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posted 8 years ago
Cross border business transactions – forgotten pitfalls.
How can you identify them and how can they be overcome?
On Friday 27th January 2017 I had the privilege to be an invited panel speaker at the Women Economic Forum in The Hague.
The topic was: “Harmonizing Cultural Identities & Aspirations With a Shared Approach to Growth: Time for a New EU Agenda?”
Distinguished ladies and gentlemen from around the world gathered at the World Forum in The Hague to share their findings and ideas about a shared approach to growth within the EU.
What does this have to do with cross border business transactions?
In my practice as Attorney-At-law I am involved in cross border business transactions on a daily basis.
What strikes me is that no matter how big the business partners, they hardly ever think of the cultural differences amongst each other.
Let me give you an example I used in my speech (thanks to the Dutch company which explicitly gave me permission to share their case):
A Dutch company was selling 200 fully equipped ambulances to Saudi Arabia. When the first ambulances were unpacked the Saudi called the Dutch company and told them that they are insulted by what they had delivered. The Dutch didn’t understand, they delivered state of the art ambulances, manufactured by Mercedes. The Saudi doctor explained: In your ambulance you have an air-conditioning installed. The big unit is on the ceiling and from there, behind the driver, two side tubes connect the air-conditioning to the outside air. When a patient lies in the ambulance his head is near the driver; so when he looks up to the ceiling – all he sees is a huge cross, which for us is unacceptable!
The Dutch company adapted the air-conditioning accordingly and the problem was solved.
But, ignoring the cultural differences can lead to unexpected pitfalls and – on top of all – most of the times the other party will not explain why the “wrong” cultural approach leads to discontinuing negotiations.
Let me give you another example:
US and British negotiators found themselves at a standstill: the American company had proposed that they table a particular key point. The British negotiator nodded and immediately picked up that specific key point and started discussing it. The American negotiator got very cross and walked out. The British negotiator was left behind in disbelief.
What happened?
In Great Britain tabling a motion means to bring it to the table and discuss it. In the United States tabling a motion means not to discuss a specific item.
The awareness of those cultural differences can make or break your business deal.
Without that awareness you might be insulting your business partner and destroy a business relation before it is even established.
Therefore it is vital to engage one trusted advisor with proper knowledge of/experience in both countries.
Make sure that you seek specialized legal cross border advice before you get involved – this might save you from unexpected clashes and help you to achieve your foreign goals even smoother and quicker.
I will gladly assist you and I’m looking forward to showing you how I can be of added value for your specific business.
Edith Nordmann
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