Understanding business etiquette in international trade

By: Carol H. Morgan
28 April, 2010

With significant geographic, language and cultural barriers, nations that are typically considered "Western," (Western Europe and its former empire), are divided from cultures that are more typically "Eastern," (or those in India, Asia and Eurasia).

These differences reach into nearly every aspect of daily life, including the ways that the two groups engage in business practices and etiquette.

East vs. West: Business hierarchy
Those with a Western-style cultural background are often raised, from the time they are small, to think that everyone is essentially the same in ways that matter, and that we are not to maximise or even acknowledge differences. This might translate into a business context where everyone that is higher in the corporate structure minimises that fact, and tries to make his subordinates feel more like equals - at least on the surface. To this end he might do things like invite them to call him by his first name.

The cultures of Japan, China and India are examples of those that retain ancient social hierarchies from such places as religion or social castes. It is very important to them that they all be treated according to their position in this agreed-upon hierarchy, and for a Western business person to not do so, will be an act of dishonor.

In Japan, for instance, it is important to defer to and first address the person of most status in the room. In India, it is important to not imply that someone of middle or high social rank perform menial tasks. In an Australian business meeting, for example, if a desk needed to be moved by two people in a meeting, it wouldn't matter if one of them were the CEO, he would probably be happy to do it. But implying that an Indian businessman should do something of this type, would be to insinuate inferior or menial status.

East vs. West: Ritual
The Western preference has become, over the past few centuries, one of focusing on things that "really matter". If something doesn't have intrinsic or overwhelming value or significance, then it should be dispensed with. Clothing, language, music, and food have all become simplified and oriented toward practicality and convenience, and many of the traditional and ritualistic aspects of our possessions and practices are eliminated, if not judged to be of immediate or material value.

The Eastern philosophy of ritual (one thing typically judged to be recently less important in the West) is quite the opposite. There is still the retained sense of meaning in many of the traditional ritualised behaviours, such as engaging in proper forms of address, or ceremonial meals. Even in many aspects of business (where their Western equivalents might be more used to just 'getting down to business') meaning and value is still derived from the ceremonial aspects.

One particular arena where this value exhibits itself in the business world is in the exchange of business cards. Australian businessmen might just give each other business cards for practicality's sake, and each in turn will just stuff them casually in his pockets. This would be an insult to a businessman in Japan or India. There, cards of impeccable quality are handed to each other ceremoniously with a gracious bow, examined carefully and deliberately handled. Not to do so is insulting, so this and other areas involving rituals that Western businessmen might consider trivial formalities, are ones that should be investigated prior to engaging in business ventures.

East vs. West: Communication etiquette
Generally stated, the difference between these two interaction styles is a concentration on 'pure' communication and practicality on the one hand, and a value in interaction and relationships on the other. Western communicators have taken quite a 'just the facts' approach to communicating. This often makes them hurry through meetings, brush over introductions and politeness rules, and (to their Eastern counterparts) sometimes appear brusque and rude.

On the other hand, Eastern ways of doing things often focus on how the parties are relating, rather than just the information they are exchanging. It is quite common for them to avoid business with those they don't personally like or trust, even if it doesn't make business sense for them to do so. During business meetings and other interactions, things can quickly get derailed if the communications are unpleasant, or any unintended messages are sent that make various parties not like or trust each other.

Often Western rules of communication value saying something - just making noise or hemming and hawing if necessary. None of them want to admit it if they just need to think about something, for example. Eastern business people more often take their time and don't just say things to hear themselves talk.

For instance, an American businessman in Japan might misinterpret the silence of his interaction partner after a question or a statement, because those in America would make sure to say 'Uh, right, well...' or similar fillers even if they had nothing much to say. In Japan, for instance, if they need to think about something, they just think about it and don't set their mouths on auto-pilot in the meantime.

There are other consequences of valuing the quality of the interaction rather than just the information exchanged. In Japan and India direct refusals or denials are avoided because it creates a negative atmosphere in the interaction. Arguments don't get heated or rude, to press points or play devil's advocate, while in America the parties might actually enjoy that type of interaction.

Above all, there isn't the sense in the East, like there is in the West, that any type of interaction can be justified if it furthers the ability of the parties involved to make a profitable deal. Care should therefore be taken to make sure that in addition to the bottom line, there is attention to the form of discourse.

Western businessmen have gained a bit of a reputation for reducing business exchanges to cold, quick and calculated transactions that concentrate on the endgame profit. As with every cultural approach, it is easy for them to underestimate the possibility of a different way of looking at things. It is also possible that those of the Eastern mindset, who take comfort in tradition, politeness and personal interaction, to assume that Western business dealings should be mistrusted because they are all about selfishness and profit for profit's sake.

These differences, however, are arbitrary and culturally specific. Understanding and deference to the other's comfort in the exchange can go a long way towards ensuring mutually profitable and enjoyable business ventures between the two sides of the world.