Tuesday 30 October 2007

Focus on Poland






Three reasons make Poland a different market from other post-Soviet block states. To start with, Poles were able to travel to the Western countries during the Soviet regime. Small businesses and private ownership were allowed to exist after 1945. And finally, around 19m people outside Poland claim Polish background and maintain contact with Poland. These factors made a significant contribution to the latest rapid growth of the economy.

Firstly, those who travelled abroad (250-500,000 people per year) brought back not only hard currency earned "moonlighting" in Germany or the UK but also ideas and Western notions of quality. Sums were significant, this was quickly recognised by the regime, which legalised foreign currency accounts in the early 70's.

As soon as democracy was re-established in Poland, many expatriates or second generation Poles were willing to return and bring contacts, knowledge of Western technology and business practices back to Poland. Businesses, large and small, were set up using cash, credit or expertise supplied from Chicago, London or Sydney. The Polish SME Sector received an enormous boost, unprecedented in Eastern Europe, and quickly became an important contributor to the economic recovery.

The Polish market is relatively large and promises good growth in the years to come. Entry barriers to many market segments are still low. Its geographical location is ideal for entering the post Soviet markets. However, Polish corporate and social cultures are different from those in the West, so a number of issues should be remembered:

Emotions play a very serious role in Polish business and politics.

Organisations have rigid structures and hierarchies. Task delegation is poor.

Bureaucracy is still ripe and so is corruption and nepotism.

In negotiations, small talk is important, as are personal relationships with partners.

Corporate hierarchy is often based on age and on university degrees. It is unwise to send a young technician to negotiate with an experienced Commercial Director with a PhD or MSc to his credit.

Poles are macho-oriented, easy to offend, intolerant and racist.

Poles are also hospitable, emotional and optimistic. Most of them tend to make promises, which they hope to be able to deliver "somehow".

Gadgets, mobile phones, cars and computers play a significant part in creating a corporate image.

Business ethics are dubious and working relations bear marks of the past era.

When searching for a partner, look outside Warsaw. Provincial towns offer lower costs and staff are easier to keep.

Friday 26 October 2007

How culturally aware are you?

One of our leading intercultural trainers, Philippe Nitzer, has devised this short quiz for you to test your knowledge...
1 In Spain, the main purpose of a business meeting would usually be to:
a) make decisions by discussing in length the pro's and con's of an option
b) reach agreements by consensus between everyone concerned
c) brief their team about something already decided by specific decision makers


2 You are asking a question of your junior Japanese colleague and he/she looks down and answers you after a few seconds. You think the chances are that he/she:
a) has something to hide and is looking for an answer that would boost him/her in your eyes
b) is paying respect to your position and your question
c) hasn't got a clue what the answer is and feels ashamed

3 In Italy, the majority of people think that a good manager should:
a) have at hand precise answers to most questions his/her subordinates may raise about their work
b)be able to direct his/her subordinates to those who may have the right answers to most of the questions they may raise
c) be critical of his/her subordinates for asking him/her questions as he/she considers that, if they are in the right position, they should know the answers themselves

4 In Germany, performance review is usually perceived:
a) very well, as a way to give a chance to everyone to develop their own competences
b) very badly, as it may be seen as a way to challenge their skills and knowledge
c) as an opportunity to impress their colleagues and superiors

5 Do you think that, to be effective in a multicultural organisation, a successful competency framework should:
a) be designed in such a way it could be implemented by everyone, irrespective of their cultural background
b) take into account the cultural diversity of an organisation and be designed accordingly
c) stick to the one which has proved successful at home

6 You hear your German colleague saying about your latest proposal: "don't take it personally, but this idea is stupid". You think that:
a) he/she is very blunt and rude and these are not proper business manners
b) he/she is expressing politely and clearly his/her view about your proposal
c) he/she is purposely trying to undermine your proposal for political reasons

7 You are making a presentation in Tokyo in front of a group of Japanese executives and two of them are sitting with folded arms, their head down and their eyes closed. You think that:
a) they are very rude to be sleeping during your presentation (after all, you should be the jet-lagged one)
b) they are deliberately pretending they are sleeping to show that they are not supporting your proposal
c) they are listening attentively to your presentation

8 Your Mexican potential client has arranged to meet you in a cafe at 10 a.m. in Mexico. You are there on time but he arrives 30 minutes later and says "Sorry, I'm a little late". It may very well be that:
a) he arrived late intentionally to show you indirectly that, being the potential buyer, he is in a position of power
b) he arrived late intentionally to let you have the time to settle in and enjoy the atmosphere
c) he arrived late, as all Mexicans would, because it is well-known that business is taken very lightly over there and besides, he didn't give you any good reason for his delay

9 You email your Dutch fellow team member in these terms: "Let's meet ASAP to discuss this project.". The reply comes: "Who is Asap?". You think:
a) your colleague has a sense of humour that you didn't expect
b) your colleague probably did not understand the expression ASAP
c) your colleague doesn't seem to be co-operative as you think he/she may have meant "why ASAP?"

10 You make a request to your Norwegian junior colleague in these terms: "I wonder if you would be kind enough to do that for me when you have time". Two days later, you are still waiting. The chances are that:
a) your colleague is sulking because in his/her culture, this way of expressing a request would be considered as an order and might be offended
b) your colleague does not know how to do what you requested and does not dare to ask as it would show that he/she hasn't got the right skills for the job
c) your colleague thought that you gave him/her the choice to do it now or later and decided that he/she didn't have the time right now

The Answers

1. In Spain, the main purpose of a business meeting would usually be to: make decisions by discussing in length the pro's and con's of an option

2. You are asking a question of your junior Japanese colleague and he/she looks down and answers you after a few seconds. You think the chances are that he/she: is paying respect to your position and your question

3. In Italy, the majority of people think that a good manager should: have at hand precise answers to most questions his/her subordinates may raise about their work

4. In Germany, performance review is usually perceived very badly, as it may be seen as a way to challenge their skills and knowledge

5. Do you think that, to be effective in a multicultural organisation, a successful competency framework should: be designed in such a way it could be implemented by everyone, irrespective of their cultural background (answer b is probably also acceptable here)

6. You hear your German colleague saying about your latest proposal :"don't take it personally, but this idea is stupid". You think that: he/she is expressing politely and clearly his/her view about your proposal

7. You are making a presentation in Tokyo in front of a group of Japanese executives and two of them are sitting with folded arms, their head down and their eyes closed. You think that: they are listening attentively to your presentation

8. Your Mexican potential client has arranged to meet you in a cafe at 10.00am in Mexico. You are there on time but he arrives 30 minutes later and says "sorry I'm a little late". It may very well be that: he arrived late, as all Mexicans would, because it is well-known that business is taken very lightly over there and besides, he didn't give you any good reason for his delay

9. You e mail your Dutch fellow team member in these terms: "Let's meet ASAP to discuss this project". The reply comes: "Who is ASAP?". You think: Your colleague probably did not understand the expression ASAP

10. You make a request to your Norwegian junior colleague in these terms: "I wonder if you would be kind enough to do that for me when you have time". Two days later, you are still waiting. The chances are that: your colleague thought that you gave him/her the choice to do it now or later and decided that he/she didn't have the time right now

Intercultural Training: The British at Work and Play

Intercultural Training: The British at Work and Play

Tuesday 23 October 2007

Cultural misunderstanding, or just being rude?

How can you tell if you have just made some huge intercultural faux pas, or if the person you are talking to is just being rude?


When I think about my fellow Brits, I see that some of them I instinctively like, some I’m fairly neutral about, and there are a very few with whom, for no particular reason, I can find no common ground and it is an effort to be civil to them. There are one or two others who are deliberately and obviously rude (and not just to me). If I have to do business with people you find rude, it is important to find out as quickly as possible whether you are making some horrible cultural mistake that is offending them, and that everyone is too embarrassed to tell you about, or whether there is a personal dislike – I suppose the latter is much rare, but is potentially more damaging to a business relationship.



My advice is simple

  • Ask: either colleagues you trust or friends;
  • Look: how other people react to this person;
  • Listen: even if conversations are in a different language, you can probably tell if this person’s answers are more abrupt than conversations between other people, or you can tell by his/her tone and intonation that there is some other issue.


The most common situation is that there is some cultural issue, which is exacerbated by personality blocking full communication. As an example, an anecdote from an anonymous client recently: a large business services company employed a Saudi manager who had a huge reputation, was highly recommended for his client care and had been marked for accelerated promotion. However within his first month at the company he had lost a very important client. A quick phone call to the client established that he had gone into a meeting room, and asked the woman seated at the table to bring him a cup of coffee, and then sent her back to bring some more sugar. You can probably guess that the woman concerned was the decision maker for the project and was very upset at being treated this way. It is a stereotype (but nonetheless true) that a lot of Saudi’s are uncomfortable dealing with women in business, and those from wealthy families may be used to treating women as servants in a business environment. HOWEVER it is standard business practice (and common sense) to establish to whom you are talking, before you make assumptions, even more so when visiting a client’s office. It is a matter of politeness not to assume that anyone who might be in the room is there to provide you with drinks, and especially when not in your home country you should be more circumspect and more polite in dealing with people you don’t know.

It is also true that excessive politeness can cause embarrassment to both parties, but I would suggest that the embarrassment is significantly less damaging than causing even a small amount of offence to a potential or existing client. The above anecdote also shows how even a tiny amount of preparation can help. IF the Saudi had found out in advance the gender of the person he was meeting; IF he had been a little more culturally aware; IF he had been prepared to work in a different culture; then perhaps…

Tuesday 16 October 2007

Culture shock

What’s the difference between culture shock, homesickness and a bad case of nostalgia?

On a simplistic level, the symptoms of all three can be the same: varying levels of depression, increased stress, tiredness, flu-like symptoms, to name but a few. However I think it’s not true to say that they are gradations of the same problem.

Taking them in reverse order – nostalgia.

“Nostalgia comes from Greek nostos "homeward journey, return home" and algos "pain" - with the word nostos originally referring to the journey of Odysseus and the heroes from Troy. And if you have a yen, well, you will be surprised about the history of the word. It is from in-yan, the Chinese expression for "craving for opium" and yen first meant "craving of an addict for a drug". This became yan and, eventually, yen for a "powerful craving." (http://dictionary.reference.com/features/wordtraveler04.html)


Interestingly in modern English it’s meaning has developed to include attachment for a specific TIME rather than PLACE – we are nostalgic about a childhood summer, or student days, and less about our homes. This is especially true for “serial-expats” who may have difficulty saying where home actually is. Whole industries have developed around exploiting nostalgic feelings – museums, historically themed parks, the online “family history” sites, even to some extent social networking sites - let’s be honest, who doesn’t look up past flames on facebook/my space/friends reunited!

“An important feature of nostalgia then is the relationship between past and present; indeed it may be seen as a barometer of the present.”
(http://www.api-network.com/main/index.php?apply=scholars&webpage=default&flexedit=&flex_password=&menu_label=&menuID=homely&menubox=&scholar=186)

Homesickness, I think we can agree, is a much more specific longing for a place or person (places/people).
“Homesickness is the distress or impairment caused by an actual or anticipated separation from the specific home environment or attachment objects”
(http://en.wikipedia.org/wiki/Homesickness)
Interestingly the above definition suggests that the anticipation as much as the actual distance from home is a real issue for some people. I attended a boarding school from the age of 11, and was one of the lucky ones who didn’t suffer homesickness, but I can imagine the distress and consequent academic influence for those who did suffer. But adults suffer it too! More importantly, it is completely irrational, and it is rare that the promise of a return next week/month will alleviate the symtoms.

In my view Culture Shock incorporates elements of both nostalgia and homesickness, but is forward looking. With nostalgia and homesickness we are looking back – either in time, or physically – and making a mental step that what is behind us is better, more fun, more comfortable. Culture Shock looks around and forward and says “I can’t cope/don’t want to cope with this”. In other words you blame your current environment for the symptoms rather than idealising the past. In many ways this makes culture shock much harder to deal with. We can be nostalgic in a positive way and remember the past with a smile. Homesickness will pass – either after a visit home, or by getting used to it (this is not to undervalue the real pain it causes though). If you don’t deal with culture shock as an expatriate it will affect home and work life, and possibly quite severely – just because it is so easy to blame “the natives” for everything that is wrong. People who have experienced culture shock testify to the fact that culture shock comes in waves – you have good days and bad days. This is why culture shock is often described as a rollercoaster. You can have really good moments – the peaks – when you are enjoying everything new around you and suddenly hit a really big trough where the slightest misunderstanding is exaggerated beyond proportion.


I’m not going to discuss here how to deal with culture shock (I may return to the theme later on) but I do want to stress how important it is to be prepared for the effects and symptoms of it.







Wednesday 3 October 2007

Doing Business in Central and South Latin America

Nowadays, international business executives recognise the complexities of the main factors influencing the business entry process in Central and South American countries. The region as a whole bears all the characteristics of geopolitical, economic, social, religious and ethnic legacy resulting from Hispanic-American processes. From the Spanish conquest, the wars of independence, the aftermath of independence, the search for political stability, the acute disparities of wealth, the periodic armed revolts by dissidents, the coup d'Ðtat, military dictatorships, all have been a regular feature in Central and South America. Also the relationships with the United States and Europe, have contributed to shaping the "psyche" and culture of the "national" personality in each country.

Clearly it would difficult to suggest that there is a standard "Latin American Business Cultural Model". Latin American business executives tend to be extrovert, impatient, talkative, and inquisitive. But of course, in Central America, Venezuela, Colombia, Brazil and Argentina, they are more extrovert than in Chile, Bolivia or Peru.

When preparing your trip, remember that many countries require a business visa to conduct business transactions. Avoid Christmas and the holiday season as everything slows down. Check the climate conditions particularly in countries such as Peru and Bolivia; altitude, rain, heat, etc. may affect your health. Documents such as letters, promotional literature, and presentation materials should be translated into Spanish. If you receive a reply from a Latin company in English, however, you may begin using English in correspondence.

Prior appointments are always preferred, preferably at least one week in advance, making sure you always check the appointment on the day of the meeting. Punctuality is expected and you must take into account the traffic congestion-especially in most of the Capital cities, such as Mexico City, Sao Paulo, Santiago de Chile, Buenos Aires, Lima, Caracas etc- this can be difficult, and you must plan ahead to ensure you have plenty of time to get to your destination.

Latin Americans, tend to be people oriented, they argue emotionally, and instead of giving strict orders, they prefer to do things by seeking favours. In contrast with the "individualist" Anglo-Saxon culture, the "collective" is above everything, as a result interpersonal skills such as the ability to "fit in" and maintain cordial relations with the group, are often considered more important than professional competence and experience.

It is in this context that the "Family" has a broader "collective" connotation as it embraces blood relations, distant family, friends, or even work colleagues. In fact do not be surprised to see Latin business executives intermixing their work environment with their "social-family life". In this culture, nepotism is easily accepted as common practice; family members and relatives are preferred when recruiting staff. To that extent the individual member must take full responsibility for his or her decisions and how they affect the group or family structure.
In recent times there have been an interesting dual development in the business culture, on the one hand, the older generation continues doing business by often placing a greater emphasis on "trust" and "loyalty" by getting to know you personally, as for them, completing a human transaction is the best way they can invest their time. On the opposite side, the younger generation, especially those educated in the USA and Europe, are chiefly preoccupied with business concerns.

In family-owned businesses, senior family members usually make the final decision. In most other organizations, however, senior management makes decisions. Moreover, individuals with professional experience, who have a special understanding of the implications of the proposal, will often have input into the decision-making process .

Times, like truth are relative concepts. Latins are not very interested in schedules or punctuality - they pretend to observe them if being asked or insisted. This creates conflict and irritation with Anglo-Saxon cultures Why they don't arrive in time? Why they don't work to deadline? Why they don't follow a plan? In response, Latin people think they get more done their way!
The pace of negotiations is slower in Latin America than in Europe, as is customary, some preliminary conversation is considered necessary before each meeting, since it allows the participants to become personally acquainted. The best policy is to wait for your Latin counterparts to initiate any "small talk" and follow their lead in establishing rapport.
Meeting formalities must be followed; the two senior executives should sit facing each other. In general, Latin business executives prefer to be the ones "in control", you should try to avoid monopolising conversations or putting pressure of any kind on your colleagues. Be sensitive to the fact that Latins tend to stand and sit extremely close to others. The best policy is to respect this practice and accept that it is the cultural norm. Moreover, attempting to move away will be perceived only as a cold rejection.

A manager's status is attributed on grounds of family, age, educational and professional qualifications. They tend to have less specialisation than European or USA managers. Latins follow a top-down decision making process, where employees follow a trusting subservience to their superior as task orientation is dictated from above.

Opinions of experienced middle-mangers and technical staff do not always carry the weight that they would do in the UK, but as meritocracy slowly grows, their influence grows too. Latin managers are paternalistic and emotionally involved. Managers or heads of departments tend to concern themselves with the personal and private problems of their staff.

Business and corporate social life follow "old world" formalities; etiquette, manners and physical presence are measure of breeding and status symbols. It's considered very important to maintain good posture at all times, even in more informal situations. A firm, assured, handshake is the customary greeting on all occasions. During the handshake, state your full name; your Latin counterpart will then reciprocate by doing the same. You will have to speak not only at a closer distance, but also maintain eye contact as an assurance of your genuine interest.
Local business people tend to be very status-conscious and will often be impressed by these displays. First impression is everlasting in the mind of a Latin. In general the Latin executives are highly conservative and traditional in their dress code. Men wear dark, conservative suits for all formal occasions.

For the Latin, pleasure is before business, and they use entertainment as a way of building a personal relationship with his/her potential business partner. Much leisure time is spent socialising with family, friends and colleagues, mostly at weekends. Business dinners, in particular, are usually purely social occasions, and as such you should refrain from discussing work-related matters unless your Latin contact brings up the subject. Ensure that you write a thank-you note following any social gathering where you were a guest. Thank-you letters can be very helpful in solidifying rapport.

Women, legally enjoy all the same rights as men in most of Central and South American countries. Depending on the degree of economic growth, urbanization, industrialization, education, and expanded opportunities in their respective country, women have better or worse positions in society. Practically the representation of women in the private sector's upper and middle management is growing slowly, but remains fairly small. One can rarely mention a name, which can be easily identified with a women business leader.

Latin women tend to be meticulous dressers who closely follow European fashion. Female visitors are advised to bring conservative, stylish business clothes of the highest quality, including a cocktail dress. Often, women greet each other by quickly touching cheek to cheek and kissing the air.

For middle-class woman who want to combine job and family careers support provided by the extended family and the availability of maids is a pre-requisite. Latin businesswomen are going through the same dilemmas as business women in more other countries - in being mother, lover, wife, professional, and entrepreneur!

When doing business in Latin America, your always must make all the necessary preparations to leave a lasting impression about; your company, your products, yourself, your value systems and your attitude to business. In the final instance Latin American business people are asking themselves; Can I trust this person to do business with? Is our relationship sufficiently solid?
If the answer is YES , and trust has been acknowledge by both parties, then the business flows accordingly, and the chances of securing contracts and agreements are much greater.

© Farnham Castle/ Carlos Gonzalez Carrasco
Carlos Gonzalez Carrasco is a Latin America Business Development Consultant and Adviser to International companies entering into the Latin American market. He is a regular Commentator on Latin America Economic, Financial and Political risk issues for Bloomberg TV Financial Markets and Commodity News. He currently works as Latin American business analyst and consultant for Euromonitor Plc. He has an MBA from University of Westminster Business School and a BA in Business Studies from Chile.