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Discover key strategies from industry leaders for managing cultural nuances to drive international business success.

MASTERING THE GLOBAL MARKET:
THE ART OF OVERCOMING
CULTURAL BARRIERS IN BUSINESS

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09 Feb 2024 11:15AM (Updated: 28 Feb 2024 09:47AM)

MASTERING THE GLOBAL MARKET: THE ART OF OVERCOMING CULTURAL BARRIERS IN BUSINESS

 

In the intricate tapestry of today’s global business landscape, navigating the complex weave of cultural differences is not just beneficial but essential for companies aspiring to succeed internationally. Whether in the banking halls of Singapore or the tech hubs of Silicon Valley, understanding the subtle yet significant cultural nuances is pivotal to crafting effective strategies, facilitating seamless communication and executing operations smoothly.

Let’s delve into the insights and experiences of five distinguished industry leaders, who reveal the essence of transcending cultural barriers to foster investment opportunities and drive business growth.

INVESTMENT DECISIONS SHAPED BY CULTURE

When it comes to cross-border investments, the adage ‘one size fits all’ falls short. Mr Mohammed Alabsi, country head of XA Network, an angel investor network in Southeast Asia, emphasised the significance of cultural understanding in shaping investment decisions and interactions with start-ups. In particular, he noted that recognising different communication styles is key in building trust.

“Some cultures favour direct and explicit communication, while others lean towards a more indirect approach,” he said. “Understanding how entrepreneurs communicate is instrumental in effectively navigating negotiations and discussions.”

This understanding is not merely about etiquette but extends to the regulatory frameworks that shape business conduct and customer engagement. To gain a better understanding of a new market’s dynamics, Mr Alabsi advised companies to strike partnerships with local entities.

“Collaborating with local experts or co-investing alongside experienced investors offers valuable insights into the intricacies of local market dynamics, customer trends, regulatory landscapes and business practices,” he said.

LOCAL KNOWLEDGE FOR GLOBAL STRENGTH

United Overseas Bank (UOB) exemplifies how embracing cultural diversity within the Association of Southeast Asian Nations (ASEAN) can be a potent catalyst for business fortitude. Mr Eric Lian, the bank’s head of group commercial banking, explained that UOB’s strategy of leveraging local talents has been instrumental in their ascent as a formidable financial entity within and beyond ASEAN.

“We hire from within the communities we operate in to ensure deep local knowledge, while sharing best practices across the bank through our global network of 500 offices in 19 countries and territories,” he said. “In this manner, we tap onto our strength within ASEAN and internationally to provide sound advisory for the benefit of our clients.”

According to Mr Lian, forging successful collaborations across cultures must begin by acquiring business knowledge, experience and expertise by sectors and by countries. In this regard, UOB’s Foreign Direct Investment Advisory Unit plays a crucial role in helping companies understand the regional business landscape, thereby creating job opportunities and enhancing trade financing.

With a substantial S$800 million investment in its cash management, financial supply chain management and payments capabilities over the past decade, UOB is not just banking on present success but is always actively preparing for a future where it leads cross-border trade finance in the region.

ADAPTING TO DIVERSE WORK PRACTICES

Mr Sebastian Togelang, founding partner of venture capitalist firm Rigel Capital, has witnessed first-hand the crucial need for cultural agility when orchestrating deals across different regions such as Southeast Asia, India and the Middle East. In particular, he noted that adapting to diverse work practices is key for successful collaboration.

Furthering this adaptive approach, Mr Togelang’s firm prioritises creating synergies within its investment portfolio by encouraging collaboration among its investee companies. “This approach harnesses the extensive experience and networks of our partners, significantly bolstering the resilience and strength of our portfolio companies, thereby enhancing their growth potential and competitiveness in these dynamic markets,” he shared.

FOSTERING CULTURAL AWARENESS

Cultural fluency is the heartbeat of building trust and relationships in new markets, which ultimately drives business growth, according to Mr Ullrich Loeffler, CEO of Ecosystm. The tech consultancy has thrived by embedding diverse cultural perspectives into its core through its hires, propelling the company’s growth in new markets.

“Our goal was to build an inclusive environment where each member can bring in their individuality, yet preserve and strengthen the original Ecosystm culture that set us apart and contributed to our success,” said Mr Loeffler.

His advice is for companies to foster cultural sensitivity among its teams as a means of bridging cultural divides. This would require more flexible human resources policies that accommodate varied cultural practices, such as prayers, siesta breaks, or adherence to family traditions in different cultures. Open communication is also essential to avoid misunderstandings and promote harmony.

“Organisations should view cultural diversity in the same way as other dimensions of diversity — not as a challenge but as a source of unique strength and a means of differentiation,” said Mr Loeffler. “Embracing and capitalising on this diversity contributes to a richer and more dynamic corporate culture which sets the foundation for business success.”

TAILORING STRATEGIES FOR DIFFERENT MARKETS

For Circle, a fintech start-up steering digital currencies and blockchain technology, the cultural context is not merely a backdrop but a driving force in strategising for the Asia-Pacific markets. By understanding each market’s cultural nuances and regulatory landscape, the company is able to customise its strategies more effectively to a particular market’s unique characteristics. This also entails adjusting its strategy based on each market’s understanding of different aspects of fintech, focusing on education in newer markets and advanced discussions in more established ones.

“Throughout the region, our approach is underpinned by a commitment to respect local customs and values, which is key to building trust with local stakeholders and understanding in these innovative technologies,” said Mr Raagulan Pathy, vice president, Asia Pacific for Circle.

Source: PwC and Auxadi