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We’ve been warned and reminded of the importance that networking and relationships play in doing business in Myanmar. Anyone with a basic background in cross-cultural communication knows that a fundamental difference between Western and Eastern culture is communication style: Westerners tend to be more direct and Easterners tend to be more indirect. We expected communication to be very difficult. We’ve found that it is even more difficult than we expected.

The day we arrived we met the son of our hotel owner. He reiterated that connections to the right people were extremely important when doing business in Myanmar. To illustrate his point, he contrasted two multinational companies that entered the country.

The first entered quickly into a joint venture with a local company when Myanmar first opened. The MNC invested capital in and transferred knowledge to the local company. The investment climate became difficult for a short time and the MNC pulled out, with plans of reattempting entry in the near future. As the MNC’s in-country presence reduced, the local company was able to take full ownership of all the assets of the joint venture. According to our friend who is very well connected to owners of the largest companies in Myanmar, the JV partners do not have a good reputation in Myanmar, which is something that the MNC should have considered when choosing a JV partner.

On the other hand, the second MNC, a latecomer, was very focused on developing relationship with the right business connections in Myanmar. Representatives developed an extensive network of intermediaries with good positions in society and reputations for strong character. These intermediaries helped the second MNC to do business in Myanmar’s complex cultural environment. The second MNC took its time to study the market and develop a revolutionary market entry strategy. Now, the second MNC is the industry leader in Myanmar and poised to benefit enormously from Myanmar’s projected 40 percent year-on-year growth for this industry.

With this in mind, we are devoting most of our time in the first week to meeting with and developing deeper relationships with all the people we’ve connected with before arriving country. After we’ve built trust with them and tried to decipher their character, we’ll let them introduce us to their networks.

Author: Ann Imerbsin
Photo: Team members discussing INCO terms with a manufacturer.