Cultural Differences, Trust and Business Relationships

What impact do you think cultural differences have on a business relationship and trust-building?

Well, researchers have taken the time to try and find out!

This was the question Jeanne M. Brett (Northwestern University) and Tyree Mitchell (Louisiana State University) tried to answer in their paper, ‘Searching for trustworthiness: culture, trust and negotiating new business relationships’.

Published in The International Journal of Conflict Management, the researchers interviewed 82 managers from 33 different countries, which were then split into four regions: East Asia, the Middle East and South Asia, North America and Europe, and Latin America.

The managers were asked, “How do people in your culture determine if a potential business partner is trustworthy?”

According to the researchers, the responses highlighted “systematic cultural differences” in how people seek to establish trustworthiness in others.

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Cultural Factors in Trust Building

The researchers found the data to show that two cultural factors were strongly identifiable in the criteria that managers used to assess trustworthiness and the way they collected information to make that assessment.

1. The first factor was in how much people in a culture trust strangers.
2. The second factor was what has been called “cultural tightness-looseness”, which is about the extent to which a group or collective approach to social order prevails.

So, what did the data say about countries and regions? Here’s a brief look at what they found.

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North American & European (Western) Cultures

• Managers from Western cultures expressed that they generally just assume a potential new business partner is going to be trustworthy.
• At a cultural level, people automatically trust others until they prove themselves otherwise.
• Despite this, managers would also test these assumptions by trying to verify information.
• One way in which managers would verify is to ask lots of questions and assess the openness with which they are handled, or not.
• Managers in Western cultures do not place much focus on social relationships to ensure trust — people separate work from personal life very easily.

 

East Asian Cultures

• East Asian managers overall described a three-stage process to determine trustworthiness.
• First, they seek information about a potential business partner’s reputation through their network, whether that be personal or professional. A good reputation is key.
• Second, they meet the potential partner and test their competencies. This is done through subtle questioning.
• Third, they engage in social and relationship-building activities to further cement whether a bond of trust exists.

 

Middle Eastern and South Asian Cultures

• In this region, it’s all about respect, which is closely associated with the concept of hierarchy.
• Managers tended to trust others who were able to show them the appropriate levels of respect.  
• A potential partner’s reputation would also be researched within the community to establish trustworthiness.
• Social engagements were also found to be important in assessing compatibility and building relationships.
• For many cultures, hospitality and being a host were also important factors in assessing someone’s status.

 

Latin American Cultures

• In this region, the social relationship comes first, and the business after.
• Shared values are the main driver for judging a potential partner’s trustworthiness
• Latin American managers rely on the opinions of others as a first step in determining trustworthiness and will always do some due diligence on someone’s background.
• Making a personal connection was also deemed as being very important.
• Small talk and investing time in building rapport was seen as critical to making personal connections.

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Why the Cultural Differences?

Many of the differences come down to common themes within cross-cultural training, namely how an individual or collective a culture is, and the value placed on things like etiquette, traditions and norms.

Western cultures, being a lot more individualistic, need to rely on being open and assuming everyone is trustworthy because they don’t have social networks and structures to rely on.

In those cultures where social and family networks are more prominent, i.e. collectivist in nature, your levels of trustworthiness are not solely based on you as an individual.

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Main photo by Cytonn Photography from Pexels

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