How can cultural differences impact the relationship between franchisor and franchisee? asks Emile Spruijt
As Franchisors continue to expand across borders and the global marketplace becomes increasingly more accessible to small and large franchise companies alike, 2018 brings even more opportunities to work internationally. Multinational and cross-cultural franchisors are likewise becoming ever more common, meaning businesses can benefit from an increasingly diverse knowledge base and new, insightful approaches to business problems. And opportunities!
However, along with the benefits of insight and expertise, global franchise organizations also face potential stumbling blocks when it comes to culture and international business.
While there are a number of ways to define culture, put simply it is a set of common and accepted norms shared by a society. But in an international business context, what is common and accepted for a franchisee from one country, could be very different for a franchisee from overseas. Recognizing and understanding how culture affects international business in three core areas – communication, etiquette, and organizational hierarchy – can help you to avoid misunderstandings with colleagues and clients from abroad and excel in a globalized business environment.
Effective communication is essential to the success of any business venture, but it is particularly critical when there is a real risk of your message getting “lost in translation.” International franchisors often speak English. But more than just the language you speak, it’s how you convey your message that’s important. For instance, while the Dutch (myself) may value directness and brevity, franchisees (or business partners in general) from India can be more indirect and nuanced in their communication.
Moreover, while fluent English might give you a professional boost globally, understanding the importance of subtle non-verbal communication between cultures can be equally crucial in international business.
What might be commonplace in your culture — be it a firm handshake, making direct eye contact, or kiss on the cheek — could be unusual or even offensive to a foreign colleague or franchisee. Where possible, do your research in advance of professional interactions with individuals from a different culture. Remember to be perceptive to body language, and when in doubt, ask. While navigating cross-cultural communication can be a challenge, approaching cultural differences with sensitivity, openness, and curiosity can help to put everyone at ease.
Different approaches to professional communication are just one of the innumerable differences in workplace norms from around the world. For instance, the formality of address is a big consideration when dealing with franchise partners (and even more important: the employees) from different countries. Do they prefer titles and surnames or is being on the first-name basis acceptable?
While it can vary across organizations, Germany tends to use formal “Mr./Ms. Surname,” or they include the title as well: Herr Dokter) while Americans and Canadians tend to use first names. When in doubt, erring on the side of formality is generally safest. The concept of punctuality can also differ between cultures in an international business environment. Different ideas of what constitutes being ‘on time’ can often lead to misunderstandings or negative cultural perceptions.
For example, where an American may arrive at a meeting a few minutes early, an Italian may arrive several minutes – or more – after the scheduled start-time (and still be considered ‘on time’).
Organizational hierarchy and attitudes towards the franchisor can also vary widely between cultures. Whether or not those franchisees with junior or middle-management background feel comfortable speaking up in meetings, questioning senior decisions, or expressing a differing opinion can be dictated by cultural norms. Often these attitudes can be a reflection of a country’s societal values or level of social equality.
For instance, a country such as Japan, which traditionally values social hierarchy, relative status, and respect for seniority, brings this approach to the business relation. This hierarchy helps to define roles and responsibilities across the organization. This also means that the franchisor commands respect and expects a certain level of formality and deference from franchisee.
However, Scandinavian countries, such as Sweden, which emphasize societal equality, tend to have a comparatively flat organizational hierarchy. In turn, this can mean relatively informal communication and an emphasis on cooperation across the whole organization.
Advice to franchisors who want to operate globally:
Profile: do not compromise;
The contract should be very clear. Set the obligations as clearly as possible;
Do not expect anything if this is not in writing;
Manage your franchise network according to the franchise agreement(s). Let your master franchisees know that if you do extra work for free that, he will have to pay for this in the future;
Communicate at least once a week with your international master franchisee;
Be aware of (or even better, enjoy!)… cultural differences and language barriers.
ABOUT THE AUTHOR
Straetus International is an unique franchise brand within the debt collection industry. Straetus was incorporated in 2009 and today active in 15+ countries. With a client portfolio of 9500+ clients, Straetus is one of the leading debt collection organisations.