Although the socio-political, economic and legal understanding of countries is crucial for businesses aspiring to global expansion, understanding cultural nuances of the targeted nations are important success-determining factors.
This was highlighted by Dr Victoria Galán-Muros (left), UNESCO’s Chief of Research and Analysis at the International Institute for Higher Education in Latin America and the Caribbeans. She delivered her keynote address on Day Two of the Entrepreneurship Development in Higher Education (EDHE) Programme’s Kick-off 2023 event on 23 February. This event coincided with the Academia-Industry Training: Swiss and African Science and Business Innovators (AIT-SASBI) Spring Conference 2023, that was co-hosted by EDHE, the Swiss University of Basel and the Swiss Embassy in South Africa, in Gauteng.
In her talk, titled, Sciencepreneurs and their inter-cultural challenges when expanding their business abroad, she shared her experiences in global entrepreneurial landscapes. Having rendered public policy consultancy and advisory services in more than 40 countries, where she interfaced between universities, businesses and policymakers for over a decade, Dr Galán-Muros said she had seen exceptional enterprises and others with great potential not taking off because of cultural misunderstandings or oversights. She thus posited that cultural awareness is critical for a startup, adding that a cultural pitfall can be fatal.
Ahead of sharing a wide range of cultural lessons to remember when dealing with people of different backgrounds, Dr Galán-Muros mentioned cultural ethnocentricity and relativism. She said human beings tended to view culture from their frames of reference and, in the worst cases, perceived the unfamiliar as being either too much, too detailed, too early or too late.
High and low context cultures
High context cultures, Dr Galán-Muros explained, are often informed by non-verbal cues, resulting in a person of a different culture missing out on, or misinterpreting the interactions they are witnessing. She said high context cultures, found in Africa, Asia, Arabic and Southern Europe, exchange cultural meanings about conduct in businesses, an in day-to-day living.
For instance, in high-context cultures, individuals want to build a relationship and trust with the other person before discussing business. Engagement may entail a range of informal and non-business-related activities that enable some understanding of the other person. It is not so much that these cultures are rigid.
In low context cultures, usually found in Germany, Switzerland, Scandinavian countries and America, communication is typically explicit — clear, and linear. People are analytical, action-oriented, and logical. They do not require much background information on culture.
Dr Galán-Muros said these social cues matter for customers, partners and investors, and they warrant attention to those seeking to business across cultures.
General cultural considerations for startups
Although it may seem obvious, Dr Galán-Muros urged startups with international ambitions to consider attaining knowledge of the primary language spoken in a country they wish to expand to, if not, perhaps the second most-spoken language. She said understanding a common language with the people among whom a startup is introducing its operations stood to help with negotiations. Added to the language, she cautioned of a need to understand the degree of formality required when dealing with people of different ranks.
She also emphasised the need to understand the physical space allowed in business engagement — whether people of that culture prefer a bit of a distance or welcome close-up presence. Dr Galán-Muros reiterated that these factors may seem inconsequential, but they can speed up or hinder expansion goals of entrepreneurs. She also discussed behavioural elements such as handshakes, hugs and kisses when meeting people, hand gestures and facial expressions when presenting, and maintaining eye contact. She said it was common knowledge that some cultures encourage eye contact as it communicates trustworthiness and transparency, whereas others perceive it with disdain.
Surprisingly, even the colours of an organisation seeking to plant roots in foreign lands can influence how the people of that culture receive it — especially if those colours hold a particular significance or symbolise an unfavourable event.
Gender and religious dynamics
Furthermore, Dr Galán-Muros spoke about female representation and their roles in businesses being different in each culture. She said it was vital to research how far women get involved in these interchanges, and how society treats them. This applies similarly in certain religions. Although religious values might not matter much in some countries, they can shape the market and consumer behaviour in others.
What about literacy and attitude to risk?
Although technology is said to improve life, Dr Galán-Muros warned that people with low literacy levels may not grasp the value of today’s technological advances, and therefore show little to no appreciation for technology. In the context of this conference theme, of Social and Tech-driven Innovation for Impact, Dr Galán-Muros mentioned that no matter how good intentions an entrepreneur may have, arriving with a complex idea to people who would not understand it could be futile. This therefore called for well calculated marketing strategies.
In other words, entrepreneurs must research:
- Basic literacy, digital literacy and technological access levels of the populations in their target markets. In that, the sciencepreneurs need to be aware of technological and digital tools exposure within the population they intend to penetrate;
- Markets openness to innovation and new technological ideas;
- Perception of time; whether the people favour short-term or long-term thinking, and whether the people they are meeting are willing to sit through hours of conversation or prefer facts and figures presented swiftly, and
- The target market’s care for individuals or collective groups. She cited South Africa’s concept of Ubuntu, which was important to explain to a Swiss seeking to do business in South Africa.
Respect for hierarchy
Dr Galán-Muros spoke about the importance of knowing, understanding and valuing hierarchy when approaching a different country for business. She referred to a time she had not considered that and assumed that the individuals she spoke to would be able to help her agenda along, because of the positions they occupied. It turned out not to be so, hence the need to understand power dynamics in other societies and knowing the right individuals to target in conversations for the business objectives to materialise.
Beware of country brands
She cited country brands as another factor with potential influence on business success, or the opposite. How a country ranks globally will influence the perception of its citizens outside their borders. Although the rankings change annually, Dr Galán-Muros said it was vital to understand them and that a country with the strongest brand enjoys enormous amounts of trust when assessing the quality they produce, expertise and knowledge they bolster. She pointed to how visible the Switzerland flag was at this conference, mainly because her people knew it was a trusted brand.
Furthermore, it was the reality that other people preferred locally manufactured or produced items — high on the “not-invented-here” syndrome.
She did admit, however, that entrepreneurs could still make headway if their product quality stood out among its competitors. Notably, she said, potential obstacles did not render going international impossible but rather challenging and requiring extra effort to work around them.
- Know your market; anticipate the counterparts you are likely to negotiate with. Never underestimate the power of research.
- Undertake exploratory visits to your target market to learn. Talk to people and prepare yourself accordingly. Learn about the local culture while sharing a bit of your own. Create a reverse-learning opportunity for your prospective partners, investors and customers.
- Communicate explicitly to avoid misconceptions. But most importantly, to keep an open mind and deal honestly with others.
“I would recommend finding a local partner or an ally or a friend – someone that can help you bridge those cultural differences – from which you can learn even beyond the meetings you are having,” Dr Galán-Muros concluded.
Nqobile Tembe is Universities South Africa’s Communication Consultant.