Many challenges for companies working outside their culture


The economic crisis in European countries raised the awareness of possible business opportunities in Korea for Italian companies, but still, even with the free trade agreement between Korea and the EU, the divide seems to be as far as both countries are geographically.

To build bridges in the business world, the Italian Chamber of Commerce is organizing activities such as trade visits with the hope that companies in both countries will gel and find opportunities for business.

According to Italian chamber Secretary General Roberto Martorana, the two countries are facing two challenges right now.

One is the image of Italy, which is excellent in Korea, albeit limited to food, fun and fashion. The other is the lack of knowledge in Italy about the Korea-EU FTA.

Concerning the FTA, Martorana said, “Unfortunately, this is probably our fault, a lot of Italian companies didn’t receive enough information about this agreement.”

“We sent a lot of circulars to Italian companies, associations but until now, a lot of companies didn’t know about the agreement so we are still working on it, trying to send more newsletters and informing Italian companies,” Martorana added.

While countries like England, France and Germany started promoting the advantages of an FTA to their companies back home before it was finalized, the Italian chamber took the safe route and only started marketing the agreement after the accord came into force on July 1, 2011.

The EU-Korea FTA has been labeled the most comprehensive and deepest trading agreement the EU has ever concluded and eliminates 98 percent of custom duties by creating a free trade zone between the 27-member states and Korea.

Furthermore, it eliminates a number of non-tariff barriers as well as helping all sides recognize common standards in many areas and fields.

“A lot of companies in Italy are looking toward Korea for opportunities because of how they overcame the crisis but also thanks to the FTA and because of these, our activities are increasing,” he said.

“The lack of information is still there but the companies now know that the FTA is a good opportunity.”

One of Italy’s most enjoyable imports is wine where they have had a top five ranking for several years, but now with the FTA, the playing field has been leveled and Martorana is hopeful that Italian wines will overtake Chile to own the second-largest share of the market after France.

Established in 2008, the Italian chamber has about 80 members and is growing year by year.

Their main task is to work with companies to strengthen the trade, joint venture and investment relationship between companies in both countries.

For now, their biggest endeavors are overcoming the positive misconception that Italy is only known for its cultural offerings.

“Italy is more than that so we try to work with some Korean universities and research centers like KAIST and (Korea Research Institute of Bioscience & Biotechnology),” he said.

While they promote business, the chamber in a way also promotes the various destinations in Italy which seem to be limited to Rome, Venice and Milan to those in Korea.

“We are trying to present Italy as one country and not just three cities,” he said.
Another challenge Martorana has found with companies working outside of their cultural sphere is their limited understanding of one another.

The first challenge for small and medium size enterprises is the lack of knowledge of the English language. “So this is the big problem.”

Other major obstacles are the procedures like the exchange of name cards, contracts, age and the titles or positions of employees at a company.

“Italians are boisterous with loud voices while Koreans are the opposite. So they are a little bit scared of Italians,” he said. “The way of talking to each other and the way to start a meeting is different.”

To overcome these differences, the chamber sends information pamphlets concerning the different cultural and business norms so that this way there will not be any surprises.

“If you want to sell in Korea you must follow the mentality and system,” Martorana said.

By Yoav Cerralbo (yoav@heraldcorp.com)