Now that we’re past half way through the 2015 calendar year and at the start of a new financial year for many Australian businesses, it’s a good time for reflection.

Over the past several months we have seen China’s stock market dive and the demand for our resources drop.

And there’s also been a raft of commentaries about how an increase in Chinese property buyers has affected the Australian real estate market.

…With so much emphasis on financial and trading factors, especially in the media, we tend to forget about the crucial role culture plays in how people make business decisions. In Asia, culture has a significant impact on business – the two are inextricably linked.

Despite the huge economic gains that can be seen in many Asian countries, especially China, it would be a major mistake to assume that decisions are being made in the same way as they are here in Australia.

Cross cultural differences affect business as much as they affect any other relationships.

In my experience, many western businesses operating with Asian stakeholders fail because they don’t take these cross cultural differences into account and they downplay the importance of the relationship in the face of the task at hand.

Western businessmen with strong technical skills are keen to focus on how they can make improvements that will better meet deadlines and streamline processes. But in taking such an approach they fail to realise that their Asian clients will first and foremost wish to build trust via a process of social interactions, considering, in many respects, the business operations as secondary to the to the people they’re doing business with.

According to Australia’s first Ambassador to China, Stephen FitzGerald, a classic example – an Australian success story – can be seen within the resource sector. During a recent conversation with Bob Carr at UTS, Stephen FitzGerald commented on how the combined effort of successive Australian Prime Minsters to build relationships with their Chinese counterparts had significantly helped to secure decades’ of export growth for Australia’s resource industry. In a nutshell, the ongoing emphasis by Australia’s leaders to cultivate and nurture these relationships was a key success factor.

The Chinese term Guanxi is often referred to as ‘networking’ but it is more than that – perhaps it can be more accurately described as the ‘Aussie Mate Culture’ times a factor of ten. Its nuances are embedded deeply in the Chinese culture and Guanxi has a subtle yet powerful influence, driving many factors that affect personal relationships, social standing and business relationships. By its very nature Guanxi dictates that relationships will take time to build and cannot be rushed. It is one significant cross cultural difference that does have an impact on the way business is conducted and sometimes it takes precedence over the facts and figures that are such a relied upon cornerstone – and measure of success – for Australian commercial operations.

But for Western businesses to prosper in Asia they must to look at the ‘whole’ picture, just as Asian business people do. They need to put emphasis on long-term outcomes as well as on partnerships that are rewarding beyond traditional fiscal measures.