Global etiquette: Turning cultural differences into business strengths

When doing business, it’s easy to assume that our own cultural norms are universal, yet the truth is that what’s considered polite or professional in one culture can be completely misinterpreted in another. The world is vast, encompassing seven continents, 195 countries and 72 regions and territories, each contributing to thousands of unique cultures and subcultures. These cultures influence the way people think and behave, as well as how they conduct business. 

Why it matters: Global trade presents opportunities and challenges for credit professionals. Understanding your customer’s culture will help build and sustain strong, lasting connections and ensure smooth transactions. 

First impressions count: How perception shapes international business 

In the context of global trade, perception often poses a significant challenge for credit professionals as norms and expectations can vary widely. What may be considered normal in one country may be offensive in another. Learning what’s considered professionally acceptable is key to making a good first impression and setting the tone for all future interactions with the customer. 

For instance, in Middle Eastern countries and many parts of North Africa, direct eye contact may be considered aggressive or inappropriate unless the two parties are familiar with each other. In European countries like Italy or France, handshakes are customary upon greeting, while in countries like India or China, a deferential bow is expected.  

“I pay close attention to tone, formality and body language to ensure I’m being respectful and appropriate,” said Ty Knox, ICCE, director of credit and risk at EFCO Corp (Des Moines, IA). “I also observe how my local team members conduct meetings and negotiations and adjust my approach accordingly.” 

In various countries, addressing people by their business title is a sign of respect. In Japanese businesses, for instance, the eldest or most prominent member of the team should be addressed with his or her honorific title, such as Doctor, along with his or her surname. In many parts of the world, using respectful forms of address followed by a person’s last name helps maintain professionalism and courtesy in business communication. 

“For customers based in Mexico, Canada or Thailand, we address them as Mr., Ms., Mrs. or however they like to be addressed,” said Angie Trostle, corporate commercial credit analyst at Burnham Holdings, Inc. (Lancaster, PA). “In conversation, we try to be straightforward and don’t use slang because sometimes it gets misconstrued.”  

Mastering meetings and negotiations across cultures 

When working internationally, it is critical to pay attention to hierarchies and power structures as these can dictate how decisions are made, negotiations are held and meetings are run. The Indian business culture, for example, is mostly hierarchical, with final decisions made by higher-level officials. Once they have made a decision, someone unanimously announces it at a meeting with their business counterparts. 

Managing meetings with foreign counterparts can prove challenging due to variations in workweeks, religious observances and daily practices. For instance, in Muslim culture, prayer times take precedence and should be respected above scheduled meetings or business activities. Asking your business partners if there are specific days or times that should be avoided when scheduling meetings is fundamental. “In my experience, meetings in Asia and Latin America often start later than scheduled, with this being more common in Latin American countries,” said Knox. 

In conversation, it is important to know what topics are appropriate to talk about. In various countries, religion or politics are to be avoided at all costs, especially if those go against their belief system. In other nations, speaking on marriage and personal matters is considered unconventional. “It’s great to have a friendly conversation with your counterpart in India, but remember that they might not always welcome a lot of questions about their private life or want to hear about yours,” said Annette Hagemann, ICCE, CPC, CCP, director, global credit at APL Logistics (Scottsdale, AZ). “Take your time with this and evaluate the relationship before exposing yourself to personal details.” 

Many countries conduct business in their native language, so hiring a translator as well as referring to websites and translation software can help bridge knowledge gaps. Although these are helpful tools, it is advisable to consult with someone who speaks both languages to be sure your understanding of the translation is correct. 

Additionally, women in business should be mindful of expectations regarding their behavior and role in international transactions. Depending on the country, it is common for businesswomen to be held to regressive, offensive or even misogynistic standards. Although it may be unfair, understanding these projections will influence how much, or even whether you’re willing to adapt to a specific business culture. 

Winning strategies for successful global transactions 

#1 Be personable: Taking the time to get to know your customers on a personal level shows them that you care, which will further improve the relationship. Furthermore, spending time abroad can help you familiarize yourself with the customer and their culture. “When people feel at ease and are seen as individuals, they are more patient, open and far more willing to work through difficulties constructively,” said Darrell Horton, ICCE, former NACM National Chair. “Also, avoid being overly confident or aggressive, which Americans are sometimes perceived to be. Instead, lead with humility and respect which helps build trust, defuse tension and open doors that technical expertise alone cannot.” 

#2 Communicate clearly: To ensure a seamless transaction, communicating your needs as clearly and as early as possible will help prevent misunderstandings and better the likelihood of payment. “I request financial statements, trade references or ask for cash up front,” said Trostle. “Some people will use a letter of credit (LC), which will guarantee that you’ll be paid once the goods are delivered. I also suggest establishing clear payment terms as well as defining the payment schedule, due date, currency and accepted payments in your contract. If they dispute it, get your sales team involved to resolve the issue.” 

#3 Document diligently: Keep detailed notes of a customer’s culture and business practices and document each interaction for reference. This will not only help you maintain the customer relationship but will help you navigate potential disputes. “To manage customers from multiple countries, we keep our notes on a general screen so we can just look at them right away when an account’s been pulled up,” said Trostle. 

The bottom line: Navigating cultural nuances with empathy and professionalism allows credit professionals to minimize misunderstandings, improve collaboration and unlock new growth opportunities in the global marketplace. 

For further insights into global business cultures, NACM and FCIB members may consult the Country Business Guides provided by the World Trade REF.