WAKE-UP WAL-MART!

Wednesday, December 2, 2009
KNOWLEDGE ABOUT CULTURAL NUANCES AND ETIQUETTES GOES A LONG WAY IN ENSURING THE SUCCESS OF YOUR BUSINESS ON FOREIGN SHORES AND IN AVOIDING SURE-SHOT FAILURE.

Women don’t wear pants in Japan! Now before your imagination runs riot, let me tell you this is one of the guidelines prescribed to many female business travellers to Japan. As per Google, “Japanese business etiquette” is one of the most searched for Japan business related keywords. According to these guidelines, Japanese men do not relate easily to women with authority in business and that can cause problems while doing business. The Japanese culture encourages women to wear long skirt suits to work. Most Japanese companies prefer that their female employees not wear high-heeled shoes as Japanese men are not very tall, and towering over them might offend some.

While “Going Dutch” is a culture common to Netherlands and accepted in many other cultures, the Turks don’t believe in “Going Dutch” at all, and a suggestion to that effect may not be appreciated much.

The head is considered a sacred place and nobody in Singapore appreciates it if you fondly pat a child on his head. In India, it’s a way of showing affection – not there.

Each country comes with its unique cultural nuances, and as a business traveller, it’s of utmost importance that one remains sensitive to these seemingly small irrelevant details. They will help you strengthen your bonds with your foreign partner and help you do business better. Though it might not in any way affect your balance sheets but it helps to understand your counterpart better when you know that sitting cross-legged in Singapore may be considered offensive, or that Germans consider a weak handshake as a signal that you are insecure and not convinced of your abilities, or that in Israel (due to years of fighting) men prefer to sit with their legs slightly apart and upper body leaning forward (akin to a position where they are ready to get up at a moment’s notice), or that in Switzerland, before starting a conversation, it’s important to shake hands with everyone – including children. While Arabs consider it a show of trust and solidarity when they put their arms around you and hold your hand with both their hands, doing the same in Germany could be one of the biggest etiquette blunders one could make. Germans avoid physical contact and placing your hand on someone’s’ shoulder could make you appear too authoritative and not appreciated. Knowledge about the etiquettes of other cultures is becoming very vital as it could as well be a deciding factor in whether you succeed in that country or not.

ACROSS THE SEAS
Yes, gone are the days when simply understanding your own country’s business environment well was enough to succeed. Today, if you really want to make it big, you need to stretch out, go beyond the boundaries and learn to do business in strange, foreign cultures. Ratan Tata, during his 18-year tenure as Chairman of the Tata Group, ensured that his company expanded internationally – a strategy that India’s other business houses copied and are still trying. Today, the Tatas have annual revenue of about $70 billion – that’s great, but what’s of significance is that 65% of the group’s sales are derived from outside India. If you really want to grow big, you not only need to expand but also need to have a global mind-set too.

WHEN YOU DON’T THINK GLOBAL
This company’s revenues are more than the GDP of at least 144 nations, and today, it’s the world’s second largest company – yes, you guessed it right, it’s the retailing giant Wal-Mart! It’s an organisation that’s been super successful in America. As someone once said, “If you want to reach the Christian population on Sunday, you do it from the church pulpit. If you want to reach them on Saturday, you do it in Wal-Mart.” There is hardly any American who has not shopped at least once in Wal-Mart. That’s the power and reach of this retailer.

Yet, when it comes to going global, this is one company that has committed some very costly mistakes, for it failed to understand he local culture.

In Mexico, Wal-Mart started its stores and set up huge parking lots. Little did it realise that what was considered as a “facility” had no meaning for Mexicans as most came to the outlets in buses. It entered China in 1997 and in spite of doing business in the country for more than 12 years, the company has still not made a profit – it definitely has failed to understand the Chinese market. It tried to bulldoze its American styles into the Chinese market; a move that failed as expected. Selling golf balls in a low-income country like Mexico was as wrong as selling meat, neatly packaged in Styrofoam and cellophane to Chinese customers. A country where consumers insist on live fishes in grocery stores and on killing them in front of their eyes, packaged meat was looked upon as stale food and did not sell – despite being correctly priced and being of good quality.

Wal-Mart tried to export its American consumer culture to the world. Even its ‘Everyday Low Prices’ strategy failed and did not pass muster against the cultural preferences of consumers. No wonder it beat a hasty and costly retreat from Indonesia, South Korea and Germany. It’s not always a good idea to retain your individuality and be rigid. It pays to be flexible and Wal-Mart learnt it after incurring billiondollar losses. Today, the Wal-Mart of China keeps live fishes and turtles in its stores; it stacks up on diapers in the ‘Year of the Monkey’, which is considered a lucky year to bear children. It’s slowly learning to woo the Chinese shoppers

Wal-Mart seems to have found its footing in India too. It’s realised the importance of understanding the people and their culture before trying to sell its goods. So the first thing it did was to look for a man who understood the Indian consumer to head its Indian operations. It understood first what the Indian people wanted, studied the local kirana shops, understood which paneer sells where, and also realized jhadoos where more important to Indian households than vacuum cleaners! With 50% of Wal-Mart’s assets outside USA, it was high time Wal-Mart woke up from its stupor and realised that every market is not like its American one. Under Mike Duke – the new CEO of Wal-Mart – things seem to be looking up.

You too should know how important it is to understand the different cultures. Don’t commit mistakes like Wal-Mart. As Jawaharlal Nehru said, “Culture is the widening of the mind and of the spirit.” Widen your horizons too. If you don’t want to fail, don’t do what Wal-Mart did in the various countries. You will learn all your lessons in culture through one exercise – keeping an eye on Wal-Mart goof ups. So keep watching Wal-Mart.