Doing Business in Asia
Many Westerners wanting to do businesses in Asian nations seek information
and advice about things they need to know in order to be successful. By
Westerners who have already been working in Asian nations, they are told to
remember as priorities the "Fs": family, face, fate, favors and friends.
Although they do have some subtle differences in meanings and connotations in
different parts of Asia, nevertheless, Western businessmen need to be sensitive
to these issues if they wish to be successful. The five "Fs" are explained in
the following way. Family: This means that business is
often closely connected to family and that there is a family network that
branches out regionally and internationally, providing efficient political,
financial and emotional support, as well as distribution knowledge. This
networking is particularly obvious among Chinese who control huge business
segments in Asia and are by far the most successful business group in the
region. Their large presence also helps--Singapore is 77 percent Chinese;
Malaysia, 45 percent; Taiwan, a Chinese province, 99 percent. Indonesia and the
Philippines also have sizable and prosperous Chinese communities. It is
explained that the importance of family goes back to Confucius, who taught that
family represents relationships that one can trust. Although families in the
West may be connected, they are almost never as closely connected as in
Confucian Asia. This family dependence is also tree in Korea. The largest
corporation in South Korea is Hyundai, a multibillion-dollar company. Headed by
the eldest brother, the company’s five major divisions are either managed by one
of the five brothers, a brother-in-law or a son-in-law. Face: Two interpretations are given for the meaning of "face". One
is literal--Asians like to do business face-to-face. They want to put a face
together with a business, to recognize an individual and to associate with a
given company. Many foreign companies have made the mistake of sending a series
of different executives to Asia during lengthy contract negotiations. They are
advised not to do this; if negotiations are started by one individual, they
should be completed by that same person if at all possible. However, if a change
must be made, then the first person should take the new one and formally present
him as his successor so that the two faces are identified. The second
interpretation of "face" is that in a way it means "respect". The businessman is
told that he must show the "proper respect" according to the age and position of
the person he is dealing with and also take into account the size of the
person’s company in comparison with his own. In Western countries, age is not
necessarily given respect, but in Confucius Asia, age is given great respect.
Thus businessmen are told to always pay attention to any elderly persons
attending a business meeting. They are also warned that it is very difficult for
Japanese to speak directly and say no. They will do almost anything to avoid
saying no, even to the point of not giving an answer at all. By giving no answer
or saying something like “I’ll think about it", or "I’ll consider it". They are
"saving face", and really mean "no". This is the opposite of the Western "yes or
no" mentality. Thus a Western businessman is warned never to put a Japanese
businessman in the position of having to say "yes" or "no".
Businessmen are also given advice about how to show "face" to someone of
higher rank. Richard Tallboy, CEO of the World Coal Organization, who has had
extensive experience in Asia, tells foreigners not to forget the "Chairman’s 1/2
percent of the chairman’s own pocket." He says that this means they should
always start negotiating at a higher price with Asians. In the first round
negotiations foreigners should allow themselves to come down in price 10
percent. In the second round of negotiations they should at last come down
another five percent. Then finally when everyone is ready to sign the contract,
the Westerner should allow the chairman to negotiate another 1/2 percent off.
This way the chairman can say he was able to achieve more than his staff was
able to. Thus he gains great "face". Tallboy concludes that this way everyone is
happy and the Westerner is assured that his product will be well taken care
of. Fate: Westerners are told that many Asians strongly
believe that fate influences life, that certain events are destined, and that
people have lived many lives and will live many more after death. Because of
this philosophy, Asians are more willing than most Westerners to accept things
they cannot change. Many Westerners may call these beliefs superstitious.
However, they are warned to keep these thoughts to themselves and are told to
learn about local customs and beliefs in Asia and to respect them. Favors: Westerners are told that "Always repay a favor" is a common
saying among Asians. A favor or debt should never be forgotten. If a Western
businessman gets a favor from an Asian, he should expect to repay this favor, no
matter how much time passes. Asians are thus serious about the saying, "If
you’ll scratch my back, I’ll scratch yours." In other words, Asian societies are
reciprocal societies. The former deputy mayor of New York City, Kenneth Lipper,
tells the following story. When he was in Japan for six months in the early
1960s, he suggested the name of a Japanese acquaintance for a possible
scholarship. One day, 27 years later in New York City, he received a call from
this man who was making his first trip to the United States with his family. Now
a top executive in a major Japanese company, he and his family wanted to pay
their respects to the man who had done him a favor so long ago. Friends: If Westerners have no relatives in Asia, they are told
that the next best thing to have when doing business in Asia is to have gone to
school with someone from there. Asians want to deal with people that they know
well, or with people to whom they have been introduced by people they know well.
One successful American business executive working in Asia tells people that he
spent most of his time developing and maintaining GUANXI, which he explains as a
Chinese word meaning ties, relationships, or connections. The Japanese
equivalent is KONE. How can Western businessmen make the right connection in
Asian countries Hiring a consultant is one way, but the best way is to make
friendships and to keep them. How can a Westerner do this The answer for those
people working in Korea, Thailand and Japan is "golf". Successful businessmen
agree that it’s the best way to get to know important people in society, the way
to meet royalty, top government officials and corporate chiefs. A lifetime golf
membership in Tokyo can cost an incredible one million dollars, but some western
businessmen or their corporations have been willing to pay this because of the
connections it will bring. So, these are the five" Fs": family,
face, fate, favors, and friends. These are the priorities for Westerners when
they are doing business in Asia. The Japanese equivalent of GUANXI in Chinese is ______.