When West Meets East:
Cultural Aspects of
Doing Business in Asia
John A. Reeder
John A. Reeder is an associate.professor
o f n l a n a g e m e n t at AI)l)alachian btate Uni-
versity in Boone, North Carolina. He was
a U.SI naval aviator stationed in the Phil-
ippines for three years in the early 1960s
and taught in tl'le early 1980s at the
Northeast University of Technok)gy in
Shenyang, People's Republic M' Chi)aa.
Illustrations lot this article are Chinese.
paper-cuts.
What aspects of Asian cultures must Amer-
icans keep in mind if they are to successfully
conduct business in the Orient?
A
ll signs point toward more
and s t r o n g e r ties b e t w e e n
Asian and A m e r i c a n busi-
ness. T h e Japanese economic miracle
is now being paralleled by similar mir-
acles in several Asian c o u n t r i e s ~ T a i -
wan, South Korea, Singapore, H o n g
Kong. Asians are hard-working peo-
ple, and, when conditions are ripe,
they can create economic miracles.
Conditions could soon become ripe in
the Philippines, Thailand, Malaysia,
or Indonesia, the fifth most populous
country in the world. Even C o m m u -
nist China, with a fourth of the world's
people, is now moving in the direction
of free enterprise.
For both economic and political
reasons, involvement in Asian eco-
nomic d e v e l o p m e n t is certainly in the
s e l f - i n t e r e s t o f the U n i t e d States.
Many opportunities are missed, how-
ever, because too m a n y A m e r i c a n
businesspeople are not aware o f the
i m p o r t a n c e o f u n d e r s t a n d i n g cul-
tural differences. Business is business,
they think. And they are wrong.
1 have been involved in attempting
to arrange business relationships be-
tween Americans and Asians, ties with
great potential benefit for all parties
concerned, only to see them foun-
d e r - p r i m a r i l y because the Ameri-
cans were unable to bridge the cultural
gap.
69
Unbelievable miscommunications
and m i s u n d e r s t a n d i n g s can o c c u r
when cultures cross, even in countries
that share a c o m m o n heritage and
language. For peoples with different
traditions and languages, the possi-
bilities for culture clash multiply. Al-
though many Asians speak English,
the language that culturally condi-
tions their life is not English. And the
religious beliefs, the ethical systems,
the rules of interpersonal relation-
ships and behavior that define Asian
societies are most definitely not West-
ern. T h e potential for miscommuni-
cation with Westerners is enormous.
Americans who contemplate doing
business with Asians are well advised
to study these cultural differences in
detail in the many good books avail-
able on these subjects. This article will
focus on those aspects o f Oriental cul-
t u r e that are most i m p o r t a n t f o r
Western businesspeople to keep in
mind when in Asia. T h e single most
important concept is face.
SAVE FACE
p
ride and dignity are i m p o r t a n t
to all h u m a n beings, but no-
where in the world are they so
culiurally protected as in Asia. T o
speak or act in a way that causes an
Asian person to "lose face" is tanta-
 Business H~rizons/.lanuary-Fel)ruary 1987
"Being relaxed while at the same time
concerned with the feelings of others is the key to Asia.
T h e way around the problem of face is
not to be in a hurry, to take time
to understand and
be understood."
70
m o u n t to physical assault in the West.
Asians go to great extremes to save
their own face and everyone else's.
This causes problems for the West-
erner, who may not get a straight an-
swer to a straightforward question.
"Can you tell me the way to the
nearest post office?" If Asians know,
it would not be unusual for them to
escort you there, even though it may
be fat" out o f their way. If they do not
know, they probably will point and
say "that way." T o be seen not to know
is to lose face.
"Can you make this piece o f fur-
niture that I have designed?" Yes, they
can. And they will, even though they
know it will collapse almost immedi-
ately because the design is poor. T o
suggest a flaw in your design is to cause
you to lose face.
T h e solution to these problems lies
in the way the question is asked. "Do
you know someone who might help
me f i n d a post office? .... I've designed
a piece o f furniture, but I would ap-
preciate any suggestions you might
have for improvement."
A m e r i c a n s p r i d e t h e m s e l v e s on
their frankness and honesty. Asians
also are honest people, but honesty is
mediated by the d e m a n d s o f face. For
this reason, "frankness" in Asia is al-
most always rudeness.
It's possible for self-assured Amer-
icans in Asia to leave wide paths o f
resentment and never know that they
have o f f e n d e d anyone. No one will
tell them. Or, if anyone does, the mes-
sage will be delivered so obliquely that
it probably will not be received. Such
Americans will find that life becomes
"difficult," that no one seems very co-
operative. More than likely they will
not blame themselves nor examine
their actions and words. T h e y may
well conclude that the people are lazy
and stupid and dismiss them with the
thought, "I can't wait to get back to
the good old U.S.A. where people can
understand plain English."
T h e s e Americans will continue to
see nothing in Asia but smiles and a
pretense o f assistance, in spite o f the
reversal of goodwill--unless they push
too fat'. Past a certain point o f insuh
to pride and dignity, the smile and
disguised condescension may finally
be overwhehned by rage. T h e con-
sequences can even be deadly.
1 have witnessed Americans taking
"face" away fi'om Asians in all sorts
o f circumstances. For example, when
natives are standing nearby, "frank"
Americans will complain loudly about
the defects they perceive in their host
cou n try.
One o f the most blatant instances
o f such rudeness was witnessed by a
Filipino friend. T h e wife o f an Amer-
ican military officer, wearing nothing
but a scanty h a h e r top and shorts, was
riding in a limousine. (Filipino wonaen
dress modestly, while very y o u n g boys
are often allowed to go naked.) When
the car stopped at an intersection, the
A m e r i c a n w o m a n saw a Filipino
m o t h e r with her two naked children.
T h e officer's wife rolled down the
window and shouted, "Why don't you
put some clothes on those kids?" This
behavior was so outrageous that it was
the American woman, not the Fili-
pino nlother, who lost face. But both
losing face and causing a loss o f face
have serious corrosive effects on in-
tercuhurai relations.
One o f the charms o f Asia is that
you need have no feat" o f being in-
sulted or having your dignity threat-
ened in public. You can lower y o u r
defenses and relax. No one will insuh
you or cause you emotional pain.
Being relaxed while at the same time
concerned with the feelings o f others
is the key to Asia. T h e way a r o u n d
the problem o f face is to not be in a
hurry, to take time to u n d e r s t a n d and
be u n d e r s t o o d . T h e p r o b l e m o f
oblique answers is solved by t h o r o u g h
discussion o f a subject, by being ten-
tative and never aclamant, by express-

"The most important goal
in the Orient is to keep a smooth surface
on the sea o f life. T h e person who forces bare truth
at the e x p e n s e of appearance is the outcast
and the troublemaker."
ing y o u r own doubts about what you
are saying---even if you don't have any
doubts. Given time and the o p p o r -
tunity to avoid p r o b l e m s o f face,
Asians eventually will let you know
what they are thinking and f e e l i n g - -
or, at least, some o f what they think
and feel. But, o f course, you must be
alert t"o!" indirect answers and grasp
and u n d e r s t a n d them, which takes
time, patience, and practice.
O n e explanation o f the face aspect
o f Asian society is that it is a shame
and not a guill culture. Westerners are
likely to measure their conduct by
what they think of themselves. As long
as their internalized value system is
not violated, they do not feel guilty,
regardless o f the disapproval o f oth-
ers. In fact, to flout society's opin-
i o n - a s s o m e t i m e s we W e s t e r n e r s
think--it should be flouted is often the
mark o f the hero.
In Asia, the open violation o f so-
ciety's standards is to be avoided at all
costs. In o t h e r words, if y o u r public
actions are in accord with society's
n o r m s , if no e m b a r r a s s n a e n t is
brought upon your family, if your in-
discretions are kept secret, there is no
guilt. If you have violated the norms
o f society, you mayfi, ar that y o u r acts
will be discovered and almost cer-
tainly you will feel shame if such acts
are discovered.
T h e practical consequence o f this
difference is that the most i m p o r t a n t
goal in the Orient is to keep a smooth
I. Admittedly, this view of both East and
West is mr,oh oversimplilied, but it underlines
the very real difference that does exist.
When West Meets East: Cuhural Aspects of Doing Business in Asia
71
surface on tim sea o f life. A p p e a r a n c e you agree? .... People here are lazy,
is more important than truth. T h e aren't they?" If you say "yes," you
person who forces bare truth at the might as well pack your bags and go
expense o f a p p e a r a n c e is the outcast home. If you can't think of" a propel"
and the troublemaker. A p p e a r a n c e is response to such questions, one that
all, because face is involved. Everyone saves everyone's face, then you have
in Asia understands this, and West- no business even ruing to do business
erners must also u n d e r s t a n d this if in Asia.
successful business relationships are A rule that should be b u r n e d into
to be established in the Orient. T r u t h your consciousness is this: Compli-
may be discussed in private, but the ment, but never criticize, even if asked
pt, blic surface must be smooth. for criticism.
Sometimes Asians will test you on Asians are likely to laugh if you say
small things. If you don't pass the test, something that demeans their culture
you never will reach i m p o r t a n t issues. o1 country. But a laugh, in Asia, is
"This is such a dirty country, don't often a sign o f discomfort. Asians
smile and laugh when they are em-
barrassed. It is a way o f saving [ace.
Asians can laugh genuinely, but a de-
fensive laugh is common.
Not putting people "on the spot" is
very important. A businessman who
has spent much time in Asia told me
that one o f his biggest mistakes was
posing a riddle to an important Asian
b u s i n e s s m a n in f r o n t o f his col-
leagues. He didn't know the answer,
but when the answer was given he ex-
claimed, " O h , 1 know that!" T h e
American immediately realized he had
made a grave error.
If you ask a question in Asia and
don't receive an answer, don't push
it. It is probably a nmtter o f lace. Give
it time. Ask again later in a different
way and, preferably, in private. Face
is less p a r a m o u n t if other people are
not present.
Face need not always work against
the American, who can use it in he-,
gotiations. T h e statement "1 would
lose lace if I accepted those terms" is
 Business Horizons/.]anu:try-Fel)rt,ary 1987

"The fact that many Americans are not willing

to invest the time to develop the necessary interpersonal
trust has sabotaged many a budding business opportunity. The
American desire to 'get down to business' interferes with
the relaxed development of the social relationship
that is itself the true cornerstone
of an Asian business agreement."
72

a more effective bargaining tool than
all tile facts and figures even the most
sophisticated c o m p u t e r can generate.
PRESERVE YOIJR OWN DIGNITY
trust had not already been achieved,
it is doubtful that a business arrange-
ment ever would have been agreed
upon.
Establishing trust takes time. T h e
fact that many Americans are not will-
politics, and problems. 1 h o p e d tile
time would come when my students
would tell me some o f their opinions
about China, but 1 didn't pressure
them.
In a n o t h e r two or three months, an

C
lass and caste are realities o f
Asia. If Americans, who sup-
posedly (and admirably) be-
lieve in the equality o f all, cannot
accept those realities o f Asia, they may
e n c o u n t e r problems. This is not to
suggest that the lower classes o f Asia
should be treated with disrespect. But
if American businesspeople in Asia
wish to be respected, they must con-
duct themselves with dignity.
Above all, never show anger, even
ing to invest the time to develop the
necessary interpersonal trust has sab-
otaged many a b u d d i n g business op-
portunity. "File American desire to
"get down to business" interferes with
tile relaxed d e v e l o p m e n t o f tile social
relationship that is itself the true cor-
nerstone o f an Asian business agree-
merit.
Asians j u d g e by actions and feel-
ings, and it takes time to observe ac-
tions that reveal underlying character.
opening presented itself. I began talk-
ing a b o u t - - a n d q u e s t i o n i n g t h e m
a b o u t - - M a r x i s m and o t h e r aspects o f
Communist ideology and thought. By
tile time I left China, my class and 1
were talking very openly about many
things that would not have been dis-
cussed had I not taken a great deal o f
time to build trust.
BE SINCERE

if you feel it. No matter how high your
official position, the public display o f
strong emotion will label you a "peas-
ant."
ESTABLISH TRUST
Words are ,lot believed in Asia until
actions prove sincerity, competence,
reliability. "File lack o f trust in words
alone arises partly from the impor-
tance o f face described earlier, but
there is more to it than that. Asians
have an intuitive u n d e r s t a n d i n g o f a
I
n doing business in Asia, as in the
West, the word sincerity means
demonstrating a genuine inten-
tion to come to terms and carry out
y o u r part o f the bargain. But, in Asia,
it carries additional meaning and sig-
nificance connected to the p r e f e r e n c e

A
sians do business on the basis
of personal relationships with
p e o p l e they have c o m e to
trust. This r e m a r k may seem trite, but
it is much truer o f Asia than o f the
West, where faith is placed in legal
contracts.
Asians are not so legalistic. Con-
tracts are often renegotiated, as an act
o f faith in the relationship, when
things go badly for one o f the parties
or unforeseen difficulties arise. T h e
primary objective is to cement the
long-term relationship and to estab-
lish e n d u r i n g mutual trust and good-
will. From the beginning, it is assumed
that both parties are acting in good
faith. In fact, ifa great deal o f mutual
truth o f h u m a n life: Your real self is
revealed by your actions, a real self
perhaps even you do not know.
Trustworthiness i s j u d g e d t h r o u g h
intuition and attention to detail. For
example, never say, "[A particular
person] told me . . ." A n y o n e who
would jeopardize a n o t h e r person by
betraying a confidence is not to be
trusted.
T h e length o f time n e e d e d to es-
tablish trust can be illustrated by the
class in English I taught while in
China. For a full three months, I fol-
lowed the textbook exclusively, taking
time to give individual help w h e n e v e r
it was needed. T h e n I began lecturing
on the United States--history, society,
for personal and long-term relation-
ships. When a potential business op-
portunity turns sour, Asians often say
that the o t h e r party failed to show
"sincerity." Generally, what is meant
is either arrogance or tight-fistedness
or both.
In Asia, both parties to a potential
business deal will, in the early stages
o f negotiations, go out o f their way to
entertain each other, usually t h r o u g h
expensive dinners or banquets.
T h o u g h t f u l gifts are given. Small fa-
vors are done. T i m e is given. Failure
to appreciate the importance o f such
things shows a lack o f "sincerity."
Americans who do business in Asia,
particularly in the initial stages, must

"A persistent firmness,
combined with flexibility and the willingness
to explore all possible alternatives, will earn respect.
Be firm, but avoid obstinacy and rudeness.
Be persuasive in a gentle way, a way
that saves everyone's face."
often work t h r o u g h intermediaries,
people who know the ct, lture, who can
m o n i t o r events and help smooth out
difficulties, who have a relationship
with the Asian businesspeople. A fail-
ure to show "sincerity" to the inter-
mediary will be it, st as d e t r i m e n t a l to
business prospects as a failure to show
it to the o t h e r party. An a t t e m p t to
"bypass" the i n t e r m e d i a r y or an atti-
tt, de o f a r r o g a n c e ("I know what I ' m
doing so you stay out o f it") will p r o v e
to be a d e a d - e n d street.
BE P A T I E N T
B
usilaess in Asia c a n n o t be
rushed. T h e tirst m e e t i n g be-
tween parties most probably
will be in a r e s t a u r a n t or nightclub,
and the subject o f business is not likely
to arise. And as the guest, yo, should
not be the one to bring t,p the subject.
T h e a p p e a r a n c e o[" being in a rush,
and the tenseness and closed-mind-
edness that it brings, can in itself re-
suh in a loss o f dignity for the person
in a hurry. It is also an a f f r o n t to the
'Tace" of the o t h e r person or persons
present. After all, how can you think
them i m p o r t a n t people if you d o n ' t
seem to want to spencl time with t h e m
socially? Your impetuosity is also in-
t e r p r e t e d as a sign that you do not
u n d e r s t a n d the i m p o r t a n c e o f per-
sonal relationships; t h e r e f o r e , you
probably are not to be trusted.
Delays and "wasted time" mr, st be
expected in Asia [or m a n y reasons. In
China, everything is difficuh and time-
const, ming because of the bureat,-
cracy; for all practical purposes, the
whole country is one gigantic orga-
When Wcsl Meets East: Cuhural Aspects o1" l)~fing Business in Asia
nization. In J a p a n , e v e r y o n e even re-
motely affected by a business decision
must first be consuhed. In most Asian
countries, delays arise because of a
combination of both bureaucratic red
tape and the need for broad consul-
tation. Because a show o f impatience
will only complicate matters further,
Americans are well advised to relax
and try to enjoy the sh)wer pace o f
life.
Perhaps even m o r e crucial than
short-term patience is patience for the
long term. Asians look primarily for
bt, siness relationships that p r o m i s e to
be r e w a r d i n g over the years. T h e y are
much m o r e willing to e n d u r e low ,'e-
turns or none at all in the initial
73
months of a business venture than are
most Ame,'icans.
T h e American preoccupation with
the monthly profit and loss statement
(as a means o f judging corporate, di-
visional, and individual p e r f o r m a n c e )
is one of the greatest barriers to the
establishment o f successful business
relationships with Asians. A m e r i c a n
['ocus on the short run is detrimental
to the d e v e l o p m e n t o1 ventures ancl
relationships with high promise for
h)ng-run economic success--exactly
those things that most interest Asian
businesspeople.
BE F L E X I B L E
I
n some Asian countries, appoint-
ments are kept on time; in some,
they are not. In some, little ad-
vance warning will be given o f meet-
ings, banquets, events. A knock on
your door: "Can you be ready to talk
with [IVlr. X] and his advisers in fifteen
minutes?" You mr, st maintain the ut-
most flexibility in planning y o u r time.
In fact, it's better not to plan time very
closely.
Minimize preconceived notions, and
let your Asian hosts suggest the flow
of events. In terms of business ne-
gotiations, let them suggest how things
shot, ld proceed and what the t e r m s
might be. Asia is different f r o m the
West, and Asians know what will work
there and what will not. T h e y know
their own country in a way that a for-
eigner never will. American society is
relatively open. Asian societies are not.
This is not to suggest that you m u s t '
be "easy." You must be p r e p a r e d to
bargain. Most Asians enjoy bargain-
 Business Horizons/.]anuary-February 1987
ing, and they are good at it. Don't
immediately put all your cards on the
table; they won't. Be willing to com-
promise, but don't give up more than
you should. A persistent firmness,
combined with flexibility and the will-
ingness to explore all possible alter-
natives, will earn respect. A calm and
relaxed stubbornness is advised, with
cahn and relaxed the key words. Be
firm, but avoid obstinacy and rude-
ness. Be persuasive in a gent& way, a
way that saves everyone's face.
After a bargain is reached, giving a
little extra to show goodwill should
74 prove, in the long run, to be worth
far more tlaan the price o f the "little
extra." You will be on y o u r way to-
ward genuine fi'iendsbip and nautual
respect, the ultimate basis for most
successful business ventures in Asia.
If difficulties arise later, don't insist
on following the contract to the letter.
With understanding, patience, and
empathy, you will establish a long-
term working relationship that will
prove to be invaluable, even in terms
o f money.
OBSERVE ASIAN ETIQUETTE
A s a general rule, real author-
ity in Asian business organi-
zations is not decentralized.
I f you have not established direct con-
tact with the top person in an orga-
nization, you most likely will need to
rely on someone who can a r r a n g e it.
In China, for example, many for-
eign businesspeople have spent a con-
siderable a m o u n t o f time and m o n e y
waiting in expensive rooms at the Pe-
king Hotel without ever meeting the
person who has the power to get
something accomplished. This led to
the r u m o r a few years ago that what
the Chinese were really selling were
rooms in the Peking Hotel.
A fi'iend or confidant or interme-
diary in Asia is also useful to acquaint
you with local customs. Use this per-
son as an example fbr behavior. When
your intermediary gives hints regard-
ing p r o p e r procedure, [bllow t h e m - -
and don't insist on reasons. Intuition
is trusted in Asia above reason and
cold logic. Your friend may not know
the reason or may be unable to artic-
ulate it in English. If you push for
s o m e t h i n g a p p r o x i m a t i n g Western
rationality, you may cause this valu-
able confidant to lose face.
Many little things can make a dif-
ference, things you can learn only by
close observation and with the help o f
someone who knows the culture. For
example, in China, to avoid being
rude, it is important when giving or
receiving a gift to hold it with both
hands. In several Asian countries it
would be indiscreet to ask for a meet-
ing with an important official early in
the clay. Because prestige can be ex-
hibited by coming to work r a t h e r late
ill the morning, for you to suggest an
early meeting could imply a lack o f
respect ['or the official's status.
Saying "thank you" too often is to
be avoided. A warm smile and an un-
spoken expression o f appreciation are
g e n e r a l l y m u c h b e t t e r . "F~)o m a n y
"thank-yous" indicate that you think
just saying "thank you" fulfills the ob-
ligation and releases you from nautual
help and favors. Inexpensive gifts are
important as a means o f showing gen-
uine appreciation ['or services and fa-
vors. (Of course, some services and
favors call for expensive gifts.)
T h e subtleties o f Asian etiquette can
be complex. When the service staff at
the d o r m i t o r y where I was staying in
China would do something for me, I
would say, "You are very kind" or "l
appreciate your help." Almost always
the reply was: "It's my duty." Being
an A m e r i c a n , nay t h o u g h t s were:
"Don't you like me? Why does every-
tiring have to be your dut~,?" After a
few months; l suddenly realized that
they had been telling me, "You don't
owe me anything for this."
T r y to learn a little o f the language.
Just the effort to say a few worcls in
the native tongue--hello, goodbye,
beautiful, thank you, excuse me--will be
greatly appreciated. When you say, in
their language, ' T i n sorry, l don't
speak your language," it is both a cause
for a m u s e m e n t and a sign that you
are not, as they would say in T a g a l o g
(the Philippine national language), a
bostztse (rude and arrogant) American.
G
o slow. Be calm, never loud.
.Listen m o r e than you talk.
Observe how your Asian hosts
do things, and follow their example.
Finally and above all, enjoy yourself,
and let your hosts know that you are
enjoying yourself, their hospitality,
and their country. []