CROSS-CULTURAL MISCOMMUNICATION IN INTERNATIONAL BUSINESS                                               By David A. Chodack We live in the age of mass-communications, the Internet and an increasingly interconnected world. In spite of this and  the much publicized "Global Economy", cultural differences and miscommunication still cause too many international business deals to fail. The reason for this is usually a simple failure to do adequate research before jumping in. Among the most famous examples, is General Motors' disastrous attempt to sell the popular Chevrolet Nova in Mexico. Mexico is, of course, right next door to the United States and Spanish is hardly an exotic language unknown in the United States except among a handful of scholars. In spite of this however, no one at General Motors seemed to realize until it was too late, that "Nova" would translate into Spanish as "No go" and would therefore scare off potential buyers. It would be easy to write this incident off as just one more example of American arrogance, along with the refusal of American car makers to produce right hand drive cars for the Japanese market. However, there is more than enough evidence that cultural arrogance, ignorance, or just plain failure to do adequate research, works both ways. Foreign companies trying to penetrate the American market can and do make the same mistakes. Almost all of the large Japanese real estate investments in the United States, the ones which  had many Americans fearful of a foreign takeover, lost money. The Japanese companies took advantage of low interest rates and liberal lending policies at home to establish a major presence in the American market, particularly in key cities like New York and Los Angeles. This made a lot of money for people like Michael Crichton, who fed upon American xenophobia and paranoia with his book and movie, Rising Sun. It made little or no money for the Japanese.  The properties they purchased, including such American institutions as Rockefeller Center and Pebble Beach golf course, proved to be overpriced and unprofitable.  Most were  resold within a few years at  steep discounts. It is not only giant Japanese corporations which failed to do adequate research before leaping into the American market. On a trip to Taiwan a few years ago, I saw an ad  in the local English language newspaper for diet tea. I decided that there was an obvious  market for this type of product in the U.S. so I contacted the company and found out that they had maintained an office in Los Angeles for seven years, but had failed to successfully penetrate the American market. Since I was overweight at the time, I decided to test the tea myself. The company supplied me with free samples and to my pleasant surprise, it worked so well that I lost about 30 pounds within a few months. As far as I was concerned, the tea was an obvious success. However, my efforts to work with the company to market the tea in the U.S. were not nearly so successful. Their marketing director was an Englishman from South Africa, where he had been a very successful distributor and in the company's mind, he should have been equally successful in the U.S.  After all, the primary market they were aiming at in both South Africa and the U.S. consisted of white,  English speaking people. Therefore, the two markets should have been similar,, if not identical. Right? Wrong. I tried to explain to them that English people - and South Africans of English descent --  drink  tea on a regular basis, but . Americans don't. The company refused to see the difference and never succeeded in the U.S., even though their product was excellent. Examples like this abound. Companies large and small, foreign and American, try to export a successful product or service to other countries and other cultures and suffer disastrous results. Even many companies who have tried to export their manufacturing while keeping their sales and marketing efforts focused on their traditional markets, have run into unexpected problems. Many companies who attempted to open factories in Third World countries in order to take advantage of cheap labor, found the lack of physical and/or legal infrastructure to be insurmountable problems and were eventually forced to  retreat with their tails between their legs. On the other hand, of course, there are many companies which have successfully established themselves internationally. Who even thinks of Nestle, for example, or Shell Oil, as foreign companies doing business in the US? They have successfully integrated themselves and are as American as apple pie, while Japanese companies such as Sony, Toyota, etc. are unashamedly Japanese, yet still manage to dominate the American market. The key is understanding of and sensitivity to, other cultures and their peculiarities and a willingness and ability to adapt. Visit, Hong Kong, Taipei, Bangkok, Singapore and other Asian cities and you might be surprised to see that 7-11 stores are almost as common as they are in the US. But once you are inside the stores, don't look for hot dogs and other American convenience store staples. Instead, you will find them stocked with strange foods you will never find in a typical 7-11 in the US. Even such totally American foods as ice cream and pizza and Mac Donald's hamburgers have been successfully adapted to conform to local tastes by American companies serious about doing business internationally. Many other, smaller companies have found success by bypassing the cultural problems and concentrating on providing goods and services to the ex-patriate communities, thereby turning their foreignness into an advantage. In other cases, it has simply been a case of waiting for the local market and/or the necessary infrastructure to develop, rather than adapting a product to local tastes. For example, when Coca Cola first tried to penetrate the market in Mainland China, the average family still did not have refrigerators. Since the average Chinese did not seem to like the taste of warm Coke any more than the average American, Coke was not very successful. Once refrigerators became common, the situation changed and Coke became very popular. The answer is simple. Those companies, large and small, which look before they leap, are likely to enjoy success. Those who don't, risk failure.