Understanding cultural differences in export markets

"The English never say no and the French never say yes." Understanding cultural differences is often the key to success, or indeed the cause of failure, in commercial negotiations. Gestures are a particularly important area of difference and often give rise to misunderstandings. Such cultural features are found too where matters of payment and debt collection are concerned.

The first time you go to Athens, you’ll need a little time – and a few misunderstandings – before realising that “neh” means “yes” and “oh-kee” means “no”. Not so much because of the words themselves, but because of the gestures that go with them: there is no gesture to emphasise “yes”, while “no” is generally accompanied by a nodding of the head that for us would signify full agreement. It’s also far from obvious that a “tss” sound emitted with the eyes rolled upwards combined with a shrug is not intended as an insult, it just means “I don’t know”.

Difficulties in interpreting gestures

Internationally, gestures are often misleading. In Brazil, the ‘A-OK’ sign with thumb and index finger forming a circle will go down particularly badly, being an insult of a sexual nature directed at the other person. But the usual Brazilian gesture to mean or ask “Tudo bem?” (are things OK?), the thumbs up sign, will have a similarly insulting meaning if directed towards Iranians – with the same negative effect on cordial relations.

Such examples abound and experienced exporters will always have amusing anecdotes on the subject, such as a waiter in Beijing who was insulted to be left a tip, or a Japanese host who ordered a visitor a new portion of (live) eels because the visitor had cleared his plate and the host thought he was being kind to the visitor by doing so. Hands on hips in Indonesia, soles of the feet pointing towards a face in Thailand, or merely interrupting a German before they have finished speaking are just some of the inappropriate behaviours that your contacts in a country can help you to avoid, much more so than close scrutiny of your travel guides.

Transparency, settlement and debt collection: equally sensitive differences

These examples reflect the significant differences in habits from one country to another as regards public availability of financial documents, regulation and debt collection:

  • Public availability obligations do not exist everywhere – not in the United States, for instance.

  • Late payment does not mean the same thing in different countries. Viewed as a serious shortcoming in Japan or Germany, if it happens, profuse apologies and explanations are offered. Whereas elsewhere, payment dates are viewed merely as a suggestion!

  • Moving on to the collection stage, differences still proliferate: foreign court rulings are not enforceable in Russia or Saudi Arabia; retention of title clauses have to be formally recorded in Portugal and Poland, to say nothing of the vast differences in the cost and length of procedures.

Finding help

Are you prepared for cross-cultural negotiations? The benefits of exporting are there for you to grasp. But in view of the difficulties, exporting should not be a solo mission. As your credit insurer, we leverage local information sources, can talk knowledgeably to debtors, and have a network of legal intermediaries accustomed to local practices. It also keeps you informed of the situation with your receivables at any time.