South Asia - Introduction to Business Culture and Protocol

South Asia contains about a quarter of the world's population and any way you cut the demographics it is a large, growing and important market, with the new knowledge- based industries - such as software - up there amongst the world's best. And it is by no means a difficult market for us. Look at what we have going for us. English is the language of business; our laws and legal systems are substantially the same. Indeed the way we go about our daily work is very similar and you will find both women and men in senior positions in both industry and politics. We have a common heritage in much that we do and love - including cricket!

So how do you prepare for a first visit to this vast subcontinent? Well - and much of this is self-evident- the first thing to do is to satisfy yourself that there is a market for your product or service. South Asia is amongst the most price competitive markets in the world, so try to do some research on competitive local pricing before you go - or put it high on the list of things to do in your visit. There is help at hand in doing this pre-visit research including Trade Partners UK where a variety of subsidised services are available to help you- for instance market information reports which amongst other things assess the market for your product or service, review competition and profile potential agents, distributors, partners and so on together with names of professional advisers you might want to consult. Do some homework on the area too. Give some thought to your market entry strategy. Is it to find an agent or distributor? A joint venture partner or what?

Think carefully about your itinerary. Try to be sure you are meeting decision makers - not always as easy at it sounds. Check whether there are any national or local holidays during your trip and be sure to leave enough time between meetings to get from one to another. Crossing some of the big cities can take literally hours. Taxis are safe but can and do get lost! Better to ask for a hotel car.

What clothes to pack? For business meetings you won't go wrong with a suit in the winter months and a short sleeved shirt and tie in the very hot summer months. Speak to a local travel clinic and seek advice on the appropriate vaccinations. Get a visa. Take a few small gifts with you. Corporate "giveaways" for use at the end of business meetings and a few pieces of china, or the like, as gifts if you are invited in to your host's home.

Know your product or service inside out and those of your world-wide competitors' too. The local businessmen are well travelled and will almost certainly know your competitors - particularly their prices. Take plenty of company and product literature with you and a good supply of business cards.

In doing business you are likely to meet with any or all of the following management styles:
• The business house and which is something of a hang over from the past when family driven conglomerates thrived behind the wall of import protection and on cosy political friendships. They tend to be autocratic and, to us, seem disorganised.
• The subsidiary or associate of a MNC with local publicly quoted shareholdings which was a means of complying with the (then) rules limiting foreign ownership. They are professionally managed with a good understanding of marketing and strong local brands.
• The service companies which are typified by the young, successful, often US focused, software companies. World class in both their output and corporate governance and many say are the bow wave of India emerging as a superpower in the world's knowledge based industries.
• The public sector is still very much a dominant and often a monopoly force throughout South Asia. It tends to be inefficient; bureaucratic, over manned and heavily unionised.

What can you expect at your first meeting? Don't be surprised or put off by what you have seen on your way to the meeting nor the building or offices you have arrived at. Remember all is not always what it seems. Time keeping and time management are not always what we would want. And your meeting may suffer a number of interruptions. You will be greeted with hospitality and drink lots of tea before you leave. Be ready for an opening conversation on anything but business and let your host lead it towards business. Remember you are hopefully starting to build a relationship - which is important to the local businessman. At the end of the meeting sum up, check there is a common understanding and seek agreement to what you have discussed and decided. Then send written confirmation when you return to your home office. Local businessmen love "MOU's" - memorandum of understanding.

During your meeting seek to find out who is the real decision-maker. Don't be surprised if after a while you are invited to meet the head of the family. He or she may very well be the real decision-maker and the one who approves the deal. Don't be surprised too if he or she tries to shave prices further as part of the approval. Do not be disappointed if your first meeting fails to reach the decisions you had hoped for. Patience is a virtue and nowhere is this more true or necessary than in South Asia. The decision making process can take several meetings and involve several people. And often bureaucracy rears its head to delay and occasionally prevent decisions.

Age and "keeping face" are important factors to remember. Age demands respect and in many companies is part of the hierarchy. Forms of address vary widely from "Sir" or "Madam" through to first names from the very first meeting. Some of the older companies have a formal style and others, particularly the newer ones, are both informal in their style and dress codes. You just have to feel your way on this. The fear of losing face restricts some people from contributing to a discussion. Drawing out comment from people can sometimes be tough but it is worth working at. The good and much used words "No problem" usually means quite the opposite, and is a warning to probe politely!

Meetings, particularly the more serious ones may often conclude or extend into an invitation to a lunch or dinner and which as the relationship develops may well be to meet the family at home.
When you return to your home office document and send your understanding, decisions and next steps to the companies you have met. Remember that whilst they may have thought you were the proverbial answer to the maiden's prayers whilst you were with them, out of sight is also out of mind. So you will almost certainly have to chase the promised actions. Be patient and don't be surprised by surprises!

Farnham Castle/Julian Stretch

Julian Stretch OBE is a trade and investment adviser to a number of companies including the South Asia unit of the UK's Department of Trade & Industry. From 1995 to 1999 he was Director of International Operations for a British domestic appliance manufacturer. Prior to that he spent 25 years with Rank Xerox Ltd including managing the company's operations in South Asia, Eastern Europe, Russia and the Middle East. He established Rank Xerox in India where he set up a manufacturing and marketing joint venture. From 1988 to 1992 he was chairman of the then British Overseas Trade Board's area advisory group for South Asia. He was awarded the OBE for services to exports in 1992.

Want to do Business in Japan?

Japan has the world's second largest GNP and is the world's second largest market accounting for 60-70% of the economy of Asia. It is the source of a great deal of advanced technology, much of it built into Japanese consumer products owned by consumers throughout the world. Japan has 50 million mobile phone users (40% of the total population) most with Internet access, while broadband technology is rapidly advancing on both the home and business fronts. Total sales through mobile e-commerce reached $500 million in 2000 with projections of $10 billion in sales by 2005.

The Japanese have the justified reputation of being the world's most demanding consumers who are satisfied with nothing less than the very highest standards of quality and service. The Japanese market is therefore the benchmark for any company aiming to succeed in international business.

Despite its ultra-modern, Western appearance and technological sophistication, foreign business people often find that on closer acquaintance, Japan is in many ways the most culturally distinct advanced society they will have encountered. This is part of its fascination. Too much is sometimes made of this but is does mean that time spent acquiring the necessary cultural awareness and knowledge needed to adapt one's style and approach to fit Japan is a necessary investment. Key aspects to be aware of are the strong group orientation of Japanese and the distinction they make between tatemae, the face which Japanese present in public to maintain harmony and avoid embarrassment, and honne, one's real feelings or the actual situation.
Japanese business is relationship-based on the assumption that it is the relationship which makes the business possible. Since Japanese are instinctively wary of those with whom they have no relationship, whether Japanese or foreign, it follows that building a relationship takes time and requires patience, persistence, and perseverance. These are among the qualities most admired and respected in Japanese business and they are needed in abundance by both companies and individuals in Japan if they are to succeed.

The hallmarks of the Japanese approach to business are tireless collection and collation of information, thorough preparation and meticulous attention to detail. Foreign companies in Japan should do their best to match this and should also have clear objectives and a well thought out strategy for the market. Time-consuming and often very costly mistakes have been made there by foreign businesses which have failed to gather sufficient information and skimped on preparation and planning. "Winging it" or "playing it by ear" are sure recipes for disaster. Those who do their homework thoroughly will find a vast amount of information readily available from official and commercial sources as well as many experienced consulting companies to call on with long experience and specialised knowledge of Japan's particular markets. Being prepared also means knowing one's company, products and markets inside out. Those who do not cut a poor figure in Japanese eyes even if they can do business in Japanese.

Formality and formal politeness are much more important features of Japanese social and business life than in most other societies. Their observance ensures respect for hierarchy, the smooth functioning of social relations and the elimination of uncertainty and any possibility of public embarrassment. Knowing and being able to observe the basics of etiquette are therefore important for the incoming business person wishing to make the best possible impression. First encounters in business, for example, must always begin with the formal exchange of meishi or name/business card. Any business visitor to Japan therefore needs to take an ample supply (anything between one and two hundred) of professionally produced cards. They are a key element of the public face not only of the individual but of their company. On the sophisticated and often involved protocol for meetings, entertainment and other areas of business, it is best to take expert advice.

Japanese companies are collective organisms whose individual members are with the company for most if not all of their working lives. Decisions are made after an exhaustive period of information gathering, consultation and discussion (nemawashi) among all relevant parties in the company. This takes time and will involve repeated requests for information as well as great patience from a prospective business partner. It also underlines the necessity for any business partner of developing and maintaining good relationships with as wide a range of people as possible in their Japanese counterpart.

Being able to speak and do business in Japanese is always an advantage, not least because it shows an unquestionable commitment to the market. The language is also an important window into Japanese culture and without the ability to read it, foreigners have the unnerving experience of being functionally illiterate when they arrive in Japan. However only a minority of foreign business people will have these language skills while all Japanese have some knowledge of English and some a very good command of it. It is therefore certainly possible to do successful business through the medium of English in Japan. Native speakers of English however need to now how to adapt their language in order to communicate effectively with second-language speakers of English like the Japanese. This involves much more than just speaking more slowly. And even when doing business mainly in English, every foreign business person should make the effort to learn some courtesy and survival Japanese and in particular the polite expressions and formulas which always lubricate social interaction in Japan. This will always be appreciated.
Whether business is being done in Japanese or English, all relevant printed information such as company brochures, product information and the like should be produced in Japanese and an interpreter, properly briefed, should be used at all important business meetings.

The economic and financial news coming out of Japan over recent years has seldom been positive but this should not be allowed to obscure Japan's massive strengths and the increasing opportunities it offers for successful and profitable business. Worth highlighting here is the genuine welcome now on offer to foreign inward investment in an economy where in the past it has deliberately kept it to a minimum. As a result foreign investment has been rising rapidly.

Graham Thomas was previously Head of the Briefing Office, School of Oriental and African Studies, University of London. He now provides a consultancy service to companies wishing to do business in Asia, specifically in Japan and China and for expatriate Japanese executives to manage non-Japanese effectively in Europe and the UK. May 2002

To find out more about our Working with Japanese, Japanese Language or Living and Working in Japan programmes, please email: info@farnhamcastle.com, or visit our website at http://www.intercultural-training.co.uk