Final Blog

We traveled to China and India to learn about what it takes to do business on a global level. We were interested in whether the theories that work in America are effective when used abroad. We witnessed firsthand the challenges of doing business in an emerging economy. And we were fortunate enough, thanks to the efforts of Dr. Carr and Dr. Singh, to get an inside look at many companies in a variety of industries. Although no two companies operated in exactly the same manner, they had all found their own unique recipe for success. These companies focused on business’s basics, like staffing and communication, but they couldn’t stop there. To achieve success, they all needed to customize solutions to the problems particular to their environments.

I believe the most important characteristic common to these companies was commitment to communication. Not a single company took communication for granted. In fact, they all strived to continuously improve the process. Clear communication is absolutely essential to any successful business. This is never easy, and it becomes harder when cultures mix. At a basic level, a company needs to clearly communicate the value its products offer to its customers. Unfortunately, what works in one society often needs to be reworked in another. A grocery store can offer an example that was particularly insightful to me. Here at home, we like to walk in a grocery store and see clean, polished, freshly stacked produce. It gives us the impression that the fruit is fresh, inspected, and safe to eat. This model does not work in India. Buyers in that market view unorganized, blemished and dull produce as being fresher because it didn’t have to spend time being processed. Most of us have grasped the idea that no two people are alike, this notion can be extended and exaggerated when talking about people from different cultures. And, as this example illustrates, these cultural nuances can make all the difference in a business’s profitability.

Intra-company communication processes are the fibers holding a company together. No strategy can be effectively executed if these processes fail. Employees in global businesses often face language, distance, time, and cultural barriers. We visited one company where the employees overcome these obstacles on a daily basis. This company has large offices in both Germany and China. The German employees speak German, the Chinese employees speak Mandarin, and inter-office communication is held in English. It’s obvious that the language, distance, and time barriers are substantial, but the cultural barriers present the largest complications. The two cultures have different ways of conveying a message, different idioms, and different manners. The cultural contrasts are apparent when a question is asked. In response to the question, the Chinese employees tend to circle around the answer without stating it outright. The listener is supposed to come to the conclusion himself. The German employees answer questions quickly, clearly, and directly. The German employees who are not used to such a roundabout approach might not be able to pick the answer out from what was said; and the Chinese employees who are not used to reaching conclusions so quickly may wonder about the accuracy of the statement when they were not included in the reasoning behind it. The employees must be trained in the cultural differences before they can effectively communicate with each other. An understanding of their coworker’s cultural background can help to ensure that their message is not lost in translation.

Communication between companies based in different countries presents another challenge to businesses going global. We had the opportunity to hear from a young man who recently started a business in Beijing. He and his Chinese partner help foreign businesses market themselves in China. From him I learned the importance of having someone who can go between cultures. He attributes his recent success to his commitment to understanding the Chinese culture. He is an American, so he understands what American business men are looking for in a company, and he successfully delivers that. His Chinese partner has been helping to immerse him in Chinese culture so that he can be more successful at marketing. Individuals like this young man can help a company bridge cultural gaps that exist in the world of global business. He showed us how important it is, and how much work it is, to continuously pursue an understanding of the society you intend to do business in. This man was not atypical of the expatriates that we met in both China and India. The most successful expatriates that we met were genuinely interested in learning about and trying to be a part of the culture surrounding them. Employing individuals with this sort of passion will give a head start to businesses entering new markets.

There is a lot of literature depicting both China and India as an up and coming land of plenty. Both countries have markets of over one billion people. And the rise of globalized business is driving an exploding middle class. These appear to be markets ripe for the picking with nearly limitless potential. But these markets are not as easy to tap into as we’re often led to believe. The competition is fierce. The cultural barriers are many. The infrastructure is limited. And market data is extremely hard to find.

The streets of New Delhi demonstrate chaos as I’ve never seen before. In India, an effective work environment needs to be built from the ground up. Many businesses have started creating environments where their employees can spend their time outside of work. This serves a dual purpose—it can keep the employees happy, and thus more effective while they are working, and it helps to attract some of India’s top talent. One of the best examples of this was a call center we visited in Mumbai. This particular business spent a lot of time and effort creating a place where their employees could be safe, happy, and effective in their jobs. They had gyms, spas, game rooms, and cafeterias. They provided their employees a sanctuary from the chaos outside. From what I could discern, the benefits from this investment far outweighed the costs.

The cutthroat competition one could expect in these emerging economies was exemplified by a technology firm we visited just outside New Delhi. This firm had the most effective advertising campaign I’ve seen. They had spent the last few years doing a fantastic job of differentiating themselves from their competition. This firm taught us that the basic business principles we learned in the United States can’t always be transferred overseas. In the United States, businesses usually choose either a differentiation or a cost leadership strategy, and if they choose a differentiation strategy they can and should charge a premium for their product. However, this firm let us know that their incredible advertising campaign did not allow them to charge a premium for their product; this is just what needed to be done to gain market share. It appears that success in the Indian market requires both a cost leadership and a differentiation strategy.

I should end by noting that that this trip’s value extended far beyond these business concepts. These countries were the most foreign places I’ve ever been in my life. Nothing was familiar. I didn’t understand the customs or the languages. And their culture and history is nothing like our own. A recurring theme from throughout this last year was to always look for common ground. Meeting people from China and India provided us an amazing opportunity to practice. Even with so many cultural differences, I was able to find and build common ground with people where ever we went. By finding and building common ground, we can connect with people across cultures and work to develop solutions that represent collaboration rather than compromise. Of all the lessons that we learned on this trip, I believe that this is the one that will help us most if we hope to do business abroad.