Monday, April 5, 2010

You must understand your audience.

I recently travelled to Latin America where I watched a difficult business transaction unravel during a late night dinner.

The American, Mr. Low, whom I accompanied, was negotiating business contract language with a Latin American, Mr. High. The relationship began to disintegrate as Mr. Low (representing a low context culture) insisted that the proposed contract re-structuring include specific financial goals. Mr. High (representing the high context culture) was quite insulted by the demand for the specific language.

"You don't understand my culture," he said. "My word is my bond. If I say I will do it, I will. This is bad. We don't do things this way in my country. You should have studied my culture before you came here."

"You should have studied mine," Mr. Low replied. "I have a boss and he wants to see the language in the contract. What if you or I die before the end of next year. Who will remember our agreement? I trust you, but I am being asked for this contract language. If you had studied my culture, you would know this is how we do business."

The situation was worsened by the fact that Mr. High had a colleague with him and didn't want to lose face. Mr. Low wasn't worried about that, to him this was just business.

I had studied the difference between low context cultures and high context cultures but this was the first time I had witnessed them in action. And it was uncomfortable. The Latin American man seemed genuinely hurt by the American's approach and the American seemed genuinely puzzled and perplexed by the whole thing. As for me, true to my Libra nature, I saw the points both of them were making.

These two intelligent and otherwise friendly businessmen were simply struggling inside their own high and low context cultures and neither understood the other's culture enough to step out of their ways to find a third path. The evening ended with Mr. Low repeatedly telling Mr. High as we walked back to our hotel that he trusted and respected him while Mr. High tried to understand what was happening. It was rough. And, as far as I know, they still have not resolved the issue.


  1. Having spent two years trying to do business as a Peace Corps volunteer in Ukraine, I have to say that I sympathize with Mr. Low much more than Mr. High. The bizarre responses I got to "May I have a receipt with that?" were truly legendary, and my Ukrainian counterparts never could understand why I wouldn't just give them the money to go buy stuff (I said 'bring me the receipt and I'll reimburse you').

    As arrogant as this sounds, sometimes you really have to beat them over the head with fraud controls and the importance of contracts.

  2. I agree with you Ed, I can see both their points of view. I'm curious though, as to whether or not the conversation would have gone differently had Mr. Low expressed sensitivity to the culture before the request as opposed to after.

  3. I feel that conflicts arise when one tries to uphold his cultural values and beliefs over those of others. In this case, I observe that both Mr.Low and Mr.High failed to understand that they are doing a global business. If both of them had taken a little effort to understand each other's business context, this situation could have been avoided. I come with a cultural background, where we do not call our professors by name. In America, students calling their professors by name is normal. Now I have two choices. I can either call my professors by name or by their designation. Neither hurts anyone. I can either uphold my cultural values or adapt to American culture. But there are certain similar cultural issues where I must give up my cultural beliefs and accept other’s cultural values so that I can better fit into the society. Understanding these tradeoffs is essential for succeeding in cross cultural communications.

    Nishanth Babu (nbabuach)