Offering a toast to friends and key business partners is a way to recognize and to reinforce important relationships. But using one wrong word can be disastrous despite all your good intentions. Coca-Cola’s CEO, Muhtar Kent, realized this too late.
Mr. Kent proposed a toast to China’s president, Hu Jintao, at a dinner in Washington. A courteous gesture to begin with, except the word he used to say “Cheers” was the wrong one. Instead of “Ganbei” Mr. Kent said “Kanpai”, toasting the honored Chinese guest in the Japanese language.
The result was laughter in the crowd and embarrassment for the unfortunate chief executive and for his high-profile trademark. After all, despite good business relations between the two countries, resentment lingers among many Chinese people for what happened during the Japanese occupation.
And how did this happen? Did Coca-Cola not have the budget for cultural training? Was there too little perceived benefit in the China market for a thorough cultural preparation? Was the risk of damage from a cultural gaffe seen as being acceptable? Of course not. Most likely, Coke’s CEO may have decided to “wing it” and say what was well-intentioned but sadly misinformed by relying on his own knowledge of the culture.
It is said that “A little knowledge is a dangerous thing” and at Dragonbridge, we have seen this too often. Time and money is allocated to the “hard” elements (costs, quality, scheduling…) but less to the “soft” elements. But “soft” elements such as cultural awareness, protocol, local business etiquette, customs and practices are neglected at great cost to the long-term goals of any company working in China or with Chinese partners.
Business relationships in China begin with personal relationships so knowing how to build the relationship with sensitivity, credibility and respect is essential.
Are more Chinese drinking Coke after hearing about this incident? Unlikely. Something to think about for those that want to deal effectively with this enormous market.
For the original article from Bloomberg: