International Success Built on a Foundation of Trust -- The Importance of Keeping Open Eyes, Open Ears and an Open Mind

When you are doing business half way around the world, certain problems of putting successful deals together and managing people and operations become magnified.   Communication is made more difficult as people grasp for understanding in a second language or concepts become lost in translation.   Cultural nuance becomes a trap for the uninitiated.   And your ability to gain critical information from and to supervise the activities of sales agents / distributors / JV partners / operations managers becomes exponentially more difficult.   

The one viable solution to these problems is to take the time to develop a relationship based on genuine mutual understanding and trust with your foreign business colleagues.   Unfortunately this requires patience, a quality frequently in short supply in the fast paced world of the information economy, particularly for American business people used to closing the deal.   The problem is at times further complicated for Americans delving into international commerce for the first time by a certain ethnocentric view of our inherent likability and trust-worthiness.   While there is more often a healthy concern for whether we can trust our foreign would-be business partners, short shrift is given to whether they can trust us -- and that is an unfortunate mistake which leads to problems down the road and can undermine the ultimate success of the venture.

So what's not to trust -- after all, we are model business people used to operating in the world's most successful economy.   Our foreign contacts should be prepared to emulate us, not treat us with suspicion -- no?   Like it or not, many people abroad, including many business people in our allied states, have a love-hate relationship with America.  We may be envied or revered, but also frequently feared for our aggressiveness and suspected for our motives.

One principle of good business that I've always been a firm believer in is that you cannot afford to listen to only affirming opinions.   To be successful, you must make a genuine effort to hear and understand discordant information.   It is in this light that I recently added a new book to my "must read" list -- Failed States by Noam Chomsky.

Professor Chomsky's book may not be an obvious choice for a "must read" in international business.  For one, he is a professor of linguistics and philosophy at MIT and his work is generally more in the realm of political science and foreign policy than international business.   Second, he is not without controversy.   Among other things, he has the distinction of being profiled in David Horowitz's recent book "The ProFessors -- The 101 Most Dangerous Academics in America", although even Horowitz (the self-anointed arbiter of the western intellectual canon) acknowledges that Professor Chomsky is among the most cited living authors and quotes, among other sources, a New Yorker profile in which Chomsky is called "one of the greatest minds of the 20th century" (profile by Lavissa MacFarquhar, March 31, 2003).   Perhaps the greatest homage to Professor Chomsky in this internet age is that there is a Wikipedia article devoted to him and his work.

More to the point of this post, as Horowitz states, "[Chomsky's] following has grown, particularly in Europe and Asia, where his views have helped inform an inchoate anti-Americanism" (The ProFessors p. 87).   I'm not so certain that one can attribute anti-Americanism abroad to Professor Chomsky as much as to the perception of some of our government's foreign policies -- I've certainly never had anyone in Europe or Asia cite Chomsky as the basis for their concerns with America's place in the international arena.  But the point is that the mistrust and suspicion are real and widespread.

At the risk of over-simplification, the central thesis in Professor Chomsky's book is that the United States itself resembles many of the rogue nations that it has deemed to be "failed states" in that (1) it frequently disregards or unilaterally abrogates well established principles of international law and norms of conduct; (2) it has an uneven record with regard to democracy and freedom abroad in that it has often propped up ruthless tyrants when it suits its self interest better than the popularly supported alternative; and (3) policies are adopted and acted on which contravene the popular will, suggesting a systemic erosion of democratic institutions at home as well. 

Now one can easily disagree with the professor's opinions and conclusions -- I for one disagree with his extension of his thesis to condemn the globalization of commerce or his seemingly gratuitous criticisms of free trade agreements such as NAFTA.   But the book is very well written and copiously annotated with references to source materials such that a reader should at least come away understanding that his arguments have a rational foundation and appreciating how people in other countries could view America with fear and suspicion, even if we continue to be live that it is the result of a misinterpretation of our true intentions.

The good news is that business people the world over share a certain understanding of principles and language related to sales, velocity, profitability and their impact on the opportunity to improve one's standard of living.   Accordingly, it seems usually to be the case that common ground can be forged and a mutuality of respect and trust established in the context of a commercial transaction which transcends the acrimony created between our governments and their politics.   But when you go abroad in search of that common ground that will lead to success in the global marketplace, know what baggage you carry with you lest you get derailed by unspoken suspicions or hidden agenda.

(Attribution Note: The Rumsfeld cartoon appeared in Vol. 16, No. 5 May 2003 issue of Z e-magazine accompanying an interview of Noam Chomsky by V.K. Ramachandran entitled "Iraq is a Trial Run".)

Comments

[Noam Chomsky]

[Note: Professor Chomsky was kind enough to provide some thoughtful feedback on the post via e-mail. I publish his comments here with his permission -- Craig]

Thanks very much for your kind and encouraging words, much appreciated. I did have a few thoughts.

First, I don't condemn the globalization of commerce or free trade. My reaction to them is rather like Gandhi's response when he was asked what he thought about Western civilization. He's supposed to have answered that "it might be a good idea." The concept of "trade" has become highly ideological. Properly, we didn't call it "trade" when the Kremlin produced parts in Lenningrad, sent them to Poland for assembly, and then to Moscow to sell. It crossed borders, but wasn't trade in any meaningful sense; rather, interactions within a command economy. We do call it "trade" when a corporation -- a command economy -- produces parts in Indiana, sends them to Mexico for assembly, and then to California to sell. There's no real difference. Since corporations are pretty much unaccountable, economists don't know the scale of these operations, but usual estimates are in the range of 40%. Same with "free trade". The only correct phrase in "North American free trade agreement" is "North American." It certainly wasn't an agreement: the population in the U.S. and Canada was opposed, and though Mexico didn't have reliable polls, that seems to have been true there as well. And it was only very partially about "free trade." Tariffs were already very low, the "trade agreements" have extreme protectionist measures going beyond any historical precedent (e.g. TRIPS in the Uruguay round) and other measures that have nothing to do with trade and everything to do with what economists call "kicking away the ladder" -- depriving the poor country of the measures that the rich used to develop (e.g. TRIMS, but much beyond). That aside, the U.S. can't really enter into a "free trade agreement" because the economy relies so heavily on the dynamic state sector to socialize cost and risk: for example, what we are now using, computers and the internet, mostly in the state sector for about 30 years, in each case. And a great deal more.

As for NAFTA, the extensive reviews at the time of the Summit of the Americas in 2002 concluded that it is one of those rare agreements that harmed working people in all three countries (HRW, Economic Policy Institute). There's substantial evidence for that, I think. It also in part lies behind the current passion about immigration. Clinton knew what he was doing when he militarized the border for the first time (Operation Gatekeeper) when NAFTA came into effect in 1994.

I also think we should keep away from the term "anti-American." Europeans overwhelmingly like Americans, enjoy and appreciate American culture, have wedding parties at McDonald's, etc. They oppose state policy. But that makes them "anti-American" only if we identify state power with the country, the society, the culture, the people. That's done only in totalitarian societies. No one would be called "anti-Italian" if he criticized Berlusconi. As far as I know, "anti-American" (or "un-American" or "hate America", etc.) is about the only exception, tacitly adopting totalitarian assumptions.

My only quibbles.

Noam Chomsky

[Craig Maginness]

I want to thank Professor Chomsky for his thoughtful comments.

I particularly appreciate his distinction between "anti-American" and "anti-American government policy". Happily, as Professor Chomsky notes, Americans as people are viewed fairly favorably around the world. It does seem, however, that concern with some of our governemnt's polices has created a somewhat steeper hill to climb in establishing a mutuality of trust while each party feels out where the other stands relative to those policies.

I would invite others to comment on whether intra-corporate transfers constitute "trade", and whether NAFTA and other similar pacts constitute "free trade agreements" in any meaningful way, as well as whether they have been a success in achieving benefit for the participating countries.

Craig