February 2007
By Elke Schulz

Elke Schulz has a degree in American Studies and has years of experience working with US companies on both sides of the Atlantic.

Time is money – understanding US business culture

The US, the world’s third largest country both in size and population, is a multicultural mosaic of 300 million people of mixed race and heritage. Yet, despite this ethnic and cultural diversity the US still exhibits a distinct business culture. If you are planning business ventures in the US, a basic understanding of this business culture is essential to your success. Here are some insights that help you avoid common mistakes and misinterpretations.

Basic concepts

An important aspect of US culture is the American Dream: the widespread belief that every individual can succeed and prosper financially by working hard. This idea contributes to a strong work ethic and to a system that is merit based. The repercussions of this belief in US work life are long work hours and frequent overtime, as well as a clear distinction between management and subordinates.

In addition to a strong work ethic American business culture is also characterized by a heavy emphasis on individual initiative and achievement. Personal competence, professionalism and accountability for individual performance are highly valued. This leads to a work culture where superiors are only consulted when (absolutely) needed and where most business is carried out autonomously. However, more often than not this emphasis on individual achievement also contributes to a more competitive work ethic.

Another striking character trait of US business culture is its well-known informality. Thus, titles are seldom used in business environments and most US business partners will offer to use first names almost immediately. Although this casual style can be misleading for people from other cultures, it is certainly not intended as disrespect, but is rather an expression of the prevalent egalitarian notion in American culture.

Communication style

In their business communication Americans use a very direct style. The primary purpose of communication is to exchange information, facts, and opinions. Typical phrases are “let’s get to the point” and “what’s the bottom line”. There is more importance attached to what is said than how it is said. Should a conflict arise, it is dealt with directly and openly. In accordance with their explicit communication style Americans will not hesitate to say “no” or criticize others in public. If silent moments arise in conversations, Americans are rather uncomfortable and often feel compelled to quickly fill the gaps. Obviously this direct form of communication can cause problems with people from cultures in which business is build on personal bonds, where conflict is handled indirectly and where “saving face” is important.

Time is money

Just like many other cultures are preoccupied with relationship-building, Americans are preoccupied with time. For them time is almost a tangible asset, which can be saved, spent, lost, found, invested, and wasted. Their central tenet is that “time is money” and wasting time is just as bad as wasting money. Thus punctuality is an essential part of US business etiquette and lateness is considered disrespectful and rude. Meetings start on the dot and are expected to proceed uninterruptedly. Schedules are important and deadlines are strictly adhered to. In meetings and negotiations great emphasis is put on getting the best results in the quickest possible time. Although this may appear hasty to others, it is in line with the time-conscious behavior of Americans. If you really want to annoy your American business partner, either be late for a meeting without calling in, or sit down and talk as if you have nothing else to do for the rest of the day.

Meetings

Meetings start on time and often begin with a firm handshake. The handshake should be accompanied by direct eye contact, which signals interest, sincerity and confidence to your American business partner. During the initial introduction you should address your American business colleagues with their respective titles and their last names. They will let you know immediately how they wish to be addressed. If you prefer to be addressed by your last name and/or title, do let your US business partners know immediately. They will not be offended, but respect your direct and honest approach.

Be prepared to participate in small talk at the beginning of the meeting. It serves as a means to ease tension and to create a comfortable atmosphere before “big business” starts. In addition, it can also be an important tool for networking or testing the ambience. Suitable topics include everything from job/work-related matters to sports (a clear favorite in the US), weather, travel, food etc. Controversial subjects such as religion or politics should be avoided just as personal matters.

Business cards are infrequently distributed and are usually not exchanged unless you wish to contact the person at a later date. The exchange of business cards is done casually and does not require a set of rules. And no, it is certainly not intended as offense when the US business associate, who just received a business card from the Japanese delegate, stuffs this card into the back pocket of his pants without reading it.

The dress code may vary according to location and type of business, but wearing classic clothing (suit and tie, dress suit) in grey or navy will ensure that you give a confident and conservative appearance.

Americans respect their privacy and personal space and generally sit or stand further apart than people from Southern Europe, Saudi Arabia or Latin America. It is therefore advisable to keep a comfortable distance of approximately 18 inch (or an arm’s length).

Negotiations & contracts

In negotiations Americans are deal-focused. They want to “get down to business” right away. Getting to know each other and building relationships can be done while the business discussions are under way. Americans regard negotiations as problem-solving situations based on mutual benefit and personal strengths, with a clear emphasis on financial position and business power. In discussions and negotiations American business partners value information that is straightforward and to the point. They expect the other delegates to think for themselves and to express their own ideas and opinions.

The main objective of negotiations is usually the signed contract.

Contracts are legally binding documents and are commonplace in the US. During negotiations all the legal aspects and fine points of the written agreement will be scrutinized. Should a disagreement arise later on, the US side will rely strictly on the terms of the contract. When doing business in the US you should be aware of the fact that for most procedures there are a set of rules and guidelines, state and federal laws, that your US counterpart must follow and that you as business partner also need to adhere to.

Business language

American business language is full of idiomatic expressions, many taken from sports (e.g. touch base, ballpark figure, game plan, home run) or military (e.g. rally the troops). Most Americans may not even be aware that they are using idioms, but it can be quite a challenge for people who are not so familiar with American culture. Thus, if your US counterpart requests a “ballpark figure” and you are not sure what he is referring to, or he states that “sales went through the roof” and you are wondering “which roof?”, it is a good idea to get help from an interpreter.

Apart from these idiomatic expressions the American language offers a few other pitfalls as well for foreign business associates. For example, the ubiquitous “how are you” is by no means a question that requires an explicit answer regarding your physical and emotional well-being, but is a polite greeting form that can simply be answered with “Fine. Thanks.”  In the same way the remark of your business partner “let’s have lunch together” should not be taken literally as a specific invitation to have lunch, but rather as a polite “let’s keep in touch” message.

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#6 Michelle Diehl wrote at Fri, Apr 20 answer homepage

I guess it depends on which cultures you're comparing, but between Germany and the USA I would definitely say Americans are more concerned with how you say things. The "what" is important as well, but Germans are often thrown by the more indirect, read-between-the-lines style of communication from their American colleagues. I think the higher up in management one goes, the more direct the communication style.

#5 Steven wrote at Sun, Jun 25 answer

My experience is bad. US companies are deeply hierarchical and do not seem to understand that the achievement of targets, goals and ambitions is as much a group as individual activity. Time is money! ROI! does it add value; well some things are not so root cause but more emergent. Sorry but I deeply dislike Americans and their culture.

#4 Judy wrote at Wed, Sep 14 answer

American business can be tough but fair. Always get a good lawyer and try for a diverse team - people from different ethnic groups, different genders, and different regional backgrounds. It pays off!

 

Glenn sounds like his own business didn't turn out very well. Put on your big boy pants and try again, Glenn.