Knocking Down Cultural Barriers

The word "yes" is spoken. Heads nod. You think you're about to ink the deal, then silence. It turns out that "yes" really meant, "We hear you," not, "We agree." The problem could be a clash of cultures, whether you're working with a prospective client or supplier or, as Japanese giant Sony learned, even your own subsidiary.

A few years ago, Sony experienced a silent revolution that delayed a major IT project for two years because the Miami-based Japanese project leaders working on the project for Latin America "didn't understand why employees would not do what they were told to do," recalls Cesar Aguirre, then a senior Sony HR executive. The project's Latin American constituents said they weren't consulted and felt rebuffed when they offered suggestions.

There may have been something more, though. Both Japanese and Hispanic cultures are based on relationships and have a lot of machismo, so saying a project isn't going well could be humiliating, speculates John Hooker, professor at Carnegie Mellon University's Tepper School of Business and author of Working Across Cultures. In Sony's case, Aguirre ultimately had to replace the Japanese team with Latin Americans who were empowered to make the changes they considered necessary.

Sony's problem is far from unique. Aguirre, now president of Human Assets Group Corp., says managers pay too little attention to the implications of cultures. He strongly advises studying the culture and history of a region before doing business there. This includes learning about people's customs and behavior in meetings, in work situations and socially.

When international architecture firm 5+Design, based in Hollywood, California, opened its Hong Kong office, it bridged the cultural gap by hiring a Chinese Canadian as the director of its Hong Kong office. Fluent in both languages as well as Western and Chinese cultures, she is able to mesh the culture of the Hollywood office with Chinese sensibilities and keep the Hollywood office in the loop about projects in Macau and the mainland, contributing to billings that are projected to reach $15 million this year.

According to founding partner Arthur Benedetti, 48, she is flown into Los Angeles for a week each quarter for briefings and face time with the 65-person staff. Says Benedetti, "We'll look for people with local sensibilities as we hire additional employees," both in Hong Kong and for a large project in Abu Dhabi.

Gail Dutton is a veteran business and technology writer.

This article was originally published in the November 2007 print edition of Entrepreneur with the headline: Say What?.