For a Win in Asia, Be Culturally Sensitive

For a Win in Asia, Be Culturally Sensitive

Ames Gross

With the U.S. economy flat and the European markets hit by a debt crisis, emerging markets arebecoming growth targets for medicaldevice companies. Asia, of course, presents a significant percentage of that growth. The potential market in Asia is huge. With more than 4 billion people, the region is home to two-thirds of the world’s population. To be successful in Asia, however, a different approach to business often isrequired. Companies need to be mindful of cross-cultural issues when considering expanding into Asia.

Taking the time and resources to account for local Asian business practices and culture can help ensure sustainable success. For example, establishing good relationships with local physicians and government officials might help to set the foundation for setting up research-and-development centers and clinical trials. These relationships also can be very helpful down the road during medical device registration and product launch.

Asia: A Diverse Region

Although collectively called “Asia,” countries in the region differ vastly in their cultures and in their ethnic diversity. For example, the vast majority (about 92 percent) of the Chinese population is Han, with the remaining 8 percent composed of 55 ethnic minority groups. Meanwhile, in Malaysia, about 25 percent of the population is ethnic Chinese, 7 percent is Indian, and the remainder is native Malay. In contrast, Japan and Korea are very homogenous countries, with very small minority populations.

Customs also may vary among countries. Cultural practices in India bear little resemblance to those of Indonesia or China. Moreover, the religious makeup of each country can differ. Many religions, such as Hinduism, Buddhism, Confucianism, and Taoism are practiced throughout theregion. For example, about half of the population in South Korea either is Christian or Buddhist. In contrast, the two major religions in China are Taoism and Buddhism. Indonesia predominantly is Muslim at 86 percent of the population, and the remaining proportion is a mix of Buddhist, Christian and Hindu.

An additional factor is the vast diversity that frequently exists within a country. For example, China and India cover such large geographical areas that one overall strategy for the entire country does not alwaysmake sense. In both China and India,language or dialect, culture, and income levels vary in nearly every region of the country. As such, regional as well as citydifferences for these larger countries in Asia also are very important components ofcultural consideration and understanding.

Cultural Perceptions

One of the most important keys to doing business successfully in Asia is relationships. For most Asian countries, senior Western executives meeting once or twice a year with their Asia team does not constitute a close relationship. Instead, Western executives who see their Asian counterparts six to eight times a year (for work and social activity) are more successful. Yearly holiday cards with personal hand-written messages, frequent phone calls, and polite e-mails all help to form closer ties with Asian offices, affiliates or partners. Other courtesies include being aware of major holidays and sending appropriate greetings, such as for the Mid-Autumn Festival in China and the Lunar New Year.

For Western executives working in Asia, taking the effort to understand that each country in Asia is different also is very important. For example, it may not be appropriate for a Western Caucasian to be a country manager in Japan unless he or she is truly global and has spent many years in Japan/Asia. On the other hand, it equally is difficult to expect success for a Japanese company operating in the United States with a non-English speaking Japanese executive.

Awareness of the corresponding perceptions and stereotypes is important as well. Some common positive perceptions of Westerners from an Asian perspective include being creative, egalitarian, energetic and independent. On the other hand, some negative Asian perceptions of Westerners may include legalistic, argumentative, know-it-all, culturally ignorant, insincere and demanding. Of course, these are general stereotypes and not all Asian countries share the same attitudes and mindsets.

Employees and Personnel

Competition for qualified, experienced business and regulatory personnel in the medical device industry has increased with Asia’s rapid growth. Make sure to respect your employees and highlight opportunities for advancement at your company.

Hiring the right people to maximize market opportunities means picking personnel who not only are technically versed in their area but also culturally sensitive. To adjust plans accordingly to each Asian country, employees must be flexible and adaptable, as well as versatile. Western medical device companies also must provide incentives and retention strategies to keep top employees at the company.

It also is important to provide cross-cultural education at Western headquarters, such as seminars on the relevant Asian countries for the appropriate personnel. Another method is to arrange VIP trips to Asia (or vice versa with Asians coming to the West). Such trips can foster stronger relationships and bonds. Besides executives traveling to and from Asia, having your Asian staff work at your Western headquarters for a short period of time also is good idea.This way, they can get the appropriate training and feel more connected to the company and Western employees.

Organizational Structures

Another key point is putting the right organizational structure in place. For instance, Japan often is the major location for a medical device company’s Asia business and most major medical device

companies will set up a separate office specifically in Japan. Then, foreign medical device companies also will place a regional hub in Singapore or Hong Kong to cover their non-Japan activities in the Asian markets. Generally, the Japanese office will report directly to the Western headquarters rather than through the Singapore or Hong Kong office. Although this is a simple concept, some foreign medical device companies structure their Asian business with the Japan office reporting to the Singapore or Hong Kong office. This often can be a turn-off for Japanese executives.

Dealing with Regulatory Bodies

It is important to keep in mind that each Asian country will have their own specific requirements and procedures when dealing with regulatory agencies and governments in Asia. Local Asian offices of Western medical device companies should be involved in face-to-face meetings with local regulatory agencies and keep headquarters regularly updated with exactly what is happening. In almost all situations, in countries such as China, Japan and Korea, documents will need to be in the native language.

While the practice of lobbying is common in the West, it is less acceptable in some Asian countries. Western executives may be surprised that simply showing up at an Asian government regulatory office for a key meeting generally will not help your cause and actually may hurt you.When communication is necessary, let your company’s local Asian staff or local Asian distributor’s regulatory staff deal with the local regulatory body directly.

In some countries, disclosing all information and setting up pre-consultations before a product registration is customary. The Japanese Ministry of Health, Labor and Welfare expects medical device company executives to wear formal dark suits with a white shirt and a dark tie for meetings. In other Asian countries (especially in Southeast Asia), meetings with the government regulatory entity may be more casual, and no tie or jacket may be needed. Having personnel who are knowledgeable about such details is crucial.

Ames Gross is the president and founder of Pacific Bridge Medical. He is recognized nationally and internationally as a leader in Asian medical markets. For more information, please visit www.pacificbridgemedical.com.