IMPEDIMENTS TO INTERNATIONAL BUSINESSES

Influence of culture and inter-personal communication

Recently I’ve had a conversation with an entrepreneur raised outside of Europe who was developing a services business in Portugal.

The main topic of our conversation quickly turned to culture and communication differences, where it was hard to understand why some Portuguese businesses would show reluctance to partner, even when provided with new clients for provision of legal services they were, in principle, trained to do.

The business model was very simple. We bring you clients, while you ensure the job is well done. The reluctance to cooperate, was nonetheless, confusing.

The paradox is that even though new business opportunities may be offered by foreign companies, the locals may be too careful to establish relationships for a number of reasons:

• Simple distrust and reluctance to do business with someone who doesn’t speak the language and comes up with business ideas that have not yet been discussed in great detail.

• Another point is that while prospect of good income is offered, there is a fear of potential repercussions. These can vary from deviations from the usual way of conducting business to plain dependency on a foreign actor who may soon start imposing a particular agenda.

• Lack of competence or knowledge may also be an issue. Some actions or possibilities on part os businesses or individuals have not yet been explored and may require further research, communication with local authorities, clarification of rules where new circumstances appear. This is an additional effort in terms of time and resources.

There are likely many more than the above 3 reasons. Nonetheless, it is important that solutions are presented. and these likely lay in a mediation function.

It may be helpful to conduct a conversation in different languages. Dedicate time and effort to explaining the exact nature of expectations and define steps that are best presented in a written form. Contracts or instruction notes for these occasions, even on a short-term basis, may be most reassuring.

Discussions with local authorities often require lobbying-like efforts and must be taken seriously. Written rules and their practical adaptation are often differing things.

In any case there is no better way to build trust other than to cooperate and let potential partners wait and see for what happens. While this may be accepted as a common sense logic, it is fundamental to dedicate time and effort to establish these relationships and equip oneself with tools that would make partners comfortable with initial cooperation.

If you require a mediation function, please get in touch to better discuss.

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