Apparel exports


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Apparel exports

  1. 1. INDEX International Business 2 Export Marketing 18 Culture 89 Import 185 Export Finance 200 Letter of Credit 247 Export Procedure 300 Duty Exemption 330 Documentation 355 Shipping 389 BOL & AWB 423 Marine Insurance 438 INCO Terms 461 Export Costing 541 SEZ 582 EOU & EPZ 595 1
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  3. 3. The beverages you drink might be produced in India, but with the collaboration of a USA company. The tea you drink is prepared from the tea powder produced in Sri Lanka. The spares and harddisk of the computer you operate might have been produced in the United States of America. The perfume you apply might have been produced in France. The television you watch might have been produced with the Japanese technology. 3
  4. 4. The shoe you wear might have been produced in Taiwan, but remarketed by an Italian company. Air France and so on so forth might have provided your airtravel services to you. You get all these even without visiting or knowing the country of the company where they are produced. All these activities have become a reality due to the operations and activities of international business. 4
  5. 5. Thus, international business is the process of focusing on the resources of the globe and objectives of the organizations on global business opportunities and threats. 5
  6. 6. Evolution of International Business The business across the borders of the countries had been carried on since times immemorial. But, the business had been limited to the international trade until the recent past. The post 1990s period has given greater fillip to international business. In fact, the term international business was not in existence before two decades. The term international business has emerged from the term international marketing, which in turn, emerged from the term ‘export marketing’. 6
  7. 7. World Trade Organization World Trade Organization (WTO) deals with the rules of trade between nations at a global or near- global level. But there is more to it than that. It’s an organization for liberalizing trade. It’s a forum for governments to negotiate trade agreements. It’s a place for them to settle trade disputes. It operates a system of trade rules. 7
  8. 8. Born in 1995, but not so Young The WTO began life on 1 January 1995, but its trading system is half a century older. Since 1948, the General Agreement on Tariffs and Trade (GATT) had provided the rules for the system. The last and largest GATT round was the Uruguay Round, which lasted from 1986 to 1994 and led to the WTO’s creation. Whereas GATT had mainly dealt with trade in goods, the WTO and its agreements now cover trade in services, and in traded inventions, creations and designs 8
  9. 9. The WTO agreements are lengthy and complex because they are legal texts covering a wide range of activities. They deal with: agriculture, textiles and clothing, banking, telecommunications, government purchases, industrial standards and product safety, food sanitation regulations, intellectual property, and much more. But a number of simple, fundamental principles run throughout all of these documents. These principles are the foundation of the multilateral trading system. 9
  10. 10. WTO - The Principles The trading system should be ... Without discrimination free - barriers coming down through negotiation predictable - foreign companies, investors and governments should be confident that trade barriers should not be raised arbitrarily; more competitive more beneficial for less developed countries 10
  11. 11. Types of Trade Restrictions & WTO Tariffs A tariff is a charge on imports. Specific tariffs are a fixed charge for each unit of good imported (e.g. $4 per barrel of oil). Ad valorem tariffs are charges computed as a percentage of the value of the imports (e.g. 30% on imported clothing). WTO on Tariffs When GATT was created, the average tariff on manufactured goods was about 40%. It is now down to about 3.8%. Approximately 44% of international trade in industrial products is now tariff-free. 11
  12. 12. Types of Trade Restrictions & WTO Quotas A quota is a restriction on the quantity of imports. Voluntary Export Restraints (VERs) WTO on Quotas Quotas are prohibited on most goods. WTO on VERs As of 1995, VERs are no longer allowed. Countries that have them have up to 8 years to phase them out. 12
  13. 13. Types of Trade Restrictions & WTO Local Content Requirements To avoid tariffs, companies often do the final assembly of products within the country in which the companies plan to sell. However, components are often manufactured in another country. Some countries therefore have local content requirements. They might, for example, stipulate that an auto company that assembles cars in the country use at least 75% local content. WTO on Local Content Requirements Local content requirements are no longer allowed. There is a 5-7 year phase-in period for developing countries. 13
  14. 14. Types of Trade Restrictions & WTO Administrative Barriers Many countries use customs and inspection processes to interfere with imports. Japan had a practice of inspecting all tulip bulbs by slicing them open (& thus ruining them). France used to require that all imported VCR’s be processed through a remote, under-staffed office. The result was costly delays. WTO on Administrative Barriers The WTO has rules that attempt to prevent administrative abuses. However, the rules are unable to prevent all abuses. 14
  15. 15. Types of Trade Restrictions & WTO Export Subsidies In order to assist exporting industries, some governments have adopted policies of subsidizing exports. WTO on Export Subsidies Export subsidies are not allowed (on most products). However, general subsidies are allowed. 15
  16. 16. GATT: ‘Provisional’ for Almost Half a Century From 1948 to 1994, the General Agreement on Tariffs and Trade (GATT) provided the rules for much of world trade and presided over periods that saw some of the highest growth rates in international commerce. It seemed well-established, but throughout those 47 years, it was a provisional agreement and organization. The original intention was to create a third institution to handle the trade side of international economic cooperation, joining the two “Bretton Woods” institutions, the World Bank and the International Monetary Fund. 16
  17. 17. Globalization - A Network Approach The term “globalization” describes the increased mobility of goods, services, labour, technology and capital throughout the world. Although globalization is not a new development, its pace has increased with the advent of new technologies, especially in the area of telecommunications. 17
  18. 18. 18
  19. 19. Trading among nations is a historical phenomenon. For thousands of years trading of goods has been taking place among nations. The content, structure, methods and procedures of trading have however undergone qualitative and structural change from age to age and from region to region. 19
  20. 20. International marketing is the performance, in more than one nations, of business activities that direct the flow of company’s goods and services to consumers for a profit. The only difference, in the definition of domestic marketing and international marketing is that international marketing takes place in one or more foreign countries. The apparently minor difference accounts for the complexity and diversity found in the international marketing environment in terms of rules / regulations / procedures of individual nations. 20
  21. 21. Why Should India Globalise? Human Resources Wide Base Growing Entrepreneurship Growing Domestic Market Niche Markets Expanding Markets Transnationalisation of the World Economy NRIs Competition Economics Liberalisation: 21
  22. 22. Why An Indian Firm Should Globalise? Profit Advantage Growth Opportunities Domestic Market Constraints Competition Government Policies And Regulations Spin-Off Benefits 22
  23. 23. Importance of International marketing Development of national economy and its rapid growth Development of exporter’s economy and his rapid growth Profitable use of natural resources and meeting certain important obligations Increases employment opportunities Increases national income and standard of living of its people 23
  24. 24. International Marketing Conduct of business activities with goods and services between more than one nation Export Marketing Only Export of goods and services from one nation to another Domestic Marketing Conduct of business activity with in a nation 24
  25. 25. Difference between International Marketing and Domestic Marketing What is the difference between domestic and international marketing ? The answer lies not with difference concepts and principles of marketing but with the environment within which the marketing programmes and plans must be implemented. 25
  26. 26. Difference between IM and DM Conceptually there is no difference between the fundamentals of domestic and international marketing. The uniqueness of international marketing comes from the different levels of uncertainty encountered in the foreign market. It is different from Domestic marketing because of the different cultural influences involved and their potential impact on the successful implementation of marketing programs. 26
  27. 27. Difference between IM and DM Competition, legal constraints, government controls, weather etc. are uncontrollable elements and can be affect the profitable outcome of sound marketing plans. Generally, the marketer cannot influence or control these uncontrollable elements but instead must adjust or adapt to them in a manner consistent with a successful outcome. 27
  28. 28. Difference between IM and DM The challenge of international marketing is moulding the ‘ Controllable elements’ of marketing decisions (price, product, promotion, advertisement, distribution etc) within the frame work of the ‘uncontrollable elements’ in the market place (competition, politics, laws, level of technology, consumer behavior and so forth) in such a way that the marketing objectives are achieved. Thus the difficulties created by different environments are the international marketer’s primary concern or task. 28
  29. 29. Difference between IM and DM Similarities Prime importance is satisfying the basic needs of consumers Non-human factors like products Cost, price are similar to that in Domestic marketing It is mandatory to adapt Research And Development, product development Creates good will of the company and Nation in the market 29
  30. 30. Difference between IM and DM Differences Traders have to observe restrictions of each country due to political Entities such as quantity restrictions Exchange control, Tariffs and customs Duties. Traders need not observe such restrictions 30
  31. 31. Difference between IM and DM Differences Difference in legal systems from nation to nation. Laws and customs of trade are different in each nation . No difference in legal systems within a nation. 31
  32. 32. Difference between IM and DM Differences Difference in monetary systems and exchange rates from nation to nations . No difference in monetary systems with in a nation 32
  33. 33. Difference between IM and DM Differences Less mobility of production factors such as capital, labour etc . More mobility of production factors such as capital, labour etc 33
  34. 34. Difference between IM and DM Differences Difference in market characteristics such as demand pattern, distribution channel, method of market promotion etc . Negligible difference in market characteristics is nil 34
  35. 35. Difference between International Marketing and Export Marketing International Marketing Export Marketing A. Scope : 1.Involves setting up of overseas branch For 1.Involves only activity of exporting goods processing, assembling, packaging and direct and services manufacturing through Direct investment joint ventures and Collaborations turn-key projects, Consultancy services etc. B. Approach : 2.Will not counter the interest of domestic 1.It will counter domestic market competition market. 2.To avail incentive by home government 3.Not, to avail the government's incentives 3.The exporting company is ethnocentric and 4.A proper marketing strategy is evolved home Oriented and produces and Sells goods to foreign buyers 4.Mostly opportunistic Approach is involved. 35
  36. 36. Controllable Elements in IM Product Price Promotion Advertisement Distribution 36
  37. 37. Uncontrollable Elements in IM Government Controls ( towards domestic & Pvt Sector / foreign business ) Political Considerations (stability, nature etc.,) Legal Constraints Economic factor (Level Of economy, Purchasing Power etc.) Cultural factors and Consumer behavior (Life style, beliefs, customs habits, fashions etc.) Weather factors (Climate Topography) 37
  38. 38. Domestic Environment The main aspects of domestic environment within the limitations of which a firm has to carry out its foreign marketing/exports, consists of a large variety of factors, the relative importance of which keeps on changing from one point of time to another. 38
  39. 39. Domestic Environment These factors are broadly related to the Domestic, Economic and Political conditions, including existing and potential resources, level and trend of economic growth, industrial base and structure, and the existence of facilitating and supporting agencies for foreign trade. 39
  40. 40. Domestic Environment In a fast developing economy like India, the following aspects of national export expansion policies and measures are gaining importance: Development and expansion of export potential industries and markets. Greater processing of raw materials at source and more emphasis on export of manufactured goods. Planned development of an export sector and export priority and import substitution industries. Export incentive and support schemes Quality control and standards Institutional and infrastructure support. 40
  41. 41. Domestic Environment Structure of India’s foreign trade can be classified into three parts: 41
  42. 42. Foreign Environment The main elements of foreign environment affecting marketing activities of a firm in a foreign country consist of the following. POLITICAL DIMENSION LEGAL DIMENSION GEOGRAPHICAL DIMENSIONS BUSINESS DIMENSION 42
  43. 43. Foreign Environment POLITICAL DIMENSION Attitudes towards International Buying Political Stability Monetary Regulations Government Bureaucracy 43
  44. 44. Foreign Environment LEGAL DIMENSION Laws and regulations regarding product specification Standards, Packaging and labelling, Copyright, Trademark, Patents, Health and safety Promotional methods, Price control 44
  45. 45. Foreign Environment GEOGRAPHICAL DIMENSIONS Climatic features, Altitude, Temperature, Humidity etc., which affect the use and performance of products and equipments, transportation, distribution etc., 45
  46. 46. Foreign Environment BUSINESS DIMENSION Business Customs and practices, Distribution structure and channel network, Competitive patterns, Means & methods of marketing environment 46
  47. 47. Cultural Environment Culture is the sum total of knowledge, belief, art, morals, laws, customs and other capabilities acquired by humans as members of the society. Since culture decides the style of living, it is pertinent to study it especially in export marketing. Every country (even regional groups within each country) has cultural traditions, preferences and taboos that the market must study 47
  48. 48. Cultural Environment Frenchman uses almost twice as many cosmetics and beauty aids as does his wife. Only one Frenchman out of three brushes his teeth The Dutch never touch Vodka. Germans eat more spaghetti and more often than the Italians. Chinese don’t writes notes using Red Ink. In Thailand, it is considered offensive to show the sole of the shoe of foot to another. The head is considered sacred in Thailand so never touch the head of a Thai 48
  49. 49. Cultural Environment The number 7 is considered bad luck in Kenya and good luck in the Czech Republic. The number 10 is bad luck in Korea, and 4 means death in Japan. In Bulgaria a nod means no, and shaking the head from side to side means yes. The "okay" sign commonly used in the United States means zero in France, is a symbol for money in Japan, and carries a vulgar meaning in Brazil. The use of a palm-up hand and moving index finger signals "come here" in the United States and in some other countries, but it is considered vulgar in others. 49
  50. 50. Cultural Environment In Saudi Arabia, the law prohibits the wearing of neck jewelry by Men. In Argentina, do not be offended if your business associate arrives 30-40 min. late to a meeting. In Costa Rica, if you are invited for dinner to a home, bring flowers, chocklets, scotch or wine. In Germany, first names are reserved for family members and close friends. In India, the significance of a business arrangement is often determined by the amount of time spent in negotiations. 50
  51. 51. Cultural Environment 51
  52. 52. Cultural Environment 52
  53. 53. 53
  54. 54. Economic Environment In considering the international market, each Exporter must consider the importing country’s economy. Two economic characteristics reflect the country’s attractiveness as an export market. They are the country’s industrial structure and the country’s income distribution by employment industrialisation and Socio economic Justices. The country’s industrial structure shapes its products and services, the requirements, income levels, employment levels and so on. 54
  55. 55. Economic Environment Four types of industrial structure can be distinguished Subsistence Economics Raw - materials Exporting Economies Industrialising Economies Industrial Economies 55
  56. 56. New Opportunities in IM Rapid world trade growth Improving currency convertibility Increasing trade barriers in international market Expansion of world market and Integration of world economy through globalisation 56
  57. 57. Constraints in IM Political Risks due to changes in political situation Commercial Risks due to lack of knowledge & transit-time Credit Risks due to realisation of export proceeds on Credit basis Cargo Risks due to unexpected transit disasters to Shipments Exchange fluctuation Risks due to invoicing in buyers currency which may depreciate Legal Risks due to difference in commercial laws and proceedings 57
  58. 58. Constraints in IM Trade Barriers Three-faced Competition Diverse Languages, Customs and Traditions Corruption Technological pirating. High cost of product and communication adaptation. 58
  59. 59. Avenues of Entry into Foreign Markets A domestic company can sell its products to foreign buyers directly or indirectly. For direct exports, it establishes direct contact with foreign customers (actual users or importer distributors) and ships the goods as per the customer’s orders and requirement. The exporting firm takes upon itself the entire responsibility concerning packing, documentation, shipment, credit exchange risks, the Government regulations etc., 59
  60. 60. Avenues of Entry into Foreign Markets Indirect exporting is more common in companies just beginning their exporting. First it involves less risk and investment and second it does not have to develop an overseas sales force. However, Exporters who have grown sufficiently large would like to undertake their own exporting (direct). The investment and risks are obviously higher but so is the potential return. 60
  61. 61. Avenues of Entry into Foreign Markets 61
  62. 62. Avenues of Entry into Foreign Markets By Licensing/Franchise arrangement By Tie-up (Buy back) arrangements By Investment in abroad for processing / assembling / packaging etc. By Offering consulting / turn key projects 62
  63. 63. Marketing Entry Strategies Ethno centric Operational strategy : (with the help of overseas Agents ) for Product formulation Product specification Pricing strategy Distribution Promotional measures 63
  64. 64. Marketing Entry Strategies Regiono Centric Operational strategy Catering to a group of Countries having similarity in Marketing in market characteristic Geo Centric Operational strategy Creating globally through well Co-Ordinated Net work Poly centric operational strategy Creading to Country to country basis 64
  65. 65. Mechanics of Protectionism Protection stands for restrictions imposed on the import of foreign goods. The theoretical and logical arguments for free trade have equal validity in all countries, yet the international trader must face the reality that he lives in a world of tariffs, quotas and non-tariff barriers. All these governmentally imposed barriers are imposed through the political pressures of business for protection of their markets. 65
  66. 66. Mechanics of Protectionism The arguments in favour of barriers or protective tariffs are many. But all arguments can be essentially classified as below: Protection of Infant Domestic Industry Protection of Home market Need to keep Money at Home Conservation of Natural Resources Reduction of Unemployment National Defence Retaliation and Bargaining 66
  67. 67. Mechanics of Protectionism An economy with strong cost advantage in manufactured goods or having capacity to manufacture more goods, enjoying high standard of living will prefer free trade. Similarly a country with a monopoly will also prefer free trade. But restrictions on trade may be necessary for developing countries to encourage its industrial production and also to increase employment and economic activity. In an economy depending primarily on agriculture, protection also helps in diversification of its production activities. 67
  68. 68. Mechanics of Protectionism Arguments against protection are that it prevents trade, prevents better productivity, results in higher price, leads to competitive protection and wars, etc. Protection is essential for countries that are in the process of development and this fact has been recognised universally. As a result, a number of international institutions have been established for the help of developing and undeveloped economies. 68
  69. 69. Trade Barriers Trade barriers may be Tariff Barriers and Non Tariff Barriers or protective barriers 69
  70. 70. Objectives Of Trade Barriers To Protect Home Industries from Foreign Competition To Promote New Industries and Research and Development To Conserve Foreign Exchange Reserves To Maintain Favourable Balance Of Payments To Protect National Economy from Dumping To Curb Conspicuous Consumption To Make Economy Self-reliant To Mobilise Public Revenue To Counteract Trade Barriers Imposed By Other Countries 70
  71. 71. Tariff Barriers Tariff barriers have been one of the classical methods of regulating international trade. Tariffs may be referred to as taxes on the imports. It aims at restricting the inward flow of goods from other countries to protect the country’s own industries by making the goods costlier in that country. Sometimes the duty on a product becomes so steep that it is not worthwhile importing it. In addition, the duty so imposed also provides a substantial source of revenue to the importing country. 71
  72. 72. Tariff Barriers Tariffs may be classified according to the purpose Revenue Tariff - Increases Govt. revenue Protective Tariff - protects domestic industry how they are levied. Counter active Tariff-Similar to anti-dumping Specific Tariff - based on per units/ Vol./ Length/number of goods Ad valorem Tariff - based on certain percentage of FOB/CIF value 72
  73. 73. Non Tariff Barriers To protect the domestic industries against unfair competition and to give them a fair chance of survival various countries are adopting non-tariff measures. Some of these are : Quantity Restrictions, Quotas and Licensing Procedures Foreign Exchange Restrictions Technical Regulations Consular Formalities 73
  74. 74. Difference between Tariff and Non- Tariff Barriers 74
  75. 75. New Tariff Barriers New tariff barriers faced by Indian products in various overseas markets are severely constraining our exports. These barriers may broadly be enumerated as Restrictive import policy regimes (import charges other than customs tariff, quantitative restrictions, import licensing, custom barriers); Standards, testing, labelling and certification, which are set at unrealistic high levels nor developing countries or are scientifically unjustified; 75
  76. 76. New Tariff Barriers Export subsidies (including agricultural export subsidies, preferential export financing schemes etc.,); Barriers on services (visible and invisible barriers restricting movements of service providers, etc,); Government procurement regimes; and Other barriers including anti-dumping and countervailing measures 76
  77. 77. Channels of Distribution Channel of distribution: is the route through which goods & services move from producer to buyer It includes producer, exporter, middle-men Buyer, physical handling and distribution of goods and services 77
  78. 78. Channels of Distribution Factors considered in selecting channels of distribution in international export Product Characteristics Market characteristics Middlemen considerations Company Factors 78
  79. 79. Product Characteristics Perishable Products - shorter distributors channel Unit value – diamond - direct selling (SDC) - Computer - daily consuming items (Long Distribution Channel) LDC Weight and Bulky - bulky items direct selling - light item - LDC Standard products – LDC (In quality, Color) New established products - direct selling (SDC) 79
  80. 80. Market Characteristics No of purchase (soap /garments) - LDC Geographical nature widely dispersed buyers (LDC) Size and No of orders requiring frequent purchase LDC Nature of Buyer and produce-Govt. buying’s Direct selling 80
  81. 81. Middlemen Considerations Service and attitude of middlemen-> higher profit- LDC Specialist middlemen availability Cost of DC in overall cost will decide type of DC 81
  82. 82. Company Factors Size of the company/exporter Financial strength of the company Marketing policy of the company 82
  83. 83. Channels of Distribution for Consumer Goods 83
  84. 84. Channels of Distribution for Industrials Goods 84
  85. 85. Major Groupings of Countries Classification of world market is to effectively meet their specific requirements in trade, economics, industries etc. Following is the division on trading block basis: European Economic Community (EEC) European Free Trade Area (EFTA) Andean Common Market (ANCOM) Caribbean Community and Common Market (CARICOM) COMECON (Former USSR and present CIS coutnries) Central American Common Market (CACM) Association of South East Asian Nations (ASEAN) 85
  86. 86. Major Groupings of Countries World Market could also be further classified in the following ways: Classification based on difference in industrial development of the countries. Countries based on industrial development On the basis of GNP On the basis of Population 86
  87. 87. Major Groupings of Countries World markets are also grouped based on favourable locations as described below: Continental location.. Switzerland, Nigeria Littoral location.. Spain, France Isothermian location.. Egypt and Panama Peninsular location.. India, Italy Insular location.. Srilanka, Britain 87
  88. 88. Major Groupings of Countries Lastly the world market is also classified as follows: American Region Eg. North America and Canada Europe Region Western Europe- ECM,EFTA countries Asian & Oceanic Region China, Afghanistan, Australia, New Zealand, Thailand, Vietnam, India, Pakistan, Philipens African Region 88
  89. 89. 89
  90. 90. Business executives who hope to profit from their travel should learn about the history, culture, and customs of the countries they wish to visit. Flexibility and cultural adaptation should be the guiding principles for traveling abroad on business. Business manners and methods, religious customs, dietary practices, humor, and acceptable dress vary widely from country to country. It is recommended that business travelers prepare for country visits by reading travel guides. 90
  91. 91. What is Culture? Set of values, beliefs, rules and institutions held by a specific group of people Ethnocentricity Cultural literacy Belief that one’s own Detailed knowledge of a ethnic group or culture culture that enables a person to function X is superior to that of √ others effectively within it 91
  92. 92. Nations and Culture National culture Nation states build museums and monuments to preserve the legacies of important events and people Subculture Group of people that share a unique way of life within a larger culture (language, race, lifestyle, attitudes, etc.) 92
  93. 93. Components of Culture Aesthetics Physical Values & environments attitudes Manners & Education Culture customs Personal communication Social structure Religion 93
  94. 94. Aesthetics Music Painting Dance Drama Architecture 94
  95. 95. Values and Attitudes Values Attitudes The Ideas, beliefs and Positive or negative evaluations, feelings and customs to which people tendencies people hold are emotionally attached toward objects or concepts • Freedom • Time • Responsibility • Work • Honesty • Cultural change 95
  96. 96. Manners and Customs Manners Customs Appropriate behavior, Traditional ways or speech and dressing behavior in specific in general circumstances 96
  97. 97. Social Structure Social structure Culture’s groups, institutions, social positions and resource distribution Social stratification Process of ranking people into social layers Social mobility Ease of moving up or down a culture's "social ladder" 97
  98. 98. World Religions Christianity Islam Hinduism Origin of Buddhism Human Values Confucianism Judaism Shinto 98
  99. 99. Mixed Signals "Okay" "It's a secret" "Crazy" "Vulgar gesture" "Very nosey" "Very clever" 99
  100. 100. Education Cultures pass on traditions, customs, and values through schooling, parenting, group memberships, etc. Education level Well-educated attract high-paying jobs, while poorly educated attract low-paying manufacturing jobs Brain drain Departure of highly educated people from one profession, geographic region or nation to another 100
  101. 101. Problem of Illiteracy 101
  102. 102. Physical and Material Culture These influence a culture’s development and pace of change Topography Physical features characterizing the surface of a geographic region Climate Weather conditions of a geographic region Material Culture Technology used to manufacture goods and provide services 102
  103. 103. Punctual Attitudes toward punctuality vary greatly from one culture to another and, if misunderstood, can cause confusion and misunderstanding. Romanians, Japanese, and Germans are very punctual, whereas people in many of the Latin countries have a more relaxed attitude toward time. The Japanese consider it rude to be late for a business meeting, but acceptable, even fashionable, to be late for a social occasion. In Guatemala, on the other hand, one might arrive any time from ten minutes early to 45 minutes late for a luncheon appointment. 103
  104. 104. Greeting When cultural lines are being crossed, something as simple as a greeting can be misunderstood. Traditional greetings may be a handshake, a hug, a nose rub, a kiss, placing the hands in praying position, or various other gestures. People around the world use body movements and gestures to convey specific messages. A misunderstanding over gestures is a common occurrence in intercultural communication, and misinterpretation along these lines can lead to business complications and social embarrassment. 104
  105. 105. Greeting Men are safe in extending a hand to another man. However, the rules may change when a man greets a woman; or a woman greets a man, or even another woman. Germany and the United States have firm handshakes, with the German being very brief and the US being about three to four seconds France, Guatemala, and Japan have more limp handshakes Singapore has a longer handshake (10+ seconds) 105
  106. 106. Greeting Women should be the first to offer a hand for a handshake in New Zealand, Singapore, South Korea, or Taiwan Women may greet other women by patting the right forearm or shoulder in Chile, Costa Rica, El Salvador, Honduras, Mexico, Nicaragua, or Panama Women should wait for a man to offer his hand first in a Hindu or Muslim country, if a western handshake is going to be used 106
  107. 107. Greeting In South Korea, more respect is shown by cupping your left hand under your right forearm, as if supporting your right forearm during the hand shake A traditional bow may be used in China, Hong Kong, or Japan Traditional greeting in India is namaste -place the hands in a praying position, palms together with the fingers just beneath the chin, bow and say namaste Traditional greeting in Thailand places the hands, palms together, in front of the chin, bow the head to touch the top of the fingers, and say Sawasdee - the word that means “Good Luck” 107
  108. 108. Title Proper use of names and titles is often a source of confusion in international business relations. In many countries (including the United Kingdom, France, and Denmark) it is appropriate to use titles until use of first names is suggested. Thais, address one other by first names and reserve last names for very formal occasions and written communications. In Belgium it is important to address French-speaking business contacts as "Monsieur" or "Madame," while Flemish-speaking contacts should be addressed as "Mr." or "Mrs." To confuse the two is a great insult. 108
  109. 109. Gift It is also important to understand the customs concerning gift giving. In some cultures, gifts are expected and failure to present them is considered an insult, whereas in other countries offering a gift is considered offensive. Business executives also need to know when to present gifts - on the initial visit or afterwards; where to present gifts - in public or private; what type of gift to present; what color it should be; and how many to present. It’s very important in Asia and the Middle East to only use your right hand, or both hands, to offer or accept a gift. In Japan and Hong Kong, use both hands. 109
  110. 110. Gift Gift giving is an important part of doing business in Japan, where gifts are usually exchanged at the first meeting. In sharp contrast, gifts are rarely exchanged in Germany and are usually not appropriate. Gift giving is not a normal custom in Belgium or the United Kingdom either, although in both countries, flowers are a suitable gift when invited to someone's home. In Singapore a recipient may “graciously refuse three times” before accepting your gift. But in Chile, gifts are accepted and opened immediately. And in Indonesia, small gifts are given on a frequent basis. 110
  111. 111. Gift Countries in which a gift is expected: Europe Czech Republic, Poland, Russia, Ukraine Latin American Bolivia, Columbia, Costa Rica Pacific Rim China, Hong Kong, Indonesia, Japan, Korea, Taiwan, Malaysia, Philippines, and Thailand 111
  112. 112. Gift Countries in which a gift is not expected on the first visit, but would be expected on a subsequent visit: Europe Portugal, Spain Latin American Brazil, Chile, Guatemala, Nicaragua, Panama, Peru, Venezuela Pacific Rim Malaysia, Singapore Scandinavia Finland, Norway 112
  113. 113. Gift Countries in which a gift is not expected, or gifts are less frequent exchanged: Africa Australia Europe - England, France, Hungary, Italy Latin America – Uruguay Scandinavia – Denmark Middle East – Pakistan, Saudi Arabia United States 113
  114. 114. Business Cards Customs concerning the exchange of business cards also vary. Although this point seems of minor importance, observing a country's customs for card giving is a key part of business protocol. In Japan, for example, the Western practice of accepting a business card and pocketing it immediately is considered rude. The proper approach is to carefully look at the card after accepting it, observe the title and organization, acknowledge with a nod that the information has been digested, and perhaps make a relevant comment or ask a polite question. 114
  115. 115. Negotiation Negotiating is a complex process even between parties from the same nation. It is even more complicated in international transactions because of the potential misunderstandings that stem from cultural differences. It is essential to understand the importance of rank in the other country, to know who the decision makers are, to be familiar with the business style of the foreign company, and to understand the nature of agreements in the country, the significance of gestures, and negotiating etiquette. 115
  116. 116. Australia Appearance Men wear a conservative dark business suit and tie. Women may wear a dress, or skirt and blouse, for business. Informal clothing is appropriate when not attending business functions. Casual pants are fine for both men and women. Men should not become physically demonstrative with another man, or wink at a woman. 116
  117. 117. Australia Behavior Being punctual is critical. Maintain good eye contact during meetings and conversations. A single, male passenger using a taxi should sit in the front seat. Gift giving is not a common practice in business. You may bring a small gift of chocolate, wine or flowers if invited to someone's home. Should you approach a line/queue, go to the end/back and wait your turn. Do not litter. 117
  118. 118. Australia Communications Shake hands when meeting and when leaving. Although uncommon, some women may greet each other with a kiss on the cheek. Exchanging business cards is common among professional workers. Australians are friendly and open, but directness and brevity are valued. Opinions are respected, Be an active listener, and ask if you do not understand something in the conversation. Do not hype yourself, your company or your information. Sightseeing and sports are good conversational topics 118
  119. 119. USA Appearance Business suit and tie are appropriate in all major cities. Wear dark colored business suits in classic colors of gray and navy. For an important formal meeting, choose a white dress shirt, for less formal a light blue shirt will still give you a conservative appearance. Women should wear a suit or dress with jacket in major cities. Wearing classic clothing and classic colors of navy, gray, ivory, and white will ensure you give a confident and conservative appearance. 119
  120. 120. USA Behavior Business conversation may take place during meals. However, many times you will find more social conversation taking place during the actual meal. Business meetings may be arranged as breakfast meetings, luncheon meetings, or dinner meetings depending on time schedules and necessity. Generally a dinner, even though for business purposes, is treated as a social meal and a time to build rapport. 120
  121. 121. USA Behavior Gift giving is discouraged or limited by many US companies. A gracious written note is always appropriate and acceptable. If you do give a gift, it should not appear to be a bribe. An invitation for a meal or a modest gift is usually acceptable. Do not use or chew on a toothpick in public. Many public places and private homes do not allow smoking. In some areas laws have been passed to prevent smoking in public places. 121
  122. 122. USA Communications Offer a firm handshake, lasting 3-5 seconds, upon greeting and leaving. Maintain good eye contact during your handshake. If you are meeting several people at once, maintain eye contact with the person you are shaking hands with, until you are moving on the next person. Good eye contact during business and social conversations shows interest, sincerity and confidence. 122
  123. 123. USA Communications Introductions include one's title if appropriate, or Mr., Ms, Mrs. and the full name. Business cards are generally exchanged during introductions. However, they may be exchanged when one party is leaving. A smile is a sign of friendliness, and in rural areas you may be greeted with a "hello" rather than a handshake. Ask permission to smoke before lighting a cigarette or cigar. Due to health concerns, you may or may not be given permission. 123
  124. 124. India Appearance Men are generally expected to wear a suit and tie for business, although the jacket may be removed in the summer. Women should wear conservative dresses or pantsuits. When dressing casual, short-sleeved shirts and long pants are preferred for men; shorts are acceptable only when exercising. Women must keep their upper arms, chest, back, and legs covered at all times. Women should wear long pants when exercising. 124
  125. 125. India Behavior The head is considered the seat of the soul. Never touch someone else’s head, not even to pat the hair of a child. Beckoning someone with the palm up and wagging one finger can be construed as in insult. Standing with your hands on your hips will be interpreted as an angry, aggressive posture. Whistling is impolite and winking may be interpreted as either an insult or a sexual proposition. 125 Never point your feet at a person. Feet are
  126. 126. India Behavior Never point your feet at a person. Feet are considered unclean. If your shoes or feet touch another person, apologize. Gifts are not opened in the presence of the giver. If you receive a wrapped gift, set it aside until the giver leaves. Business lunches are preferred to dinners. Hindus do not eat beef and Muslims do not eat pork. 126
  127. 127. India Communications There are more than fourteen major and three hundred minor languages spoken in India. The official languages are English and Hindi. English is widely used in business, politics and education. The word "no" has harsh implications in India. Evasive refusals are more common, and are considered more polite. Never directly refuse an invitation, a vague "I’ll try" is an acceptable refusal. Do not thank your hosts at the end of a meal. "Thank you" is considered a form of payment and therefore insulting. 127
  128. 128. China Appearance Conservative suits for men with subtle colors are the norm. Women should avoid high heels and short sleeved blouses. The Chinese frown on women who display too much. Casual dress should be conservative as well. Men and women can wear jeans. However, jeans are not acceptable for business meetings. Revealing clothing for women is considered offensive to Chinese businessmen. 128
  129. 129. China Behavior Do not use large hand movements. The Chinese do not speak with their hands. Your movements may be distracting to your host. Personal contact must be avoided at all cost. It is highly inappropriate for a man to touch a woman in public. Do not point when speaking. To point do not use your index finger, use an open palm. It is illegal to give gifts to government official however; it has become more commonplace in the business world. 129
  130. 130. China Behavior It is more acceptable to give gifts either in private or to a group as a whole to avoid embarrassment. The most acceptable gift is a banquet. Quality writing pens as considered favored gifts. The following gifts and/or colors are associated with death and should not be given: Clocks Straw sandals A stork or crane Handkerchiefs Anything white, blue or black 130
  131. 131. China Behavior Always arrive on time or early if you are the guest. Do not discuss business at meals. Do not start to eat or drink prior to the host. As a cultural courtesy, you should taste all the dishes you are offered. Sample meals only, there may be several courses. Never place your chopsticks straight up in your bowl. By placing your sticks upright in your bowl your will remind your host of joss sticks which connotes death. 131
  132. 132. China Behavior Do not drop the chopsticks it is considered bad luck. Do not eat all of your meal. If you eat all of your meal, the Chinese will assume you did not receive enough food and are still hungry. Women do not usually drink at meals. Tipping is considered insulting, however the practice is becoming more common. 132
  133. 133. China Communications Bowing or nodding is the common greeting; however, you may be offered a handshake. Wait for the Chinese to offer their hand first. Applause is common when greeting a crowd; the same is expected in return. Introductions are formal. Use formal titles. Being on time is vital in China. Appointments are a must for business. Contacts should be made prior to your trip. Allow the Chinese to leave a meeting first. 133
  134. 134. China Communications Bring several copies of all written documents for your meetings. The decision making process is slow. Many Chinese will want to consult with the stars or wait for a lucky day before they make a decision. Present and receive cards with both hands. Never write on a business card or put it in your wallet or pocket. Carry a small card case. The most important member of your company or group should lead important meetings. Chinese value rank and status. 134
  135. 135. South Africa Appearance South Africans of Urban cultures generally wear western dress. Dress well in public, it will be expected by your South African host. African women wear a sari. 135
  136. 136. South Africa Behavior Gift giving is not the norm in business. Do not present gifts with the left hand. Use either both hands or the right hand when giving and presenting gifts. Gifts will be opened upon receipt. Business meetings can be held over lunch or dinner in a good restaurant. Meals at the home of a white South African will include a barbecue by the pool--called a braaivleis (Afrikaans for roasted meat) or braai. 136
  137. 137. South Africa Communications The handshake is the most common greeting. There are a variety of handshakes between ethnic groups. Use titles and surnames to address people. Appointments should be made starting at 9 a.m. Do not rush deals. South Africans are very casual in their business dealings. Business cards have no formal exchange protocol. South Africans prefer a "win-win" situation. 137
  138. 138. Brazil Appearance Three-piece suits carry an "executive" connotation, whereas two-piece suits are associated with office workers. Conservative attire for women in business is very important. Also make sure your nails are manicured The colors of the Brazilian flag are yellow and green. Avoid wearing this combination in any fashion Touching arms and elbows and backs very common Flicking the fingertips underneath the chin indicates that you do not know the answer to a question 138
  139. 139. Brazil Behavior Make appointments at least two weeks in advance. Be prepared to commit long term resources (both in time and money) toward establishing strong relationships in Brazil. This is the key to business success Never start into business discussions before your host does. Business meetings normally begin with casual 'chatting' first If entertained in the home, it is polite to send flowers to the hostess the next day, with a thank-you note Purple flowers are extensively used at funerals, so be cautious when giving someone purple flowers. Violets are OK to give Tipping is typically 10% in Brazil 139
  140. 140. Brazil Communications Handshaking, often for a long time, is common. Shake hands for hello and goodbye; use good eye contact; When women meet, they exchange kisses by placing their cheeks together and kissing the air First names used often, but titles important Music and long, animated conversation are favorite Brazilian habits. When conversing, interruptions viewed as enthusiasm. Brazilians enjoy joking, informality, and friendships Portuguese is the language of Brazil Good conversation topics: soccer, family, and children Bad conversation topics: Argentina, politics, poverty, religion, and the Rain Forest 140
  141. 141. Costa Rica Appearance Business dress: Men should wear a conservative dark suit. In warmer climates, a jacket is optional. Women can wear a dress or skirt and blouse for formal business meetings, but it is far more common for women to wear pants to work. Costa Ricans are much more formal and serious than other Latin Americans. Local people bathe frequently because of the heat, and guests are expected to bathe at least once daily 141
  142. 142. Costa Rica Appearance Making a fist with the thumb sticking out between the middle an index fingers is obscene. This gesture is known as the "fig" Most North American gestures will be understood is Costa Rica Don’t put your feet up on any furniture except items expressly designed for that purpose Fidgeting with your hands or feet is considered distracting and impolite 142
  143. 143. Costa Rica Behavior Costa Ricans are by far the most punctual people in Central America. Since Costa Ricans allow themselves only a limited time for their midday break, everyone is expected to be on time for a business lunch Most business entertaining takes place in the evening, since lunch is the main meal of the day. Gifts frequently exchanged on all kinds of special occasions If you are invited for dinner to a home, bring flowers, chocolates, scotch, or wine. Have business cards, proposals, and other material printed in both English and Spanish 143
  144. 144. Costa Rica Communications Handshaking the common greeting. Titles are important and should be included on business cards. Address a person directly by using his or her title only. For persons who do not have professional titles it is common to call a gentleman Don (plus his firstname) and a lady Dona. Most Hispanics have two surnames: one from their father, which is listed first, followed by one from their mother. Only the father’s surname is used when addressing someone Politics are freely discussed because of stability Good conversation topics: children, history, art Bad topics: any personal criticism, religion 144
  145. 145. France Appearance The French are very conscientious of their appearance. Dress conservative and invest in well-tailored clothing. Patterned fabrics and dark colors are most acceptable, but avoid bright colors. French businessmen do not loosen their ties or take off their jackets in the office. Women should also dress conservatively Women should also avoid any glitzy or overpowering objects, such as flashy jewelry. 145
  146. 146. France Behavior Punctuality is treated very casually in France. France is a highly stratified society, with strong definition and competition between classes. The French handshake is brief, and is accompanied by a short span of eye contact. Always shake hands when meeting someone, as well as when leaving. French handshakes are not as firm as in the United States. Gift giving is left to the foreigner’s discretion. 146
  147. 147. France Behavior The French have a great respect for privacy. Knock and wait before entering into a room. Always give notice before your arrival. Business can be conducted during any meal, but lunch is best. Avoid drinking hard liquor before meals or smoking cigars between courses. The French believe this permeates the taste buds, compromising the taste of the meal. Good gifts to present include books or music, as they demonstrate interest in intellectual pursuits. 147
  148. 148. France Communications French is the official language in France. If you do not speak French, it is very important that you apologize for your lack of knowledge. Most individuals in business speak English. The French have a great appreciation for the art of conversation. The French frequently interrupt each other, as the argument is a form of entertainment. 148
  149. 149. Germany Appearance Business dress in Germany is very conservative. Businessmen wear dark suits; solid, conservative ties, and white shirts. Women also dress conservatively, in dark suits and white blouses. Chewing gum while talking to someone is considered rude. Don't be surprised if occasionally you see a fashion statement with white socks being worn with a dark suit. 149
  150. 150. Germany Behavior Germans are strongly individualistic. The German thought process is extremely thorough, with each aspect of a project being examined in great detail. This process is often times very time-intensive. However, once the planning is over, a project will move very quickly and deadlines are expected to be honored. Germans do not like surprises. Sudden changes in business transactions, even if they may improve the outcome, are unwelcome. 150
  151. 151. Germany Behavior German citizens do not need or expect to be complimented. In Germany, it is assumed that everything is satisfactory unless the person hears otherwise. Punctuality is necessity in Germany. Arrive on time for every appointment, whether for business or social. Being late, even if it is only by a few minutes, is very insulting to a German executive. When being introduced to a woman, wait to see if she extends her hand. 151
  152. 152. Germany Behavior In business situations, shake hands at both the beginning and the end of a meeting. Additionally, a handshake may be accompanied with a slight bow. Reciprocating the nod is a good way to make a good impression, as failure to respond with this nod/bow (especially a superior) may get you off to a bad start. Be sure to look directly into the person's eyes while shaking hands. Business is viewed as being very serious, and Germans do not appreciate humor in a business context. 152
  153. 153. Germany Behavior In business meetings, age takes precedence over youth. If you are in a group setting, the eldest person enters first. Germans keep a larger personal space around them, approximately 6 inches more space than North Americans do. People that have worked together for years still shake hands each morning as if it were the first time they met. 153
  154. 154. Germany Behavior German men frequently great each other with 'last name', even when they know each other very well. Germans are able to consume large quantities of beer in one evening, but public drunkenness is not acceptable. Typically, you do not wait to be seated in German restaurants, and it is not uncommon to share a table with strangers. However, most Germans will think it odd if you try to initiate a conversation with them beyond just establishing that the chairs are available. 154
  155. 155. Germany Communications German is the official language. Germans love to talk on the telephone. While important business decisions are not made over the phone, expect many follow up calls or faxes. Germans guard their private life, so do not phone a German executive at home without permission. Titles are very important to Germans. Do your best to address people by their full, correct title, no matter how extraordinarily long that title may seem to foreigners. This is also true when addressing a letter. 155
  156. 156. Hong Kong Appearance The color red is considered a lucky color in Hong Kong. When dressing for a business meeting select a red tie to impress your host. The color white is synonymous with death. 156
  157. 157. Hong Kong Behavior The toast is an integral part of the culture in Hong Kong. All countries have a standard toast however each country has a different pronunciation for the word toast. Everyone is expected to drink a toast. The guest of honor makes the first toast. Follow the lead of your host when dining. Do not blow your nose at the table or in public. 157
  158. 158. Hong Kong Behavior Do not rub your chopstick together before dining. It implies that you have been given poor quality chopsticks that may have splinters. It is impolite to refuse to drink. Even if you do not drink, accept it and toast with your host. Drinking helps to relax the host and is an important part of the relationship building phase in Chinese business culture. Gift giving is a very important part of Chinese culture. At close of trip, have a dinner for your host as show of respect. 158
  159. 159. Hong Kong Communications The handshake is fairly common in Hong Kong, however a slight bow will show a sign of respect. A round of applause may greet you during your visit. The Chinese like to applaud. You are expected to return the applause out of respect. Because Hong Kong is so densely populated the Chinese tend to converse very closely together. Silence is held in high regard in Hong Kong. Allow your host to contemplate without interruption. 159 Names are usually written in the following order the
  160. 160. Hong Kong Communications Names are usually written in the following order the last name first, middle name second and the first name last. Use titles with names whenever possible. Appointments are recommended. Punctuality is expected. Use only black and white materials for presentations, as colors are very significant. Patience is important. The Chinese do not make business decisions quickly. 160
  161. 161. New Zealand Appearance When conducting business in New Zealand, you want to dress conservatively and tending toward a more formal look. Men should wear darker colored suits with a conservative tie. To maintain formality, a white shirt would be worn. Women should wear a suit, a dress, or skirt and blouse with a jacket. The wardrobe should incorporate classic styles and colors (navy and gray). 161
  162. 162. New Zealand Appearance Umbrellas and raincoats are necessary most of the year because of the climate and rainfall. The climate is temperate, not tropical. When not involved in business meetings and activities, your wardrobe may be casual. Do not use the "V for victory" sign while in this country. 162
  163. 163. New Zealand Behavior Always be on time or early for all appointments. Punctuality is part of the culture. "Fashionably late" is not an option in this country as most social events start on time. Maintain a reserved, formal demeanor, especially when first meeting someone. Take your lead to become more relaxed by following the behavior of your New Zealand hosts. Talking is minimal while you are eating a meal. Dinners are reserved for social interactions only, therefore not business is discussed at these occasions. Lunch is used for business conversations. 163
  164. 164. New Zealand Behavior Boisterous behavior is always inappropriate, even when you are drinking. Pace yourself to maintain the proper reserved and polite behavior. A tip may be refused, as tipping is rare. Entertaining is frequently done in a person's home. A small thank you gift of flowers, chocolate, or whiskey may be taken to the host Cover your mouth if you must yawn, and do not chew gum or toothpicks in public. Ask permission before you attempt to photograph someone. 164
  165. 165. New Zealand Communications The official language is English. When meeting someone, and when leaving, use a firm handshake with good eye contact. Men generally wait for a woman to be the first to extend her hand for a handshake. Women do shake other women's hands. When your are meeting someone, say "How do you do?" A more relaxed greeting, such as "Hello", is reserved for the meetings after you've had the opportunity to get to know the person. 165
  166. 166. New Zealand Communications The people are reserved, but always very warm and polite when you meet them. Address a person using his/her title, or Mr., Mrs., Miss plus the full name. Honesty is the best policy. Don't hype your product or service, and don't be a braggart. Do not allow your voice to get loud. Maintain a reserved manner. Politics, sports, and weather are good conversational topics, and may be hotly debated. 166
  167. 167. Russia Appearance Businessmen in Russia usually wear suits that are dark and well tailored along with good dress shoes. Do not stand with your hands in your pockets. This is considered rude. Women dress rather conservatively, avoiding overly flashy or gaudy outfits. Women should always cover their heads when entering into any Russian Orthodox Churches. Skirts should be worn rather than pants. When attending dinner in a citizen’s home, casual dress are appropriate. 167
  168. 168. Russia Behavior As a foreigner, you are expected to be on time to all business appointments. However, your Russian counterpart may be late, as this may be a test of your patience. Do not expect an apology from a late Russian, and do not demonstrate any kind of attitude if your business appointments begin one or two hours late. This may also be a test of your patience. Social events are more relaxed. It is acceptable for foreigners to be 15 to 30 minutes late. Patience is an extremely important virtue among Russians; punctuality is not. 168
  169. 169. Russia Behavior Russians are known as great "sitters" during negotiations, this demonstrates their tremendous patience. As a foreigner, you should realize that "Final Offers" are often not actually the end of the negotiations, and that often times the outcome will be more beneficial and attractive if you can hold out. There is a Russian term meaning "connections" or "influences. It is extremely difficult to do business in Russia without help from a local. 169
  170. 170. Russia Behavior To help with this, gifts, money or other items are often a good idea when doing business in Russia. If attending dinner at a family residence, it is appropriate to bring a gift, such as a bottle of wine, dessert, or a bouquet of flowers. When shaking hands with someone, be sure to take off your gloves, as it is considered rude not to. When attending any formal engagements such as the theatre, it is appropriate to check your coat and other belongings at the front door of the establishment. 170
  171. 171. Russia Behavior Do not show the soles of your shoes, as this is considered impolite. They are considered dirty, and should never come in contact with any type of seat (like on a subway or bus). Be sure to have plenty of business cards with double sides of information. One side should be printed in English, the other side in Russian. Be alert and open to taking a drink or having a toast, as refusing to do so is a serious breach of etiquette. 171
  172. 172. Russia Communications Russian is the official language. Speaking or laughing loudly in public is considered rude, as Russians are generally reserved and somber. Many Russians speak English, as it is often taught beginning in the third grade. Russians are highly literate, and have almost a 100% literacy rate. Good topics of conversation include peace, the current changes taking place in Russia, and their current economic situation. 172
  173. 173. Saudi Arabia Appearance Never show bare shoulders, stomach, calves and thighs. Visitors are expected to abide by local standards of modesty however, do not adopt native clothing. Traditional clothes on foreigners may be offensive. Despite the heat, most of the body must always remain covered. 173
  174. 174. Saudi Arabia Appearance A jacket and tie are usually required for men at business meetings. Men should wear long pants and a shirt, preferably long-sleeved, buttoned up to the collar. Men should also avoid wearing visible jewelry, particularly around the neck. Women should always wear modest clothing in public. High necklines sleeves at least to the elbows are expected. It is a good idea to keep a scarf handy, especially if entering a Mosque. 174
  175. 175. Saudi Arabia Behavior It is common to remove your shoes before entering a building. Follow the lead of your host. Alcohol and pork are illegal. In the Muslim world, Friday is the day of rest. There are several styles of greetings used; it is best to wait for your counterpart to initiate the greeting. Men shake hands with other men. Some men will shake hands with a woman; it is advisable for a businesswoman to wait for a man to offer his hand. 175
  176. 176. Saudi Arabia Behavior The left hand is considered unclean and reserved for hygiene avoid gestures with the right hand. Men walking hand in hand is a sign a friendship. Try not to cross your legs when sitting. Never show the bottom of your feet. The "thumbs up" gesture is offensive. Gifts are not necessary, but appreciated Women in Saudi Arabia are not permitted to drive vehicles. 176
  177. 177. Saudi Arabia Communications Do not discuss the subject of women, not even to inquire about the health of a wife or daughter. The topic of Israel should also be avoided. Sports is an appropriate topic. Names are often confusing. It’s best to get the names (in English) of those you will meet, speak to, or correspond with before hand. Find out both their full names and how they are to be addressed in person. 177
  178. 178. Saudi Arabia Communications Communications occur at a slow pace. Do not feel obligated to speak during periods of silence. "Yes" usually means "possibly". Your Saudi host may interrupt your meeting or conversation, leave the room and be gone for 15 to 20 minutes for the purpose of his daily prayers. At a meeting, the person who asks the most questions is likely to be the least important. The decision maker is likely a silent observer. 178
  179. 179. UK Appearance Business attire rules are somewhat relaxed in England, but conservative dress is still very important for both men and women. Men's shirts should not have pockets; if they do, the pockets should always be kept empty. Additionally, men should wear solid or patterned ties, while avoiding striped ties. Men wear laced shoes, not loafers. Businesswomen are not as limited to colors and styles as men are, though it is still important to maintain a conservative image. 179
  180. 180. UK Behavior Always be punctual in England. Arriving a few minutes early for safety is acceptable. Decision-making is slower in England than in the United States; therefore it is unwise to rush the English into making a decision. A simple handshake is the standard greeting (for both men and women) for business occasions and for visiting a home. Privacy is very important to the English. Therefore asking personal questions or intensely staring at another person should be avoided. 180
  181. 181. UK Behavior Eye contact is seldom kept during British conversations. To signal that something is to be kept confidential or secret, tap your nose. Personal space is important in England, and one should maintain a wide physical space when conversing. Furthermore, it is considered inappropriate to touch others in public. Gifts are generally not part of doing business in England. 181
  182. 182. UK Behavior A business lunch will often be conducted in a pub and will consist of a light meal and perhaps a pint of ale. When socializing after work hours, do not bring up the subject of work. When dining out, it is not considered polite to toast those who are older than yourself. 182
  183. 183. UK Communications "America and Britain are two nations divided by a common language" George Bernard was once quoted as saying. In England, English is the official language, but it should be noted that Queen’s English and American English are very different. Often times ordinary vocabulary can differ between the two countries. Loud talking and disruptive behavior should be avoided 183
  184. 184. UK Communications One gesture to avoid is the V for Victory sign, done with the palm facing yourself. This is a very offensive gesture. If a man has been knighted, he is addressed as "Sir and his first name" example: Sir John. If writing a letter, the envelope is addressed "Sir First name and Last name" example: Sir John Roberts. 184
  185. 185. 185
  186. 186. Imports, exports and its related activities together are referred to as foreign trade. Hence the rules and regulations concerning export and import in India fall under an Act called Foreign Trade (Development & Regulation) Act 1992. 186
  187. 187. In recent years the Indian Government's stance on imports into the country has eased considerably. Prior to liberalisation during the days of the "license raj" importing was a tedious and expensive proposition governed by repetitive procedures, a host of licenses and exorbitant customs duties. With the thrust on globalisation and exports, cognisance of the need for imports has simultaneously increased. 187
  188. 188. This recognition that import of certain products is essential to fuel the growth of exports has resulted in a number of export oriented schemes under which imports against an export obligation have been permitted. The government has freed imports considerably, smoothened import procedures and brought down customs duties on various categories of imports. Against export obligations imports are often duty free. Finally the foreign exchange essential for imports is now more easily available. 188
  189. 189. Import Licensing As stated in the EXIM policy all goods are freely importable except those falling in the negative list of imports. Before we go on to look at import licensing let us first take a look at the negative list of imports as contained in the EXIM policy. 189
  190. 190. Import Licensing The negative list of imports consists of three parts. Prohibited goods in the negative list of imports that cannot be imported (Prohibited Goods) Goods the import of which are restricted by licensing and can be imported only in accordance with a license issued in this behalf. (Restricted Goods) Goods, the import of which is canalised may be imported by the canalising agency specified in the negative list. The Director General of Foreign Trade may however grant a license to any other person to import any canalised goods. (Canalised Goods). 190
  191. 191. Import Licensing As mentioned earlier for import of goods falling in the negative list (restricted goods) a license has to be procured from the licensing authorities. An application form (refer index of forms) needs to be submitted to the concerned regional licensing authority. The completed application form has to be submitted along with two copies of the bank receipt/bank draft) as proof of remittance of the prescribed fee (refer table below for fee structure). 191
  192. 192. Import Licensing The import licensing authority can issue the license, subject to one or more of the following conditions that the goods covered by the license shall not be disposed of export in accordance with the provisions of the Policy or in the manner specified by the licensing authority in the license. that the applicant shall execute a bond for complying with the terms of the license 192
  193. 193. Import Licensing Categories of Users Actual user means an user ( person / business / industry ) that will employ the goods for his/its own use - and may be either industrial or non-industrial. Actual user (Industrial) means a person who utilises the imported goods for manufacturing in his own industrial unit or manufacturing for his own use in another unit including a jobbing unit. Actual user (Non-Industrial) means a person who utilises the imported goods for his own use in commercial establishment, any laboratory, Scientific or (R&D) institution university or other educational institution or hospital; any service industry 193
  194. 194. Imports - The Process Import registration As per the Foreign Trade Act 1992, "No person shall make any import or export except under an Importer-Exporter Code (IEC) number granted by the Director General or the officer authorised by the Director General in this behalf in accordance with the procedure specified in this behalf by the Director General." 194