The goal of this document is to give some specific details on how to behave in business context and in meetings in Southeast Asia, what to do and what not to do.
Why should I read this document?
Meetings and appropriate behaviour are essential to establishing long-lasting relationships with Southeast Asian counterparts resulting in successful business dealings. Thus understanding how hierarchical collectivist cultures communicate and use meetings platforms is key.
5 Most important things to know about doing business in Southeast Asia:
- Establishing long-term relationships and building trust is the only way to ensure long-term business success in Southeast Asia, and this takes time and patience!
- All cultures in South Asia are hierarchical and collectivist cultures and thus management is top-down and centralised. The boss is expected to be more directive, acting as a father or mother rather than a coach.
- In Southeast Asia, displaying appropriate behaviour when doing business is important. Southeast Asian cultures are all high-context, indirect communicators and disrupting this harmony can damage or end business relationships.
- Using intermediaries with a greater understanding of the local culture, customs, and regulations is important to help understand your business counterpart.
- Check whether the countries in Southeast Asia that you are dealing with are more Masculine or Feminine, as this will affect the way to motivate employees.
"Meetings are a key aspect of business dealings in all countries, and the way we behave can either build relationships or erode trust in Southeast Asia. It is important to understand that Southeast Asian countries are all collectivist and hierarchical, and thus relationship-orientated, implicit communicators that do not favour conflict or the disruption of harmony. It is important to understand that meetings will have a different purpose in Southeast Asia compared to other countries with lower Power Distance and higher Individualism scores. It is not unusual for business parties to meet multiple times before discussing business. Even formal business meetings will usually start with small talk as a way to establish whether the other party is trustworthy and thus a good business partner to have in the long-run. Establishing strong, trusting, long-lasting relationships is the preferred way to conduct successful business in Southeast Asia, and this takes time and patience."
In Southeast Asia the main purpose of formal meetings:
- To give the manager a platform to show the way
- To give the manager a platform to inform subordinates
- To boost morale and to create in-group harmony
In Southeast Asia the main purpose of informal meetings:
- Relationship building
- To check out in private if people agree
- To collect information and ideas; bottom-up
- To negotiate
- To check out opinions of the different groups of stakeholders
- Realise consensus “informally” among stakeholders
Business appointments should always be made in advance. Always arrive on time for a meeting but be prepared to wait. Initial meetings are usually more formal and used for building rapport as business relationships are based on familiarity and trust, thus when having a first meeting do not expect business decisions to be made. Meetings are always started with small talk and you might be asked multiple personal questions, this will be followed by business discussions from the most senior counterpart - follow his/her lead and wait for their cue. Try to avoid topics about religion and politics, rather talk about topics like hobbies, food, personal interests, and family.
Older people and people with the highest rank are usually introduced first and they are shown great respect. Follow the seating arrangement as suggested by your Southeast Asian counterpart, and always address the most senior person in the meeting even if they are not the one that chairs the meeting (you will need to have adequate status to do this). Also, ensure that team members do not have conflicting statements. Southeast Asians also require a list of people who will attend the meeting as this will allow them to involve the correct department and give face to the most senior person, in return your company should request a list of your Southeast Asian counterparts that will attend the meeting to allow you to do the same. Always respect titles as Southeast Asia is hierarchical and respect should be shown by honouring titles and addressing your counterparts in the correct way.
In Southeast Asia the meeting platform is not for subordinates to brainstorm or a platform to express their ideas, it is mainly for the boss to boost morale, give direction or confirm decisions that have already been made. When dealing with Muslim counterparts, avoid scheduling meetings on Fridays or during prayer times.
Southeast Asian people mainly rely on nonverbal communication including facial expressions, tone of voice and body language. Nonverbal communication tends to be subtle and indirect, and Southeast Asians may hint at a point rather than making a direct statement as this may cause the other person to lose face. Rather than say "no", they might say, "I will try", or "I’ll see what I can do". This allows the person making the request and the person turning it down to save face and maintain harmony in their relationship. If you are unsure about the response that you received you could continue the discussion, re-phrasing the question in several different ways so that you may compare responses. Silence is important and pausing before responding to a question indicates that they have given the question appropriate thought and considered their response carefully. Responding to a question hastily can be considered as being rude. As body language is deemed more important than what you say, avoid using rude gestures like putting your hands in your pockets. Self-control is important in public thus avoid emotional outbursts or using a lot of hand gestures when talking. Southeast Asians may also laugh, at what may appear to outsiders as inappropriate moments, to conceal uneasiness.
The Concept of Face
Southeast Asians strive to maintain face and avoid shame both in public and private. Face is a personal concept that embraces qualities such as a good name, good character, and being held in esteem by one's peers. Face also extends to the family, school, company, and even the nation itself. The desire to maintain face makes Southeast Asian people strive for harmonious relationships and it can be lost by openly criticizing, insulting or by singling out an individual from the group, bringing shame to the group. Other ways to lose face is by challenging authority, showing anger, refusing a request or disagreeing with someone in public. On the other hand face can also be saved by remaining calm and respectful, discussing offenses in private, avoiding placing blame on anyone, by using non-verbal communication to say "no" and through allowing the other person to get out of the situation with their pride intact.
Titles are very important due to the hierarchical nature of all countries in Southeast Asia and some Southeast Asians will have a western nickname that can be used as traditional names might be too difficult to pronounce. Business correspondence should always include formal titles and full names, however, in conversations a nickname may be used if it has been offered by your Southeast Asian counterpart. The most senior person is always introduced first and shown great respect. It is recommended to be introduced via a third-party mutual connection as Southeast Asians do not like to do business with people they do now know. Introductions include sharing business cards and shaking hands is mostly acceptable in Southeast Asia. Males should not shake a female’s hand if it is not offered - slightly bow your head as a sign of respect instead.
The Social Aspect of Meetings
It is important to understand that social activities are needed to help build relationships and establish trust. These informal gatherings can sometimes include family members or lots of drinking (in non-muslim countries) and even karaoke. Business is rarely discussed as part of these social events, however, it is a crucial element not to be ignored if a company wants to be successful in dealing with Southeast Asians.
Short case study
Examples of doing business in Vietnam, from Thien Do, Mary Quilty, Anthony Milner, and Simon Longstaff 2007. School of Management, Marketing, and International Business Working Paper Series, Volume 2, Number 2, 2007
Mr B was the director of BB Water. He seemed to have sole control of his business. For example, after describing how he set up the bottling plant and negotiated with government officials to get the necessary papers he said: “At the beginning I bought the land, designed the buildings and supervised the construction. I had to interview and train each person. Also I had to discipline people.”
He explained that he could not delegate discipline because workers would ‘react’ if they were admonished by “anyone but the boss, the owner of the company”. His exercise of authority extended to having to tell a typist how to type a letter and fax it to a foreign company, checking for mistakes constantly, aware (he claimed) that a Vietnamese secretary would “put the letter aside when work finishes at 4:30” unlike a non-Vietnamese secretary who would “simply work until she completes the task”. Mr B outlined his schemes to keep employers at his factory. After he trained them he gave them a share in the business, so that if profits went up that year they would be shared across the company. He also offered annual bonuses and a retirement scheme that gave out larger payouts the longer the workers stayed at the factory. All this was in addition to the workers’ social benefit and medical benefits which he was legally required to pay. Despite all these loyalty schemes, many of his workers supplemented their income with money from what he called ‘odd jobs’, or moonlighting. This outside work, he explained, “is partly why they (were) not devoted” to his enterprise.
In an interview Mr B complained that “Vietnamese don’t think for themselves” - although this may also have been a result of his belief that “you almost have to take their hands and do it for them step by step”. Because of his ‘hands-on’ approach in introducing these foreign standards, Mr B proudly asserted “People think BB Water is a foreign company because of the organisation”. Mr B’s complaints about his staff not taking individual responsibility may show that he has had a more individualistic attitude than them. This behaviour, he suggested, had been picked up on his trips to France, Japan and other countries in Southeast Asia.