November 16, 2018

Expert: Political turmoil hurting U.S. firms in Asia

Photo | Liese Klein
Photo | Liese Klein
Austin Auger at the Big Connect on Thursday.

Uncertainty around U.S. commitments in Asia is taking a toll on U.S. business interests in the region — and China has stepped in to take leadership, an expert told an audience at the Big Connect business expo in Wallingford on Thursday.

Austin Auger, business development director for Tokyo-based CB&I Co. and an alumnus of Southern Connecticut State University, spoke on the cultural and political challenges to doing business in Asia at the annual business event sponsored by the Greater New Haven Chamber of Commerce.

With its cultural preference for predictability, Japan has been most strongly impacted by recent U.S. actions, including President Trump's decision to withdraw from the Trans-Pacific Partnership trade agreement.

"The Japanese are very cautious, they love the certainties and process," Auger said. "They know that they have to work with us, but they also have to work with the Chinese." Smaller and mid-sized companies seeking to do business in Japan are more likely to be impacted by political turmoil. "Not the large corporations because they are thoroughly embedded" in the Japanese economy, he added.

Earlier in the talk, Auger explained cultural differences across the world that directly impact business dealings. In his role at CB&I, Auger interacts with executives across Europe, Asia and the Americas and has led numerous cross-cultural training sessions.

Cross-cultural training can help U.S. executives work more effectively overseas, Auger said, along with learning basic cultural rules and a few phrases of the local language.

"You need to know that cultural differences exist and seek to understand first," Auger said. "Ask clarifying questions and do not assume anything." Cultural competence is increasingly critical with the rise of globalism, he added: Asia is expected to generate more than 50 percent of global GDP by 2050.

U.S. executives are much more tolerant of risk than the rest of the world, according to Auger's research, and are much more focused on immediate goals rather than building long-term relationships.

Cultures also vary widely in their communication styles. For example, "Americans are saying what they mean, Japanese are trying to interpret… the meaning behind their statement," Auger said. By contrast, Americans tend to take statements at face value and may miss important subtext in business communications in other cultures.

More of Auger's observations:

  • Asian businesses tend to employ people with more ambiguous roles in decision-making and spend much more time in planning and information-gathering before making deals.
  • Executives from all of the major Asian economies tend to avoid direct confrontation and resolve conflict through indirect means.
  • Within Asia, Korea and China are more top-down and hierarchical in decision-making than the United States, in contrast to the consensus-building style of Japanese businesses.
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