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Americans, Relationships, and Contracts

Why do American businesspeople often seem less focused on personal relationships in the business world, as opposed to many of their global counterparts?

One of the most salient differences between Americans and many other cultures when it comes to establishing new business partnerships is the American tendency to “dive into business”, “get down to the nitty-gritty”, and negotiate some sort of written or verbal agreement as quickly and efficiently as possible.  Although we do our due diligence, we don’t necessarily feel the need to make a deep personal connection with everyone we intend to partner with.  Why, then, do business people from a great many other countries tend to rely on both due diligence *and* building a deeper personal connection?

In the U.S., we have a vibrant legal system. We have plenty of lawyers, a well-defined history of contract law, a relatively efficient and impartial court system, and a transparent, albeit sometimes expensive, process for leveraging the court system when necessary.  The bottom line is that in the US, we have recourse. We have little doubt that if we sign an agreement with someone, or even enter a simple verbal contract, it will be enforceable.  And if we do have to enforce it, we have systematic and institutionalized ways to do that.  The US is often criticized (sometimes rightfully so) for being a very litigious society; we rely on our court system to be the enforcer of last resort when protecting our personal and professional rights.  It’s the efficiency of the court system that makes this possible.  Even for minor grievances, we have “small claims court”. In the end, we don’t need to trust our potential business partners on a deeply personal level because we know that we have options if they don’t stand up to their end of the deal.

In many other countries, the legal system is simply not as transparent, easy to maneuver, or efficient. In such cases, businesspeople who are forming a new agreement will want to be sure they have other methods of enforcement besides the court system.  Building a strong relationship and getting to know your potential business partner (including their team, their family, and their social network) gives you a deeper and stronger connection.  Enforcement can then be based on commitment to friendship, an aversion to being shamed in front of one’s friends and family, or unwillingness to cause long-term damage to a professional network.  And in some places, those factors may act as a much more timely enforcer than a court system that may requires several years to reach a decision on a contract – by which time the market opportunity may not even exist any longer.
So for many Americans, the need to build strong personal relationships before entering into a business relationship is less intuitive, whereas for many international professionals, there is no better option to ensure success in a partnership.

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