AIRA Newsletter

A recent assignment of mine has involved extensive negotiations with and analysis of a Japanese company. Most of the time, I was located in Japan working directly with the company’s team. I am comfortable dealing with international organizations and sensitive to the various legal and accounting standards that require local expertise, but typically the cultural issues have been very manageable with little effort.

What I discovered in Japan was very different. The cultural aspects needed to be carefully orchestrated from the very beginning to ensure a smooth process. My trip was sudden and, with only 24 hours notice, I could not get business cards translated into Japanese for me or my team. This lack of having a “meishi” (business card) created some confusion during introductions, since understanding seniority and position are critical to “proper” meeting etiquette in Japan. Our counterparts could not readily determine to whom they should direct themselves. Our translator was able to effectively guide us so that we understood their hierarchy, but it clearly made the Japanese professionals uncomfortable. As a result, vital information was not expressed at first, because of their concern about directing the conversation to the wrong party and possibly offending us. With time, they understood I was the lead, but that we work as a team, which helped communication progress more easily.

In this particular case, we did not have any women in our kick-off team. As it turned out, an all-male team was probably a good thing, initially. Our restructuring practice is led by a woman and we have several senior women in our group, but we were unaware of the limited roles women had at the company. In fact, we only observed them in clerical roles or as translators. I believe a woman in a leadership position may have slowed our initial progress in negotiations.

So it isn’t just the legal and accounting issues that must be managed during international negotiations, but many cultural aspects, as well. These items are just a few of the things to think about, when dealing with international transactions. If you have had any interesting experiences related to cultural business exchanges, please write us about them.

Sincerely,

Peter Stenger, CPA, CIRA
Editor.

Peter Stenger is a Director in the Restructuring and Performance Improvement group at Stout Risius Ross, Inc., and is responsible for strategic, operational and financial consulting solutions for turnaround and underperforming clients. He has spoken on bankruptcy and strategic planning issues for the Turnaround Management Association, for the Association of Insolvency and Restructuring Advisors at the National Conference of Bankruptcy Judges, and for other international organization in North America and Europe. He earned his BB/A in Accounting from the University of Notre Dame,a nd is also a Certified Public Accountant, as well as a Certified Insolvency and Restructuring Advisor.