When Expanding Abroad, Mind the Gaffe

If you're a business owner who thinks smiling will win over Russian clients, you may be in need of one of the growing number of firms offering crash courses in international business etiquette. American firms have been stepping up overseas expansion despite the recession, but misunderstandings—like not realizing the Russians prefer somber business settings—can complicate an already tricky process, cultural coaches say.

The cost of cultural blunders can run into seven figures for firms like AlertDriving, a producer of online driving courses that failed to take differences in local driving habits into consideration when expanding into more than 20 countries. The reluctance of some cultures to give negative feedback means the errors took years to spot and more than $1 million to fix, the firm's chief executive tells the Wall Street Journal.
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