Of all the barriers to cross-cultural business, perhaps a lack of trust is the greatest. This phenomenon is not new, and is not restricted to trans-Pacific trade. Historically, Canada is one of mankind's most successful attempts at building a multi-cultural society, in terms of genuine respect and understanding. Yet even in Canada, people still show a preference to do business with others of similar background.
Without trust, you cannot do business in the Pacific Rim. Here is a short, simple guide to begin the process of building trust. You will see this starter list does not mention contracts, factory inspections or negotiations. Nevertheless, these are the required first steps. If you think this list is too soft and squishy, then you are not ready to begin business in the Pacific Rim.
Do your research and ask questions with a goal of gaining cultural empathy. The first questions are not hard. For example, ask, "Where are you from?" And please, don't settle for "China". Follow it up with, "Yes, but what city in China?" Surely the readers of this column believe there are important differences between Toronto, Montreal and Vancouver. Likewise, Koreans see a difference between Seoul, Busan and Incheon, and Indonesians certainly see a substantial difference between Jakarta and Surabaya. When you force yourself to dig in and understand the subtler distinctions between localities, you will find that you gain a deeper understanding of the people as a whole. You will also find it easier to see your Pacific Rim partner first of all as a person, and not a foreign person.
Westerners often prefer not to do business with friends. When problems occur, we expect the supply chain partner to take action because of market leverage and contracts. In other words, we subtly threaten our partners with a loss of reputation, or with legal action. In Asia, those threats do not always carry much weight. Therefore, Asians often prefer to do business with friends. Mistakes will happen, and because of our friendship, the mistake will be corrected. Does this motivate phony friendships? Maybe, but that only explains why it takes years and years to really build trust. Count on it, your Asian partner has genuine personal friendships with his or her most trusted business partners. Genuine and personal.
Your business partners had doubts about you too. Accept that, and do not be insulted by it. Do not assume that their doubts were the same as yours. Westerners typically think of "breaking trust" in terms of quality not delivered and contracts not kept. You trusted your supplier with the quality of your product, and you will be angry if that trust is broken. But what trust were you given? In Japan, Korea and China, saving "face" is the most important trust. You need to know that you are accepting the responsibility to bring about an increase in dignity and honour for your business partner. Be sure you understand this concept fully, because you will lose your partner's trust if you cause a loss of face, regardless of how well the business deal was carried out.
Westerners sometimes get the mistaken impression that trust is impossible in the Pacific Rim, or not valued by Pacific Rim partners. Nothing could be further from the truth. But trust is built on a different basis. Remember – in the Pacific Rim, contracts, inspections, and negotiations are important, but they come after understanding, friendship and face.
Mark McKay ([email protected]) is associate dean of the School of Business at Trinity Western University, and also president of MJMcKay Corp., which offers cost-focused strategic advice on Asia Pacific business.
