meetings (which all the British interviewees found frustrating!). In meetings the French tend to be very direct verbally & very assertive. Direct questions sound abrupt to their British counterparts (what are you saying exactly? What is this expected to do?) They are in reality probing questions. Strong statements are being made: je ne suis absolument pas daccord! (I disagree totally! where a British counterpart might have said: I fear we might not be seeing eye to eye on this one. It is simply a clear statement of position. No hard feeling involved. Do not take it personally. Dont lose your temper, just respond in kind. Make your views and how you feel known, clearly. On the contrary, the French are very formal & very polite in writing. They do like to waste time with little formalities and courtesies and lots of letters to and fro, as one of our interviewees puts it. A business letter demands an appropriate introduction, a main body, and a conventional conclusion. It is a very formal business! Where a British business person would end his letter with yours sincerely, or even regards, his French counterpart will end with a formula like this: Je vous prie de bien vouloir agrer, Monsieur/Madame,
28
lexpression de mes salutations les plus distingues (Literally, it means: I pray you, Sir/Madam, to accept the expression of my most distinguished greetings). There are several formulas of this sort. It is acceptable for an email to be sent to a business partner, but be aware that it is considered less formal. If you write in French you should end your email with the word: Cordialement. If your French is not that fluent, buy yourself a book on writing French letters or ask a French speaker (possibly with some competence in your field) to check it for you.
does French practice differ in terms of working hours and holidays?

No, the French are not always on holiday, but they are more frequently so than in the UK. Les vacances like les week-end are sacred! This is part of French quality of life. The paradox is that the French workforce is very efficient, with very high productivity. The French work less hours per week (35), have more annual holidays, with a minimum of 30 days off, to be taken from May to Oct (priode lgale). In August most of the economy is closed, with everything grinding to a halt. But this may be changing: President Sarkozy has recently de-taxed overtime, trying to quietly put the 35 hour week to rest. nouvel an (new year) Lundi de Pques (Easter Monday) Fte du travail (labour day) Fte de la libration (Armistice day - 1945) Ascension Fte nationale (Bastille day) Sainte Marie (Assumption) Toussaint (All Saints) Fte de lArmistice (Armistice day - 1918) nol (Christmas) 1 January variable in March or April 1 May 8 May variable in May 14 July 15 August 1 november 11 november 25 december
What we would call bank holidays fall on any day of the week, allowing staff to faire un pont (to bridge, to make a bridge) to the nearest week-end, taking the days in between as leave. Just check before hand when the national holidays will be, keep in mind bridges, forget about business in August (July can be tricky too) and dont expect offices to be opened there because they are in the UK. To generalise, office hours are normally 8.30 to 6.30 with a long lunch break from 12 to 2. A lot of French women dont work on Wednesdays (childrens day), so dont arrange a meeting on a Wednesday!
How does France position herself in relation to Europe? How are British business people seen in France?
France, one of the founder members of the European Union, certainly sees itself very much as a driving force of the European project. That said, recently French citizens have felt betrayed by promises of prosperity perceived as unfulfilled, by a loss of control in Europe itself and in France, a loss of sovereignty (the changeover to the Euro, quite traumatic for some, is blamed for rampant price rises), by an extension of European borders without their consent, and so forth. In France there are different visions about what Europe (as the EU is frequently referred to) should be. However, there is not a single political party in France which is declaredly against the European Union. France is
29
quite proprietorial as far as the EU is concerned. The French might be quick to criticise the Union, but might resent other nationals doing so. The French will generally think of the British as the English (Les Anglais), upsetting as this might be for other inhabitants of the UK. The feelings are mixed, maybe due to a closely inter-related history with Britain, perhaps, making them cousins and enemies at the same time. France fought England during the Hundred Years War, a defining moment of Frenchness. Jeanne DArc, heroin of French resistance, is the patron saint of France. It also fought the UK on the side of the American colonies, and it fought for world supremacy until the 19th century (when Britain had the bad taste to prevail!) However, since Victorian times, lentente cordiale has prevailed and the UK and France have been allies in the past two Worlds Wars. Apart from its debt for Libration, the young in France have been falling under the charm of Cool Britannia since the sixties. The Celts, if differentiated, are more popular: the Scots on account of vieille alliance, the Irish as they appear romantic, victims of the English, the Welsh as closer relatives, if not long lost cousins (Les Gallois, Welsh are related in French minds to les Gaulois, their own Celtic ancestors). So if you have any Celtic blood you will find that this tends to go down well with your French contacts. Les Anglais are seen as eccentric and difficult to fathom, not clear and sincere, not quite committed, sitting on the fence. There is some rampant Anti-Americanism in France, and some find the UK too close to Uncle Sam. They are also seen as cool & self controlled. On balance, especially in business, the British have a positive image: very efficient and pragmatic (they are, after all, in Napoleons own words a nation of shopkeepers). British business people feel appreciated in France.
Are there significant regional differences in France? Should marketing material be adapted accordingly?
One of the charms of France is her massive regional variation, going from the snowy high mountains, (Pyrenees and Alps), to the dramatic Brittany coast or the sunny Mediterranean. This difference is reflected in landscapes, climate, architecture, food and the people, subject to cultural influences from neighboring countries, not to mention some distinct local languages such as Breton or Occitan. However, this regionalised France has until relatively recently been kept together and firmly governed from its head - Paris. Its 22 relatively devolved regions were only created in 1982. ( see annex 2). Paris still has a fairly central role though, remaining firmly in the driving seat. France has bi-cultural border regions; so, like their neighbours in the Mediterranean regions of the South, bordering Italy and Spain, people are expected to be warm, friendly, not always respectful of deadlines or engagements. In the North West, on the Atlantic: Normands are seen as quiet, not eager to take sides or make hasty decisions. Bretons are seen to be hardworking. In the continental North East, Alsaciens and Lorrains are expected to be stickers for time, cold and efficient. The food, surnames and local expressions reflect these cross-border influences.
30
Though everybody recognises this variety, people are proud to be French. Parisian style prevails in business, and no real difference therefore was cited on how business is done or how products are marketed across France. As one of our interviewees puts it, Be prepared to read up on lots of French literature and be patient. Also find out the relevant French societies and entities which cover the areas and join them and go along to their local meetings. It is a very good way to meet some potential customers. If your marketing goes beyond some leaflets, the best route is to seek advice with UKTI or French speakers with a specific knowledge of your field before you invest in a major advertising campaign. If you have a good product which does things better than their own or is easier to use then you will succeed but it may take time to achieve this. Further information and guidance can be found in the How-To-Guide Adapting Materials to International Markets available (in the East of England) from your international communications advisor (www.rln-east. com/resources/how-to-guides).
What points of business etiquette should a newcomer be aware of?

The general consensus amongst our witnesses was that France was more formal than the UK. Remember this in your dealings. Use surnames and titles (Monsieur le Prsident Directeur Gnral is the French for Chairman or executive manager), use the polite form of address ( vous) unless asked otherwise, and respect seniority. The personal space is closer than in the UK. People stand closer, shake hands on arrival and departure. Often, between men and women or between women, a bise is exchanged (this is a light peck on each cheek). Appearance, presentation, dressing well are all important factors in French business. Dont forget that Paris is capitale de la mode (fashion)! The way you dress is a symbol of your status, your position & your power. You are expected to wear a well cut suit, and have accessories (shoes, socks for men, shoes, handbags, jewelry for women) to match. If you are dressed too casually, too informally, you are not going to be taken seriously. Appearance is important and can work against you, if you dont take proper care. It is important (though not indispensable) to establish a rapport to facilitate business. To build a positive personal relationship is the best way to be trusted, so time spent to make friends is time well spent. However this is still business dont confuse this advice with the idea that you and your family should mix with business colleagues out of the office: that is another matter see below. Eating and drinking well are quite central to the all-important quality of life in France. Every shop and business closes down between 12 and 2 for a lunch break. French business people will assume the same applies for you. A djeuner daffaires can be a time-consuming affair, but generally it will be a pleasant experience! It is rather different to one of those sad occasions in which people continue a meeting while munching on a sandwich. This would be considered as a deliberate insult by French people so take care if you host French business guests in the UK. In France, you are more likely to go to a top restaurant aux frais de la Princesse (at the expense of the company or the government), seen in France as part of the benefits of business. However, dont raise business concerns before the end of a meal. If you entertain visitors, take time for proper meals; choose
31
a good restaurant, in preference with local specialties, as French people like to try local food - there is a huge regional variety in France, and it is one of the pleasures of traveling. They will expect to do the same in Britain, and have le rosbif! In France, business (or the working sphere) and social life are kept generally apart, people dont tend to go out socially with their business associates. Often in the UK people expect to bond, while in France an excessive familiarity can be seen as frivole, pas srieux (frivolous, not serious). Keep your distance, especially if you are in a senior management position. Of course, there is no reason not to build eventually a personal friendship in consequence of a lengthy business association. Then families will be involved and the informal tu become appropriate. A rule true all over the word if you want to want to endear yourself to the locals is praise, dont criticise. France is no exception here, bien au contraire! ( quite the opposite). Do comment positively on the country and whatever is working well for you, and keep criticism to yourself, or minimise and contextualise it. As one of interviewees puts it: I also drove a French Renault Espace, which helped break the ice, I think, and always complimented their wines and cheeses. Below is a table to illustrate some of the clichs and false stereotypes of French business culture and compares this to UK business culture.
Clich of French Business Culture

French market to consider after succeeding elsewhere (US, M.E.) Difficult market to enter: - Cultural & language barriers - Regulatory barriers - too much trouble - Fragmented market/system Bureaucratic healthcare system takes too long to enter French buy French and/or dont buy British Interpret rules to suit themselves
Reality of French Business Culture

Good springboard for other EU & non-EU markets No-easy market - We are here to help - Compare with the US or the NHS
For the French, UK system is not that easy too Be patient and invest time & money France: more and more open economy Every country tends to protect its industry
In the two tables below, cultural differences in management styles (table 1) and orientations (table 2) are highlighted, the diagram also pays particular attention to contrasts between the UK and France, and more importantly, the similarities perceived as cultural barriers for doing business with France. Table 1
Management Styles in France

Principle-minded Thinks circuitously Distrusts simplicity Tends to overcomplicate Feels he never gets full, sophisticated answers from an Anglo-Saxon Prefers logical arguments to reality
Management Styles in UK
Fact-orientated Thinks linearly Distrusts complexity Tends to oversimplify Feels he never gets straightforward questions from a Frenchman Empirical, trial & error, experiments with reality
Table 2
Cultural Orientations France

Theoretical: deductive reasoning oriented Roman Catholic Centralised Quality of life oriented Power and relationships oriented Avoids uncertainty
Cultural Orientations UK
Pragmatic: inductive reasoning oriented Protestant Federal High achievement oriented Profit and task oriented Bold in risk taking
32
TEN TOP TIPS

Nail the language down. Prioritise improving your French. Greet people in French, to establish a friendly contact, and if you are not so fluent in the language, then state you will speak English, or use an interpreter. Remember France is more formal than the UK: use surnames and titles (Monsieur le Prsident directeur Gnral), use the polite form of address (vous) unless asked otherwise, respect seniority. Shake hands on arrival and departure. Appearance is important. Dress smartly (suit), this is a symbol of status. Take time to make friends, to eat, drink, and relax. The importance of eating and drinking in France cannot be overstated. dont raise business concerns before the end of a meal. If you entertain visitors, take time for proper meals; choose carefully your restaurant, in preference with local specialties. Presents or social niceties wont influence decisions, but taking care of details (tre civilis, sophistiqu) shows care, interest and respect, and facilitates business. Be positive (give praise where it is due, keep criticism to yourself). Make sure you are negotiating with a person with decision power. Dont expect immediate decisions. French people will want to know who is in charge, and will want to know if a person has decision power. They will expect to deal with senior elements of a company. Come well prepared. In meetings the French tend to be very direct verbally & very assertive. Do not take it personally. It is simply a clear statement of a position. do the same. Keep your cool, but be firm and decisive. on the contrary, the French are very formal, very polite in writing. If your French is not that fluent, buy yourself a book on writing French letters or ask a French speaker to check your letters for you. In France, business (or working sphere) and social life are kept generally apart. dont expect to socialise with business partners (clients/suppliers etc) or colleagues outside your normal working life. Do your homework. Familiarise yourself with the country, the region you are targeting, and the specifics of your field. Get a clear picture (if necessary doublecheck) of rules and regulations governing all the aspects of your undertaking. Plenty of support and information is available. (UKTI, CCI etc). Do not underestimate or try to bypass what seems useless bureaucracy. The system may be daunting, but in fact it works quite well and it is worth taking the time to do everything by the book. do not be confrontational with those in authority, it will not work. Be patient. Enjoy what France has to offer!
Everybody we spoke to found it a very pleasant experience to do business and/or live in France but they cautioned that you need to understand it in order to succeed. The final piece of advice is to embrace the country and culture. A business opportunity can also be an opportunity to relax and enjoy what the country has to offer. France is the worlds number one tourist destination, with 82 million visitors a year. Its food, wines, fashion, shopping, entertainment, monuments, not to mention its landscape and climate are justly world-famous and might prove a valuable collateral aspect to your business activities.
33
GERMANY BUSINESS CULTURE
This report has been adapted from the UKTI field culture report written in dec 2007 by Martina Shorts & david owen for UKTI East of England. This 2010 report provides background information on both the cultural and business differences that a British businessperson visiting Germany needs to have at his or her fingertips. We also have contributions from our German business colleagues who presented at the decipher Germany culture workshop in September 2010. our thanks go to dr Ralph von Strandmann of the Automation Partnership and Bettina Ewer from Audi Germany for their contribution and valuable research .
34
A separate section of this report has been dedicated to the advanced manufacturing sector. This is supported by other sections which contain relevant information specific to manufacturing, such as packaging and recycling issues. This report has been adapted and updated with current information gathered by RLN East (UKTI) and our UTKI colleagues based in For further details on how to commission a report on more company sectorspecific information, available under the British Governments Overseas Market Introduction Service (OMIS), please contact your nearest UK Trade & Investment (UKTI) representative.
Top Tips
Confirm appointments and be on time
If at all possible always confirm appointments in writing. Try and be on time or better still be a bit early. This may give you the added advantage of having time to get a feel for how the office or factory is functioning before you go into the meeting. If you are running late, ring up the company you are visiting and let them know.
Meetings are more formal

Meetings in Germany are, generally speaking, more formal than in the UK, and your appearance and behaviour should be too. A suit and a tie should be worn. A firm, but not knuckle-breaking, handshake when greeting and parting is always part of the ritual.
Titles
Titles are important, so if Herr Mller is a Doctor or Professor use Herr Doktor Mller or Herr Professor Mller. Women, except those serving you in restaurants or if obviously still teenagers, should never be addressed as Frulein. Always use Frau Mller or if she has a title Frau Doktor Mller. Some people may tell you to drop the Doktor, in which case you may do so.
First names - not to begin with

Unlike in the UK, the use of first names is not as prevalent amongst colleagues in a German company and certainly not with visitors, though with American and British influence it is moving that way. Your host may well accept or even suggest that using first names is OK in order to make you feel at ease, but remember that if you were a German he probably would not do so. Should your German be good enough to carry on a conversation in that language, do not on any account use the familiar second person singular Du for you, but stick to the polite form Sie, also you. If the personal rapport is really good, then perhaps the change from Sie to the more personal Du can be made at some time in the future over a beer or two in the local restaurant, however it is also quite acceptable to use a first name and still say Sie.
Small talk and hard facts

Time is money in the minds of most German businessmen, and generally speaking at a business meeting they will want to get down to the heart of the discussion quickly. This means having all the facts at your finger tips and being well prepared with trade literature in German, or at least an insert in that language, and prices in EURO. Your literature should concentrate on technical details about the product or service. A certain amount of small talk is in order, but is best kept until the end of the meeting.
35
More direct
Without intending to be impolite, Germans tend to be more direct when it comes to expressing views or making statements and will expect the same from you. Therefore be careful not to use typical English sentences like - we may be able to deliver - when what you really mean is - there is no way we can deliver. Your host will only understand that you can deliver.
dont give up
Keep returning to Germany to remind people that you are committed. Persistence pays!
A funny thing happened on my way to see you!

Sarcastic or black English humour should be used very sparingly. It may backfire on you if it is not properly understood and could cause embarrassment.
Company Questions
Is it true that the Germans are direct, and should we be equally direct?
Yes, this is true. Not because they want to be, but because of the way they communicate and the German language has a bearing on this. Would you mind terribly if does not really exist in German, certainly not in such a convoluted way. There is no fuss over politeness as there is in England. The English contact should not necessarily adopt this directness; stay truthful to your own culture. The typical English way of doing things can be appreciated by your foreign contact, although going straight to the point would not do any harm. Setting out your objectives in a clear manner, without codifying your language might put you in an advantageous position. Dont use idioms, and keep your language simple. Germans often appreciate the first name term practice that the English adopt and are sometimes relieved to use it themselves. Germans generally want to know everything in detail and will ask probing and very direct questions about a product/service. This can be misunderstood as rudeness, when really it shows interest. Once the German person has all the details and is satisfied with the information, he/she will be very much committed.
Can you give some examples of where communication has gone wrong?
Yes, once when an English contact said well go away and think about it. The German delegation were horrified because they thought that that meant they had been dismissed and that it spelt the end of the negotiations. Always remember that if your contact is speaking English, this is not their mother tongue you should always summarise meetings at the end in order to avoid any misunderstandings. Another area where problems or misunderstandings can arise is German punctuality. When a delivery date is given, it generally means that the Germans will do their utmost to stick to it and they will expect the same from their business
36
partners. Problems can occur where other nationalities have a different concept of time and do not consider time of the essence.
Is it true that all Germans speak good English?

No, the older generation in particular often doesnt. Young German business people, who are widely traveled, would however. But some of them would not speak well enough to conduct a business meeting. Do not take it for granted that contacts within SMEs will speak English.
What, as a German, are your impressions of British business culture?

That the approach to doing business is fairly relaxed. English people tend to use understatements often, they therefore do not necessarily trumpet their own achievements or the advantages of their product. Also, English people tend to work longer hours and hold more meetings.
Are there any issues relating to German company structure that English contacts should be aware of?
Yes, employee structures are more hierarchical in Germany staff will probably not have the same relationship with their manager than staff in England might have. Germans would not necessarily communicate in the same way amongst themselves. The manager-staff relationship would not be as relaxed as in most English companies.
What are the differences between the German spoken in Germany, Austria and Switzerland?
German is a language with several standard versions spoken in different countries. Austrian German and Swiss German are varieties of the German language, distinguishable by their accents. This is quite different from the local dialects which are spoken in the different parts of Austria (Austro-Bavarian, Allemanic, Vorarlberg, etc). Swiss German (Schweitzerdeutsch) is another version of German spoken in Switzerland, and there are different local dialects (mainly Allemanic) in the different parts of German speaking Switzerland. Within Germany itself, the German language varies greatly according to the region. Germany is divided into 16 states, or Bundeslnder, with the federal capital in Berlin. Each state has its own capital and regional government, as well as its own customs and local dialect/accent. There are many cultural and linguistic differences between the predominantly Lutheran Protestant North where High German (Hochdeutsch) is spoken, and the mainly Roman Catholic South with its various dialects (the dialects of Swabia, Hessia, Bavaria and Bade, to name only a few). Between the different standard versions of German spoken in Germany, Austria and Switzerland, there are differences in pronunciation, vocabulary and grammar. Particularly in the legal, administrative and culinary areas, the vocabulary can differ in the three countries.
37
If I speak Standard German (Hochdeutsch), will the Austrians and Swiss understand me and will I understand them?
It is important to remember that Standard German is the official language in all three countries. It is generally taught at school and used in the written language. This is quite different from the local dialects spoken in the different regions of Germany, Austria and Switzerland which can be very difficult to understand, even for German native speakers. A Northern German, for instance, can have great difficulty in understanding a Bavarian and vice versa. Usually, a persons dialect or accent gives away where he or she comes from. Generally, Germans, Swiss and Austrians will make an effort to speak Hochdeutsch with someone who does not understand their local dialect. They may still have a different accent and intonation from pure Hochdeutsch, but generally they can be understood and they will certainly be able to understand you since Hochdeutsch is the common denominator. Sometimes, however, local accents can be quite strong and this can lead to problems. Particularly in a business environment, people will make an effort to speak clearly. However, do not feel shy to say so if you have difficulties in understanding.
Are there differences in the business practices between different German Lnder, and Are there differences in character shown by the people in different German Lnder?
Business practices are generally the same. Due to the cultural and linguistic divide between Northern and Southern Germany, business practices may vary slightly in so far as the North has a tendency to be more formal, whereas things can be more relaxed in the South. There are many cultural and linguistic differences between Northern and Southern Germany. This also becomes apparent in the character of the people in the different German Lnder. It is difficult to generalise, but people in the North have a tendency to be more formal and introvert than people in the South who can be perceived as warmer and more extrovert. The landscape certainly also has an influence. Looking at the wine growing areas of Germany along the rivers Rhine and Mosel for instance, there is generally a great deal of joviality and humour. But every part of Germany has its own qualities and characteristics and it is generally good advice to take people for what they are.
Are those Germans who live in the West of the country more likely to speak French as a second language, than English?
It is certainly true to say that the proximity to France has an influence on the German Lnder bordering France. This becomes apparent in the local cuisine as well as in the desire of people on both sides of the border to understand and to communicate with their neighbours. In Baden, where the river Rhine forms a natural border with France, there is a possibility to learn French in primary school. Sometimes, basic French is even being taught at Kindergarten level. Still, English is generally acknowledged as the most important foreign language and is therefore generally the first foreign language that students learn. However, in the Lnder bordering on France, there is a possibility to learn French as the first foreign language.
If I am invited to visit a customer in Germany should I go visit them?

If you are invited to visit a customer it is definitely recommended to go to visit them. Nothing is better than face to face discussions and for a customer to see and touch your product or design. It is often the case that if you are asked to visit it is not a question of would you like to come but often a case that the invitation is more of a formal request for a meeting and to discuss your relationship and products. It may even lead to more sales!
38
What are the rules about packaging in Germany?

With regards to the manufacturing or consumer retail sectors in Germany the question of packaging is very important. If a company is serious about exporting it would be worth the investment in translations for labels etc. To make it more cost effective for printing the labels for stock you could, of course, have more than one foreign language on the packaging, e.g. packaging for European markets with German, French & Spanish. German language packaging could also be used for sales to Austria and Switzerland. A sticker with German instructions enclosed would be enough for the German market. If you are selling to the younger consumer retail market for example it is even more important for the customer, i.e. child - who will often be the main decision maker when it comes to what toys are bought - to be able to read the packaging. Something further to bear in mind regarding packaging for the German market are the recycling regulations this is know as the Green Dot system.
The Green dot - der Grne Punkt

The German Packaging Ordinance that came into force in 1991 stipulates set targets for the collection and recycling of all consumer and industrial packaging. Manufacturers or retailers have to take back used packaging and are responsible for its environmentally friendly recovery. They also have to produce documentation of how this has been undertaken. For goods imported from companies that are registered in another European Union country, either the importer or the exporting company can be held responsible for collecting and recycling the packaging. The German retail trade and manufacturing industry have established a system administered by the Duales System Deutschland - DSD - to undertake the collection and recycling on behalf of all parties in the sales chain. A fee is charged by the DSD for the use of the green dot symbol which exempts a company from its obligation to collect and recycle its packaging as well as producing proof that this has been done. The revenue raised is used to finance the cost of the collection and recycling.
39
General Information
The Economy
The German economy - the fifth largest economy in the world in PPP terms and Europes largest - is a leading exporter of machinery, vehicles, chemicals, and household equipment and benefits from a highly skilled labour force. Like its western European neighbours, Germany faces significant demographic challenges to sustained long-term growth. Low fertility rates and declining net immigration are increasing pressure on the countrys social welfare system and necessitate structural reforms. The modernization and integration of the eastern German economy - where unemployment can exceed 20% in some municipalities - continues to be a costly long-term process, with annual transfers from west to east amounting in 2008 alone to roughly $12 billion. Reforms launched by the government of Chancellor Gerhard SCHROEDER (1998-2005), deemed necessary to address chronically high unemployment and low average growth, contributed to strong growth in 2006 and 2007 and falling unemployment, which in 2008 reached a new post-reunification low of 7.8%. These advances, as well as a government subsidized, reduced working hour scheme, have helped to explain the relatively modest increase in unemployment during Germanys 2008-09 recession - the deepest since World War II. GDP grew just over 1% in 2008 and contracted roughly 5% in 2009. Germany crept out of recession in the second and third quarters of 2009, thanks largely to rebounding manufacturing orders and exports - primarily outside the Euro Zone - and relatively steady consumer demand. The German economy probably will recover to about 1.5% growth for the year 2010. However, a relatively strong euro, tighter credit markets, and an anticipated bump in unemployment could cloud Germanys medium-term recovery prospects. Stimulus and stabilization efforts initiated in 2008 and 2009 and tax cuts introduced in Chancellor Angela MERKELs second term will increase Germanys record budget deficit, which is expected to exceed 5% of GDP in 2010. The EU has given Germany until 2013 to get its consolidated budget deficit below 3% of GDP. A new constitutional amendment likewise limits the federal government to structural deficits of no more than 0.35% of GDP per annum as of 2016.
Germany is decentralised
It may not be immediately apparent, but Germany is very decentralised. As everyone knows, London is definitely the capital and focal point for the English, and Paris for the French. However although Berlin may be the capital of Germany and seat of the Federal Parliament, Hamburg, Cologne, Dsseldorf, Frankfurt, Stuttgart, Munich and other major cities are regarded by their inhabitants as being more important when it comes to how their daily lives are run. With the exception of Cologne, the cities above along with others, are the capitals of one of the 16 Federal States (Bundesland, pl. Bundeslnder) each with its own parliament (the picture shows the plenary chamber of the North Rhine-Westphalia government). This can for example mean that although the Federal Government may issue a directive, it is the job of the individual states to action it. This can lead to minor differences in the way, for example, the states run their police forces, set up their schooling systems, implement building regulations and support businesses. In other words for a businessman looking for the overall authority, there is often not one government body that needs to be consulted, but 16!
40
Schooling
Pre-school education is provided by institutions (mainly Kindergrten) catering for children from three to six, the age at which they usually start school. From the age of six, they are obliged to attend primary school, known as the Grundschule. Following the primary school stage at which all children attend mixed-ability classes the organisation of the secondary schooling varies from one state to another. However the following types of schools exist in the majority of the Lnder (NB The translations given offer the nearest equivalent only): Hauptschule Realschule Gymnasium Gesamtschule Junior high school Secondary modern school Grammar school Comprehensive school
Public schools in the English sense and private schools are not so prevalent in Germany, and carry a slightly negative image of being crammers for children unable or unwilling to cope in the state schools and whose parents are able to pay the hefty fees. Further education follows at technical colleges or universities. The system of doing an apprenticeship is the norm in nearly every trade or profession and is more often than not coupled with vocational schooling (Duale Ausbildung) in a Berufsschule. A very detailed, but no longer quite up-to-date report on schooling in Germany can be found at: http://www.eurydice.org/ressources/eurydice/eurybase/pdf/0_integral/DE_EN.pdf
Religion
There is no state church in the Federal Republic of Germany and the Roman Catholic and the Protestant Churches make up approximately a third of the population each, though the number of people actually attending church is dwindling rapidly. The Free churches and the Greek Orthodox Church as well as the Jewish communities are also represented amongst others. There are an increasing number of Muslims living in Germany, particularly amongst those migrants originating from Turkey.
Healthcare
On the whole German patients are spoilt compared with their British counterparts needing to see a doctor or have an operation. With some exceptions waiting times are short and the standard of medical care is good. The German healthcare system is decentralised, with central government having very little executive responsibility for the provision of healthcare. Federal and State (Land) governments are responsible for the maintenance of the public healthcare system. Roughly 90% of the population are insured with one of the over 200 Statutory Health Insurance (SHI) or public sickness funds. The SHI also insures 6 million Germans who have additional private health insurance. Around 8% of the population are privately insured. Depending on which Health Insurance company they are members of, Germans pay between 12.5% and 16% of their gross earnings towards insurance coverage. For private insurance payments are higher, and vary considerably depending on the benefits on offer. On top of the above, every patient has to pay 10 to the first doctor they visit in each quarter. This is a government initiative to try and reduce the number of people using medical services unnecessarily. The government has also reduced the number of medications
41
that a doctor can prescribe, unless the patient or their Health Insurance is prepared to pay the full cost. Otherwise patients pay a percentage of the retail price of each medication up to a maximum of 10. All insured persons are issued with plastic identity cards which enables the doctor or hospital to read off basic information about the patient. Further information on the German healthcare system can be found in English on the website of the Federal Ministry of Health: www.bmg.bund.de
Food and eating out

If your appointment with a German businessman happens to be around midday, he may suggest continuing your discussion over a meal. He will know where to go and depending on the circumstances you should at least offer to pay. It is unlikely you will be invited out to an evening meal or be taken to your hosts home, but this may happen later if the business relationship is long term. Various regions have their specialities, such as the knuckle of port pictured on the previous page, and you should ask the waiter what is typical. But be warned, portions can be quite substantial. Germany has a wide range of beers and wines, many of them brewed or grown locally, and you should take the opportunity to try them out. The Germans are proud of their Purity Law (Reinheitsgebot) for beer brewed in Germany. But exceptionally (see the chapter on regulations) foreign brewers selling into Germany do not have to abide by this law. In most pubs and in some restaurants it is the custom that the drinks you have been served with will be noted by the waiter or waitress making ticks on a beer mat at your table.
Do German work practices differ from the UK in terms of working hours?

Productivity and working hours
Productivity in Germany is very similar to the UK, although at one time it was definitely higher, and for several years the German unions felt safe in propagating the 35 hour working week. But in the face of the threat of massive job cuts during a period when the strength of the German economy waned, a 37 - 38 hour week became the norm in industry, and anything up to 40 hours, and sometimes over, for office workers. Factory and building workers start between 06:30 to 07:30 hours, office workers between 08:00 and 09:00.
Wages
Wages are comparable to the UK, though this will depend on the profession and / or the position within a company or organisation. As yet there is no minimum wage, a controversial issue supported by the unions, but not by the employers federation, nor by the majority of the members of the Federal Government.
Retail opening times

Retail opening times vary considerably depending on locality. Non-food shops generally open between 09:00 and 10:00 and close between 18:00 and 20:00. Department stores usually stay open longer than other retailers, and there is a trend for supermarkets to be open between 07:00 and 22:00 Monday to Saturday. The only shops that open on Sundays are bakers and those attached to petrol stations.
42
Trade Unions
Most of the major industries and professions, e.g. metal working, engineering, chemicals, building, transport, hospitals, etc. have unions who together with the employers unions work out a tariff covering wages and working hours, usually applicable to the whole country, but not necessarily. The Confederation of German Trade Unions (DGB - Deutscher Gewerkschaftsbund) is the umbrella organisation for trade unions in Germany with eight member unions. Further information can be found under http://www.dgb.de/sprachen/englisch/dgb.htm
Festivals
In the early part of the year Carnival is taken very seriously in some parts of Germany, and although employers are under no legal obligation to allow their employees to have time off or in lieu, more often than not they do. Therefore unless you want to join in the festivities, it is best to check in advance and perhaps chose another time to undertake your visit. A prime example of a festival period is Rosenmontag (Rose Monday which takes place 48 days before Easter Sunday) and where in the cities of Cologne, Dsseldorf, Mainz and surrounding towns carnival processions take place over a long weekend. In southern Germany Karneval is known as Fasching. Munich not only celebrates Fasching, but also their famous Beer Festival which takes place over two weeks in September. The simple title Oktoberfest, hides the fact that it is in fact now held in September.
Is it important to speak German in order to do business in Germany?

Must I speak German?
Not everybody has the ability or the time, so what are your chances of doing business in Germany only speaking English? There is no straightforward yes or no answer to this question, as it depends on a number of factors. If you are dealing with someone from middle management upwards, the chances are they will speak very good English or certainly enough for a general conversation. If the company is an international company or used to dealing with overseas customers or suppliers, your chances will also be good. Those Germans who are confident of their language ability usually welcome the opportunity to practice their skills on you.
not everybody speaks English

On the other hand when talking to regional distributors, technicians and engineers or people at shop floor level, you may find these people have skills, but not necessarily those which include languages. Junior government or municipal officials are also less likely to speak English and the same applies to people from what used to be known as East Germany above the age of about 40, as Russian was their first foreign language.
denglisch
Unlike France where traditionalists go to great lengths to forbid the use of any anglicisms, the English language has steadily permeated everyday German, and politicians, dignitaries, scientists and schoolboys talking about computer games take great delight in using English words to replace perfectly good German terms.
43
Trade literature
However, no matter how well a German businessman understands English, when it comes to technical details, trade literature or even more important, signing a contract, they will want to discuss it and see it in German. If you can check beforehand whether the person you will be meeting understands English, and if not, take along an interpreter, it may well be worth the extra cost as it can make the difference between obtaining or losing a contract.
Umlauts
At some stage you will notice that many words have what are called Umlauts (, and ) in them. Even if you cannot quite master the pronunciation, in written form, particularly if the option should not be available on your keyboard, you can get round it by placing an e after the letter, i.e. = ae, = oe and = ue.
Show commitment
Above all show commitment by following up any leads that come your way, and do not overlook the fact that Germany is a buyers market. In other words, in most cases the Germans will not come to you, but rather expect you to go to them. Unless it is quite clear and for obvious reasons that business will not be forthcoming, do not take no for an answer. Keep going back at regular intervals to remind people you are committed to doing business. Germany is not the worlds third best exporting country without reason, and Germans will quickly see and evaluate how professional, or not, your sales operation is.
Germany has a reputation for being over regulated. True or false?

The answer to this question is - yes it is true. However there are advantages as well as disadvantages in this state of affairs. The advantages are, if you want to sell a product or service in Germany you can usually find a law, directive, regulation or norm which covers it. In other words you know exactly where you are and can manufacture the product or offer the service to meet local requirements. In this day and age a search on the Internet will usually provide the answer, though admittedly not always in the English language. German industry and businesses are also well organised through Chambers of Commerce (unlike in the UK membership is obligatory) and Trade Associations. Other regulatory bodies exist for banking, insurance, the building industry, drugs and medical equipment, etc. The disadvantages include what on occasions would appear to be a certain amount of protectionism. Do not therefore assume that because you are selling your electrical equipment, toys, paints, vehicle accessories, etc. in the UK and other EU countries, you can automatically sell in Germany. Products already tested in the UK to meet safety standards often need to be tested again in Germany, a process which can be both expensive and time consuming. Although re-testing is not necessarily mandatory, you will stand little chance against your German competitors without the blessing of a German testing institute such as TV. Further details can be found at http://www.tuv.com/de/en/index.html. On the whole, although they at times complain about it, Germans accept a regulated way of life as they feel it provides a framework of security.
44
INDIA BUSINESS CULTURE
This report is designed to support and complement existing cultural information available through the UKTI posts in India (see www.rln-east.com/ culture). It adds value in that it provides evidence and information from discussions and interviews with those in the field with regard to Indian business culture. Its primary purpose is to help better prepare UK businesses for approaching the Indian market for the first time, and is meant as an informal introduction to Indian business culture for our clients.
45
The information contained in this report is based on a number of sources, including discussions with both English and Indian businesses and business support agencies in India, material from the UKTI (RLN SW) publication Doing Business in India, information from the UKTI (RLN EM) culture sheet and pod casts, and a UKTI trade mission visit accompanied by project staff to India in October 2007. It also has up to date information from leading business experts from India who visited the UK to run a workshop in June 2010 with local businesses from the East of England The report focuses solely on Indian language and business culture, and has been written in an informal style to reflect the comments made by those we met and to share answers to questions that were put forward by local businesses to our India Culture Business experts. To provide a range of views and establish consistency, we have cross-referenced comments from a number of sources as identified above. This report is a combination of the findings made in the field report which focuses on businesses we met in Mumbai, and, is then balanced by the India Business Culture Workshop that was hosted in the UK by Leading experts who gave detailed information on business culture specifically focusing on Time, building relationships, negotiation and communication. As a first port of call we would recommend the UKTI posts in the cities of New Delhi, Mumbai, Ahmedabad, Kolkata, Chennai, Bangalore or Hyderabad. We also recommend the support of our workshop deliverers, the company CrossCultures Business Consulting, who are based in the UK and Mumbai. Specific thanks go to colleagues at UKTI Mumbai and Lina Bilkha & Ann Means of Cross Cultures Business Consulting, who provided us with valuable information. Although the report focuses on answers to specific questions posed by clients, it is important to emphasise the similarities between Indian and British business culture due to the countrys strong historical link with the UK. These similarities are outlined in the response to question 1 below. When in India, the practical advice in-situation from a distributor or other contact can be invaluable and will save you from having to remember all the intricacies of Indian business etiquette. It is also important to note that changes in attitude to business partnerships with India have started to take place. Where previously it would be saidI come to India to do business because it is cheap is being replaced with the statement I come to India to do business for the value and quality.
46
Generic Information
First, some generic information on the countrys economic performance: trade and investment is increasingly becoming an important component of the economy mobilising GDP growth to reach new highs of over 10%. A simultaneous slowdown in population growth post 2000 has also accelerated per capita income growth by over 4% per annum. India is now the worlds twelfth largest economy by market exchange rates and the fourth largest in PPP terms (2007-2008) after the USA, China & Japan. Liberalisation has triggered the growth of a rapidly expanding consumer class. The increased use of consumer durables portrays this feature. Though the western economies are still struggling for growth, the Indian economy is expected to grow at over &% in 2010. However growth continues to be unevenly distributed. The States of Karnataka, Andhra Pradesh, Tamil Nadu, Gujarat, Maharashtra, and West Bengal continue to grow at a faster rate than their populous counterparts such as Bihar, Madhya Pradesh and Uttar Pradesh. Unemployment and income disparities continue to trap around 25% of the population below the poverty line. Indias slow paced yet consistent reform programme has reduced economic distortions and has increased external and internal competition. The public sector role both as producer and consumer of goods and services is declining, although still significant - the public sector now accounts for a quarter of GDP, one-third of investments and one-sixth of final consumption expenditure. This is expected to fall gradually as privatisation programmes gain momentum in the coming years. Indias privatisation initiatives have enhanced the attractiveness of state-owned assets in sectors with a promising future such as telecoms, oil and gas, pharmaceuticals, financial services, real estate development, infrastructure and travel and tourism.
Business Responses to UK SME Questions:

The report now addresses 6 main questions and 4 other considerations. These questions are those raised by UKTI clients we have talked to: 1. What are the main similarities to UK business culture? 2. What are the main differences to UK business culture? 3. Are there cultural differences between the various regions of India? 4. What meeting & negotiation styles are used? 5. What about the language is English sufficient for everyday communication? 6. What about the intricacies or formalities of greeting and social graces? 7. Indian cultural time operations 8. How to build relationships with your Indian counterpart/business partner(s) 9. How to negotiate in business 10. Communication techniques, tips and methods for practice. 11. What are the main similarities to UK business culture? India is a very large and complex country. Many business people will have had a western or western style education. The business language is English, and the country also has a similar legal and business framework to the UK. India has a substantial middle class, a skilled workforce and an increasing purchasing
47
power. In large cities, business meetings and entertainment are conducted as in Western countries. Indians are known for their hospitality towards strangers, and although initial business meetings are likely to be held at offices or hotels, it is not unusual for business associates to be entertained at home. You must be prepared to adapt your offering to the Indian market. For example, successful consumer product exports are often innovative, lower-priced versions of their UK equivalent. Any advertising or other promotion should be adapted to take account of Indian culture. The establishment of large western companies, particularly in the hi-tech and IT sectors, has increased as these organizations not only find the cost savings here important to their bottom lines, they welcome the large pool of educated hi-tech labour, young people who have chosen to stay in their home country when offered opportunities from incoming multi-nationals.
What are the main differences to UK business culture?

India is an ancient civilization and its people have a predominantly religious attitude to life, marked by clear authority structures and distinct social status lines. The Indian government is committed to breaking down caste differences; however, it is important to remember that certain values and attitudes enable Indians who live in extreme poverty to understand and accept their lot in life, even if it is not easy to bear. India is one of the most ethnically diverse places in the world, and its distinctive culture is the product of numerous waves of migration over several thousand years. It is a nation of contrasts: though it is economically self-sustaining, 46% of its adults remain illiterate. In contrast, Infosys Park in Bangalore, Indias equivalent of Silicon Valley, generates $4 billion per year and has an annual growth rate of 50% whilst elsewhere more than 300 million Indians live in abject poverty with no pure drinking water, primary health care or basic sanitation. Although there is an increasing number of senior professional women women in business is a relatively recent phenomenon in India. Female visitors will be treated with courtesy and respect, however your contact may at first be a little uncomfortable, with for example shaking hands (see section on greetings below). In such situations care needs to be taken to develop the relationship slowly. Pollution is prevalent in the major cities, although measures are being taken in many cities to combat this
Are there cultural differences between the various regions of India?

There are clear differences in the dispersal of wealth across India, and several clusters have developed which have influenced the shape of business culture. On the whole the business culture of Mumbai will be
48
similar to other major Indian cities, and it is probably more relevant to focus on the specific business culture of growth sectors and where these are located. Hi-tech IT clusters have developed both in Hyderabad and Bangalore, and these bring with them the development of western business and office practices. As a slightly extreme example, in one large Indian IT company in October 2007 HR policy was introduced to specify the appropriate type of clothing to be worn by female staff as they started to dress down & be less covered and thus had become a distraction to some of the male colleagues. The creative & media sector focused around Bollywood in northern Mumbai would adopt a similar business culture to other worldwide film clusters. Some cities are considered more business-friendly than others. At one business meeting we discovered that some considered one city (I cannot state which in this report) less business-friendly and did not attract the same level of investment as its equivalents in other parts of the country.
What meeting & negotiation styles are used?

Make appointments in advance and confirm one week before arriving and once you have arrived. Arrive on time. Indians appreciate punctuality, but dont always practice it themselves. Be prepared to spend time getting to know each other before talking business. Send any agendas and back up materials in advance, and follow up the meeting with an overview of what was discussed and the next steps. Take plenty of business cards, and exchange these after the initial handshake. Put your title and any qualifications on your card, present it formally with either both hands or the right hand, and with your name towards the recipient so they can read it when it is handed over. Try to use your contacts title (professor etc) when initially speaking with him/her, and when entering a meeting room greet the senior staff first. In some organizations/sectors (but not all) it is customary to use formal modes of address throughout, in others first names are the norm. Take your cue from those around you but err on the side of formality. Seating is likely to be hierarchical, and time will need to be spent on general conversation at the start of the meeting. People may tell you what you want to hear. Dont assume a smiling face means acceptance, it can also signify understanding without agreement, thereby saving face for all parties. It is often advisable to confirm agreements verbally as well as by interpreting body language. Stressing your common aims can help win round a conversation. In meetings, take plenty of time to build up trust before getting down to business. Always present your business card (you do not need to translate it into an Indian language). It is important to maintain harmony, avoid conflict and confrontation during discussions. Mask any feelings of frustration with a smile. Negotiators tend to be sensitive to honour, saving face(izzat), dignity and self respect. It is important not to allow your host to lose face(avoid, for example, contradicting your host in public). The most senior person will make the decisions, and if he is not at the meeting you are at the early stage of negotiation. Decision making can be a slow process. Dont lose your temper as that means you lose face
49
and are seen as untrustworthy. Hierarchy and status can have a profound impact on decision-making, with the decisions usually left to a senior colleague in the organisation who is often a significant family figure. A contact may need to refer his/her findings further up the organisational hierarchy. In meetings subordinates would usually not question, contradict or interrupt a senior colleague, and in an office environment may even stand when the boss enters the room.The hierarchical nature of Indian society demands that the boss is recognized as the highest individual in authority. When establishing business contacts, aim for those in the highest position of authority since decisions are made only at this level. In any event, you will often find that subordinates are reluctant to accept responsibility. Sometimes a meeting can be prolonged as the other person is on the phone. The caste system, while it remains a feature of Indian individuals lives, and affects public service organizations through a system of reservations for the underprivileged (a kind of positive discrimination), is unlikely to prove a feature of your business experiences in India. Concessions are expected in price and terms, so you can expect them in return. Concentrate on building rapport, and do not be confrontational or forceful nor disagree in public with other people on your team. Indians will accept your word as your bond. Politeness, praise and respect are important and avoid making Indians feel hurried, as they dont like to say no. In Indian culture a direct No can be seen as rude so silence or we will try may be used instead. Successful negotiations are often celebrated by a meal. A gesture you will notice is a distinctive rotational move of the head. When done with a smile it can mean yes or I understand. Dont point with your finger, that is rude, and Indians point with a jerk of the chin. Indian society is based on personal relationships, and a gift or reward for personal services is not always regarded as corrupt, although offering inducements in advance to influence contracts does happen. Paying bribes to prevent a form being obstructed is not uncommon, but many foreign firms operate successfully without engaging in this practice In business risk is embraced, and innovation and pushing boundaries is encouraged. The success of Indian software companies demonstrates this. Be prepared to take time to build relationships, as Indians want to do business with people they know and trust. Show your own qualifications, business successes and abilities, and stress that you too value partners who are honourable and trustworthy. You must be willing to be a patient negotiator and not become visibly frustrated or angry. Being aggressive can be seen as a sign of disrespect. Decision making can be slow, but by being flexible and aiming for a win-win you can develop a long term business relationship. Westerners can sometimes be seen as arrogant and even patronizing if they voice criticisms of aspects of India. Understandably Indians are sensitive to criticism and wish to be treated with respect. Dont get frustrated with the bureaucracy and length of time it can take to get things done. You need to have a good rapport with contacts at various levels within the organisation you are targeting, particularly as this can help to expedite some of the paperwork or other red tape. Do not feel irritated if your contacts appear curious about you or your more personal details such as income, family, age etc these are acceptable
50
questions in the Indian context. If uncomfortable with personal questions it is fine to explain that in the UK we are not used to speaking about certain aspects of our lives. You may find that your Indian partner wants to take a controlling share in your UK business.
What about the language?

The official language is Hindi. There are 17 other official languages including Bengali, Gujarati and Urdu. English enjoys associate status but is widely used in national, political, and commercial communication. Over 800 dialects are spoken, and the Indian constitution recognizes 18 regional languages. Of these the main ones recognized by UK visitors are Hindi, Gujarati, Punjabi, Tamil & Urdu, the remaining state languages are Assamese, Bengali Kannada, Malayalam, Marathi, Oriya & Telugu, and the remaining Indic, Dravidian & classical languages are Kashmiri, Konkani, Manipuri, Nepali, Sanskrit & Sindhi. Hindi is written from left to right in Devanagari script. Few people in the south of India speak Hindi, which is the traditional language of the north, and this has hampered efforts by the Indian government to replace English with Hindi as the national language. English is the first language of many educated Indians, and continues to be used as the common language which has the widest acceptance across the different regions of the country. In the south of India Tamil is widely spoken, as are Malayalam and Telugu. It is not usually necessary to translate literature and other promotional material (including key website information) into Hindi. Although many distributors deal with foreign suppliers, it is useful to have an Indian interpreter on hand, and the positive impression you will make by learning to speak a few basic Indian phrases cannot be overestimated. A guide to how to best use an interpreter can be found on the UKTI international communications website page http://www.rln-east.com/resources/how-to-guides.asp. Financial support for training in one or more of the Indian languages the East of England is available via the ESF-funded Beyond 2010 project, which provides 70% funding. For more details see www.rln-east.com/ lace. To write Hindi one uses a series of steps. A step means you take the pen off the paper. Most Hindi letters can be written in 2 or 3 steps. The last step is the drawing of the horizontal line at the top. Although English is widely understood in business, there can be misunderstandings in communication between English and Indian contacts, often due to the differing expectations. Face-to-face communication between parties helps to alleviate this, as we found with one life science business we visited, where longer conversation revealed issues which would not have been discovered in a remote relationship (although clearly this can be applied to many markets, not just India). Indians will speak good English, but it is important to bear in mind that communication may be difficult due to accent, so to be patient and understanding. They study traditional English at school, so some of the
51
vocabulary may be old fashioned. You may get an email saying highly esteemed it is good to write back in a corresponding style and share a common understanding of appreciation. It is good for the UK business person to express appreciation to the Indians as it is important to Indians to share their feelings and comment on how you look. They are not embarrassed about compliments, this is a western tradition and so it would be good if you are able to share your appreciation verbally or in emails to the Indians. Indians do regular business with the USA because they are blunt and share emotions and are more transparent than the UK culture. Indians find it hard to work out our emotions and how we are feeling, so it is good to be open to avoid this difficulty. Indians love humour, body shaking laughter is very common and it is considered good to share humour and laugh together when dealing with each other. Experts advise that it is good to say yes often when discussing deals, as it shows that you are listening and keen. In return they will often interrupt you and say yes, which demonstrates a common connection and understanding when doing business. Indians wont say please or thank you often, they will use go eat, go take or give me. It comes out abrupt to western cultures, but to Indians it is a linguistic trait, as politeness is indicated by verb endings in Hindi rather than a separate word. Dont take it personally or take offence. Social interaction is part of the business culture in India. For instance, family days are often run, where the whole family are invited to see where their relatives work, and have food and drink and take part in an office party. It is believed that the family will then support and understand the working environment and responsibility of their family member, as work is very important to Indian culture. Indians would prefer not to fire people, it is more common that they will be moved to another job within the business. There is a great sense of responsibility felt by the boss who sees that by firing a member of staff they would be taking the food from the mouth of the family the employees salary supports. Legally you can fire someone but culturally you it is unacceptable.
What about the intricacies or formalities of greeting and social graces?

Business wear is conservative for men and women. Men should wear a dark suit and tie. Women should wear a suit or dress and not show too much skin. If you are going out for a meal ask about the dress code of the restaurant as it may be formal. Table manners can also be formal and food may be eaten with the fingers, or you may be provided with a spoon and fork. You may be invited to wash your hands before and after a meal. Bottled water, soft drinks or beer are normally drunk with food, and Indians eat late. Arrive promptly, but be prepared to wait as Indians are not always punctual. Wait to be told where to sit. Guests may be served in a particular order, with the guest of honour served first, and if you are uncertain about anything ask your host how you should behave. Normally the person who gave the invitation will pay for everyone, and offering to pay will be seen favourably, but expect to be turned down. To reciprocate and show appreciation, invite your host out another time. Dietary restrictions are affected by religion so Hindus do not eat beef and many are vegetarians, Muslims
52
do not eat pork nor drink alcohol, and Sikhs do not eat beef. Lamb, chicken and fish are the most common main courses for non-vegetarians. Washing your hands both before and after a meal is essential. When refreshments are offered, it is customary to refuse the first offer, but to accept the second or third. To refuse any beverage will only be perceived as an insult. Most traditional Indians are teetotalers and vegetarian, so their eating habits need to be respected. Westernised Indians are more outgoing and do socialise and drink alcohol. Do not use your left hand, particularly when eating: it is considered unclean. Gesture and eat with your right hand. Personal questions or questions about your family are normal and should not be seen as intrusive. What we might consider nepotism is seen as positive and people openly show favouritism to relatives. Promotion often depends upon seniority and experience, not performance and achievement. There are several styles of greetings in use, so it is best to wait for your counterpart to initiate the greeting. The traditional Indian greeting is the namaste. To perform the namaste, hold the palms of your hands together (as if praying) below the chin, nod or bow slightly, and say namaste(nah-mas-tay). Many Indians are exceedingly generous, and you may be invited to their homes, as business and hospitality are intrinsically linked. Once you arrive at an Indian hotel or office (not at Indian homes), you will sometimes be adorned with a garland of flowers, which you should remove immediately as a sign of humility. When receiving a gift, it is customary not to open it in front of the giver, and when offered a gift, it is impolite to refuse it. If you take a gift to the house, you will find that all the family will be present, you should present the gift to the eldest female in the family, family hierarchy is very important in India. Your gift will not be opened; it will be placed in the centre of the activity for the evening meal and will be opened after you leave, much like if you were receive a gift. The best gift to take would be chocolates to be safe, in any case it is not normally correct to take alcohol as a gift Indians will prefer you to be upfront and honest about any food you cant eat or if you dont like spice. They will adapt this for you, this is better than trying to eat it and they then know you dont like it. Food is very personal to Indian culture. You may also be asked to try over 100 dishes that will be prepared for your visit so be prepared to eat a lot! It is very important to say if you like the food. You should make sure that you comment on the food and its taste, as this will go down very well. Hospitality is very important, and they will expect the same in return when they are invited to visit you in the UK. They will expect to be looked after and their accommodation and business trip to be planned by their UK partner. They do accept that they might not be invited into your home and that it will be meals out but be aware than hospitality is very important. Shoes are often removed before entering a home. Follow the lead of your host. Feet are considered unclean, so never touch anyone else with your shoes or feet.
53
Time
Time operates very differently in India, so expect to be delayed. It is common for meetings to be held much later than the agreed meeting time: this is expected to be understood, as if something more urgent comes up that will take priority you are to understand that as a business person and should not mind waiting for a meeting which is less of a priority. It is not to be taken personally. Western thinking dictates that something has to be done now whereas Indian culture has a calm down, why today and not tomorrow approach. If a deadline has to be kept to then it is advisable to create an artificial deadline, which would be before the real deadline. Overtime does take place in India; if work has to be done people will work hard and long hours, the priority is quality and good value, so if something needs to be done Indian people will work to make sure that it is completed. Indians are not as concerned about taking holidays, as work is worshipped after such a long a time of deprivation, and is considered very valuable to Indians. The structure of meetings is slightly different; even if you were to prepare an agenda for the meeting, expect it not always to be followed. This may be due to something else being more important to be discussed, in which case Indians will suggest that the agenda be abandoned and the urgent maters or new issues discussed instead of the pre-prepared agenda. Indians are very flexible when it comes to running meetings. This flexibility can be frustrating sometimes for people used to a more structured style, but can also have huge advantages, offering the opportunity to discuss things which have recently arisen. Mobile phones are on in meetings, and it is OK to multitask, leave the room or answer the phone all of these are considered a normal way to conduct a working day. Landlines are not often answered, so if you do telephone, try first to ring a mobile rather than a landline and dont take offence if your call is not answered. It is safe to assume that they are busy. It is not personal if they ignore the phone. When first talking about business, do make sure you ask the following key questions. 1. Explore their perspectives regarding goals, values, business objectives, tax, problems with authorities and any relevant environmental concerns. UK and India share info upfront so you know about the type of partnership with whom you are entering into a contract. 2. With regards to bribes, apart from the legal and ethical problems involved, they dont always work! It can sometimes however be both acceptable and useful to offer small gifts (promotional items, stationery etc) to officials, as tokens of respect, as would be the case in other parts of the world.
Building Relationships
When it comes to building relationships with your business counterparts, it is important to acknowledge that Indian business culture is centered on trust and that everyone seems to know everyone else. Therefore, when you are establishing a new working relationship, key to this will be the developing of trust. A number of failures in business from the UK side are due to their not embracing Indian culture and not taking a long term view and accepting that key to successful business partnership is to think long term and develop trust and respect. If you were to start a deal and then not be in touch for a period of time, when you go back
54
you may find that the India partner will not be interested in working with you any more, due to this period of silence. There is a lot of goodwill for the British by Indians, and so you should be aware of that and build on that as part of your business relationship. In India it is commonplace for your boss to help with personal problems if you went to him for advice and assistance. It is quite common for a boss to help get a member of staffs child into the right school, or resolve a family issue. Signing a contract: if asked to write a signature on a contract, Indians may treat this as an insult, as Indians will consider you to be their friend with whom they do not need to engage in such formalities. Rather, you may well have a series of agreements with clauses that change over time and adapt with the relationship as it develops.
Negotiations
Negotiation is a key part of Indian business culture. Indians are known for being tough negotiators and are proud of that status. It is commonplace for there to be displays of emotion in meetings where a negotiation is taking place. It can be a deliberate tactic on the part of the Indian business person; do not let this put you off. Be willing to show your emotions and not to be frightened off or lower your offer by their displays of emotion. The typical displayed emotions will be to leave the room, bang fists on the table, and to multi task and use lots of arm and face gestures. Dont think that your offer is being rejected, as often the next day the Indian partner may return as if nothing has happened and accept your offer. Emotional displays are a typical part of Indian culture in comparison to the western stiff upper lip culture which equally they find strange to adapt and deal with and it can often be perceive that western business men dont care, or have no passion about their business which can deter a good outcome for both parties. The better your relationship (see how to build relationship section 8), the better your chances of a successful negotiation. Often the spirit of the agreement is as important, if not more important, than what the actual contract states. Contracts are to be seen as flexible, fluid documents and it is important that you bear this in mind when negotiating contacts. Male business colleagues will do the negotiation, and if you are female they may talk first to the male colleague, even if you are a female company owner. Equally, you are advised to talk and negotiate with the owner, the highest ranking family member, no matter what you may have agreed with other Indian colleagues, the final decision will always reside with the owner/senior family member. Negotiation will often be about cost, but quality and brand value are very important to Indians. Indians may put the value of the product above the cost of the product. Indians are very cost conscious, high end products are very desirable but high end is only with a handful of wealthy people (relatively speaking) in India.
Other tips & information

Research the market before you go, and understand the size, potential and price dynamics and how and
55
where you want to enter it. Branding is very important. Visit the market and take time to build personal relationships - and be prepared to make follow up visits. Allow plenty of time for meetings and travelling around the market. Do not under-estimate how quickly India is developing. Dont assume anything - but find a way of checking progress without causing the other party to lose face. At street level India is a cash economy and people may claim they dont have change so try either to pay the right money or be willing to ignore people trying to earn a few more rupees. Tipping is used to get things done and less often for good service. In a restaurant 5%-10% is expected. Taxi drivers dont expect a tip, unless you are paying one to take you around all the time. Poverty and begging can cause more problems for Europeans than Indians. It is best to ignore them as if you do give money you will not be left alone. Many expatriates living in India follow the example of their Indian friends and colleagues and donate money to official charities rather than to beggars. Your business contacts or your hotel will be able to advise you if you wish to do this. If offered the opportunity to change money, dont. It is illegal and the difference you may get is not worth it. There are over 150 ways to nod your head in India culture, and so dont think that a particular nod means what you think it would in western culture. It is also important to remember that Indians will never say no; it is not part of their culture to say the word no. Equally, do not assume that yes means yes, often yes means they have heard you not that they will do what you have asked. Astrological factors are very important to many Indians. Hindus believe that their calendar ( the lunar calendar) guides them through all decisions that they make in life, from marriage, death, birth and even business. Auspicious days are generally favourable days on which to sign contracts or other forms of agreement. Airport tax is payable prior to international departure. If this was not included in your airfare then keep the correct amount of rupees available. Use bottled water for drinking and cleaning your teeth. Avoid (we are advised that milk is fine in the places business people will visit) raw foods like salads and unpeeled fruit, as they may have been cleaned in polluted water. Eating vegetarian dishes, boiled rice, cooked vegetables, lentil preparations and eggs are safest. The currency is the rupee, abbreviated to Rs. 1 rupee = 100 paise. 1 lakh = 100,000 rupees; 1 crore = 100 lakhs = 10 million rupees. All visitors need a visa. Tourist visas available from embassies and consulates are normally valid for 90 days from date of issue. 85% of businesses are owned by families, in which the business is run through the hierarchy system of the family. The dominance of the head of the family is a legal system in its own right, referred to as the Hindi undivided family (HUF). The other branch of businesses is the Indian MNCs (multinationals): employees are usually who are well educated and speak excellent English
56
Over 80% of Indians are Hindus and believe that their present position in life is on account of their karma or actions in past lives. Hinduism has no founder or prophet, and reincarnation is its basic tenet. Hindus live their lives in accordance with a predetermined destiny, and life is a cycle of births and rebirths. The ultimate quest is for moksha or liberation from the life cycle by living a pure and perfect life. Hindus may worship several of a pantheon of many thousands of Gods, representing incarnations of the trinity of deities: Brahma, the creator, Vishnu, the preserver, and Shiva, the destroyer. There are regional variations in the popularity of Gods and Goddesses, however Ganesha the elephant God is popular in most of India, as are Lakshmi the Goddess of Wealth and Saraswati the Goddess of Wisdom Hinduism is central to life in India and permeates work, education and politics. In offices, it is common to see prayers offered to a Hindu deity. If you are setting up a new project, plant or machinery, your Indian counterpart will most likely pick an auspicious date based on astrological advice. Muslims number around 10% of the population. Christians, Sikhs, Jains, Buddhists, Parsees (especially in Bombay)and Bahais also have a strong religious presence.
57
ITALY BUSINESS CULTURE
This report is designed to complement existing information about business culture in Italy, but also to provide some underpinning economic pointers to inform the decision making process about identifying market strengths, weaknesses, opportunities and threats.
58
The main purpose of this report is to add value to the various useful reports available on the UKTI web site, which is the source for some of the information included in this document; this report adds evidence and information gathered from discussions and interviews with people who are out there in the field with regard to Italian business culture. Its primary purpose is therefore to help better prepare UK businesses for approaching the Italian market for the first time. The report focuses on Italian language and business culture, and has been written in an informal style to reflect the comments made by the people we interviewed. To provide a range of views and establish consistency, a total of 3 meetings in Italy and 2 meetings in England were arranged, together with a number of email contacts. Interviews & discussions were held with individuals from a broad range of business backgrounds. These included senior staff from both corporate and SME-type companies. Although many of the companies interviewed were from the food and drink sector, we also involved representatives from ICT, utilities and services industries. The people interviewed were Italian staff from companies based in Palermo, Sicily, who have frequent contacts with UK-based companies, both in terms of supply chain and of import, British staff from UK-based companies who have been dealing with the Italian market for many years in a number of sectors, including manufacturing and ICT, as well as staff from Italian business support organisations. There are a number of databases which provide B2B services relating to information on Italian companies and access to in-depth business reports, Financials, as well as information on Directors and their positions held in other companies. One of this is http://www.cerved.it/xportal/web/eng/homeeng.jsp
Italy and its regions

One very important issue to consider is the fact that Italy is divided both geographically and administratively into regions. Check this site to have a fuller description of the regions and their potential resources and market opportunities: http://www.travelvantage.com/ita_regions.html This is especially important when dealing with autonomous regions, such as Sicily, Valle dAosta etc., as these regions may have different regulations concerning taxes, for example. The first point that anyone wanting to do business with Italy should consider is the impact that the geographical set up and the historical traditions have on the culture, business and way of life. In practice, one could simplify by stating that there are three somewhat different cultures coexisting in Italy: the Northern regions, the Central regions and the Southern regions, which would include the islands of Sicily and Sardinia. This is a massive simplification and generalisation, but we feel it is a useful starting point. Italy is relatively
59
young as a unified country, less than 150 years old, as Italian independence was proclaimed in 1861. But the last 50-60 years have seen a vast reduction in regional differences, including the rapid demise of regional and local dialects, which have been confined to the personal and family area, whilst all communication is now carried out in standard Italian.
Demographics
Italy has a population of over 58 million people (2006). Of these, the vast majority are of ethnic Italian origin. There are also German, French and Slovene minorities in the North, and Albanian and Greek minorities in the South. The Italian labour force is 24.49 million strong with a moderately high unemployment rate of 7.7 per cent (Source: CIA World Factbook, 2005).
Unemployment in the northern regions is relatively low; however there are deep pockets of persistent unemployment in the south and on the two islands of Sicily and Sardinia (up to 25% in some areas, though this is decreasing). The main and official language is Italian, although English is spoken in some tourist centres. Italy is currently facing a major demographic problem in addition to the extremely low birth rate, Italys population is ageing faster than that of any other European nation. One interesting point in this context is that so far Italy has one the highest levels of pensions in Europe, as most employees qualify for a pension based on a high percentage of their last few years average salary (up to 80%) as well as a lump sum equivalent to the value of one salary for each year worked. Therefore, this means that Italy is potentially a rewarding market for goods addressed to the over 50s. The ageing population factor underlies the current intense debate on immigration. Immigrant labour is increasingly needed, especially in the North. Public opinion however tends to associate continuously high levels of illegal immigration (especially from North Africa and the Balkans) with rising levels of crime and other social problems.
Economic activity
The Italian economy is diversified with an industrial base, and Italy differs from other European powers in that it has relatively few transnational corporations, and the most recognisable of these are in the fashion and food and drink sectors. Instead, the strength of the Italian market rests on small, generally family-run businesses. Over 90 per cent of Italys four million enterprises have ten employees or less. Because of this characteristic, the Italian business and financial infrastructure is designed to be especially supportive for Italys all-important SMEs. The Italian market has some significant redeeming qualities, including a very high private savings rate, a strong financial and industrial foundation, a large share of many global niche markets, and a high-performance equity market. The Borsa, the Milan stock exchange, experienced 25.3 per cent year-on-year growth in 2005. The Italian Economic Strategy for 2007-2013 (published on December 13th 2005), shows a downturn, compared to the European average, from 1990s to now, mainly in heavy industry and manufacturing in general, but also in terms of productivity (average growth of added value for each employed person only
60
0,5% in the last ten years). Yet the pattern in Southern Italy has been counteracting this negative trend, with a growth in productivity and, from 2002, of the employment rate. This appears to show that doing business in Southern Italy may offer interesting opportunities.
The questions
The project focused on 5 questions which were identified as central to developing a practical know-how by all the people we contacted. 1. How much Italian do I need to learn to deal efficiently with the Italian market, and how much English is generally spoken by the business community in Italy? 2. To what extent should companies adapt their English marketing and web materials into Italian, and is there much difference between the north and the South in terms of marketing? 3. To what extent does the economic situation in Italy offer opportunities for UK imports, and which kinds of imports would these be? 4. What are the main barriers facing trade with Italy? 5. What are the top tips you would give to a British business coming to Italy for the first time? The combined wisdom of those we met is outlined below. We would like to express our thanks and deepest gratitude to all who contributed to this project, including Giulia La Paglia and Roberta Messina - and above all to Maurizio Miccich, who put together a professional programme and through his colleagues provided all the support we needed for our research in Italy, and Peter Kersh, in the UK.
How much Italian do I need to learn to deal efficiently with the Italian market, and how much English is generally spoken by the business community in Italy?
English is Italys first foreign language taught in schools and many English words have found their way into Italian, especially in the business register. It is therefore not difficult to find business people capable of speaking excellent English, especially in metropolitan contexts. Generally speaking, in the northern regions, where the large companies are located, export import managers are more than likely fluent English speakers. The sectors where English is more easily spoken are Fashion and Textiles, Bio-Tech, Advanced Engineering, and specialist Food and Drink, though this is again a generalisation. So, in technical terms, and if your product is unique and has little or no competition, it is strictly not necessary for a British business to be able to speak Italian in order to do successful business with Italy. Obviously, some knowledge of Italian would be needed when dealing with everyday peripherals, such as taxi drivers, shop assistants, customer service staff and the general public dealing with the wider business community. However, official statistics provided by Eurostat quote the percentage of foreign language taught in Italy as
61
1.2, a considerably low figure if compared with the 2.6 of Luxembourg. Moreover, companies very seldom offer adequate training for Continuous Professional Development, especially concerning languages, considering the Swedish figure of 61% and the Italian dismal 17%. Therefore, business people are often expected to do-it-yourself English language training. And this may or may not work. So, their boss may have been led to believe that they speak near perfect English, while in fact their language skills may be somewhat lacking. This might create difficulties in negotiations, as they may misunderstand the points you are trying to make, with potentially dire results, as they could never admit to their boss that they misunderstoodloss of face may mean loss of job. So, be very careful in making sure that all the messages that are mission critical are in both languages. As in any market areas, knowing the language always provides an often much needed additional gear to your business. If you are planning to do business not in the metropolitan areas of the North, but in the rest of the country, you will seldom meet fluent English speaking partners. Consequently, you need to have a strategy for employing advanced Italian skills. An interpreter (a qualified native speaker of Italian, with excellent English language skills) will make a tremendous difference, especially if you provide the interpreter with appropriate briefing. (www.blis.org.uk, to find interpreters in your region) (www.assointerpreti.it, founded in 1974, Assointerpreti, the Italian Association of Conference Interpreters, has a membership of practising professional simultaneous and consecutive interpreters from all over Italy). You should also bear in mind that, although standard Italian is now commonly spoken, local accents can be rather difficult to unravel if you are not a native speaker. This is particularly true in Southern regions, but also in a number of Northern regions, whilst this is less so in Central regions. The sectors where English is most easily spoken are those sectors which have traditionally been involved with an international market, such as wines and high class food products (Slow Food related, for example, prodotti del territorio), the music and media sector, or the fashion and textile industry.
To what extent should companies adapt their English marketing and web materials into Italian, and is there much difference between the north and the South in terms of marketing?
Everybody we spoke to was very strongly against relying on a monolingual English web site. The point made was that in order to open up a market its necessary to adopt a comprehensible marketing policy, appropriate for that market. If we accept the official statistics provided by Eurostat on the low percentage of foreign languages taught in Italy, then we see that only a small segment of the population can operate in languages other than Italian. This leaves out a massive potential market. Other interesting points raised in this context concern the difference between the North and the South of Italy. To a certain extent, the Northern way of doing business may be seen as much more similar to the British way, as you would find a substantial presence of multinational companies, such as FIAT or BENETTON, where English is widely spoken, and the spatial distribution of districts (several small and even micro-companies grouped in the same geographical area, which offer the same kind of products, for example furniture, working together as a type of consortium, and therefore sharing a central, multi-lingual management team for marketing activities, for example). This is not the case in the South of Italy, where most of the companies are SMEs and even micro and where language skills are still very much under development. Given the lack of language skills in the southern regions of Italy and the wide availability of broadband across the country, it is recommended that companies localise their websites to reflect Italian interests. Doing business in Italy is much more based on communica-
62
tion and dialogue, dinners and trust, rather than on large technical meetings. And a website is a powerful communication tool which is well placed to bridge the cultural gap, as well as the information gap. The combination of a high Internet use and a preference for communication and dialogue means that a web site with key areas in Italian and a simple set of e-mail templates with salutations and some key phrases in Italian would help establish a two-way trust, and therefore help your company win hearts and minds (i.e. win business, in this case). It is certainly recommended that companies do some serious background work to prepare for potential horizontal market segmentation issues, with particular reference to lifestyle differences between the north and the south. For instance, a shortbread biscuits company would find a much wider market in Milan, than in Palermo or Cagliari. A company dealing with luxury goods would find a wide market in most of the North and North East, but also a strong niche market in some areas in the South.
To what extent does the economic situation in Italy offer opportunities for UK imports, and which kinds of imports would these be?
Since the establishment of the European Union, trade between England and Italy has become much easier. As a consequence, the Italian economic situation makes it very receptive to welcoming a growing number of services offered by the United Kingdom. There is a great demand for financial services such as investment funds, and stock market services in general, which, historically, are more developed in England than in Italy. The same considerations apply to services connected with the natural resources market, such as the oil market. Indeed, England has a prominent place in the International market as a communication gateway between the eastern and the western market. Italian business people would probably be very interested in buying in financial brokerage services from England in particular, such as services offered by merchant banks, which are much less developed in Italy. Moreover, in the last fifty years Italy has achieved an increasingly healthy economic situation in terms of spending power. Therefore, the Italian consumer market is likely to offer great opportunities to high quality and/or a very characterized range of products (as cashmere textile, typical shortbread biscuits, fudge, or single malt whisky). These products register a high turnaround in all duty free shops in Italian airports, but they are increasingly sold on a large scale in cities supermarkets. British technology, equipment and components have a good reputation Innovative high-quality products are always of interest The best investment and co-operation opportunities are now generated by two main trends: Liberalisation of key sectors such as energy and telecommunications Interest in the concept of public-private partnership in the public services For further information on labelling and packaging regulations, import controls, customs duties, additional taxes and VAT (known as IVA in Italy), additional information on documentation, export documentation, export controls and licensing, patents and trademarks, standards and technical regulations, you can contact the UK Trade & Investment Team in Milan: MilanCommercialEnquiries@fco.gov.uk
What are the main barriers facing trade with Italy?

The main component of success in the Italian market is long-term commitment of time and resources,
63
though this is true for a number of countries. Travelling to Italy for a one-day business meeting is not good R.O.I. (Return On Investment), as you would miss out on the leisurely lunch or on the post-meeting dinner, which is where barriers come down, opinions are solidified, trust is built, and actual business is done. This would also give you the opportunity to allow your Italian partner not to get away with you should really talk to this colleague of mine, who is actually responsible for (fill in your version of things), but she is not here today, as your answer would be I will be available tomorrow, as I would very much like to finalise the agreement, and since I love this part of Italy anyway (my wife loves Italy so much mia moglie adora lItalia goes a long way). On a more techiical note, one of the main barriers confronting UK-Italy trade is the fragmentation of the economic key players. It is often very difficult for non residents to understand how to manage the dialogue between private management (often belonging to old entrepreneurial families ) and economic institutions, whose remit is to regulate trade, and therefore to allow access to financial support to trading, and last but not least the Unions. Many battles widely and wildly reported in the press are followed by friendly agreements reached on the backstage (a good dinner?), and this is not necessarily a negative way of solving problems. The British perception can create not very useful misunderstandings if fails to take into account the Italian way of doing business, based more on personal relationships than on standardised procedures. However, since the establishment of the European Union, there are no technical barriers facing trade with Italy. One challenge could be presented by the Italian and English protection system concerning residual industrial sectors, such as agriculture or textile. The Customs Classification Helpline can provide advice on tariff classification numbers. The Helpline is open from 08.30-17.00, and a voicemail service is available outside these hours. Tel: +44 (0)1702 366 077. The Italian equivalent of the British Customs is the Agenzia delle Dogane. http://www.agenziadogane.it.
What are the top tips you would give to a British business coming to Italy for the first time?
To answer this question, we feel it is relevant to provide a short description of the Italian culture and way of living. In Italy, relax and wellbeing, which include careful grooming for both sexes and a very special attention paid to clothes and accessories, are high priorities, as well as the pleasure of political and cultural discussions around a dinner table. Consequently, most of all important economic and financial agreements are reached in unofficial contexts, such as parties or dinners. Please note that a group (formal or, even worse, informal) of Italian speakers is unlikely to observe the turn taking discipline in discussions; expect to be interrupted and expect people to talk at the same time! Thus, the top tips that we would give a British business person are the following: 1. Try to establish from the beginning a personal relationship with the economic partners, gain their trust and friendship. 2. And if the partner is a group, try to understand who, in the group, has the real decision making power and who is the mediator of likely conflicts. Then try to become friend with these two.
64
3. Try to understand the kind of network linking the different key players in the areas which interest you, in order to have a clear and solid awareness of the best buyers and sellers in the area. 4. Therefore, invest some time in visiting the country before designing a market strategy, in order to get to know the reality and the features of the location. 5. As each Italian region is deeply different, do not presume to know the whole of Italy after a single experience. 6. do some in-depth research on the economy, social context, culture and policy of the actual region where you wish to export. 7. If at all possible, acquire some details on specific points of interest in the region (just to show your interest during conversation). 8. The Italian market can be very creative and quick on new ideas, although managers and entrepreneurs are always pressed for time, money, resources, etc.. so make sure you listen as well as speak (this is where a good and well briefed interpreter is invaluable). 9. Always remember that money is not the only value taken into consideration by the Italian culture: when faced with the great tsunami tragedy in Asia, Italian newspapers titles tended to read Terrible suffering inflicted by natural disaster, while British newspapers titles tended to read Millions of pounds losses inflicted by natural disaster. 10. Finally, a good tip is to make sure that you have with you a variety of different, brief proposals, in order to submit the one that best matches the outcome of your negotiations.
And, last but certainly not least, do remember that if you want to be perceived as a sophisticated international business person, you would be well advised to do the following: 1. do not order cappuccino after a meal, but un caff. Cappuccino is strictly breakfast. 2. When you are introduced to people, always shake hand firmly. 3. do not say CIAo, unless you are in very friendly terms with the person. Say SALvE. 4. Conversation: cars, football, holiday, food. If anybody starts talking politics, just smile politely and say Ci sono sempre problemi. 5. do not expect to be offered endless cups of tea or coffee during your meetings or at your arrival at the meeting, but do expect the meeting to be interrupted at various stages by somebody saying I must have un caff. And you can have a quick shot of caffeine several times a day. If you are against caffeine, ask for a decaffeinato. 6. If you are offered un aperitivo (a pre-dinner drink), you may want to ask for un Campari Liscio (straight), or al selz (with tonic) or, if you prefer a non-alcoholic drink, then ask for un Camparino. 7. Relax and enjoy your stay in Italy. If you do, you are several times more likely to do good business. 8. If you arrange for your Italian business partners to visit you back at your company, remember the hospitality they provided for you and match it.
65
JAPAN BUSINESS CULTURE
This report is designed to support and complement existing cultural information available through the UKTI posts in Japan (see www.rln-east.com/ culture). It adds value in that it provides evidence and information from discussions and interviews with those out there in the field with regard to Japanese business culture. Its primary purpose is to help better prepare UK businesses for approaching the Japanese market for the first time.
66
The information contained in this report is based on a number of sources, including the UKTI Japan culture workshops in the East of England between 2006 and 2011, discussions with both English and Japanese businesses and business support agencies in Japan, information from UKTI culture sheets and pod cast, UKTI Japans Information for Business Visitors, and a visit by project staff to Japan in September 2007. The report focuses solely on Japanese language and business culture, and has been written in an informal style to reflect the comments made by those we met. To provide a range of views and establish consistency, we have cross-referenced comments from a number of sources as identified above. Much of the report focusses on the business culture of Tokyo and Osaka. As a first port of call we would recommend the UKTI posts in the cities of Tokyo and Osaka. Although the report focusses on answers to specific questions posed by clients, it is important to emphasise the similarities between Japanese and British business culture, as the report may otherwise seem somewhat intimidating! These similarities include a general penchant for fairness and politeness, a focus on relationship-building, a desire for longer-term partnership, and an overall tolerance towards the British and willingness to help the overcome cultural differences. Careful planning, attention to detail, unprecedented efficiency, and involvement of colleagues at all levels within an organisation are Japanese traits which are attractive to the UK contact. Specific thanks got to David Abbott & Kazuko Kon of UKTI Japan, Masayuki Kusumoto of Matsushita (Panasonic), Keiichi Yamazaki of the BMC, Kazuko Kamado of the OCCI, Ian de Stains of BCCJ, and Hiroko Shimizu of JETRO. The report addresses 6 main questions. These questions are those raised by UKTI clients we have talked to: 1.What are the initial impressions companies have of Japan when they first visit? 2.How do you know whether a meeting is going well, and what negotiating styles are used? Sometimes I am not getting straight answers to my questions. Am I making myself understood clearly? 3.I have not heard from my potential contact for some time. does that mean I have been unsuccessful? 4.How would Japanese clients react to me as a female supplier? 5.What about the language? 6.What about the intricacies or formalities of greeting and social graces?
67
What are the initial impressions companies have of Japan when they first visit?
At a series of UKTI Japanese business culture workshops held in the East of England between 2006 and 2011, clients were asked for their first impressions of visiting and doing business in Japan. Initial reactions included these following comments. There is a very precise and thorough business culture, couple with an emphasis on quality in everything they saw. Tremendous care is taken with all aspects of doing business, and there is cleanliness and order wherever they went. There is a highly respectful and traditional culture, and excellent & healthy food. There was also common consensus that it appeared difficult to gauge reactions in meetings & negotiations. An opening statement, and theme throughout the workshop, was that Japanese business culture is embedded in the traditions of Japanese history, and these traditions manifest themselves in various forms during your business relationship. Family history as well as national history is considered important. The foreign languages most used appear to be (in order) English, Chinese and Korean, and this is reflected in public signposting and company documentation that we saw. The British are generally respected in Japan.
How do you know whether a meeting is going well, and what negotiating styles are used? Sometimes I am not getting straight answers to my questions. Am I making myself understood clearly?
On many occasions some of the decisions which you would expect to be made during a meeting would in fact have already been discussed and made in advance, and the meeting may be more of a formality. It therefore makes good business sense to do as much preparatory work in advance and ensure regular correspondence with potential meeting partners prior to the negotiation or presentation so that you can gauge initial reactions. It would also be good if your contact in Japan could exchange some preliminary dialogue to elicit likely reactions to what you have to propose. This is a well-known process called nemawashi or going round the roots. Japanese like to place emphasis on harmony. You may therefore not receive direct answers to direct questions. It is also useful to have a Japanese colleague or contact with you, as (s)he will usually be able to follow the subtleties of the meeting and gauge visual reactions better than a UK guest. (S)he could also prompt you as to where you are going wrong and where there are particular strengths you could emphasise. In many cases you will need to be prepared to factor in the time and cost of a follow-up meeting. A good sign is when you are invited to a second meeting, which is common practice where they have liked what they have heard. Do not be put off by this, rather treat it as a measure of success. If you are not invited for a second meeting and do not receive immediate positive feedback, then this is sometimes a sign that you offer needs more thought and discussion. A first meeting may be simply to build an initial understanding of each other without dealing directly with the business in hand. An interpreter may also be able to pick up on subtleties of communication.
68
Your host or client will often not be willing to state personal opinions in front of colleagues, particularly senior colleagues, so beware of asking questions which are too direct and may cause embarrassment. The presence of your Japanese agent or local contact will boost your credibility and enable your Japanese hosts or potential clients to be more at ease. The presence of this insider will also help with language issues. Equally, a client may want to obtain a consensus from colleagues on what you are proposing, and this consensus may require separate internal discussions which take time. Although on the whole senior or older staff in a Japanese company have a greater decision-making role, on occasion a more junior member of staff may have more power due to their specialist knowledge or experience, and you will need to allow time for these internal relationships to work their course. Other useful tips are (1) to send your Japanese contact a summary of any notes of your presentation in advance as well as a summary of the teams competencies so that (s)he may have a chance to read through them and discuss internally (b) add Japanese annotation and (c) use the evening drinks session to reinforce any ideas or proposals! The Japanese believe that everyone who is involved needs to be at meetings so these tend to be quite large. The most senior person may say little or nothing, leaving the presentation and discussion to a junior member. To learn who is most the senior, watch who is served tea first! Seniority of seating is normal with the most senior furthest from the door. The Japanese are comfortable with periods of silence for reflection, If they fall silent, resist the urge to burst into speech. The Japanese also appreciate restraint in gesture, in dress and in tone of voice. The Japanese seem to be comfortable with paradox, and if you accept that sometimes logic does not always follow to a finite conclusion you will find it easier to do business in Japan.
I have not heard from my potential Japanese client for some time. does that mean I have been unsuccessful?
There is a clear hierarchical system in Japan, so do not be surprised if your proposal needs to work its way through several layers of management and internal consultation. This could at times take up to a month, and lengthy periods of decision-making are again common in business practice. Once a decision has bee made, however, expect the implementation to be thorough and precise. Relationships are very important in Japanese business, and do not underestimate the importance of the social activities taking place after work (eating, drinking, general socialising). It may take a long time for you to build good relations, and this cannot be done remotely from the UK. The Japanese like to know what you as a person are like before they do business with you. It is during these activities that your Japanese client may be testing you to get a feel for what type of person you are and whether (s)he feels (s)he can do business with you. Take the time to invest in these relationships, which may take months (if not longer) to come to fruition. Japan is a network society, bound by rules and standards of behaviour. Conformity is expected and a
69
Japanese proverb explains that a nail which sticks up must be hammered down. He is a team player is a highly paid compliment. Japan is a collective society hence Japanese people tend to do things together, this is especially the case in decision making, which is a time-consuming collective process called nemawashi. This process can be challenging to foreigners but when the Japanese are ready, things can move very fast. Personal dignity, or face, is very important to the Japanese, so they work hard to save face, to give others face and to avoid others losing face. It is therefore an indirect culture and you always need to read between the lines. A Japanese business person may not wish to offend by giving a negative response to your proposal, therefore be prepared for such as response to be clouded in general terms or delaying tactics. The Japanese are generally hungry for information which they then need to absorb and consider, therefore feedback may not come immediately. Equally, Japanese colleagues may need to discuss the issues under consideration to verify that they have mutually understood what is on offer. If you are asked the same question more than once, this may be because your Japanese contacts need to be sure that they have understood all the information you are presenting so that they can report to superiors. The Japanese like to get to know business partners over a period of time. Expect many meetings in which no business is discussed but in which your prospective partners get the feel of you. When the Japanese make agreements, it is for long term. Human interaction on a regular basis is important for building relationships and can help overcome or avoid miscommunication. With some products (such as household electronics) globalization is having an effect on colour schemes, for instance, where previously popular colours (red in China, gold in the Middle East) are being replaced by standard black or grey units.
How would Japanese clients react to me as a female supplier?

They will treat you differently than they would a female Japanese business contact as they know you are from overseas. There are also several Japanese companies where senior staff are female, and the Japanese are having to adjust to this trend. We would still recommend, however, that you make sure your job title in Japanese adequately communicates your seniority. Many Japanese SMEs are still dominated by male senior staff. In some Japanese companies where a Japanese female member of staff may be more senior than her male colleagues, English is sometimes used to avoid the use of female Japanese language to male junior colleagues, as this female language is usually reserved as deferential to Japanese men. It is best to wear skirts which fall below rather than above knee level, if this is the chosen attire. Many business women also wear trouser suits these days
70

At first sight written Japanese is complex and daunting, as it can consist of three different alphabets all mixed together. Hiragana is phonetic and is used as the traditional Japanese alphabet, and in crude terms appears to be a series of upright shoelace characters (eg: ). There are 48 hiragana characters. Katakana is used to phonetically transliterate imported words, and in crude terms appears to be a series of short straight and bendy lines (eg: ) . There are 46 katakana characters in total, and we are led to believe that you can learn them in a couple of afternoons. Kanji are Chinese characters which are pictorial (eg: , meaning Tokyo and meaning Osaka). Some examples: in the sentence (meaning I am sorry) the first character is kanji, the second hiragana, the third and fourth kanji, the fifth, sixth and seventh hiragana. In the sentence (meaning I am staying at the Hilton Hotel) the first character is kanji, the second hiragana, then there is a row of 7 katakana characters to translate Hilton Hotel, then a series of hiragana characters to present the verb and postpositional phrase (the grammar of place). We found the revised Romanized 3rd edition of the book Japanese for Busy People Book 1 by the Association for Japanese Language Teaching (ISBN: 13-978-4-7700-3008-5) extremely clear and well thoughtout, with exercises to reinforce the main points of grammar and new vocabulary carefully presented and organised at a logical steady pace. If you have time, study the katakana alphabet. This will ensure that you are not completely alienated by the language on arrival. Once you can read words, you will be surprised at how many can be deciphered. It will also help you find your way using maps (beware of English maps, they will not help you read Japanese street signs!). It is important to translate literature and other promotional material (including key website information) into Japanese. Although many distributors deal with foreign suppliers, it is useful to have a Japanese interpreter on hand. The positive impression you will make by learning to speak a few basic Japanese phrases cannot be overestimated. A guide to how to best use an interpreter can be found on the UKTI international communications website page http:// www.rln-east.com/resources/how-to-guides.asp. Useful phrases and more advanced telephone dialogues can be found on http://www.rln-east.com/materials/receptionist_phrases.asp which is a basic language lesson focussing on telephone Japanese. Financial support for Japanese language training in the East of England is available via the Beyond 2010 programme. For more details see www.rln-east.com/lace. In terms of the Japanese learning English, they learn the Roman alphabet at elementary school but may have difficulty with pronunciation although they are very good at reading and writing. In recent years the JET (Japan English Teacher) programme, has brought English speakers into schools and universities as Language Assistants which has to a small extent helped alleviate this problem, although there is debate as to how effective this has been. On the whole, the Japanese education system does not lend itself to learn-
71
ing spoken English. Windows has hiragana embedded in its software, and this is usually accessed during typing by the Alt-Del keys. UKTIs publication Information for Business Visitors contains the following useful information: The Embassy maintains a list of interpreters who are willing to work for visiting British business people. Their charges are less than half normal commercial rates. The interpreters are perfectly competent to deal with general business conversations. But they are not normally specialised or professionally qualified interpreters. Anyone expecting to have a very technical or difficult discussion, especially one involving specialised terminology, should consider employing a properly qualified interpreter from one of the agencies which provides these services. The Embassy can supply a list of such agencies if required. The main hotels in Tokyo can also arrange interpreters at fairly short notice, although their costs, too, are normally higher than those charged by the interpreters on the Embassy list. The interpreters on the Embassy list normally need to be booked some time in advance, but occasionally they are available also at short notice (although this may mean that we are unable to get your first choice of interpreter). The Embassy is always glad to introduce business people in need of interpreters to one of those on the list. But the Embassy is not an agency and cannot therefore be responsible in any way, either on matters of payment or conditions under which the interpreters work, or for the standard of services which are provided by interpreters. An interpreters availability to do overtime cannot be guaranteed, unless arranged in advance. If interpreters are invited to lunches, dinners or parties, it should be made absolutely clear whether the invitation is being extended for social reasons or whether they are being asked to work overtime. In this way misunderstandings can be avoided. The interpreters should always be paid in cash and they will also normally expect full payment for cancellations unless made well in advance. A full day means between 3 and 7 working hours plus a one-hour lunch break. A half day is up to 3 hours. If a half day runs over 3 hours, the full day rate will automatically become payable. Trips outside of Tokyo will be charged at a full day rate (ie no half day rate). For overtime in excess of 7 hours, Yen 4,000 will be charged per hour or part hour for A & B types of work, and Y2,000 for C type of work. Before 8 am and after 6 pm an extra Yen 1,000 per hour or part hour will be charged in addition to the usual daily rate and/or hourly overtime rate for A & B types of work, and Y500 for C type of work. All rates are calculated from the time of meeting up with the interpreter until the client and interpreter part company ie including travelling time. The interpreter should also be paid for any time spent in a preliminary briefing meeting. Higher rates may be payable in certain circumstances, depending on the nature of the work and the availability of interpreters. Travel expenses are met by the client in addition to the basic fee. For cancellations, a full fee is charged in the case of cancellation on the day of assignment or the previous day for whatever reason unless the interpreter herself cancels. In the case of cancellation with less than a weeks notice, it is 30% of the normal fee. It is most important to provide informative materials about the clients background and about the subject matter of the assignment, eg company brochures, product catalogues, as far in advance as possible (the more technical the subject, the more detailed the information required). At the minimum you should at least provide a briefing or have a discussion with the interpreter regarding the purpose of your visit before holding any meetings.
72

An initial sub question of this was do I use first names or surnames when talking to my client, and how do I react when they start using their first name? Many Japanese names have meanings (eg: Akemi means beautiful, Akira means intelligence, Keiko means respectful child, Takashi means eminence, Takeshi means brave). The first name follows the surname, and most Japanese family names consist of two characters. The Japanese commonly address each other by family name, usually attaching an appropriate title such as san (eg: Sato-san). If a client starts using their first name in e-mails, you may follow suit, but remember to include the title. The names of Japanese contacts are written in kanji (Chinese characters) and the names of foreigners in katakana (a system used for writing words borrowed from other languages). A useful website for transliterating English names into Japanese is http://www.takase.com/Names/NameInJapaneseA.htm. It is good practice to have your Japanese name on the reverse of your business card, and it will help your client with the pronunciation of your name. Equally important is your job title, as emphasis is placed on these. In response to the question do I bow or shake hands? we can advise that bowing is the usual custom between Japanese, although handshakes are starting to be used even between Japanese and almost always with Western visitors. There are 3 angles at which to bow depending on the seniority of the person you are addressing, ranging from a simply nod of the head (junior staff) to a full 90 bow (senior staff). It may well be that your Japanese client bows after you have bowed, and you will not need to bow further. It is useful to know the basic greetings and farewells for these occasions. It is also customary to present business cards with both hands whilst bowing. Clients also asked about which gifts they should take and when & how they should present them. It is not a Japanese custom to open gifts when presented with them. The more power the contact has, the more expensive or unique the gift should be. Given the Japanese affinity with national history and identity, gifts which are typically English or with Royal connections would be appropriate. Be prepared in case the Japanese client does not have a gift prepared and they will need to hunt around for one at short notice best to take advice from your agent or local contact before your meeting begins. The presentation of the business card is an important ritual, which you should learn. You should offer your card with both hands and receive your counterparts card with both hands, keeping the card at approximately chest level. It is acceptable to place a card on the table in front of you and this can be quite useful should you forget the name or title of the card bearer. You can respectfully place it in your wallet or at the back of your cardholding case. Under no circumstances should you write on, damage or hand back a card as this is considered rude. Try to have your business card printed in English and Japanese. This is your chance to get to know the Japanese and build a relationship with them. When offices close at about 7 pm, colleagues often go out to eat or drink together. Dont miss an opportunity to join them. Things normally stop around 9pm as people often have a one or two hour commute home. Always offer to reciprocate hospitality at the same level as you received it. Office gifts can be exchanged but dont open them. They wont open yours in your presence.
73
Top Tips for Doing Business in Japan

The following is an extract from UKTIs publication Information for Business Visitors. It contains ten top tips on doing business in Japan. Despite what some books say about the uniqueness of Japan, there is nothing mystical about doing business in this country. Business is business here as elsewhere, and increasingly cosmopolitan. So you need not worry unduly about the niceties of Japanese etiquette. But a few general points are worth remembering: 1. Take things slowly. English comprehension is usually not as good as it appears. Many Japanese are too polite to let you know when they do not fully understand. Keep what you say simple and straightforward. The same is true if an interpreter is used. Speak in short bursts which can be easily translated. Dont ask rhetorical questions. Dont use sporting metaphors. Only make very simple jokes, if you have to. And dont try to do business in Japanese unless you are very confident indeed. For follow-up meetings at least, you should provide your own interpreter, as a matter of basic courtesy. 2. Never be late. Punctuality is crucial ! Tokyo is a crowded city which can be difficult to get around. Leave plenty of time to allow for traffic hold-ups. Keep to the timetable for your meetings. Dont try to change or cancel appointments at the last minute unless you have absolutely no alternative. Dont overrun the designated period unless your interlocutor clearly wants to extend it. 3. Take business cards with you and have plenty available. They should be printed in Japanese on the reverse and be standard size (90 x 55mm). Business cards in other sizes do not fit the card boxes which sit on practically every Japanese desk and so are likely to be discarded. 4. Construct a short but warm introductory statement for each meeting. This should not be a sales pitch. It should explain why you are here, how long you will be here, the sort of people you are seeing and any particular previous contact you have had with Japan. You could refer briefly to the long-standing warm ties between the UK and Japan. If appropriate/possible, show interest in your hosts background, education, family, hobbies etc. Give information about your own if asked. This is part of the sharing of contacts which helps to build up a relationship. No need to go over the top. But it does no harm to indulge in some wellplaced flattery. 5. Then, after you and your interlocutor have made your respective introductory statements, make your sales pitch. Decide what are the five or six crucial points you want to get across. Do not be worried if you feel you wish to refer to a previously prepared note. Your interlocutor may well do this. 6. Do not be afraid of silences. Sit tight and wait for something to happen. It is a common Western flaw in the Far East to feel that silences have to be filled. In negotiations, for instance, this normally means that the Westerner ends up conceding something. 7. If, on the other hand, you are on the receiving end of a barrage of detailed and apparently pointless questions, try to bear with them and answer them. This is both a sign of interest in your business and a means of testing a potential partner. 8. Personal posture is important. Sit firmly in chairs at meetings even if they are armchairs. Do not slump,
74
dont cross your legs and maintain a fairly formal style. Dont blow your nose noisily. Dont drink tea offered to you before your host has invited you to do so. Shake hands at the beginning and at the end of meetings. 9. If you are taking gifts, make sure that they are well wrapped, if possible professionally. Tatty wrapping paper is a British disease; as are tatty, cheap gifts. They indicate a discourtesy to the recipient. Do not give the gift until the end of the meeting. Do not be fazed if you have given a gift and not received one. You will have scored a point. Dont open the gift immediately upon receiving it: if it is not very good, you will embarrass your host. If you open it, your host will also have to open yours and that could embarrass you. 10. Accept offers of hospitality with the same grace with which they are made. Entertainment outside the office is another way in which Japanese hosts test a potential business relationship before committing themselves fully. Try to enter into the spirit of things. On taking the first drink at meals, toast your host by raising by glass to him/her and to those around you before you drink. Dont drink until it is time for these toasts to take place. And if you are called on to sing - have a go ! If your Japanese hosts are able to enjoy themselves singing with you, they will probably enjoy doing business with you. Above all, be patient. Do not expect quick returns. They may come. But for many Japanese companies, the emphasis is more on developing the sort of trust and mutual confidence that will lead to a strong, enduring relationship than on getting down to business instantly. This is why Japan is a market requiring a strategic approach rather than an opportunistic one. It is also why the potential for long-term achievement is so great. On a practical food note we found it useful to take a small notepad and copy down the names of food in the restaurant windows which we wanted to eat. Menus are a useful way of practising katakana, and major railway stations offer a variety of good value eating houses.
UKTI and Other Support

There are a number of business support organisations in Japan who are well positioned to assist the UK company doing business in Japan (see www.uktradeinvest.gov.uk then go to export-countries-Japan). We recommend the UKTI offices in Osaka and Tokyo as a first port of call. JETRO, the Japan External Trade Organization (www.jetro.go.jp) have office space which is made available free of charge for up to 50 working days for companies setting up office or other facilities in Japan, and also provide free access to local advisors and consultants in a number of fields (a list of these is provided whilst you are over there, and you put your name down next to the appropriate advisor). The British Chamber of Commerce in Japan (www.uknow.or.jp) have a set of useful dos and donts on their website. They confirm that industry clusters in Japan include biotechnology and life sciences around Kyoto & Osaka, automotive and aerospace in Nagoya and Kawasaki (near Tokyo), creative & media in Kyoto and
75
Tokyo. The British Market Council in Tokyo also support events and initiatives which support UK trade and investment with Japan. The Export Communications Review (ECR) is a heavily subsidised UKTI scheme which aims to assess your companys international communications capability and generates and action plan. It covers areas such as communications planning, translation of literature, website localization, language and culture skills, and use of interpreters. Further details, including a sample ECR and link to the online application form, can be found on www.rln-east.com/ecr. We also recommend that you undertake the (again subsidised) Online Market Introduction Service (OMIS) through which UKTI colleagues at the British Embassy in Tokyo or Consulate in Osaka can undertake informed market research and establish appropriate personal introductions to potential contacts in the market. As such, it is often the first port of call for selling into Japan.
Further Reading
Further useful academic reading can be found in Jon Alstons and Isao Takeis book Japanese Business Culture & Practices (ISBN: 0-595-35547-1) which, although slightly out of date (it is written around the time of the last recession) contains a thorough review of Japanese business culture. The book as an American slant. Of particular interest are chapters 3.15 Meetings Japanese Style which discusses the various types of meeting you may encounter, and chapter 4 which discusses negotiating tactics. The latter and includes sections on the Japanese mindset, socialising, knowing priorities, the use of silence, slow decision-making, preparations, invisible negotiators, gift giving, who speaks first, interruptions, asking questions, attention to detail, dislike of certainty, the negotiating team, and tactics & procedures.
76
KOREA (SOUTH) BUSINESS CULTURE
This report is designed to support and complement existing cultural information available through the UKTI posts in South Korea (see www.uktradeinvest.gov.uk). It adds value in that it provides evidence and information from discussions and interviews with those out there in the field with regard to South Korean business culture. Its primary purpose is to help better prepare UK businesses for approaching the Korean market for the first time. For the remainder of this report, South Korea shall referred to simply as Korea.
77
The information contained in this report is based on a number of sources, including the UKTI Korea culture workshop in Oct 2007 in Histon, discussions with business support agencies in Korea, information from the UKTI South Korea pod cast, and a visit by project staff to South Korea in September 2007. The report focuses solely on Korean language and business culture, and has been written in an informal style to reflect the comments made by those we met. To provide a range of views and establish consistency, we have cross-referenced comments from a number of sources as identified above. As a first port of call we would recommend the UKTI post in Seoul (www.uk.or.kr). Some information has also been extracted from the publicly-available culture notes by the organisations Kwintessential and Communicaid. Specific thanks go to Gary Soper of UKTI, Joe Day of the BCCK and Market Entry Services, Alan Timblick of KOTRA and Dr Soo Kil Lee. The report addresses 5 main questions. These questions are those raised by UKTI clients we have talked to. They are followed by a description of related UKTI support programmes and what have come in Korea to be known as the 11 Commandments. 1. What are the initial impressions companies have of Korea when they first visit? 2. How closely does Korean business culture resemble that of Japan or China (some of our clients considering Korea also have experience of either Japan or China) ? 3. What are the main negotiating styles used? 4. What about the language? 5. What about the intricacies or formalities of greeting and social graces?
QUESTIONS
What are the initial impressions companies have of Korea when they first visit?
Korea is keen to reduce its dependence on the USA and Japan. There is a strong historic rivalry with China and Japan. At the time of writing Korea is number 1 worldwide in terms of high-speed internet penetration. Businesses in Seoul tend to be more westernised than elsewhere, but there are few regional differences within the larger cities (due partly to the size of the country), although provincial offices are much less westernised. Almost 50% of the population live in the greater Seoul and Geon-gi Do area, and the mountainous nature of the country limits the amount of land available for urban use, hence the concentrations of high population. The Korean government, however, is pursuing a policy of balanced development that encourages investment into the more underdeveloped areas of the South West. The standard of living is fairly consistent across the country. The people of Korea share a common pride in the countrys unique cultural and linguistic heritage that has
78
emerged during her long and turbulent history. As a result, Korea boasts an enriched cultural outlook that is still strongly reflected in its current business culture. It is a safe and welcoming society. South Koreans refer to Korea as Hanggul, whilst North Koreans refer to Korea as Choson (after the dynasty which reigned from 1392 to 1910). They are a very success-driven people and can be perceived as quite abrupt and impatient, but this can mean that there is also a drive for efficiency. Trust on a personal level is seen to be very important. UKTI has labelled South Korea as a high growth market, although the economy has been mature for some time, and it counts amongst one of the more advanced economies of the world. The term emerging market has been applied to Korea in the recent past as some sectors such as financial services and telecommunications are emerging sectors. It is interesting to note that although entertaining for friendship is effective, friendship as in the West takes time to develop. Bureaucracy is still an issue, but over the last 10 years there has been a concerted effort to reduce this and to make Korea a much more business-friendly environment. Surprisingly, however, many higher ranking bureaucrats have little international experience. It would be good to have a Korean mentor to help you through the documentation and permits. Koreans are competent administrators. The civil service is modern in terms of the education and training of it staff, yet it retains huge power. The influence of Western business in recent years has led to greater recognition of concepts such as management by objectives & performance-related pay. Koreans remain loyal friends, and this manifests itself also in business. Structure and hierarchy in Korean companies: Korea is known for its vertical social structure based on age and social status. The organisational arrangement of Korean companies is highly centralised, with authority concentrated in senior levels. High-ranking individuals tend to have more power over their subordinates than in the West. Personal ties in Korea, such as kinship, schools, birthplaces, university & military service often take precedence over job seniority, rank or other factors, and have significant influence over the structure and management of Korean companies. Korean friends in business may feel obliged to assist each other, and this obligation can sometimes come over as somewhat corrupt, although it is not considered so in the Korean business culture. Other brief first impressions: street signs are not always evident. Everywhere generally appears clean and tidy. Koreans can appear loud and effusive at times. They are exceptionally polite to business visitors. Taxis are good value for money, and many have a free interpreting service, where an interpreter is accessed via the taxis telephone. If you have free time, visits to the Korean Folk Village near Sowun (south of Seoul) and the DMZ on the border with North Korea are worth undertaking. The Bukhansan National Park is also near to Seoul.
How closely does Korean business culture resemble that of Japan or China?
Koreans do not like to be compared to the Japanese. There are still bitter memories of wartime occupation
79
amongst the older generation. Nevertheless, there are similarities with many elements of Japanese negotiating style (see below), although Koreans are comparatively more open than the Japanese. In the earlier part of the 20th century Koreans were forced to adopt Japanese names and abandon the Korean language in favour of Japanese. Many of the traits found in Japanese business culture can be found in the Japan Culture Report available on www.rln-east.com/culture. Fewer similarities are to be found with Chinese business culture. However, my impression of doing business in South Korea is that it is sufficiently different from China and Japan, and that these differences should be recognized.
What are the main negotiating styles used?

Personal relationships - In Korea, personal relations take precedence over business. Korean business culture is firmly grounded in respectful rapport. Koreans spend a significant amount of time developing and fostering personal contacts. Therefore, time should be allocated for this process, particularly during the first meeting, which is frequently used to simply begin the process of establishing rapport and building trust. The word kibun has no literal translation in English, however, as a concept that permeates every facet of Korean life, it can be described in terms of pride, face, mood, or state of mind. In order to maintain a Koreans sense of kibun, particularly in a business context, one must show the proper respect and avoid causing loss of face. In a culture where social harmony is essential, the ability to identify anothers state of mind, often referred to as nunchi, is crucial to successful business ventures. For this reason, you must be aware of subtleties in communication, observing non-verbal and indirect cues that often suggest the true sense of what is being communicated. Equally, drawing from Confucian beliefs, the term inhwa signifies the Korean approach to harmony. Koreans will often reply with a positive answer and show reluctance to give direct refusals. In Korean business culture this manifests itself in an innate sense of loyalty, employee obedience and courteous and formal behaviour. Koreans will generally be loyal business partners and value longer-term relationships. Before doing business in Korea prior appointments are required and should generally be made a few weeks in advance. The most suitable times to arrange a business meeting are normally between 10am and 12pm or 2pm and 4pm. For both social occasions and business meetings, punctuality is essential. Your Korean counterparts will expect you to arrive on time as a sign of respect; traffic in the southern parts of Seoul has become notorious and punctuality is becoming less rigid, however it is advised to call beforehand if you will be delayed. Decision making in Korea will follow a formal procedure in which senior approval is necessary. It will usually be clear in a meeting who the senior decision maker is. Junior staff may possess more knowledge of the issues in hand, so it is important to engage with them as well. They may not offer an opinion, however, until the senior member of staff has passed judgment. We would advise that you develop multilevel contacts.
80
It is recommended that you send a summary of any proposals, company brochures, and marketing material, written in both Korean and English, as a preview for your Korean contacts before you visit the country. It is useful to send a copy of the CV or other credentials of the individual leading your team and of any specialist staff, as this will indicate the competencies of your side. Generally speaking, responsibility is delegated to trusted, dependable subordinates by their superiors. Therefore, it is imperative not to offend or ignore the lower ranks and to show the various managers the same respect as other senior levels. It is important that you understand the seniority ranking of this key subordinate. In some cases (s)he may be involved largely because of his/her language capability, and his/ her influence can sometimes be limited. Age is the most essential component within a relationship in Korea, and a person older than you automatically holds a certain level of superiority. Although many Koreans now appreciate the legal implications regarding the signing of contracts, they may still be interpreted as less important than the interpersonal relationship established between the two companies. It is vital that you are aware of how your Korean counterparts view these documents in order to avoid any possible misunderstandings. Koreans treat legal documents as memorandums of understanding. They view contracts as loosely structured consensus statements that broadly define agreement and leave room for flexibility and adjustment as needed. However beware that they are fully capable of enforcing the price terms of a contract when that is in their favour. They are extremely direct communicators, and in spite of the basic formality of their culture they have a good sense of humour and when entertaining can become raucous. They are not averse to asking questions in negotiation if they do not understand what has been said or need additional clarification. When presentations are being made to a larger group questioning is much less than that used in the West. Litigation is not as common in Korea as in the UK, and out-of-court settlements and negotiations are a preferred option. Criticism should always be conducted in private where loss of face will be diminished. In a similar vein, opposing someone directly can also cause a Korean to lose face and should be avoided. Negotiations can often appear initially to be a one-way street. Brinkmanship and a wear you down approach are common tactics. Koreans can be deal-orientated. In terms of market entry, you will need to do thorough research, and double-check (if not triple-check) your understanding of what has been agreed. A good local agent is indispensable.

Amongst middle management and the younger generation English is quite widely spoken, but as soon as you get into the boardroom or in meetings with the older generation English is spoken less. It is a good gesture to learn a few words of Korean, and it shows that you are making an effort. Even experienced Western Korean speakers usually use an interpreter in negotiation. It is important to translate literature and other promotional material (including key website information) into Korean. Although many distributors deal with foreign suppliers, it is useful to have a Korean interpreter on
81
hand. The positive impression you will make by learning to speak a few basic Korean phrases cannot be overestimated. A guide to how to best use an interpreter can be found on the UKTI international communications website page http://www.rln-east.com/resources/how-to-guides.asp. The Korean language has imported many words from China, and uses some Chinese characters (hanja) to indicate some names and official titles. Most Korean words are written in han-geul, the alphabet developed under King Sejongs reign in the 15th century. It is based on phonetics and consists of only 24 characters to create syllables. For example, the first syllable of the word han-geul consists of a pictorial combination of an h and a on the top and an n on the bottom. Remember that an individual to whom you are talking may understand more than (s)he can say in English, and the issue of saving face may restrain them from speaking in English unless they are confident of their accuracy. The Korean language reflects the level of respect of the person who is being spoken to. Financial support for Korean language training in the East of England is available via the LCIT (Language & Culture for International Trade) programme, which provides a sliding scale of match funding (50% over 24hrs for 5 staff or more down to 50% for 10hrs for 2 staff). For more details see www.rln-east.com/funding and www.rln-east.com/lcit.

Business cards are extremely important. They are scrutinized carefully, and that scrutiny is a sign of respect. It would be advantageous to have them printed in Korean on one side and English on the other. The exchange of business cards in Korea is vital for initiating introductions. Koreans prefer to know the person they are dealing with. Therefore, it is important to emphasise your title so that the correct authority, status, and rank is established. Cards should be presented and accepted with both hands and must be read and studied with respect and consideration before placing them on the table. Gift-giving is a common practice within Korean business settings. Generally given at the first business meeting, gifts are often used to acquire favours and build relationships. You should allow the host to present his gift first and be sure to accept the gift with both hands. To avoid loss of face, gifts of similar value should be exchanged and gifts of greater value should be given to the most senior person respectively. The number 4 is similar to the word for death so try where possible to avoid gifts involving the number 4. Today, it is quite common for Koreans to shake hands with foreign colleagues after a bow, encompassing both cultural styles. To show respect during handshaking, you should ensure that you support your right forearm with the left hand. When departing, a bow is usually sufficient. Dont address a Korean by his or her given name as it is considered extremely impolite. Korean names begin with the family name and are followed by a two-part given name. You should address your Korean counterparts using the family name followed by the appropriate title (such as Kim sa chang) until specifically invited to do otherwise. The term manager can mean different things in Korea. The term nim after a surname and
82
title conveys respect, e.g. Chung jang nim is a polite way of saying team leader Chung. Otherwise where a title is unknown, the word shi means Mr or Mrs. Greetings follow strict rules of protocol. Many South Koreans shake hands with expatriates after the bow, thereby blending both cultural styles. The person of lower status bows to the person of higher status, yet it is the most senior person who initiates the handshake. The person who initiates the bow says, man-na-suh pan-gap-sumnida, which means pleased to meet you. Information about the other person will be given to the person they are being introduced to in advance of the actual meeting. Wait to be introduced at a social gathering. When you leave a social gathering, say good-bye and bow to each person individually. In terms of table manners, the oldest or most senior person is the one who starts the eating process. Do not point your chopsticks nor pierce your food with them. Chopsticks should be returned to the table after every few bites and when you drink or stop to speak. Do not cross your chopsticks when putting them on the chopstick rest. Bones and shells should be put on the table or an extra plate. Refuse the first offer of second helpings. Indicate you are finished eating by placing your chopsticks on the chopstick rest or on the table. Never place them parallel across your rice bowl. Karaoke is another popular pastime. Tipping is not common, unless an individual has performed an exceptional service for (e.g.) a function. After protracted or difficult negotiations you may be invited to share in a hot bath, although this is not common during first contact.
UKTI and Other Support

Useful contacts in Seoul are UKTI at the British Embassy in Seoul (for trade from the UK and investment into the UK), KOTRA (for inward investment into Korea, and these also have an office in London, see www.kotra. or.kr), and the British Chamber of Commerce in Korea. The Export Communications Review (ECR) is a heavily subsidised UKTI scheme which aims to assess your companys international communications capability and generates and action plan. It covers areas such as communications planning, translation of literature, website localization, language and culture skills, and use of interpreters. Further details, including a sample ECR and link to the online application form, can be found on www.rln-east.com/ecr. We also recommend that you undertake the (again subsidised) Online Market Introduction Service (OMIS) through which UKTI colleagues at the British Embassy in Korea can undertake informed market research and establish appropriate personal introductions to potential contacts in the market. As such, it is often the first port of call for selling into Korea.
83
The 11 Commandments
A small group of expatriate and Korean business people have put together their combined wisdom on the top tips for doing business with the Koreans, and these are summarised in Tom Coyners and SongHyon Jangs book Mastering Business in Korea (ISBN: 978-89-91913-16-5). Courtesy of the UKTI post in Seoul, here is a summary of the 11 Commandments, as they have come to be known. Further useful reading can be found in the book Korean Business Etiquette by Boy Lafayette de Mente (ISBN: 0-8048-3582-9). Chapter 4, entitled Vocabulary of the Korean Way, provides an excellent introduction to key Korean business concepts.
I. Thou shall always have a formal introduction

If you are a Korean, it is most important and advisable to have a formal introduction to any person or company with whom you want to do business. Meeting the right people in a company almost always depends on having the right introduction. Whenever possible, obtain introductions rather than make contacts directly or just pop in on a businessman. Use of the proper intermediary or go-between is desirable in your business meetings. If the person whom you wish to meet has respect for your intermediary, chances are he will have equal respect for you, too.
II. Thou shall not be without business cards

In Korea, every person has a distinctive place in an organizational hierarchy. A businessman is not comfortable until he knows what company and what position the person he has just met is from. Therefore, the exchange of business cards in Korea is very important which is a formal affair and plays a very important role in introductions. Have calling cards made prior to visiting companies and keep plenty on hand at all occasions. Exchange your card with the other persons taking a moment to closely examine the persons name, title, etc. as a way of showing you hold the other party in respect. Exchange cards with both or your right hand never with your left hand. Do not quickly place the card into your pocket. After the exchange, you may place the cards on the table in front of you as you proceed with the meeting, using them for further reference.
III. Thou shall not assume everything you say in English is completely understood
Remember that the real level of comprehension of many English-speaking businessmen may not be as good as their courtesy implies. Their perception can be, and often is, surprisingly remote from what you think you are getting across to them. Cultural barriers are sometimes bigger than they may appear on the surface. Take pains to emphasize and repeat your key points for their understanding. Try speaking in short, grammatically correct sentences using simple vocabulary. Out of consideration of face, often Koreans will not admit they are not following your explanation. Sometimes it is a good idea to ask questions to verify the other persons understanding while taking care not to embarrass the other person in front of others. Try diagramming your points rather than simply using English. Exchanging notes after meetings is very helpful for this purpose.
Iv. Thou shall restrain pushing your position too hard

Korean businessmen internationally are believed to be good negotiators. Be prepared to be patient, gentle but firm, and as dignified as possible at a negotiating table. Do not try to push your position too hard. Sensi-
84
tive issues and details may be skipped for future discussions, preferable by a go-between or by your staff, if available. Use of go-betweens can be very valuable especially in delicate dealings where financial negotiations are involved. Allow sufficient time for your counterparts. Their decisions are usually made collectively and often require more time than you may expect. Often the real decision-maker is not at the negotiating table in spite of your negotiating partners business title suggesting otherwise.
v. Thou shall build human relationships

Legal documents are not as important as human rapport and relationships. Koreans do not like detailed contracts. They prefer, and often insist, that contracts be left flexible enough that adjustments can be made to fit changing circumstances. Therefore, it is very important to develop and foster good relationships based on mutual trust and benefit in addition to the business contract. To a Korean businessman, the important thing about a contract is not so much what is stipulated but rather who signed it and the fact that it exists. Do not be surprised that your business partner immediately asks for exceptions to a recently signed contract due to unforeseen business circumstances. This is normal business but, of course, it takes sound as well as flexible judgment to decide when to say yes and when to say no.
vI. Thou shall respect your partner

Koreans are extremely sensitive people. Never cause them to lose face by putting them in a difficult position. On the contrary, offer praise on your partners business successes. Their state of good feelings or kibun can do wonders far beyond your expectations. And, of course, you benefit from the good mood created. At the same time, be aware there are smooth foreigner handlers who flatter by insisting that you understand Korea better than other foreigners and therefore you can see beyond sound business logic thanks to your cultural insight.
vII. Thou shall entertain and be entertained

Entertainment plays an important role in any business relationship. When offered, it should always be accepted, and in some way reciprocated in due time. Parties are often like drinking competitions. Your capacity of alcohol consumption may be one of the deciding factors that can lead to a successful business negotiation and relationship. You may be expected to get intoxicated but you have the right to politely hold the line. Legitimate reasons for drinking little or none include personal health conditions and religious beliefs. At the same time, symbolic or token drinking can be done as a substitute when accompanied by a positive and friendly attitude. The giving of small gifts is also an accepted practice and is recommended. Golf is a popular form of entertainment. Join the game as often as possible.
vIII. Thou shall try to know your counterpart

Try to personalize all business relationships. An informal agreement with a trusted party can be considered far more secure than any written document. Try to find out as much about your counterparts as possible: their family status, hobbies, philosophies, birthdays, etc. Try balancing your social life with regular activities with Koreans and not simply people of your own or similar cultures. Even if you cannot speak Korean, there are a number of groups largely comprised of Koreans who are bilingual such as churches, civic organizations and special interest clubs. Even if these extracurricular activities have no direct impact on your business, you can gain invaluable insights into the Korean mind by active participation. Furthermore, since Korea is a tight-knit society, what may begin as an association for non-business reasons may evolve over time into important introductions to others important to your future business.
IX. Thou shall temper the use of Western logic

Do not try to appeal too much to Western logic, but try instead to find emotional common denominators.
85
Feelings and face are often far more important in local business dealings. A willingness to compromise without giving up your core values is an invaluable skill anywhere but it is an ability that will serve you particularly well in Korea. Spend some time in reading up on Confucianism. Then observe and inquire on how it operates about you in your workplace and elsewhere. The sooner you do this the more natural it will be in finding an appropriate point of making compromises and knowing where to draw the line between Korean and Western logic.
X. Thou shall keep fully informed

Be aware of the fact that many changes are taking place at an unprecedented pace in current society. With increasing affluence and the development of mass communication. the lifestyle of Korean consumers is changing rapidly. Changes in their fashions, diet habits. housing and mobility are so fast and profound that one has to take extreme care to have a proper grasp of the market. Accurate market research and other advice concerning future trends are a prerequisite for success in this ever-changing land. Remember: Korea is a world leader in the common use of broadband Internet communications and consequently events and trends often change at Internet speed. Be particularly aware how heavily younger people use their multifunction cell phones beyond simply making phone calls as this crowd can easily outpace even their wired Internet counterparts.
XI. Thou shall recognize foreigners are different from Koreans

While the first Ten Commandments definitely apply to Koreans, foreigners are placed involuntarily on a different plane than other business people. While this can work against the foreigner, it can often be an advantage. This is not to say, one should discount the first Ten Commandments, but it does mean a foreigner has a bit more wiggle room than his Korean peer. For example, as a visitor or short-timer, one may not have the needed contacts as a Korean may have cultivated. Does this necessarily mean you must find a Korean partner even if you are working within a short time schedule? The simple answer is no. Ideally you should have someone on your side that can help grease the introductions to key people. But turning a negative into a positive being the dumb foreigner who knows no better can often work, particularly if you are new to Korea. However, newbie or old Korea hand going solo or in tandem with a Korean partner, some things remain the same. Preparation is key as in all good business. Before making your first move, it is essential to do your homework on your industry in Korea, including knowing who the players are and who has been successful and unsuccessful and why. Your presentation needs to anticipate who will be in the audience and what they wish to know. You need to seriously consider what to expect of your meetings and presentations ahead of time to be at least mentally prepared. You should have a readied portfolio of relevant detailed information on hand so you can deliver it on demand (but do not volunteer it unless it is truly necessary!) In any case, with care and patience, foreign business professionals including those who speak no Korean can and have made it on their own through the front door to get to the key person. Furthermore, mature and well-prepared professionals have walked away with major contracts. This may not be the easiest way to do business in Korea, but out of necessity has come unconventional paths to success.
86
MEXICO BUSINESS CULTURE
This report is designed to support and complement existing cultural information available through the UKTI posts in Mexico. It adds value in that it provides evidence and information from discussions and interviews with those in the field with regard to Mexican business culture. Its primary purpose is to better prepare UK businesses for communicating with the Mexico market and understanding its business culture and etiquette.
87
The report focuses solely on Mexican language and business culture, and has been written in an informal style to reflect the comments made by those we met. To provide a range of views and establish consistency, several meetings, interviews & discussions were held with individuals from a broad range of business backgrounds. These SMEs and business support staff came from UK & Mexican organisations, including UKTI staff in Mexico City, Guadalajara and Villahermosa. The content of this report initially came from the Mexico business culture workshop held in Luton in January 2007 for those clients attending the March trade mission, and this content was subsequently taken to market to receive input from those on the ground. This report complements the previous scoping missions carried out in the East of England between 2006-2009 to identify potential opportunities between the UK and Mexico in agrifood & drink. This report incorporates feedback on communications issues from companies participating in the March 2007 trade mission. The project, financed by UK Trade & Investment East of England, focussed on 4 questions we have been asked by our UK clients. These were: 1. Where a UK visitor has acquired Spanish through business in Spain, what proportion of Mexican Spanish would they be able to understand, and what are the main differences? 2. To what extent should companies adapt their marketing and web materials into Mexican Spanish or Latin American Spanish, and would literature or website content in Catalan Spanish be acceptable? 3. What are the main barriers which companies may face when coming to Mexico for the first time? 4. What are the main points of etiquette I should watch out for?
The combined wisdom of those we met is outlined below. We would like to express our thanks and deepest gratitude to all who contributed to this project, and above all to Ivan Ramirez, Alicia Zayas, Mariana Morales Alvarez & Mark Buckingham of the UKTI posts in Mexico who put together a professional programme and provided all the support we needed, and to Martin Keepfer of UKTI East of England, who leads on Mexico and supported the project throughout its duration.
88
Where a UK visitor has acquired Spanish through business in Spain, what proportion of Mexican Spanish would they be able to understand, and what are the main differences?
There was overwhelming consensus that a basic knowledge of Spanish greetings went a long way to making a good first impression on any new contact. Generally speaking, English is widely spoken amongst the business community, and we believe by the majority of those involved in international business. Making the effort demonstrates a certain seriousness about entering the Mexican market. Many people in Mexico speak, or try to speak, technical English, but we recommend carrying brochures and a presentation letter in Spanish. Mexicans appreciate it when businessmen try to speak Spanish. Mexican businesses we met fell into three categories: those who spoke English, those who did not, and those who were able to speak some English but were not comfortable in doing so, and it was this latter category which was predominant. Initially they would make an effort to speak in English, but when giving presentations many will prefer to default to Spanish and use the services of an interpreter. It is interesting to note that when giving press releases the majority of Mexican journalists do not speak English. During the mission interpreters were required for many of the meetings, for the eventuality that discussions became more complex than the basic Spanish or English of the participants permitted. When dealing with everyday peripherals, such as taxi drivers, street vendors, customer service staff and the general public; where English was evidently not well spoken, a knowledge of Spanish is essential. The higher levels of English spoken is generally restricted to the business classes and higher strata of society. During the mission a number of mature students from a prestigious private Business School in Mexico City were used to act as both interpreters and communication links with the participating companies. They possessed excellent levels of English and were fully briefed, and the clients were impressed with the services they offered. A distinction needs to be made between on the one hand conversing with potential clients, partners or other contacts in grammatically-acceptable Spanish and on the other hand using every item of language competence (Spanish, English, Italian) to convey a basic message for everyday survival. A further distinction needs to be made between the communication skills required on first contact and those required to maintain a consistent business relationship. During our discussions with the companies we attempted to discover the reality of everyday communications, and the general opinion was that any language could be spoken which ensured business could be conducted. We asked whether there was sufficient difference between European and Mexican Spanish to cause problems, and it was felt by all that where a visitor possessed Spanish skills, these could naturally be used without major problems. A useful dictionary is the Longman Dictionary of UK/ US English and Latin American Spanish (ISBN 0582-511550). On the whole there were sufficient numbers of staff in these companies with English language skills, although this could vary across industry sectors. Where insufficient English skills were available, we were assured that appropriate staff recruitment at middle of senior levels with good communication skills could be available.
89
Be prepared to learn Mexican Spanish if coming to live and work in Mexico. The up-front and friendly culture tends to encourage the learning of Spanish and acceptance of any attempt, however weak, to communicate. Where key matters are being discussed, such as contracts, it is advisable to take along a interpreter, and these can be sourced through our contacts at the UKTI offices located in the British Consulates in Mexico (Mexico City, Guadalajara, Monterrey, Ensenada, Villahermosa, Acapulco). As a general guide, interpreters should not cost more than 180 per day, although this depends on the level of technical knowledge required. It is vital to ensure the interpreter has the requisite technical vocabulary and understanding where this is a core requirement. It is interesting to note that Mexicans frequently avoid getting directly to the point during negotiations, as they wish to avoid causing disappointment by a negative response. The emphasis should be placed on the visiting UK business to establish the degree to which a lack of English language skills represents a risk if not a barrier to trade with a particular Mexican partner. A useful guide to recruiting staff in the UK with relevant language skills is Recruiting People with Languages, available (in the East of England) from your international communications advisor. English is understood and spoken by many in Mexico City and other large cities. Many universities are now encouraging students to study English, particularly for the TOEFL exam. Further information and guidance can be found in the How-To-Guide Foreign Language Training available (in the East of England) from your international communications advisor (www.rln-east.com/resources/howto-guides). Useful topics to cover in a beginners workshop would be the basic pleasantries, giving and understanding opinions, dialogues with taxi drivers, and some basic information about the company. Support in the East of England for language & culture training can be found through the website www.rln-east.com/ projects, as there are several support projects currently run.
To what extent should companies adapt their marketing and web materials into Mexican Spanish, and would literature or website content in Spanish of Spain be acceptable?
The answer to this was a clear yes to the former, and possibly yes to the latter in most circumstances. Beware differences in translation between European (ES) and Mexican (MS) Spanish, however. Correspondence and trade literature should be in Spanish where possible. Although English is widely spoken, there are still many who do not speak it or understand technical terminology. Price lists should be in dollars or pesos. Many exporters price in dollars. Spanish should be used, if possible, and all costs should be included. Many junior technical or admin staff do not possess English language skills, therefore literature in Spanish is essential. On the whole Mexican partners would be happy to vet translations once done. All contracts and official documents must be in Spanish. Localisation (and not mere translation) of literature is recommended, as Mexico is a culture which favours imagery in its material. Given the rise in internet usage, it is strongly recommended that companies localise their websites to reflect Mexican or Latin American interests. Where a flag system is used, the Mexican
90
flag should be displayed, rather than the generic Spanish flag, to indicate the Spanish language, although both flags could effectively point to the same splash page where a company uses only one form of Spanish. We noticed during our visit the use of the term espaol rather than castellano when referring to the Spanish language. It was recommended that either material was second-checked by a Mexican contact or translated by a Mexican in the first instance. Where Mexico is the only country sold to, literature should be translated into Mexican Spanish, even where a UK business is selling to a number of Latin American countries, and Mexican Spanish was recommended by UKTI Mexico as being a good starting point for generic material across Spanish-speaking Latin America. When we asked whether Colombian Spanish was a good alternative, we were advised to still use the Mexican form of Spanish (spoken Colombian for audio & visual material is often considered too melodic). UKTI Mexico City offer translation services through one of their staff. We also came across instances where packaging would have to be considerable altered to meet local regulations. This included the need to state net content on food packaging and not merely the number in grams, and some terms were not permitted (eg: curry sauce would have to be termed a curry type of sauce. Organisations known as validation units are useful contacts, as they are able to produce alternative labels which can be placed over the existing UK label and which confirm to Mexican legislation. Further information and guidance can be found in the How-To-Guide Adapting Materials to International Markets available (in the East of England) from your international communications advisor (www.rln-east. com/resources/how-to-guides). Mexico has one of the worlds fastest growing rates of internet use. Coupled with increasing business with the US, the internet is an ever more important business media. Where companies employ staff with a limited knowledge of English, it is often found that these staff understand individual words but struggle to form full sentences. Mexican business is influenced by its proximity to the United States, although the UK is seen as a favourable partner.
What are the main barriers which companies may face when coming to Mexico for the first time?
Clearly this question needed to be approached with tact, and there were elements of some discussions which are best left to informal feedback with your advisor. This said, the question was answered openly and honestly by all, and the combined wisdom of those we met is outlined below. The use of local legal representation (asesores) is highly recommended, and this view was consistent across several of our discussions. UK business also needs to be prepared to adapt to Mexican business culture as well as recognise regional differences, although the basic culture is the same. There may be sectoral differences, such as with oil and gas in Villahermosa, which possesses a different business environment to the centre or north of the country. Assistance in overcoming these barriers is provided by a number of organisations, including the UKTI posts, consultants, and local legal & business support representation. These include MSM Asesores. These
91
recommended for the majority of UK importers that )their defined) type 2 agreement containing a basic contract would be sufficient when selling in Mexico. Commercial invoices require the description of the merchandise and not just the codes, as the customs authorities may determine that different codes are needed from those the UK company may provide. There may be some reclassifying of merchandise. Mexico has an 8-digit system, but only the first 4 digits are international. Due to the Free Trade Agreement with the EU, tariffs are generally lower or zero-rated. Form EUR1 can be used for invoices of less than 6000 euros, which is stamped by the Chamber of Commerce and not Customs. Mexico is very fussy about procedures and documentation, and it is advisable to send documentation in advance to the distributor or importer so that they have the opportunity to look through it. Some products require translations into Spanish of user manuals, commercial information and warranties. There was one interesting example of a machine clearing customs but not the chemicals to lubricate it, and these had to be sourced locally. Some clients asked about the risk of their products being manufactured in Mexico without licence to do so. In some instances the UK products value lies in that it is imported, and would therefore not be manufactured in Mexico, although this limits itself mainly to luxury or niche items. Terms and conditions of sale need to be provided in English and Spanish in many instances.
What are the main points of etiquette I should watch out for?
In many ways like the US but it isnt. English is generally spoken but dont assume so. Bring brochures in Spanish. Mexicans attach some importance to titles. Business cards are important and are usually exchanged at the beginning of the meeting. Mexicans generally dress more formally than Europeans. It is important that you are well dressed for business meetings. Mexicans like to use personal meetings for anything of substance. Typically the phone us used only for making arrangements. Mexico has a different attitude to time, and meetings dont always start and end on time. The size of Mexico City and the heavy traffic dont help with punctuality. In a business meeting you shake hands with everyone on arrival. Mexicans dont like to cause offence, and not saying no doesnt mean yes. Mexicans attach great importance to titles. Those in most common use are for holders of degrees, ie Licenciado (Lic), Ingeniero (Ing), Arquitecto (Arq), etc, who will expect to be addressed, both orally and in writing by their respective title. Both patronymic and matronymic surnames (ie Ing Lpez Martinez) are used in writing. In speech the second surname is dropped. Business cards (preferably in Spanish) are important and are usually exchanged at the beginning of the meeting. The main meal is usually eaten in the early afternoon. Only a light meal is taken in the evening. Business people in small cities are usually unavailable between 14.00 and 16.00, when they return to work until 18.00. However, in larger cities such as Mexico City, Guadalajara and Monterrey meals hours can be only 1 hours due to the distance from office to home. If it is a business meal, then the meals can take from 2 to 3
92
hours depending on the type of business discussed. Breakfasts tend to be hearty to last the morning and the equivalent of the UK lunchtime! Mexicans generally dress more formally than Europeans. It is important that you are well dressed for business meetings. Mexicans make friends first, then do business: this is a quote from Mexican business guru Miguel Angel Cornejo. You should be prepared to spend time socialising. Only move onto business when you have built up rapport. Face to face contact is crucial. The prominence of women in Mexican business is increasing. The vast majority of foreign women visiting Mexico are accorded suitable respect. Mexico is sometimes remembered for its machismo attitude towards women, however, modern Mexico is not like this at all. The modern Mexican woman is cosmopolitan, professional, and well respected. If you are a woman planning to do business in Mexico, you should find that you are accepted, respected and treated very courteously and professionally. Due to issues of translation, Mexicans tend to invert phrases in English-The budget of my company we have for 2006 vs. We now have the 2006 budget for my company completed. The meaning is always there, but you must listen carefully. Mexicans also do not like to disappoint UK visitors, and on occasion may agree to attend (for instance) an event but then will not turn up. When making a phone call to Mexico, it is relatively difficult to establish first contact as it is customary for several secretaries to process the call prior to reaching the intended person. Some secretaries may not speak English; so speak in Spanish, or have a couple of Spanish sentences prepared. If speaking in English, speak clearly and slowly, and try to pronounce your vowels and the letter r as Mexicans are used to American English. Receptionist phrases in several languages, including Spanish, are available on the UKTI international communications website www.rlneast.com-resources-materials. If you are unable to contact your Mexican counterpart and only able to leave messages, it is not likely - at least by Mexican standards - that your calls or messages will be returned. In most cases Mexicans tend to think that if a call is important it will be placed again. It can be common for Mexicans to arrive late, and they often like to share their experiences rather than come straight to the point. The secretary is also normally the person writing and answering all the emails on behalf of his or her boss at higher levels of seniority. Make sure that you are meeting and negotiating with the people who will be making the decisions. These will be senior people within the company. If a Mexican firms top managers are present at a meeting; they will expect the same from your firm. They will feel insulted if subordinates are sent to meet with them. Business deals in Mexico are only closed between friends and business meals are the time to get to know each other, the actual business is sometimes reached over coffee and after-meal drinks. If scheduling a dinner meeting, you need to be aware that for Mexicans dinner often occurs at 9:00 pm, not the typical U.K. time of 6:00 pm 7:00 pm. It is also recommended that women should not invite a male counterpart for a business dinner unless other colleagues or spouses attend. In Mexico, time is a very flexible thing. Dont be offended or surprised if your contacts in Mexico dont arrive on time. For social events, you could show up 30 minutes later than the time on the invitation. If you are sending invitations to a social event, be aware that guests wont show up on time, and importantly - it is not customary to define a time at which the event will end; in Mexico, this should be left open-ended.
93
Names: In Mexico, people have three names: first, paternal and maternal. Written, they will use all three (or the third will be often abbreviated with the first letter), but verbally they will use the first two. Titles: Titles are extremely important in Mexico - a big status symbol. Men meeting men: Men always shake hands when they meet and before they depart each others company. An abrazo (hug) is shared between friends; wait for your Mexican counterpart to lead with his. Men meeting women: a formal handshake is appropriate for business when meeting and before departing; some women may learn toward you to kiss; you should follow through with a light kiss on the cheek. Hugging as above. Women meeting women: a formal handshake is appropriate, and it is likely that women will kiss on the cheek when they meet and depart. Hugging as above. Generally: never just stand there and say hello, nice to meet you. Physical contact is essential to gaining peoples trust and understanding in Mexico. Mexicans make friends first, and then they do business, not the other way around. If you do not take time to develop a relationship, then you may as well not be in Mexico on business. Be aware that their first impressions of you will count a lot. Use this time to develop the relationship and build a friendship. In Mexico business meetings start off slowly, with the majority of time discussing general topics and waiting until the final moments to bring up the matter at hand. In the every second counts mentality of the U.K, light conversation like this is often viewed as an expensive waste of time. A meeting should always begin with small talk. Family is very important in Mexico, and a friendly enquiry about how the family is doing is often common practice. Other topics include the weather, latest fashions, and Mexicos areas of outstanding natural beauty. Consider the context you are in: Most initial meetings begin over breakfast or lunch so dont rush and dont be rushed. Trying to sped up the process can lead to problems later on. Business deals are rarely closed over the phone; Mexicans like to look you in the eye when they are closing the deal. Personal contact and relationships are important, as they are throughout the entire Mexican Culture. Mexicans dont like the constraints that European-style meeting formats: they feel it breaks down the creative process that leads to new ideas and better concepts. Be prepared for your meeting format to follow a hap-hazard pattern, with subjects changing various times and tangents commonplace. Mexico has a very well developed and sophisticated media infrastructure, and Mexican consumers are very influenced by the various media. Television, radio, bill-boards, business and technical magazines are the most popular forms of advertising: newspapers have nowhere near the circulation that they have in the Europe, although targeted ads in specific papers can be effective in certain markets. Free publicity materials are very popular. Mexicans consumers really love are the touchy feely promotions: in-store samples, free trial packs. Free gifts and toys that advertise your product will also go down well in Mexico and are especially important if you are launching a new product in the consumer market. Advertising can be targeted locally, regionally or nationally. All the major (global) ad agencies have offices in Mexico, and there are many independents who will do bespoke/ specialist advertising work for smaller and companies operating in niche markets.
94
Long delays can occur due to lengthy holiday periods in Mexico, especially during numerous religious periods like Christmas, Semana Santa (Holy Week or the week before Easter),Our Lady of Guadaloupe (December 12th), Mothers day (May 10th), Day of the Dead (November 2),Kings Day (January 6 - Dia de Reyes), etc. Distribution in Mexico may also be affected by the numerous long weekends, called puentes (bridges) and there is a joke that-the longest bridge in Mexico is the Puente Guadalupe Reyes. which runs from December 12th, the Day of Our Lady of Guadalupe, to Kings Day on January 6th. Use only authorised taxis, available from hotels or official stands. In most cases, you need to purchase tickets from the authorised taxi companies at the airports before you go to your taxi.
Background Information to Mexico

Mexico is a former Spanish Colony it was conquered (defeating the native Aztecs) in 1521 by Hernn Corts with just 550 men and 16 horses and gained independence from Spain in 1821 Mexico is a Federal Republic comprising 31 States plus a Federal District (Mexico City); full country name = United States of Mexico Mexico is a vast country bounded to the north over the Rio Grande by the United States and by Guatemala and Belize to the south. The Sierra Madre and Rocky Mountains run south from the border with the US. The interior consists of an elevated plateau. Northern Mexico is dry and desert-like, while the south is mountainous jungle containing the ruins of ancient city complexes. Mexico is one of the worlds most bio-diverse countries. Presidential and Congressional elections were held in Mexico on 2 July 2006.On 5 September 2006, the Federal Electoral Court declared Felipe Caldern of the Partido Accion Nacional (PAN) the winner of the election and President-elect. He took office on 1 December and his term will last until 2012. Mexico is the fourth largest country in the Western Hemisphere; its area (736,000 Sq Miles) is around eight times that of the UK and its climate ranges from rain forest to desert to Caribbean beach to mountains and volcanoes Adult literacy rate stands at 91%; 7% of the population is older than 60; 52% of the population is younger than 25; the population is around 105m, of which a third are under 15 years old; 50% of the population are classed as poor; the North is wealthier than the South (proximity to the US)
95
President Fox (2000-06) set a series of key policy aims for his six-year term. These included: fiscal reform to improve the low tax take for the government; rooting out Mexicos pervasive corruption; tackling rising crime levels; major constitutional change to make Mexican politics less centralised and more accountable; raising educational standards so Mexico can compete with more advanced economies; and economic growth with the opening up of key sectors, eg energy, to foreign investment. 40% of the population is concentrated in only 5 states: State of Mexico, Mexico City, Veracruz, Jalisco and Puebla; urban population stands at 75%; the number of households is 24 million; Guadalajara and Monterrey vie for 2nd City status.
96
POLAND BUSINESS CULTURE
This report is designed to support and complement existing cultural information available through the UKTI posts in Poland (see www.uktradeinvest.gov.uk). It adds value in that it provides evidence and information from discussions and interviews with those in the field with regard to Polish business culture. Its primary purpose is to help better prepare UK businesses for approaching the Polish market for the first time.
97
The information contained in this report is based on a number of sources, including UKTI Poland, the UKTI Poland culture workshops in Histon in Dec 2006 and in Bishops Stortford in Nov 2009, discussions with Polish business support agencies in Krakow, information from the UKTI Poland pod cast, and six visits by project staff to Poland between September 2005 and October 2007. Specific thanks go to Piotr Radew (MARR), Adam Oliver (Brown & Co, Poland), Lis Slawomir (consultant), discussions with several East of England businesses and Leszek Wysocki of UKTI Norfolk. The report focuses solely on Polish language and business culture, and has been written in an informal style to reflect the comments made by those we met. To provide a range of views and establish consistency, we have cross-referenced comments from a number of sources as identified above. As a first port of call we would recommend the UKTI post in Warsaw. Specific thanks got to our colleagues in Krakow, who acted as project partners in the European-funded project HARVEST, which provides language & culture business support to SMEs in the agrifood and drink sector in both Poland and the East of England. At a UKTI Poland business culture workshops held in Cambridge on 7 December 2006 & on 25 November 2009 delegates were asked what experience they had of trading with Poland, and responses tended to fall into 2 categories: (1) prior experience which needed updating and (2) initial recent experience which needed confirming. The presentation and discussions which followed aimed to build on and share these experiences as well as to present an overview of current business practice and etiquette in Poland. Some of the questions asked by delegates were related to standards, licensing, corruption, bureaucracy, business processes, reactions to female UK business visitors and whether the Polish businesses are generally more difficult to deal with. Following an introduction by each company present of their experience of the market, the main presentation at both workshops began with an overview of Polish macro business culture in order to set the scene.
Generic Information on Poland

The Polish Constitution of 3 May 1791 was the second in the world and the first written constitution in Europe. Poland is one of the largest countries in the EU, with a surface area of 312.700 sq.km and a population of 38 million. Poland is considered to the a dominant country but the importance of understanding the historical background of Poland is crucial. The urban population accounts for 62 % of the total population. English is the most popular foreign language. Poland has a moderate climate, with relatively cold winters and warm summers. Poland was established as an independent nation in the middle of the 10th century, and experienced its
98
political and military zenith during the 16th century. It subsequently experienced a loss of independence between 1772 and 1918, and was invaded by both German and Soviet troops in 1939 to 1945. After World War II Poland became a Soviet satellite state, and was later the first country in the former Soviet block to become free from 45 years of Communist domination. The Solidarity Party took the power in 1990, and Poland joined NATO in 1999 and the European Union in May, 2004. Poland is considered the most devout Catholic country in Europe, with 95 per cent of the population declaring themselves to be believers, and with 75% actively practicing. Roman Catholicism plays a central role in Polish identity and social solidarity. Polish people are very involved in the life of their country, and their strong sense of patriotism is a result of a very eventful history. There is a strong national pride in an unbroken historical and cultural identity, and close personal relationships are a result of years of foreign occupation and a family-focused society. In the initial stages of market entry UK business visitors will need to earn the trust of their Polish partners, and only then can a closer acquaintance turn into a closer relationship. Polands Macro Economic situation is +1.1 and is the ONLY country in the EU to have positive GDP economic growth in 2009. Foreign direct investment for 2008 was at an all time high of 10.97bn. Foreign direct investment is crucial and its importance can not be overstated in modernising and accelerating both the regional and country development of Poland.
More Detailed Facets on Polish Business Culture

Following this overview, the specifics of Polish business culture were discussed in more detail. It was commented that normal office working hours are flexible, beginning at 7-9 am and finishing 3-5 pm. There is no usual practice of having formal lunch breaks, with the exception of business lunches for clients or visitors. It is important to be on time for business meetings, as this will be a gauge of your reliability. Appointments should be confirmed a couple of days before a meeting is held, and it is not unusual for meetings lasts longer than planned. If telephone calls are to be made, it is advised to not make them after 4pm as the conversation will not be as productive as it could be as the working day is usually coming to an end in Poland. The business culture in Poland dislikes ostentatious displays of wealth, and Polish counterparts will take notice whether clothing is clean, well pressed and in good condition. In big companies, conservative suits and ties in subdued colours are the norm, and vivid colours are considered inappropriate. Women should wear conservative suits or dresses. Informal wear such as is not usually acceptable, even at 30 Celsius! In Poland there is a preference for doing business face to face, and building relationships is the key to a successful cooperation. Other practical tips were offered, such as maintaining direct eye contact during a conversation. Polish people are very sensitive to body language, and are appreciative of visitors making the effort to smile. Do not appear over friendly as this can be perceived as a
99
sign of weakness. Polish businesspeople love to conduct discussions on a wide range of topics including public life, family and careers. When in a group, it is best to avoid conducting small-group private conversations. Usually, after two or three meetings the use of first names is welcomed, and professional titles are not used when addressing Polish executives (as is the case, for instance, in Germany). Several face to face meetings to establish a good working relationship were considered appropriate, more than was considered the norm in the UK. Do visit in person flights relatively inexpensive and the effect on your counterparty will be significant. According to Polish business etiquette, gifts are given at the beginning of a relationship, especially when contact is made for the first time (the best gifts are always items which are typical of UK culture). It is good practice to be the first to hand over your card, and there is a decreasing need to have business cards translated. Polish negotiators tend to be reserved, and periods of silence during negotiations are not unusual. It is advisable to be aware that there are differences when it comes to issues of legal / accountancy matters when doing business with Poland. it is not uncommon for a UK company to be asked for something that simply doesnt exist in the UK for example an KRS extract or NIP number. In Poland documents and contracts are extremely important. It is advisable that you clarify your VAT position as early as possible and confirm it as early as possible in any correspondence. Polish companies are required to complete monthly reconciled Profit and Loss accounts which means if you make a correction to an invoice after the event it is a real annoyance. If possible employ people on a self employed basis, this removes many obligations in terms of employment legislation and try to always employ staff on a three month trial basis to begin with. You will need admin / accountancy support in making social security submissions on a monthly basis if you employ anyone. All salary figures quoted are per month and usually gross to the person employed. To this you need to add 20-30 % company employment costs. Information on doing business in Poland can be found on UKTIs website. Simply go to the country page where you will find information on: Economic background and geography Customs & regulations Selling & communications Contacts & setting up visiting and social hints and tips
Given Polands gradual transition from command-led to market-led economy, and companies varying degrees of ability to adapt to change, it is advisable to try to analyse the environment of the company which you are going to negotiate with. If possible, the group was advised during initial negotiations to represent ones company by a couple of negotiators, one of whom should be middle-aged. There followed some discussion on how this would work in reality as well as a precise definition of middle aged.
100
Decision-making in Poland is viewed as a top-to-down decision making process, with a strongly regulated business environment where these rules are adhered to rigidly. There is a strong respect for hierarchy and authority in Polish companies. Meetings start with some small talk, which allows to relax, and make first judgments about potential or new partners. The decision-making process is slower than in the UK, and it may take several meetings before a business deal is finalised. The only major difference is that the formality level in Poland is higher than in the UK. When meeting someone for the first time in a business environment you should introduce yourself using both first and last name. Shaking hands is followed by the exchange of business cards. When addressing senior management in Polish companies in writing you should use Dear Mr Last name or Dear Mr President rather than Dear First name. When your relationships with local contacts develop, you can take a less formal approach. Polish people can be voluble and gesticulation is an integral part of conversation here. However, little significance is placed on specific gestures and you do not need to worry about inadvertently causing offence. Polish business people wear suits for business meetings. Dressing well for a meeting is expected as it shows your counterparts that you value the opportunity to meet them. When engaging in social activities such as being invited for a meal, meeting in pubs is very popular, with beer as the most frequently ordered drink. A toast is usually performed, and it is important to maintain eye contact with your host. During the toast, as a visitor it would be advisable to comment on some aspect of the visit such as the warm reception of the host, the beauty of the city etc. The group was advised to learn some basic Polish words, as this would be considered as a friendly gesture. Equally, do not try to hide your emotions and feelings, as an open attitude towards others will be appreciated. The standard greeting is a firm handshake, and on many occasions men keep the door open until every woman has passed. After a brief break the group were invited to both comment on what they had heard (with these responses embedded in the relevant sections above) and field their own specific queries or experiences. One item discussed was the barrier to trade caused in certain industry sectors by the example of seeming intransigence of one Polish public body to accept the designs for electrical equipment supplied by a UK qualified designer, as this designer, although qualified in the UK, was not licensed in Poland. One probable reason for this, as put forward by another member of the group, was that in legal terms in Poland the designed signing the design is legally responsible for any negative outcomes following use of that design, particularly as regards health & safety. In the UK it would be the organisation (and the head of the organisation) employing the designer which would be legally responsible and not the individual designer him- or herself, as is the case in Poland. A second item discussed was that of rubber-stamping and of the remnants of bureaucracy from former Communist times. Some members of the group had experienced such procedures based on the old systems, although the speaker felt this was changing for the better, but could be exacerbated by entry into the EU, which has its own system of imposed bureaucracy. Hence the unfortunate visitor could in fact stumble
101
across elements of both systems. Polish businesses are considered thorough in their adherence to these rules, therefore the UK business should allow more time for these processes to be followed through. The reactions to female business representatives was raised, and it was felt in general that this was not an issue for the Poles, and that women readily held senior positions in Polish organisations. The issue of seniority was again raised, and the impression that senior but young negotiators give. Requests were also aired as to support from UK organisations for establishing contact with Polish companies or other organisations, and three sources of assistance were proferred: (1) UKTI commercial staff based at the British Embassy in Warsaw (ewa.veenendaal-rawicz@fco.gov.uk) (2) the Bedfordshire Chamber of Commerces Poland team (www.brightarc.co.uk) and (3) the Malapolska Development Agency Malopolska Agencja Rozwoju Regionalnego (www.marr.pl). The issue of corruption was raised, and was discussed outside the scope of the workshop for informal feedback. Given the public nature of this document, it is more appropriate to recommend to UK companies that the lobbying of influential parties as per in the UK is a valid practice. The level of English language competence was also discussed, and it was felt that although the younger generation of Poles possessed good English skills, many of the contacts UK businesses met were not always of this generation and did not always possess good levels of English, necessitating the use of an interpreter qualified in the field under discussion. Much mileage can be gained from acquiring some basic skills in the Polish language which, albeit difficult from a grammatical and pronunciation perspective at first sight, adds credibility to the UK visitor and shows commitment to the partner. The workshops concluded with a review by David Owen of the resources and information available related to the business culture and language of Poland. These could be found on several sections of UKTI East of Englands international communications website www.rln-east.com. The Beyond 2010 programme provides match funding for short-term language training, and is ring fenced for UKTI clients. The Export Communications Review (ECR) is a heavily subsidised UKTI scheme which aims to assess your companys international communications capability and generates and action plan. It covers areas such as communications planning, translation of literature, website localization, language and culture skills, and use of interpreters. Further details, including a sample ECR and link to the online application form, can be found on www.rln-east.com/ecr. We also recommend that you undertake the (again subsidised) Online Market Introduction Service (OMIS) through which UKTI colleagues at the British Embassy in Poland can undertake informed market research and establish appropriate personal introductions to potential contacts in the market. As such, it is often the first port of call for selling into Poland.
102
RUSSIA BUSINESS CULTURE
This report is designed to support and complement existing cultural information available through the UKTI posts in Russia (see www.rln-east.com/ culture). It adds value in that it provides evidence and information from discussions and interviews with those out there in the field with regard to Russian business culture. Its primary purpose is to help better prepare UK businesses for approaching the Russian market for the first time.
103
The information contained in this report is based on a number of sources, including the UKTI Russia culture workshop in June 2007 in Histon, the Russia business event in Suffolk in June 2007, notes from UKTI culture pod casts, discussions with both English and Russian businesses and business support agencies in Russia, and a visit by project staff to Russia in August 2007. The report focuses solely on Russian language and business culture, and has been written in an informal style to reflect the comments made by those we met. To provide a range of views and establish consistency, we have cross-referenced comments from a number of sources as identified above. Much of the report focusses on the business culture of St Petersburg and Moscow. As a first port of call we would recommend the UKTI post in St Petersburg, Moscow and Ekaterinburg (www.britaininrussia.ru), as well as the RussoBritish Chamber of Commerce (www.rbcc.com, adminspb@rbcc.com). The report addresses 6 main questions: 1. What are the initial impressions companies have of Russia when they first visit? 2. What about the strength of the economy? 3. What are the main barriers which companies may face when coming to Russia for the first time? 4. What negotiating styles are generally used? 5. Which elements of bureaucracy will I come across first? 6. What about the language?
What are the initial impressions companies have of Russia when they first visit?
Russia is vast - even just the European side of Russia. Allow plenty of time for meetings as most travel will involve flights, including between St Petersburg and Moscow (or alternatively the overnight train). Traffic in St Petersburg and Moscow is very heavy, take the metro if possible, which is clean, cheap and architecturally stunning (in the case of Moscow), but beware of pickpockets. Most large cities are based in the Western part of Russia, but there are significant cities in Central and Eastern Russia, such as Ekaterinburg, Novosibirsk, Irkutsk and Vladivostok. Rebuilding and modernisation is occurring everywhere. The language appears completely alien as the Cyrillic alphabet is illegible to those who have not studied the language. It is useful to learn the alphabet in order to read the names of the metro station and general signage around town. Taxi drivers is a vague definition, as many private citizens offer lifts to foreign business folk for a fee much below the official rate used by taxis engaged through hotels. The risks inherent with these private taxis are the same as in many other countries, including advice to avoid taxis with more than 2 occupants and those
104
approaching you directly, although this system of lifts is common in Russia and is used by many Russians. The taxi driver will usually tell you the fare as you start off, and do not always expect a meter (in fact, we never saw one). Some Russians seem to drink heavily. On one factory visit the manager encouraged the drinking of vodka during the social occasion after the official business had been conducted, but a good amount if stodgy food prior to the consumption of spirits helped soften the blow. Russians tend to be superstitious. For example, shaking hands and giving gifts over a threshold is taboo. Flowers, when given in small quantities, are not given in even numbers, and black cats are seen as a bad sign. The Russians are extremely proud of their culture. The average Russian will know a lot more about their culture than the average Englishman knows about his. Russians will be impressed if you can demonstrate an appreciation of their art, literature and/or music. Russians tend to love the outdoors and in summer will spend their free time at their dachas ( : country house) or camping, swimming in rivers and picnicking. At first encounter everyday Russian food can appear to be rather bland and oily. Certainly in the late 90s herbs, spices, sauces and flavourings were fairly alien to the typical Russian family. Soup (the most wellknown being borsch) is an everyday starter at home and this is often very tasty, mostly beetroot or cabbage based. Russia is a tea-drinking nation (chai in Russian), and is usually drunk black and with sugar/lemon. Fermented milk drinks are popular in Russia. Kefir is a drink made from fermented cows milk that is slightly fizzy, thick and refreshing (and delicious when fruit is added to it). In St Petersburg the array of food on offer in restaurants is comparable to other major cities in Europe, with some restaurants offering a variety of cuisine from different countries. Beer: the Baltika brand based in St Petersburg (the Russian capital of beer) has 8 different brews (no.2-9), from light lager to dark beer respectively. Vodka: Russians drink this straight and in large measures. They do not normally sip it and they dont usually use liquid chasers, they chase shots with pickles, herrings, bread or anything salty this finger food is called (zakooski, snacks). It is traditional to always propose some kind of toast when drinking. Never toast in honor of those who have died or on Easter (for the same reason). Your glass cannot touch the table from the time a toast is proposed to the time you drink. Cheers is Na zdorovye (which means to your health). It is common to chink glasses, except for funerals or where a toast to remember someone who is dead is pronounced. The official currency in Russia is a ruble (plural rubley), however, it is very common for businesses to make their calculations in Euros (or US$). This does not mean that you have to pay in $ as most of the stores, restaurants, and hotels will only accept rubley. Credit cards are becoming more and more widely accepted, but even in large cities this is not a common way of payment. The majority of restaurants, large shops and supermarkets will accept credit cards, but ordinary food shops or small cafs may not. Outside large cities credit cards are not common at all, and you may find it difficult even to find an ATM.
What about the strength of the economy?

A strong domestic market combined with the demand for its natural oil & gas reserves is driving strong growth. Vladimir Putin is an extremely popular President, re-elected in 2004 with 70% of the vote. He is committed to economic growth and tax reform. However, 80% of Russias exports are natural resources
105
leaving them vulnerable to swings in the world prices. Putin has put aside a huge contingency reserve to offset this risk. Russia has seen enormous changes in the last few decades. There has been a stabilisation of the economy and government reforms, and enormous advances in its foreign trade links. Yet Russia remains a very bureaucratic business environment, over which government asserts considerable influence. Questions about politics, especially senior Russian politicians, are a conversation-stopper, and Russians are keen to give a positive view of their country to help overcome some negative perceptions amongst the general UK population. A visit to the market would in many cases help dispel some of the generic negative perceptions mentioned above, particularly if combined with meetings with those organisations whose role it is to help UK exporters (such as UKTI and the RBCC). The people are generally highly educated. There has been a dramatic decrease in the birth rate and a reduction in life expectancy (fuelled considerably by poor health habits) since the fall of communism. For details on corporate law (Russian legal entities, foreign legal entities, licensing, land ownership), tax system (corporation tax, VAT, customs, excise, property tax etc.), foreign exchange control, fines for infringement of tax legislation and labour arrangements, please see KPMGs online Doing Business in Russia brochure (35 pages), which can be found here: http://www.kpmg.ru/russian/supl/library/taxlegal/Doing_business_in_Russia.pdf (April 2006). Russia today is the successor to the USSR which dominated Eastern Europe from 1917-1991. Russias leading cities are now modern consumer metropolises but there are massive differences in wealth between the cities and the more traditional countryside. 75% of Russias population live in cities - 10.5 million in Moscow (the capital) and 5 million in St Petersburg. 112 million live in European Russia (The Western borders to the Urals) and 35 million live in Siberia and the Russian Far East. Russia covers eleven time zones, Moscow and St Petersburg are three hours ahead of GMT. Russias climate varies considerably between the northern tundra and the southern black sea coast. It has a long cold winter from November to April, a brief thaw in April and May and a hot summer from June till September.
What are the main barriers which companies may face when coming to Russia for the first time?
Understanding the business culture, in particular (a) who are the real opinion-formers (b) who are the real decision makers (c) what are the real motivations behind decisions/opinions? Russians are proud of their country as a world power, and you may be viewed as a privileged guest. Understanding the role of state actors in the business sphere, specifically remembering that (a) business actors and state actors are often part of the same decision-making group (b) there is a need to understand who is connected to whom, including links to potential competition (c) a need to understand how legislation is used to shape your sphere of business operations (d) a need to understand the role of local tax police, fire inspectors, police, health & safety, local government agencies (e) a need to understand the role of the customs police and how to get goods in and out of Russia quickly and without paying too much.
106
Do not assume that execution of business objectives will be completed to Western norms (on time/to budget). The operational environment is more challenging - from unexpected power/water cuts, to internet connectivity problems, general bureaucracy and differing levels of managerial and operational training and best practice. It is worth spending time with your contact in his/her organisation in order to understand how they plan, execute, etc. It may be an advantage to target companies that are owned or managed by young but well connected executives, who have studied and ideally already worked in a Western environment and who also have a track record of success in the Russian business environment. There is a massive range of managerial competencies and expertise within the Russian business environment picking a winner depends upon how politically well connected the company is, their access to funds and the competence of the management team: as a general rule, the less they have had direct experience of Western business practices, the harder it will be for you to work effectively with them. Try to understand the Russian mentality and Russians attitude to their jobs, especially given the booming jobs market which has made people very self confident and demanding.
What negotiating styles are generally used?

Russians can be reserved when you first meet them, but over time become very loyal and generous friends. Russians can be very vocal and expressive in meetings, but always come back to the table. Visiting businesses should not be put off by this, as it is all part of the negotiating technique. Dont be surprised if raised voices are heard at meetings, and people come and go during your presentation. Do not necessarily take this as a sign of disrespect. Russians may begin formally but they like to do business with friends and a warm relaxed tone is very important in building good relations. People greet each other by shaking hands on arrival and departure. The famous Russian bear hug is rare but Russians are more comfortable standing much closer to each other compared with the British. Unusually for a relationship dominated society they can be very direct. Dress tends to be formal. Russians enjoy an authoritative but friendly approach. They need to establish the credibility of the speaker in terms of experience, qualifications and knowledge. They enjoy new ideas and appreciate a moderate sell but (and this is important) like presentations to be serious and to include facts and technical details. Avoid words like aggressive and compromise. Use words like meeting halfway. Many a tense business situation can be diffused by humour. For Russians the relationship is probably (still) more important than a signed contract. Work on the relationship, work to maintain it. Face-to-face contact is vital to establish a good working relationship. Although it is changing, people need to have patience, flexibility, an open mind, a willingness to get involved and innovative approaches to business. Combination of years of central power and mentality and approach to life that differs from the British means that business can be a challenge. It is important to take a long-term approach as short sharp ventures will generally not work. Have a very firm handshake on meeting & greeting. It is common for people to introduce themselves using
107
only their surname. Before meeting your Russian counterpart it is worthwhile finding out if they have any formal title or other form of address. It is courtesy to refer to male counterparts as Gaspadin (equivalent to Mr) or Gaspadja (similar to Mrs or Miss) plus the surname. The exception may be companies run with western-style management. It is useful to present your business card with a Russian translation on the back and present it Russian side up. Dont take offence if your Russian counterpart is not punctual. Initial meetings are more of a formality. A good approach is to be firm and dignified, while maintaining warmth and approachability. English is very much in its infancy as a dominant second language, but English is more widely spoken than other foreign languages. Most Russians study it at school and university, and there will be fewer language barriers to doing business in English with larger companies, however it is far from being a second language of the country. If your Russian isnt strong enough then do invest in an interpreter, and check with your Russian team colleagues that translations are accurate. A guide to how to best use an interpreter can be found on the UKTI international communications website page http:// www.rln-east.com/resources/how-to-guides.asp. Average costs for interpreters in St Petersburg can be $20$30/hr, and this can be two to three times more in Moscow. Both UKTI and RBCC have lists of approved translators and interpreters. They can also act as a source of information and help. The same applies for printed literature having them in Russian saves time and shows good preparation. It is useful to emphasise your own expertise and professional qualifications, and it is acceptable to put these to the fore and will not necessarily be seen as showing off. Russians can be confusing communicators. Sometimes they can be careful with what they say, and as a result there can be a great deal of reliance on non-verbal communication. At other times they can be extremely frank. They are tough negotiators and can be somewhat theatrical. Their main aim is to gain concessions, so there may be a lengthy wearing-down process, and caving in early is a sign of weakness. If you do concede, you can ask for the gesture to be reciprocated in some way. Dont be surprised by loss of temper, walkouts and threats to end the deal. Russian negotiating teams are hierarchical, and only the leader of the team will speak and make decisions. The others will only join in if invited to do so. The getting to know you part is always done over food & drink. Significantly more time in meetings can be spent on relationship building, which means meetings can be longer and involve abstract debates. Russians are hierarchical and the most senior person makes all decisions, so ensure you are negotiating with the decision maker. Make sure the working process is highly organised and that everyone knows who is responsible for what. Good personal relationships are important if you want to succeed, so frequent personal contact is important. The Russian negotiation style varies from strong confrontation to extreme patience. Your key strength is never to get upset and exercise patience. Have a number of throwaway concessions to use in negotiation.
108
Show you understand their position and make recommendations rather than direct orders or regulations. Build up trust through clarity of action. Expect money and cash to be king and discussions about money to be frank. Russia is an Asian culture face and not losing face are very important to Russians. Dont expect to be told bad news directly, especially not in front of others work at the relationships, so that you provide informal opportunities to be told information that would otherwise be very difficult for a Russian to tell you directly. Double-check what you assume has been agreed has actually been agreed. Often you can assume yes means agreed when what it actually means is I dont want to do this, but I feel I should say yes, because I will feel ashamed if I dont or if I say my company cant do this. You could use words such as have I understood you correctly? Russians often struggle with small talk, and the beginnings of meetings can be awkward. They can be slow to follow up on meetings, so always send an email reminding people what was said and what youre waiting from, from whom and by what date. Blat is the Russian word to describe favours and contacts, a very important part of Russian business. The younger generation, under 40, are relatively untouched by the old Communist system but over 40s may still exhibit some characteristics, such as unwillingness to take responsibility, sticking to rules and needing authorisation. Many older Russians are nostalgic for Communism, not for the political system but for the job and social security. Although Russia is beset by regulations, Russians quite happily ignore them much of the time. The younger generation may refer to good networks or good contacts. Based on the old village communal system, Russians have a strong communal spirit. They often intervene and comment on behaviour and give unsolicited advice and are very patriotic (never complain to a Russian about Russia, even if they do!). Some Russian companies do not disclose the names of relevant people, and to make an appointment within such companies you should first approach its top management (Director General), sending him information about the offer. It is best to approach them by fax rather than e-mail. When a name of a specialist is known it is normal to send him a letter by e-mail. If the address is too general (eg.info@xyzltd.ru), it would be better to specify: attn. Mr Ivanov. Where personal e-mail addresses are disclosed, it would clearly be better to use these e-mails as the first point of contact. Given the slow response of Russians to e-mail (as well as often technical problems), we would recommend back-up contact by fax or by phone via an interpreter. Usually Russians also expect to have price-lists before meetings. In large companies it will be difficult to make an appointment without providing such information. As Russians are very technically educated, you should expect lots of technical questions about your products. Another local specific is that Russians often confirm their meetings at the last moment, and despite your best efforts local companies may decline to meet you. In most cases this is because they are not interested in your offer at the moment (but tomorrow everything can change) and in a small number of cases that they are not interested in this at all. Obviously those western businesses who have offices in Russia have the ability to contact Russians regularly and thus to catch the opportune moment when they need particular products.
109
Which elements of bureaucracy will I come across first?

Allow time and money to obtain both the various papers you need to apply for a Russian visa and to apply for the visa itself. Using a specialist visa company will reduce the chances of your passport getting lost / delays at the consulate. For a tourist visa you will need an application form, one passport size photograph (thick card type photo), an authorisation letter/form & vouchers (from your hotel, travel agent should be able to arrange this) and your passport to apply. Typical costs of a visa service range from 85-140 for a single entry visa, and slightly more for a double entry visit. For business visas you will need an application form, one passport size photograph (thick card type photo), invitation and your passport to apply. When you arrive you will be expected to fill in and sign a declaration of valuables you are bringing into the country, even personal things such as wedding rings. They may check when you leave. It is worth carrying your passport and visa with you all the time as, unfortunately, Russian police may stop foreigners and ask for registration (this will be provided by the hotel) especially in big cities like Moscow and St. Petersburg. Russian police are not like the UK police. Product registration can take time, particularly where changes of staff within the authorities mean that agents need to build new relationships. Russia remains a country where paperwork can be profuse. On the whole, Russian companies respond more quickly than business deals with the public sector. Often the bureaucracy can appear to hinder rather than help, and can often appear to make no sense. Russian legislation and traditions of doing business make it difficult for companies based outside Russia to work in Russia directly. Another problem is customs clearance. Long bureaucratic procedures make it very difficult to export to Russia without having a presence there. Documents everything has to be notarised and licensed and handed in duplicate or triplicate, stamped, or signed by several people. Traditionally western manufacturers either use Russian distributors (who have established links with Customs and other bodies and know how to approach them) or create an office in Moscow and establish their own links with Russian bureaucracy. This is an increasingly popular route to market for a number of leading foreign businesses. Despite some extra burden with offices this opens up access to a huge number of smaller distributors, which are usually reluctant to be involved in imports procedures. The majority of imports trade takes place via Moscow, although the demand in Moscow itself is only less then 20% of the national demand. Moscow-based distributors are bigger and have a network of regional partners. Some Moscow companies might visit the UK relatively frequently.

If you have time, study the Cyrillic alphabet. This will ensure that you are not completely alienated by the language on arrival. Once you can read words, you will be surprised at how many can be deciphered. For
110
example CTOPAHT is pronounced restorant and means restaurant. This will also help you find your way using maps (beware of English maps, they will not help you read Russian street signs!) and ask for directions. Russian is an inflective language (i.e. the forms change to convey grammatical meaning, like Latin and Polish). Once you have learned the basics of the alphabet, it is surprising how many words you will be able to read that are phonetically similar to English. The two or three hours spent on learning both the alphabet and a few basic phrases is a valuable investment. Useful phrases can be found on http://www.rln-east.com/ Documents/32/Russia%20Talk%20the%20Talk.pdf which has an accompanying audio file. More advanced telephone dialogues can be found on http://www.rln-east.com/materials/receptionist_phrases.asp which is a basic language lesson focussing on telephone Russian. Financial support for Russian language training in the East of England is available via the LCIT (Language & Culture for International Trade) programme, which provides a sliding scale of match funding (50% over 24hrs for 5 staff or more down to 50% for 10hrs for 2 staff). For more details see www.rln-east.com/funding and www.rln-east.com/lcit. It is important to translate literature and other promotional material (including key website information) into Russian. Where a translator is sourced from within Russia, remember that before they can access payment via the bank they would need to show a contract to prove they had been commissioned to do the work (this regulation is due to anti money-laundering legislation). The positive impression you will make by learning to speak a few basic Russian phrases cannot be overestimated. Although many distributors deal with foreign suppliers, fluent English is not widely spoken amongst them. This is because most people in this market have a technical/engineering background, but not commercial. The same problem is with end-users in the engineering sector. Most leading foreign manufacturers have established offices in Russia staffed with local personnel, therefore e-mailing/faxing in English is OK, although most potential partners and clients would prefer to work through an interpreter. In addition to this difficulty, to win real business here face-to-face meetings and friendly relations are essential. All this requires that newcomers first find an interpreter to help them contact local companies. All Russian verbs have aspect and are either perfective or imperfective to describe how one sees or perceives an action (unlike English). They therefore have to be learnt in pairs. Verbs of motion have their own rules (e.g. there are 12 different versions of the verb to go) according to whether that action has one definite direction or not. There is no article (one cannot therefore distinguish between a and the). People address each other by their name and patronymic (fathers name), for example, Ivan Ivanovitch to a man or Olga Ivanovna, to a woman.
To what extent is Russian spoken in the former Western states of the Soviet Union?
In terms of the amount of Russian spoken in the former satellite states of Belarus, Ukraine and the Baltic
111
states, the following summarises feedback from those we questioned. Basic results came back as (a) Belarus fine (b) Ukraine -50/50 (c) Baltic States 50/50. Belarus: Everyone is fluent in Russian and it is considered the lingua franca. Colloquially people might converse with each other in trasianka (= straw + hay) which means Russian with Belarusian endings and grammar. Many Belarusians dont know traditional Belarusian well and would regard trasianka as their native language if put on the spot and denied Russian as an option. Trasianka is what Lukashenka speaks. Stanislau Shushkevich tried to introduce Belarusian as the sole official language of Belarus in 1991, but it proved highly unpopular and when Lukashenka held a referendum in 1994 to bring back Russian as an official language (alongside Belarusian) the proposal met with popular support. Ukraine: Russian is widely spoken, and is used as the primary means of communication by just over 60% of the Ukrainian civic population including all the ethnic Russians native to Ukraine, all the non-Ukrainian ethnic minorities and a substantial number of ethnic Ukrainians. A lot of Ukrainians who dont use Russian as their primary means of conversation use surzhyk (the Ukrainian equivalent of trasianka). The only place where Russian is less welcome is Galicia - the area around Lviv where Ukrainian nationalist feelings run high - but even there foreigners would certainly be forgiven for not knowing Ukrainian. In Galicia the best order to try languages would be: Ukrainian, English, Russian. Everywhere else west of the Dniepr the best order would be Ukrainian, Russian, English. In the rest of the Ukraine (the north, Kyiv, the east and the south) the best order would be Russian, Ukrainian, English. Baltic States: There is no problem using Russian in Lithuania. Russian will be welcome in Latvia when conversing with ethnic Russians (obviously) and less welcome, but tolerated, by ethnic Latvians in Riga. Outside Riga and away from the Latvian / Russian borderland, Russian would be less welcome. Russian is not appreciated at all in Estonia by ethnic Estonians. In Georgia, Georgians prefer to speak Georgian, and even the translation of literature and business cards into Georgian can have a huge impact in terms of building relationships.
What are the top 3 tips you would give to a British business coming to Russia for the first time?
Expect the rules and norms to be different expect Russians to want to get more out of you than you get out of the opportunity. Seek out the expatriates who have been working successfully in the local business environment with Russians, for at least several years pick their brains. Seek advice from a recommended, local expatriate accountant/lawyer and from experienced Russian managers before you start. When making big decisions, if possible make sure that you have several data points/sources (independent and separate from each other) on which to base your decision. Invest in the relationships relationships, not signed pieces of paper get things done. Use the UKTI posts and RBCC (see above for contact details) as a source of support. RBCCs Bulletin magazine contains useful information.
112
Get as much advice as you can about the scheme you need to follow to get yourself set up. Make sure people are clear about costs and timeframes. Then go to consult someone else and compare what youve been told. The rules change frequently, its hard to keep up, so ask a number of consultants the same questions to try to establish your plan of action before you start spending money. And a few tips on managing a Russian workforce or company: be authoritative and show strength based on technical or professional knowledge and commitment; remain fair and show that mistakes can be learned from and not necessarily merely punished; handle corruption by subcontracting or pre-empting it, or replacing it with good relationships, being clear where to draw the line and accept the realities; rely on the unique qualities of being a foreigner; and learn to focus on the ultimate business goal without getting bogged down with everyday changes and frustrations.
113
SPAIN BUSINESS CULTURE
The information contained in this report was sourced initially from RLn SW and the updated following the Spain culture workshop in newmarket (East of England) in 2009.
114
Background and Introductory Facts about Spain

Spain occupies an area of more than 500,000 square kilometres in South West Europe and its size is two and a half times the area of the UK. Spain has a population of just over 45 million. It is a markedly urban society. Approximately 20% of the population live in cities of around 500,000 inhabitants or more. The capital, Madrid, with its population of around 3 million, is the administrative and business centre of the country around which many modern industries have grown, and where many large companies have their headquarters. Barcelona and Bilbao are also at the heart of major areas of industry and commerce. There are also important business centres in other regions, including Valencia, Sevilla, Mlaga, Zaragoza, Valladolid and Vigo. Spain is a parliamentary monarchy. The King is the Head of State and his primary mission is to arbitrate and moderate the regular functioning of the countrys institutions in accordance with the Constitution. The Constitution of 1978 enshrined the fundamental civil rights and public freedoms as well as assigning legislative power to the Parliament (Cortes Generales), elected every 4 years. The March 2008 elections were won by the Socialist Party (PSOE), under the leadership of Jos Luis Rodriguez Zapatero, current President of the Government. Spain is a highly developed, competitive market. Almost anything sold in the UK is likely to sell well in Spain. The Spanish government is committed to opening up the Spanish market and Spain, therefore, offers many opportunities to the British exporter across a range of sectors. The main UK Exports to Spain include telecoms equipment, road vehicles, office machinery, medicinal & pharmaceutical, electrical machinery and various manufactured articles. Imports from Spain are largely in the same sectors with the addition of fruit and vegetables. The high level of UK imports of services from Spain is mainly accounted for by travel and transportation. Spanish companies are becoming increasingly competitive and are looking more and more outside their home base for opportunities to enable them to globalise their business. Indeed, Spanish Ministry of Trade figures show an upward trend in the level of outward investment from Spain (2.47 billion in 2003 to 21.42 billion in 2006). Nevertheless, the majority of Spanish FDI has come from 20 or so major players in the banking, automotive, telecoms and infrastructure sectors. Other major Spanish investors include hotel chains, retailers and companies in the renewable energy sector.
115
Ten Top Tips

Try a few words in Spanish. Making the effort to learn some greetings will get meetings off to a good start. Arrive at meetings on time but do not be surprised if you are kept waiting for a short time. do not plunge straight into discussion on business. discuss football, family, and the weather. If there is an agenda for a meeting do not expect to stick to it rigidly. Interruptions by your Spanish interlocutor are not seen as rude but demonstrate interest in what you are saying. Be flexible when it comes to timings of meetings. The Spanish work a long day and you may be offered an appointment early evening. Accept it. Try to be flexible in adapting to working practices around meals. Lunches normally last 1 2 hours and are an important part of the business process. A sandwich at the desk is seen as very English. dinner can be late, possibly starting at 21:30 or 22:00. Enjoy the very important social element of business. Personal contact is paramount in Spain. Pick up the phone rather than email. demonstrate your commitment by making frequent visits to your customers/ distributors. Make sure some of your literature and your website is in Spanish. do not assume that Spanish business people will speak English. If in doubt, offer to bring an interpreter to a meeting with you. Make sure you are dealing with a person at the right level if you are looking for decisions and do not expect quick decisions. The Spanish will not be rushed. Learn a little about the region you are in and recognise the potential sensitivities between regions.
How important is it to speak Spanish to do business in Spain?

There was unanimous agreement on the importance of speaking Spanish, especially in Madrid and the other large cities. Many British people whose experience of Spain has largely been from holidays in the coastal areas expect the level of English to be high in the main cities which it is not. The main business language used throughout Spain is Castillian Spanish (although several of the autonomous regions throughout Spain have their own language, i.e. Catalan, Basque, Gallician). Most large Spanish firms will have people who can do business in English particularly in sectors such as ICT, but in general English is not widely spoken especially amongst smaller agents or distributors. In a business context, speaking Spanish enables greater understanding of the characters of the locals. It will generally be possible to find a person who can read printed material in English however the Spanish will expect British companies to produce material in Spanish if a long term working relationship is to be established. Company brochures should be translated into Spanish and where possible websites should be available in Spanish or at least have a summary page in Spanish. If you write to a company in English, if all your Trade Literature is in English, and if you expect to conduct all your business in English you will be at an immediate disadvantage.
116
British firms will therefore need to be prepared to consider methods of communicating in Spanish. We advise against using a stock letter format in correspondence (i.e. one that looks as though it will be sent to a number of companies). It will be thrown away. The same is true of unsolicited emails. However much English is the language of choice for the business community, there is no substitute for being able to discuss and converse with potential clients/ suppliers/officials, etc., in their own language. The Spanish are patient with people who make an effort to speak in their language and even a few stock phrases will break the ice at meetings.
What are the differences between Spain and the UK in a general business context?
Visitors to Spain should realise that there are two quite distinct business cultures in Spain. On the one hand there are the bigger and newer, or reformed, industries that have received significant amounts of foreign investment and embraced modern, international management techniques. On the other, there are the traditional SMEs and family businesses that account for the majority of Spains GDP. The leading banks, which still constitute the business elite, are situated somewhere in the middle. There are wide differences in many aspects as a result of the UK being an Anglo-Saxon culture and Spain a Latin culture. A mistake companies frequently make is to send off an email with details of their offer and then wait to hear back. Usually, they wont. Spanish businessmen and women expect you to pick up the phone and talk to them. And then if things look like they are progressing, they expect you to come and visit them. This applies when you are dealing with potential customers but also with distributors. Spain is an easy place to get to. And with low cost airlines springing up all the time, a visit to the market need not be expensive. The Spanish are more apt to negotiate from starting positions (on things like price) at levels, which in the UK one might think unrealistic, but this doesnt mean that they will not change a lot, if the deal needs to get done. The human relationship of the people at the negotiating table matters more to get you to being able to close the deal but it will not get you the deal. Spain is a very price sensitive market. It may be quite difficult for a UK company if their sales pitch is focused solely on quality. Which is not to say that Spaniards will buy low quality products, they wont. But they certainly want to know how much it costs and they will then try to knock the price down. This applies particularly when dealing with the bigger companies and in some sectors firms have virtual monopolies and they act like it. One striking difference for most British exporters is protracted payment terms. 90 days is common and in some sectors, for example healthcare, 180 days is not unusual. Some Spanish companies seem less ordered/regimented in their approach to doing things and at times give the impression of improvising. Despite that, and often to the despair of the British business partner, deadlines are met. Spanish buyers can be quite conservative. You may find that they are less interested in hearing how innova-
117
tive your product is, and more keen to learn who your existing customers are. This is one of the reasons the large firms enjoy such bargaining power. They know that if you sell to them, you will be able to use that fact with every other Spanish supplier, to great effect. You will see this looking at Spanish company websites. There is sometimes so much space given to the logos of their customers, that their own product range is hard to find. Decision-making can be slow and tedious: various levels of management will be consulted and all aspects of your proposal will be analysed in painstaking detail. Ultimately, though, only the individual in highest authority makes the final decision. You must, therefore, understand that you will often be dealing with intermediaries but that maintaining a good relationship with these intermediaries is crucial to success. Spanish business people can be spontaneous and flexible and this can be a real positive. If you want to set up a programme of calls with two weeks notice you should be able to do it. People are flexible, and generally willing to see you at short notice if they are around. On the other hand, you will find it next to impossible to organise the same programme 2-3 months in advance. Business people in Spain like to keep their options open for as long as possible and find it difficult to commit to long term plans. In Spain there is much more reliance upon trust, and resolving smaller issues as you go along. There is also much more social contact, coffees, drinks, business lunches, telephone calls, etc., with contacts. Email, etc, is much less effective at securing objectives.
Spain has a reputation for red tape and bureaucracy

Bureaucracy is inescapable in Spain. Most applications for licences, permits, etc, take much longer in Spain than in the UK. Setting up a company in Spain is also more time consuming. The recognition of 17 different regional autonomies in the 1978 Constitution has caused bureaucracy to proliferate. Each region has its president, government, parliament and administration. The number of people on the payroll of the 17 regional governments increased as powers were transferred to them. Rules are extensive and confusing and often conflicting between Administrations but things are improving slowly. An example given by a local contact was that a tender for professional services to a regional government in Spain for a PPP project (which took a month to prepare) was rejected by a one sentence letter saying that the company did not have the right words in their Objeto Social (i.e., they had not specifically mentioned PPP in their official company description). Our contact said that this simply would not happen in the UK. It is often said that in order to deal with bureaucracy in Spain, you have to be retired, unemployed or a student as these are the only people with enough time to queue, and attend (in person!) the number of times it is usually necessary to file paperwork or obtain a certificate. As a foreign citizen seeking residency in Spain the queues for documentation are enormous and the process involves waiting around for hours and hours. But if you have time, patience and reasonable Spanish you can get through the licences, permits, official
118
stamps, official forms, official translations, etc. And if you dont speak Spanish, a lawyer or a Gestora (private agencies which specialise in dealing with administrative and legal work) can help you reduce this horrendous burden. In Spains defence on this point, there is often a historic reason behind this bureaucracy in that most Southern European countries legislation stipulates the need to produce documents (and often formalise them before a Notary) for them to have legal effect. As a way of an example, the items that a commercial invoice must include to become legally payable (invoice number, date, description of product or service, etc) are subject to a specific regulation in Spain. In general, legal and administrative issues tend to be far less flexible in Spain than in the UK. There are also some signs that this is changing for the better. There are efforts at setting up one-stop shops in some autonomous communities for e.g. setting up companies, industrial activity authorisations, product approvals, etc. but red tape and rubber-stamping can still slow down affairs.
What should one expect in meetings with Spanish business people?

When doing business in Spain handshakes are standard as with the rest of Europe. First-time introductions will be formal; as the relationship develops it will naturally become less so. It is always a good idea to try and use some of the local language. A simple means of doing so is in using the appropriate greeting for the time of day - Buenos dias (good day), Buenas tardes (good evening) or Buenas noches (good night). Most people can be greeted using Seor (Mr) or Seora (Mrs) followed by their surname. You may also hear people being addressed with their professional titles; Profesor may be used with teachers and engineers are referred to as Ingeniero. The Spanish can be described as a cheerful and outgoing people. Their warmth and initial friendliness may appear superficial to a foreigner but in fact allows a way of observing social niceties whilst at the same time affording the time and a proper opportunity to get to know someone. When doing business in Spain, note that relationships built in a face-to-face environment are the most important. People will want to spend time getting to know others in order to ensure the right chemistry exists for a business relationship. It is therefore important to present yourself in the best possible light; the Spanish appreciate people who are dignified yet modest. The ability to be amusing and entertaining is also much prized and humour plays an important part even in business meetings and discussions. Banter is acceptable but be sure not to employ sarcasm as it may get lost in translation and cause offence. Spanish business people are generally very polite and friendly. They will be genuinely interested in you and will demonstrate their curiosity and also the ability to be flexible. Spanish business people will however want to get to know you personally before doing a big deal. You should always begin a meeting with social conversation and football is one of the most popular subjects to break the ice but you can also talk about family, the weather, food etc. Ignore this at your peril!
119
You should expect a reluctance to stick to the agenda and a longer meeting than you anticipated. Sometimes you should be prepared for hidden agendas. If you are interrupted while talking, do not interpret this behaviour as an insult or a cause for concern. More often than not, the Spanish participants interruptions indicate genuine, animated interest in the discussion. Equally, the Spanish give advice to one another and to visitors freely, so you should not take offence at this habit. It is also likely that the meeting will not start on time or the person you are meeting will keep you waiting. This is not demonstrating rudeness. During a meeting you may detect that there is a reluctance for your Spanish contact to say anything negative about the product, price, etc. As with the punctuality issue, your meeting is likely to have lots of interruptions mobiles, etc. Dont expect to be offered coffee in a business meeting - possibly take a coffee in a local bar afterwards (if the meeting has gone well). Spaniards place great importance on the character of the person with whom they do business and hierarchy and rank are important. You should deal with people of a similar rank to your own. Spaniards do not like to lose face, so they will not necessarily say that they do not understand something, particularly if you are not speaking Spanish. You must be adept at discerning body language. The Spanish are very thorough. They will review every minute detail to make certain it is understood. First you must reach an oral understanding. A formal contract will be drawn up at a later date. Spaniards expect both sides to strictly adhere to the terms of a contract. Business dress is stylish yet, conservative. You should dress as you would in the rest of Europe.
What points of business etiquette should a newcomer be aware of?

Spain has a balance between work and social life, and business requires more social time than in Northern Europe. As already mentioned, personal contact is an essential part of business in Spain and companies should ensure that they visit the market regularly. They should also be prepared to adapt to Spanish business hours and working practices which differ markedly from those in the UK. It is said that the British eat to live whereas the Spanish live to eat. Entertaining/eating out is an important aspect of Spanish business life. Dont ignore an invitation to lunch as a seemingly unproductive waste of time. Restaurant hours are much later than in the UK, lunch often starts between 14.00 - 15.00 and dinner between 21.30 - 22.30. Late evening meetings are not uncommon and should be accepted when offered. Do not jump straight into talking about the business at hand. Always start with a social discourse. Call each other on a first name basis.
120
The use of humour, and the indirect way by which things are said. There is more subtlety in the way in which deals are done in Spain, than is generally the case in the UK, and many different levels on which negotiations take place. Being committed to the market is the only sure-fire way of really knowing whats going on. The way you present yourself is of critical importance when dealing with Spaniards. It is best to display modesty when describing your achievements and accomplishments. Communication is formal and follows rules of protocol. Avoid confrontation if at all possible. Spaniards do not like to publicly admit that they are incorrect. Trust and personal relationships are the cornerstone of business. Spaniards, like many societies, are concerned that they look good in the eyes of others and try to avoid looking foolish at all times.
does Spanish practice differ in terms of working hours and holidays?

Although international business practices are becoming more common, it is still quite usual for the day to start slowly office staff will tend to drift in between 8.30 and 9.30am and then depart for coffee or a cigarette around 11.00 (coffee is usually taken off the premises). Lunch is normally taken between 2.00-4.30pm after which work resumes until around 8.00pm or later. The range of characters and approaches to business in Spain can be anything from a long lunch with wine to a full day session in a conference room with sandwiches and Serrano ham or a dinner. The latter will normally not start before 9.30-10.00pm. British companies should therefore be prepared for long working lunches and late dinners when with potential Spanish clients/partners. Counterparts do not like to waste time, and if they are engaged will often come straight to the point (a good sign, in general) unless they are sussing you out (i.e. in the early stage of a relationship) in which case you may never even talk directly about the deal. From the middle of June until the middle of September, most offices in Spain adopt summer hours. A typical working day will start at about 0830 and end at about 1500. In and around the month of August it is common for many businesses to close or operate with a skeleton staff. Holidays tend to be taken all in one go random days off are unusual. There are more religious holidays which unlike the UK do not fall on Mondays or Fridays. If they fall on a Thursday then many people will take the Friday off (this is called a puente i.e. a bridge weekend).
121
national bank holidays in Spain include:

Ao nuevo (new year) - 1 January Los Reyes Magos (The Three Wise Men) - 6 January viernes Santo (Easter Friday), variable in March or April Fiesta del Trabajo (Labour day) - 1 May La Ascensin (Ascension of the virgin Mary) - 15 August Fiesta de la Hispanidad (Spanish national day) - 12 october Fiesta de Todos los Santos (All Saints day) - 1 november Fiesta de la Constitucin (Constitution day) - 6 december La Inmaculada Concepcin (The Immaculate Conception) - 8 december navidad (Christmas day) - 25 december
The different regional communities have their own bank holidays, e.g.:
Comunidad de Madrid - 2 May Catalunya - 11 September Galicia - 25 July Comunidad valenciana 9 october Each town or village will also have its own local holiday, e.g. Madrid 15 May - San Isidro or Barcelona 24 September - La Merc If one were to identify a single feature that symbolises Spains progress in recent decades, then it would have to be the revision of attitudes towards the traditional siesta. Of course, there are many provincial areas, particularly in the rural south, where the long afternoon break remains the norm, but this is no longer the case in the main centres of commerce. Air-conditioned offices obviously help to reduce the need to avoid the extreme heat of mid-day but Spanish business has also realised that it cannot afford to be at rest in the afternoon when Europe [and indeed the world] might reasonably expect it to be at work. Whilst typical working hours in Spain may still be somewhat different from most of Europe, then, they are no longer completely idiosyncratic.
How does Spain position itself in relation to Europe? How are British business people seen in Spain?
Spain became a full member of the European Economic Community in 1986 and in 2005 was the first country to approve in a referendum the Constitution of the European Union. It considers itself fully integrated in Europe but views UK as being slightly to one side. Business and commercial relations between the UK and Spain go back for several centuries. British companies settled in the Basque Country, Andalusia, etc. As a result of this, British business men and women have developed deep
122
roots in the Spanish business community. An obvious consequence of these excellent trade relations has been the outstanding anglophilia one can see and breathe in different parts of Spain. All the above has left obvious signs of British surnames (i.e. Smith, Greaves or MacMahon in the Basque Country); sports such as football or rugby; English words such as Mister for football coaches, etc. Traditional British clothing particularly for men - is considered desirable with brands being very important. There are around 700 UK companies already in Spain. Leading British companies established in Spain are especially present in sectors such as power, telecoms, retail, invisibles and services. British business people are well regarded in Spain and considered to be honourable. British people are viewed almost as a preferred partner, due to the large numbers of UK residents in Spain and the relative proximity of the political arena. Many British businessmen and companies have the wrong idea about Spain thanks to the countrys international projection as a sun and sea destination for holidaymakers. This is far from the business Spain. Spain produces more cars, more steel and for example more wind energy turbines than the UK and is eagerly trying to become a member of the G8. One of the largest trade commodities in both directions with Spain and her European trade partners is automotive parts, which by extension opens the market up to a host of other business opportunities in the form of raw materials, machinery and equipment and advanced engineering services. In the Basque Country particularly, and in northern Spain more generally, the British businessperson is viewed very positively. British business people are regarded as serious and people of their word. The British businessperson is also associated with quality goods and services.
How important are the regional differences in Spain?

There are very significant regional differences in Spain. Tastes vary considerably between North and South and inland and coastal regions. Catalunya and the Basque regions are good examples of how different people are compared to those from the centre or, say, Canary Islands. Different languages, traditions and cultures in some areas also set them apart. Spain is organised into 17 Autonomous Communities (Regions) each of which generally comprises one or more provinces. These autonomous regions vary greatly. Andalusia is larger than Holland and Belgium together. Madrid has more inhabitants than Luxembourg. Apart from the well documented Catalan and Basque issues, each of Spains autonomous regions has its own way of doing things as well as a strong regional identity. It is important to have access to regional contacts to ensure that you obtain the right introductions. Despite regional animosity, if you have to be regional Madrid-based businesses are the most acceptable (i.e. from Madrid you can just about do business anywhere. However if you are Catalunya
123
based, business in Barcelona will be easier, but business elsewhere may be much more complicated and its similar in other regions. There are differences that can have an influence on business. In the case of the Basque Country and Navarra both areas raise and administer their own taxes, which means that they are masters of their purse strings in a way that other areas of Spain are not. This means that both areas can embark on projects or establish business priorities in the knowledge that they have the resources to see them through. This from a business point of view is an important asset when looking at, for example, local infrastructure projects and their financing. In some regions, particularly the Basque Country and Catalunya, it can help to have local representation, i.e. not do the business from a distance. Most companies based outside both regions have their local representations to look after the business there for them.
Should marketing material be adapted accordingly?

Castillian Spanish should also be used at all times in written and spoken advertising and publicity, but with other languages (certainly Catalan and Basque) translations can be an advantage as the business develops. Once a business relationship is consolidated contributing to marketing costs could be part of the business relationship. Language, particularly labelling, can be an issue in some communities where there is more than one official language, e.g. the Basque Country, Catalunya, etc. The issue can be a sensitive one at times and the British businessperson should be guided by his/her local business partner. On approaching the market for the first time some marketing material, i.e. trade literature in Spanish would always be helpful - the use of Basque or Catalan at that stage would not make or break potential business. Translations can be a hassle, but they may be the only way to communicate effectively in an inclusive, engaging way.
124
KINGDOM OF SAUDI ARABIA BUSINESS CULTURE
These notes are designed to support and complement existing cultural information available through the UKTI posts in the Kingdom of Saudi Arabia (KSA). They are based on input from businesses operating in the Kingdom, from UKTI posts Saudi Arabia, from international trade advisors experienced in advising on sales to the KSA, from content provided by Middle Ground Trading, and from the KSA culture workshop in Bedfordshire in nov 2009 .
125
It is designed primarily to help UK business visiting the KSA for the first time, although we recognise that even experienced exporters to the Middle East may find the content valuable. It is also designed to supplement the official generic cultural information found in the country section of the UKTI website www.uktradeinvest.gov.uk. The report gives an indication of what business life is like on the ground, in other words it is a report written by business for business, and we request that the reader respects the confidentiality with which this information is given. A further useful guide is the publication by the Cranfield academic Dr Jehad Al-Omari entitled The Arab Way How to work effectively with Arab cultures (HowtoBooks, Oxford, 2005). The report has been divided by questions asked by client companies. These questions or sections are:
1. An overview of the Kingdom 2. How does the legal framework differ from that of the UK? 3. What about working hours? 4. What is it like to drive in the Kingdom? 5. What are the implications of being a female businesswoman? 6. What are the main features of Saudi negotiation & meeting style? 7. Lessons learned. 8. Interview with an ITA.
An overview of the Kingdom

Of the population of 27 million in the KSA, 6 million are expatriates. It has a land area of 2.2m km2. the main cities are Riyadh (with 5m inhabitants), Jeddah, Mecca, Medina and Dammam. Average temperatures are -14C in winter and +35C in summer, although it can top 50C at times. 80% of the population are under 30 years old. There is a pro-western absolute monarchy which has a strong relationship with the UK. The King is Guardian of the Two Holy Mosques, and the Royal Family determine succession. The King owes legitimacy to the Religious establishment (Ummah), with Hanbali (Wahabi) jurisprudence. There is a Council of Ministers and Majlis AShura. The main sensitive political issues are the Middle East peace process and fear of Iranian aggression. Levels of security are high. 30% of UK exports to Dubai and Muscat are bound for Saudi Arabia, and the UK is the second largest investor in the Kingdom. The Kingdoms core economic objectives are to invest in a future after oil, to invest in a diverse economy, to provide jobs for future generations, to invest in itself (i.e. there is no Sovereign Wealth Fund), liberalisation & privatisation. Its current income is forecast to be 68 billion, however it is likely to be higher as it was predi-
126
cated on $40 bbl. As its expenditure is only 79 billion, it has a current economic surplus of 98 billion. Its foreign debt is negligible, and it has reserves of 300 billion. The main beneficiaries of its local investments include security & defence, infrastructure, education, healthcare, hydrocarbons and power. Within the fiscal stimulus programme, Saudi Arabia is one of 9 UKTI high priority markets due to the amount of money available for commercial development. There is a record budget, substantial foreign reserves & no debt. The King has guaranteed 300 billion for infrastructure, and the banking sector remains secure and well regulated. Main developments include the rise of economic cities (including one influenced by the Chinese), transport gateways, power, water & wastewater, mining, healthcare, education & training, defence & security, oil, gas & petrochemicals, Jubail and Yanbu. A string of privatisations is taking place, with currently Saudi Telecomm, water & wastewater authorities, Maadan, Saudi Arabian Airlines, airports & power undergoing the process. In terms of business climate, it boasts WTO and G20 Membership, supported by a Foreign Investment Law of 2000 which allows double taxation and investment promotion agreements. It has an OECD rating of 16th globally in terms of Best place to do business in the Region. There is a tangible reform process under King Abdullah, with some barriers such as visas and licencing becoming slowly becoming more relaxed. On the other hand, there is an opaque and glacial bureaucracy, Hanbali jurisprudence and Sharia courts, insufficient movement on certain barriers (such as visas and licencing!), issues of security & terrorism, the process of Saudisation (5-20%) to contend with, cultural and religious divides, and issue of succession. Some female business people have had difficulty obtaining visas, even when scheduled to travel with male colleagues. This is often the luck of the draw and applicants are encouraged to keep trying. The UK is recognised as prime financial centre which is strong on Sharia compliant expertise. It is seen as a positive investment destination and a 2nd home facilitated by friendly visa regime. The UK is a prime partner in the educational reform process as well as no in international trade support. The KSA is a deeply conservative Muslim culture. Women must wear the abbaya in public and cannot drive. There is little western style entertainment (what little there is, is on the coasts), and not much sport. Everything closes for prayers, so most social activity happens at night, including shopping. Alcohol is prohibited.
How does the legal framework differ from that in the UK?
The legal system is derived from Sharia, Sunna and Royal Decree, and commercial issues are decided by Sharia Court or Board of Grievances. Sharia protects contracts, independent resolution, and individual & property rights, however it does not project forward e.g. future profits, nor back e.g. retrospective legislation. Only Saudi licenced lawyers can act as advocates, although UK lawyers can go into partnership with Saudi companies and give technical advice. It is rare for a case to end up in court, as most Saudis prefer an out-of-court settlement. Contracts can be lengthy and complex, and specifications can be changed frequently and without warning. A new royal decree aims to facilitate the implementation of English law. Personal taxation is 20% for non-Saudi residents doing business in the KSA, with corporate tax up to 20%. There is no income tax, and the Zakat is only payable by GCC nationals. Laws have been liberalised but personal contact is still paramount.
127
What about working hours?

In terms of telephone communications with the Kingdom out of the UK, with an Arab automated message, pressing 9 for English or 0 to divert to an operator. The KSA is on GMT +3 in the winter and +2 in the summer, and there are 4 prayer times to be aware of. For instance, in wk 43 these are at 11:38 (dhuhr), 14:53 (asr), 17:19 (maghrib) and 18:49 (isha). When factoring this plus the Arab week-end to the UK working week, this has a direct impact on communications, as can be seen below: UK office time 8.30 am 9.00 am 10.00 1300 13.00 am 14.15 pm Riyadh office time 11.30 going to prayer 12.00 back in the office for 1 hr 13.00 to 16.00 away from office 16.00 return to office for 1.25 hrs 17.15 going to prayer
Say 3 hours a day for 3.5days..
What is like to drive in the KSA?

When it comes to visiting a contact, do not assume that the taxi driver knows or understand the location of the clients address. This is due to a combination of factors such as the way in which addresses are organised, the lay-out of the road systems and the practice of drivers operating within defined areas. It is useful to have a map of the location provided by the client, with easyto-fund landmarks highlighted. An example is given below. A driver previously used by one of the presenters is Suresh, and his number is 00966 504843152. Please note that it is also not custom for women to drive. Hiring a car is not advised, as the traffic conditions and ways of driving by locals would encourage visitors to hire a local driver. These can be sourced from the local hotels at reasonable rates of around 10/hr. As taxis are not frequently seen on industrial estates, it is advisable to remind the driver to wait for you whilst you are at your appointment. At the end of the appointment it is advisable to agree timescales for the next communication.
What are the implications of being a female businesswoman?

Women have a specific role in the home but if they chose business they can be powerful forces and are respected. Publically there is separation, particularly in restaurants, meetings or public places. The abbaya is worn in public. Women may not drive (by custom not law). Restrictions are being lifted e.g. in terms of travel, university gender mix and schools.
128
Female business women, albeit facing several disadvantages (possible need to be accompanied by make colleague, lack of custom to drive, difficulty obtaining visas etc), can also make the most of their gender status. Women are often allowed to the front of queues and treated with respect in public, in fact Saudi women sometimes go directly to the front of a queue. Saudi women are often considered to be strong characters and not the subservient characters they are often portrayed as in the West. You may find some practical disadvantages such as lack of restrooms in male-dominated environments such as factories. Bear in mind that the practice of wearing an abbaya over the top of other clothing is sometimes relaxed, therefore be prepared to be suitable attired if you do find you can remove it. Some Saudi men may not shake your hand but instead put their hand on their chest (heart) as a way of greeting. Similarly, as an English male it is better to wait for a female Saudi to extend her hand first.
What are the main features of Saudi negotiation & meeting styles?
In terms of meeting styles, face-to-face contact is very much valued, and frequent visits to potential or existing clients may be necessary. It would be good to check if your Saudi contact is visiting the UK and, if so, you can offer practical assistance (such as collecting from an airport) or a visit to your premises. Catering requirements will dictate that no pork or alcohol is served, although it has been known for the alcohol restrictions to be relaxed at certain functions. Functions in turn can be organised dry to accommodate Arab visitors. Saudis are loyal business partners. Where a business in the UK may be suffering losses, the Saudi partner may decide to continue to support and not close it in order to preserve the long-term relationship. Most Saudis in business will have worked or studied abroad. It is better to schedule a meeting after you have arrived, but explain travel plans in advance. Saudis sometimes have the habit of not turning up for a meeting or cancelling a meeting at short notice, therefore it is best to have a plan B so that you can maximise the use of time which had been allocated to the cancelled meeting. Be wary of Saudi holidays, as they seem to be getting increasingly longer. All literature and business cards should be bilingual, and proper attire at a meeting is considered a mark of respect. Saudis can be difficult to pin down for a meeting. Prolonged meeting and much social discourse is the norm dont expect business to move quickly, although there are occasional exceptions. Being called to meetings at midnight or at other unsociable hours is a sign of progress. This is mainly because Saudi contacts are busy during what little remains of the working day, and therefore may consider meeting you to be important enough to hold the meeting at an unsociable hour as opposed to delaying or cancelling it. Very public meetings become private as decision time is reached. Try to be sensitive to which Yes means No. A few Arab phrases help. Meetings are ritualised, and you greet everyone individually as you enter the meeting. This can sometimes be off-putting if you (or your contact) are in the middle of making an important point and the proceedings halt to allow this to happen! Invitations are often refused once, but persevere, as just its part of the culture.
129
Memory, not notes, is the norm. Body contact and closeness is common do not draw back it will be seen as rejection. Saudis use the right hand, and gesticulation is impolite. Do not overtly admire possessions, as this will force your host to offer you the possession, and you will later have to reciprocate. When addressing Saudis, How to address Saudis, with the Royal Family it is Your Royal Highness, and with ministers or ambassadors it is Your Excellency. Otherwise, address them by first name - e.g. Dr Ahmed bin Sultan Al Helaissi is Dr Ahmed. For some businesses, it can prove hard to assimilate the Saudi culture. Some businesses have experienced constant bartering, even with commercial contracts (as opposed to street vending). You may find that contract details are changed several times as part of the negotiation or even delivery process. It is possible to ask for up-front payment as part of the terms of the contract, however make allowances for late or severely delayed payment. Exchange rate fluctuations will come in to play at this point if receiving payments in sterling, although the Riyal (SAR) is pegged to the dollar. Developing business in the Kingdom can be a long drawn-out business, therefore you will need to allow for more than one, if not several, visits to establish a good business relationship. Saudis will do business once a relationship is established, and you may need to go through different levels of hierarchy before reaching the decision-maker.
Lessons learned
When we asked one company which lessons they had learned, this was their response: reserves of patience were required, and they needed to find a reliable partner. They learned not to submit their best price up front, but rather to expect to barter and discuss terms. They advise not to expect a quick win, and stress the quality of your service as well as the goods. Having payment terms is good, but the Saudi contact may well ignore them! Often it is a case of two steps forward, one step back. Nevertheless, on balance the KSA is a lucrative market for them and is worth the investment. For telephone calls when in the KSA, it is advisable to get a Saudi SIM card. For flights, book as early as possible in advance to get the best deals. Budget for extra trips. As for accommodation, the best is not cheap, but you get what you pay for.
Interview with an ITA experienced in the KSA

[The following are extracts from an interview with an East of England international trade advisor experienced in conducting business in Saudi Arabia. It is focussed on experiences over a period of 7 years travelling and working in the Kingdom. Although the report was compiled in July 2006, we believe it is still valid today]. I used to go there every 6 weeks, first selling agricultural equipment, and then selling hospital equipment such as intensive care units, incubators and infusion pumps. To be honest, I felt Dubai to be a much nicer place to live and from which to service Saudi, and it was relatively easy to service Saudi from Bahrain or Dubai, although many Saudis appreciate a local presence. As for first impressions, two things really it was intensely hot, so if heat is problem for you, thats something to watch out for. It is also physically demanding, although it is dry heat in Riyadh and not as oppressive as on the coast. I found the winters pleasant. On the other hand, every building was air conditioned, so there was no need to worry about the weather if indoors.
130
Secondly, the infrastructure seemed very sophisticated, for instance in Riyadh the roads felt similar to Houston, with highways and a good transport network [although the culture workshop in Nov 2009 confirmed that driving in Riyadh and outside was a nightmare]. There are three major population centres Riyadh, then Jedda (the commercial capital) on the west coast this is a more relaxed city - then closer by is Mecca Medina, which Christians cannot visit. Try not to go during Haj or Ramadan, as it can be difficult to do business with people who are fasting. Finally, there are Dammam, Dharan ad Al Khobar on the east coast, commercial centres and oil fields, in fact the largest single oil installation in the world and largest offshore and onshore fields in the world. We always dealt with expatriates the first Saudi we met tended to be at the airport, and then we wouldnt generally meet other Saudi citizens until back at the airport again at passport check. It is not uncommon not to see Saudi businesspeople, and the vast majority of people working there are expatriates. Their nationalities varied depending on political circumstances - first there were frequent expatriates from Palestine, then Yemenis, now Philippinos and Egyptians. Many senior roles were held by Irish, British or American staff, as were many technical roles, but much of the workforce tended to consist of Bangladeshi, Pakistani staff and also Indians from Kerala. There were not enough Saudi citizens to achieve the rapid growth which the country was experiencing when I was there. An infrastructure was built which they couldnt maintain themselves, and the level of education was poor. Unemployment was high amongst young Saudi people, as many were not qualified to the level required by many jobs, and there were also many jobs they simply do not want to do. Usually a head of department was Saudi, but the staff performing everyday operational functions were not. There were plans to saudiise certain services. I rarely met a Saudi, and to be honest the process of saudiisation goes in fits and starts and can only go as fast as circumstances will allow. Everything we touched, ate & saw seemed to be imported, and there was very little domestic production. In more recent times women often run the business side of Saudi entities and are becoming increasingly evident in major businesses but still a very slim minority. All the ministries were run by Saudis, and there are more Saudis in ministerial functions. Dont be worried about doing business in Saudi Arabia, as Saudi is an easy place to do business (OECD has it now in the top ten for ease of doing business). The economy is well regulated, but you can only win battles in the commercial world you will never win wars so avoid litigation if at all possible. My experience of doing business there has been quite pleasant. Also, the food was good, the infrastructure was good, the demand for UK products and services is very much there. Main working hours are usually in the mornings and evenings, and the weekend is Thursday and Friday. The private sector will also work on Thursday morning. Expatriates usually live in compounds, and are left to their own devices. There is no system of alcohol licences, and alcohol is not permitted whatsoever. From my experience, the money was good and the work was good, although Saudi is not big on entertainment! Wahabism is a form of Islam, and is a literal interpretation of the Koran. It is an interpretation of the Koran. It thrives only because of an 18th century allegiance with the House of Saud and the UKs support for Ibn Saud against the Hashemites. There is also Sharia law and two types of police - the Mutawa (or religious) police and the civil police. If there is a legal dispute, it is all governed by Saudi law, and you would not want to find yourself in a court case, so it is best to settle all matters out of court.
131
In terms of the need to learn Arabic, I found that a handful of words in Arabic was enough, as in day-today functioning everyone spoke English. Everything was in English, so I was never in a situation where I needed to speak Arabic, unless I met the head of a family, which was usually at the signing of a contract. The Saudi companies were run by families, and the head of the family will have younger sons, who are often educated abroad, and it is these sons who will run the company. Dont worry about protocol, as long as you are polite and respectful. Communication was easy, the sales force were expatriate, so everything was done in English. Even the labels were in English, as it was the expatriates who would be the ones operating our equipment. Business was more personal rather than just, for example, quarterly returns, and families can run companies with multiple interests. One company we dealt with was big both in banking and the medical trade. If you were bidding in government tenders, it was a good idea to have an agreement with a commercial family, as the ministries often did not pay on time, and only trading families could hold large amounts of debt. A promissory note was provided by the ministry which any bank would honour. Only large trading families could do this, though, so it was important to understand the family we were dealing with and how well connected and financially sound they were, particularly if we were dealing with government tenders. Do due diligence on your distributor. It is also important to work out what range of products that distributor has. Some have many divisions my distributor had 169 agencies, of which I was just one, so my competition was also the other products they were selling. Guest worker salesmen were heavily motivated by commission, and you could get lost in the portfolio so to speak, so we needed to understand where we were in relative pecking order of thing. Letters of credit were advisable, even when dealing with distributors we had known for may years. In terms of contracts, generally speaking ministerial contracts were in English, as they were tendered abroad. Everything had to go through local representative, so at first sight it seemed to be a country of middlemen and intermediaries. We found many Saudis working in the law field and in the public sector, with many benefits such as housing guaranteed just by birthright. Iguama was a work permit scheme. There was a power relationship at play with Saudi senior staff, and these managers were deferred to at work, as the families could technically revoke your iguama, so there was often a reluctance to take risks amongst senior expatriate managers because of that. We could not get things to move fast, but the families did have money for things going over budget. They could, however, pull the plug on things if they did over budget.
132
SWEDEN BUSINESS CULTURE
The information in this report has been developed by our Finnish partner the University of Applied Sciences in Seinjoki in Jan 2011.
133
The economy in Sweden became weaker during the international economic crisis. Swedish exports decreased by 16 % 2008-2009 and imports by 17 % ( BUT the food industry, agriculture and medicine were exceptions!) Sweden is managing the crisis better than forecast and much faster than many other countries. The surpluses from 2006-2008 have enabled an expansive financial policy without any major permanent deficits. The public economy is expected to be balanced and turn to surplus during 2012-2014 without any budget tightening. 2009 GNP decreased by 4,9 %. According to the Government GNP will increase by 4,8 % during 2010 and by 3,7 % during 2011. Unemployment is at its peak 2010 (9,8 %), it is forecast to be 8 % in 2011 and about 6 % in 2014 i.e. the same level as before the economic crisis. In autumn 2009 it was estimated that the peak of unemployment (11%) would be reached first in 2011. Sweden overtakes the US and Singapore this year to be placed 2nd overall in the overall ranking in The Global Competitiveness Report 2010-2011 released by the World Economic Forum. Switzerland tops the ranking, while the United States falls two places to fourth position. Singapore comes 3rd. The other Nordic countries continue to be well positioned in the ranking, with Finland (7th) and Denmark (9th) among the top 10, and with Norway at 14th. The United Kingdom, after falling in the rankings over recent years, moves back up by one place for 12th position.
Business life
Sweden is a very industrialized country. Agriculture and forestry account for 2 % of the GNP, industry and construction about 30 % and the service sector about 60 %. The majority of Swedish companies are SMEs (small or medium-sized enterprises). It is worth mentioning that Sweden is one of the most attractive locations for inward investment in the world. One in four international business chains choose Sweden as their business partner in the future (100 businesses responded). Their choice is motivated by promoting the message that the Swedish market is transparent and the relevant statistics easy to find. Expensive labour costs in Sweden were the only negative issue mentioned. Largest Swedish companies (by turnover): - volvo, L.M. Ericsson, vattenfall, nordea, Skanska, Electrolux - Ericsson, volvo cars, Astra Zeneca, Sandvik, SSAB, Tetrapak, LKAB,SAAB, IKEA. ( Main source of the content below: http://www.worldbusinessculture.com/Swedish-Business-Style.html): A belief in the genuine equality of individuals and the resultant desire for consensus are at the heart of Swedish business life. Sweden presents a fascinating business model. It has proved to be a remarkably successful post-war economy, which has managed to combine both pro-business policies with the provision of an all-embracing welfare state. In Sweden there is a very large number of truly international companies emanating from a country with a population of about nine million - Ericsson, Electrolux, Atlas Copco, ABB, Tetrapak; the list is almost endless. It is a truism that countries with small domestic markets need to internationalise
134
to survive and prosper but few countries have been as successful as Sweden on the world stage. One important fact about Sweden is also the enormous breadth of its industries. Sweden has significant companies in market sectors varying from electrical goods to vehicle manufacture, from telecommunications to pharmaceuticals and from mechanical engineering to chemicals. In addition, of course, it has companies with a global presence in all these industrial areas.
Swedish business structures and management

Swedish organisations are often not as layered as in other European countries. The flatness of Swedish management structures is also mirrored at the levels of remuneration offered to different stratas within a company. A combination of tax regime and centrally agreed salary agreements have produced a country in which pay differentials are almost unbelievably low (although this is starting change). Structures are designed to be pragmatic and systematic and to allow people to perform their tasks effectively and with as little disruption as possible. This does not, however, mean that structures are extremely inflexible. Indeed matrix management, which works better in Sweden than almost anywhere else, leads to openness of communication and freedom of information which many more hierarchical societies would find almost anarchic. One key organisational necessity is the absolute need for punctuality. Dont be late in Sweden if you want to maintain a professional image. Swedish managers are seen more as facilitators or coaches who offer advice and suggestions. Bosses are not necessarily expected to know all the answers, and it is assumed that the person performing a particular task is the best expert in that particular task. One result of this approach is that decisions can be hard to reach and the process tends to be drawn out. It is important that the manager includes everybody in the process and that everybodys point of view is listened to and valued. So those from countries where quick decision making is highly valued can find this process frustrating. As managers tend to adopt a consensual approach and openness of discussion, information tends to flow well between departments and functions. There also tends to be less social distance between managers and subordinates. Management denotes a level of work-related responsibility rather than a hierarchical status. Swedes are good team players, and every team member is expected to perform his own tasks without any strong supervision.
Meetings
Meetings tend to be long with a great deal of open debate (diskuterande folk = discussing people). The participants speak one at time. Opinions are expected to be backed up by empirical evidence, which means that a great deal of pre-planning and preparation are expected. Meetings can have a cold feeling for those who are used to emotional discussions. Punctuality is of central importance in Sweden. Lateness implies a lack of courtesy and respect for the other members present. In discussions about approach to business, Swedes raise the importance of punctuality more often and more strongly than almost any other nationality.
135
Agendas are usually produced. Without an agenda, the meeting would run the risk of disintegrating into an aimless discussion.
Business communication styles

Swedes communicate well in international business situations. They speak fluent English. The international nature of many Swedish businesses makes it essential for any ambitious Swede to have a good knowledge of this world business language. As with many northern European countries, directness in communication comes often before diplomacy. The search for consensus and agreement makes directness absolutely necessary. The result of this respect for plain speaking is that Swedes can be seen as rude by those cultures which place diplomacy before direct speaking (for example Japan). Silence is golden in Sweden. In many other cultures people find any level of silence intolerable and will rush to fill it. Swedes are comfortable with silence. If you dont have anything to say why speak? Although Swedes have a good sense of humor, it is not necessarily appropriate in all business situations. Serious business should be treated seriously.
Dress code
Dress tends towards smart-casual in Swedish business life. Swedes usually wear jackets and trousers often with a fairly distinctive tie to set them apart. Pastel shades are very often in evidence. If travelling in winter, be sure to be appropriately and warmly dressed. It is best to sport a number of layers as, whilst cold outside, offices can be very warm indeed.
Top 10 Tips
1. Egalitarianism is one of the driving characteristics of Swedes. This leads Swedes to be consensus-oriented in many situations. 2. Swedes expect to be allowed to perform their tasks independently, free from interference from others. 3. Business structures tend to be flat with good, open communication across the functions. 4. Managers are expected to include subordinates in the democratic decisionmaking process. 5. Swedes tend to make good team players, realising the importance of open communication. 6. Business meetings can be long with serious discussions. 7. delegates are expected to arrive well-prepared for meetings. Agendas are often used and usually adhered to. 8. decision making can also be a long process as the necessary debate and consensus process is gone through. 9. Punctuality is essential in Sweden. Lack of punctuality can undermine professional credibility. 10. Swedes put business before relationships first, and business relationships are based on respect for competence and diligence.
136

Multi-Country Culture Guide

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Multi-Country Culture Guide

Uploaded by

Copyright:

Available Formats

Business Culture Guide

02 03 10 22 34 45 58 66 77 87 97 103 114 125 133

ARGENTINA BUSINESS CULTURE

ARGENTINA BUSINESS CULTURE

ARGENTINA BUSINESS CULTURE

ARGENTINA BUSINESS CULTURE

ARGENTINA BUSINESS CULTURE

ARGENTINA BUSINESS CULTURE

ARGENTINA BUSINESS CULTURE

ARGENTINA BUSINESS CULTURE

CHINA BUSINESS CULTURE

CHINA BUSINESS CULTURE

CHINA BUSINESS CULTURE

FACTS And FIGURES

Good PRodUCT oR SERvICE

TREAT IT AS A ConTInEnT, noT A CoUnTRy

CHINA BUSINESS CULTURE

1. What was your first impression of doing business in China?

CHINA BUSINESS CULTURE

CHINA BUSINESS CULTURE

4. Is there a difference between generations in terms of how business is done?

CHINA BUSINESS CULTURE

6. What is the general perception of the British in China?

CHINA BUSINESS CULTURE

Diversity & Characteristics of Areas of China

Discussion between David Owen (UKTI) and Chris Cotton (CBBC)

Is English widely spoken in the business community?

CHINA BUSINESS CULTURE

What about East of England companies learning the language?

CHINA BUSINESS CULTURE

And what about the system of guanxi?

What are the Chinese like with telephone communications?

CHINA BUSINESS CULTURE

Is IPR (Intellectual Property Rights) still a problem in China?

Chris any final comments?

CHINA BUSINESS CULTURE

CHINA BUSINESS CULTURE

FRANCE BUSINESS CULTURE

FRANCE BUSINESS CULTURE

FRANCE BUSINESS CULTURE

FRANCE BUSINESS CULTURE

Is it important to speak French to do business in France?

FRANCE BUSINESS CULTURE

FRANCE BUSINESS CULTURE

FRANCE BUSINESS CULTURE

France has a reputation for red tape

FRANCE BUSINESS CULTURE

What should one expect in meetings?

FRANCE BUSINESS CULTURE

does French practice differ in terms of working hours and holidays?

FRANCE BUSINESS CULTURE

FRANCE BUSINESS CULTURE

What points of business etiquette should a newcomer be aware of?

FRANCE BUSINESS CULTURE

Clich of French Business Culture

Reality of French Business Culture

Management Styles in France

Cultural Orientations France

FRANCE BUSINESS CULTURE

TEN TOP TIPS

GERMANY BUSINESS CULTURE

GERMANY BUSINESS CULTURE

GERMANY BUSINESS CULTURE