Historical Timeline

A critical way to show respect for another person's culture is to have knowledge of their country's history and current affairs. Table 14.1 outlines a few key events related to Taiwan, together with concurrent world events. ⁴

Full Country Name and Location

Taiwan is officially known as Taiwan, Republic of China, differentiated from the People's Republic of China. It is located 100 miles east, across the Taiwan Strait. The island is 245 miles long and 89.5 miles wide. Roughly the size of Denmark, its shape might be described as a vertically leaning sweet potato. The capital, Taipei, is positioned at the northern tip. The country is situated in the northern hemisphere. The Tropic of Cancer bisects the island horizontally.

Government/Political Structure

Taiwan is a constitutional republic with a president who is voted in every four years as head of state. In addition to the office of the president, the central government comprises five branches or Yuan: the Executive Yuan, the Legislative Yuan, the Judicial Yuan, the Examination Yuan, and the Control Yuan.⁵ A premier appointed by the president serves as the head of government and president of the Executive Yuan. Next elections are scheduled for January 2016.

Population and Economic Centers

The population of Taiwan is approximately 23.4 million.⁶ The country is divided into two provinces, consisting of 14 counties and three provincial municipalities, and five special municipalities (which have the same rank as a province). According to U.N. statistics, approximately 75 percent of the population lives in urban areas.⁷

The main ethnicities are Taiwanese, including Hakka (84 percent), mainland Chinese (14 percent), and indigenous (Polynesian/Malay descent, 2 percent).⁸

The major business centers and populations (2013) are outlined in Table 14.2.⁹

Economy

Taiwan is ranked 19th out of 189 economies in terms of ease of doing business according to the World Bank Group's Doing Business 2015 report.¹⁰ The composition of its 2013 GDP by sector was services (68.6 percent), industry (29.4 percent), and agriculture (2 percent).¹¹ Almost 60 percent of the labor force is involved in service industries, while just more than a third of laborers (36.2 percent) work in industry. Agriculture contributes little to the GDP from products including rice, tea, pigs, poultry, and fish.

Taiwan's strategic position as a gateway between East and West has historically underscored its importance globally to traders including the Dutch, Portuguese, Spanish, as well as to Japan. Although the Taiwanese government used to be directly involved in investment and foreign trade, this has eased over the years, and the economy is now described in the CIA World Factbook as a dynamic capitalist economy.¹² In 2012, Taiwan was the U.S.'s 11th largest trade partner and the 16th largest U.S. export market. Economic development has been achieved largely through the export of electronics, machinery, and petrochemicals. Additional key industries include communications and IT products, consumer products, and pharmaceuticals.

Corruption Perceptions Index

Taiwan ranked 36th least corrupt out of 177 countries and territories with a score of 61 out of 100.¹³ This annual index, compiled by Transparency International, measures perceived levels of public sector corruption.

Several anticorruption agencies conduct investigations in Taiwan: the Investigation Bureau of the Ministry of Justice; the Department of Government Employee Ethics of the Ministry of Justice; and the Special Investigation Division of the Supreme Prosecutors Office.

Human Development Index

Taiwan was not included in the HDI report.

Global Gender Gap Index

Taiwan was not included in the Global Gender Gap Index.

Climate

Temperatures in Taiwan average in the low to mid-70s Fahrenheit year round. In the coldest months (January to March), the temperature is unlikely to drop below 50 degrees F. The hottest months are June to August, when temperatures may reach 100 degrees in extreme cases, although more typically the highs are in the high 80s. Humidity is high everywhere with May through June being the rainiest months. From June to October, typhoons resulting in heavy rainstorms occasionally occur.

Languages

Mandarin is the official language, although many words and idioms used in Taiwan would not be familiar to Mandarin speakers in China. More than 20 other languages are in existence throughout the country, including Taiwanese or Hokkien. English is widely spoken for business. Not all taxi drivers understand English, so be sure to have addresses written in Mandarin to show them.

Belief Systems, Philosophies, and Religions

The country breakdown is as follows: Mixture of Buddhist and Taoist (93 percent), Christian (4.5 percent), and Other (2.5 percent).¹⁴

Religious freedom is constitutionally protected in Taiwan. There are more than 20 officially recognized religions/belief systems.

For an overview of belief systems, philosophies, and religions, please refer to Chapter 4, pages 64–65.

Time Zones/Daylight Savings

Taiwan has a single time zone, China Standard Time (CST). It is eight hours ahead of GMT (Greenwich Mean Time)/UTC (Coordinated Universal Time). It does not operate under Daylight Savings.

It is 13 hours ahead of U.S. Eastern Standard Time (12 hours ahead in Daylight Savings Time). See www.timeanddate.com/worldclock.

To calculate time in Taiwan, add eight hours to UTC/GMT.

Telephone Country Code and Internet Suffix

The Taiwanese telephone country code is 886, and the Internet suffix is .tw.

Currency

The unit of currency in Taiwan is the New Taiwan Dollar (TWD), or yuan. One dollar, or yuan, is divided into 100 cents.

Fiscal Year

The Taiwanese fiscal year is January 1 through December 31. Dates commonly used in business and everyday life are written as year, month, day; for example, April 1, 2020 would be written 2020/04/01. However, dates on official documents use the Republic of China (ROC) calendar, which starts from the year 1911 when the People's Republic of China was formed. Therefore, April 1, 2020 would be the 105th year of the Republic, written as 105/04/01.

Working Week

Office hours are said to be 9:00 to 17:30 (factory workers' hours, 8:00 to 17:00) with one hour for lunch, but in many cases, employees arrive slightly later in the morning and work throughout the evening. The structure of the typical Taiwanese working week is outlined in Table 14.3.

Holidays and Festivals

Some Taiwanese holidays are determined by the lunar calendar and change from year to year. Common Taiwanese holidays and festivals appear in Table 14.4. Floating holidays are designated with an asterisk. On specific holidays, an office may remain open with limited staff. Check with your embassy or trade office before planning business travel.

Business Dress/Appearance

Business dress in Taiwan should err on the formal and modest side. Men should wear a high-quality lightweight suit because of the humidity, and a tie is expected when visiting northern Taiwan, especially for first meetings. Short-sleeved shirts are acceptable when visiting clients or customers in southern or central Taiwan, where the weather tends to be hotter. Depending on the industry, a blazer and khakis are acceptable.

For Western women, a skirt, blouse, and jacket are recommended. Pants are considered smart casual, and dresses tend to be reserved for more formal occasions. Necklines and hemlines need to conform to the Asian preference for modesty. Avoid bright colors to prevent negative perceptions.

News Sources

Some popular news sources in Taiwan include:

• The China Post: www.chinapost.com.tw
• Taipei Times: www.taipeitimes.com
• Taiwan News: www.etaiwannews.com/etn/index_en.php
• Focus Taiwan: http://focustaiwan.tw

Business Cards

Show respect by honoring the presentation of a person's card. Take time to review the cards you are given. Do not place them in your pockets or write on them. Present your card with the print facing the recipient, held out with both hands. Have your information translated into Mandarin on the reverse. Ensure you bring plenty of cards to distribute: Not doing so is considered rude and unprofessional.

Technology

According to Akamai Technology's State of the Internet Report, Taiwan has the 6th fastest average peak Internet connection speed in the world and the 18th fastest average connection speed.¹⁵ The latest figures rank Taiwan 24th in the world for the number of Internet users¹⁶ and 18th globally for the number of Internet hosts.¹⁷

Gifts

The Taiwanese are enthusiastic and generous gift-givers and receivers. What's important is the story behind the gift, not its value. Something handcrafted selected to represent your city or region is appreciated because it shows you have spent time choosing the gift. Avoid having things inscribed or personalized. The Taiwanese are big on regifting, which is a positive activity here. For example, we might bring a cowboy hat from Texas to a client, who then passes it on to a customer of theirs with the message that it's a genuine Texas hat similar to one worn by a famous actor in a well-known movie.

Food is another safe gift-giving staple. The Taiwanese may have Costco, where they can buy Canadian maple syrup or Australian macadamia cookies for themselves, but the fact that you carried the gifts over thousands of miles and can tell a story about them (“CEO Wang, I hope you like these cookies—my wife picked them out because they remind her of the ones her grandmother used to make,”), makes a big impression here and helps with bonding.

When receiving gifts, do so with both hands, palms facing up. Do not open a gift in front of someone, in case what you have given them is considered of higher value or quality than their gift to you.

Introductions, Greetings, Personal Space, and Eye Contact

A handshake is the common greeting among business acquaintances, though you may notice the Taiwanese nod and smile when introduced. A slight bow is a sign of respect. There is generally a lack of personal contact among the Taiwanese, and standing two arms' length distance when speaking to someone is a good rule of thumb. As a sign of respect, avoid a direct gaze, especially with elders.

Useful Phrases

Tables 14.5 and 14.6 contain useful travel phrases in both Taiwanese and Mandarin.

Meetings and Negotiations

As age and status are highly revered, it is wise to make sure your team includes at least a few senior-level executives. At meetings, seating arrangements will reflect the importance of status: The highest-ranked members from each team sit in the middle on each side of the table and the next highest-ranked members sit to their sides accordingly. Because business is highly competitive in Taiwan, you will need to emphasize profits and thoroughly present the fine details of your proposal. However, keep in mind that greater emphasis is placed on personal relationships and reputation than profits alone. The Taiwanese are excellent bargainers, so pay attention to the subtleties of indirect communication. Although the pace of doing business is slow, avoid pressing too hard to reach an agreement and allow your Taiwanese host to set the pace of negotiations.

Presentation Styles, Conversational Topics, and Humor

When giving presentations it is beneficial to emphasize key points at the beginning and end. Allow for lengthy question and answer periods: The Taiwanese appreciate detailed information in proposals. Remember to remain composed and avoid using too many distracting hand gestures.

In conversation, avoid political references, especially about mainland China, and anything that might be considered a cultural criticism. Idioms and references used in your own country, including jokes, are unlikely to be clearly understood because they lack context. Praising sports stars such as Jeremy Lin, the Los Angeles Lakers basketball player, is appreciated.

Gestures

The Taiwanese are polite and fairly formal in their posture and gestures:

• Opening doors and offer seats to elders.
• Removing shoes before entering a home.
• Using both hands when passing or receiving items, including business cards.
• Sitting with both feet flat on the floor with hands in your laps.
• Using the whole hand to indicate or point.
• Using the V-sign (victory) is common when posing for photographs.

Notable Foods and Dishes

Taiwanese cuisine is heavily influenced by dishes originating in China, especially the adjacent Fujian province. Seafood is prevalent in this island nation's cuisine and the subtropical climate allows for a wide variety of fruits to be grown. Common ingredients include pork, chicken, rice, and soy, and typical seasonings are soy sauce, rice wine, sesame oil, pickled mustard greens, peanuts, chili peppers, cilantro, and basil. An important part of the cuisine in Taiwan is xiaochi, a variety of snack-like dishes similar to Spanish tapas, which may be served with entrées or by themselves.

Specialty Dishes

The following are some specialty dishes popular in Taiwan:¹⁸

1. Niu rou mian: Beef noodle soup with beef, thick noodles, vegetables, and pickled greens in a dark broth (the Beef Noodle Festival is held annually in Taipei)
2. Lu rou fan: Chopped braised pork belly in soy sauce and spices
3. You fan: Sticky rice with mushrooms, dried shrimp, shallots, and pork slices
4. Milkfish: Fish, pan-fried, braised, or served as a fish-ball soup
5. Ba wan: Dumplings stuffed with minced meat, vegetables, and often eggs
6. Oya misua: A thickened soup with thin vermicelli rice noodles and oysters
7. Cuttlefish: A squid-like sea animal typically in a soup with herbs and vegetables during winter
8. Bao bing: Shaved ice with fruit and flavorings such as juice and sweet condensed milk

Dining Etiquette

Breakfast meetings are not common because many Taiwanese tend to work late into the evening. Lunch or dinner is preferred. Allow your host to indicate where you should sit. Do not begin serving yourself until invited to do so. Do not refuse food. For utensils, be prepared to use chopsticks and a ceramic spoon. Leave something at the end of a meal to show you have had enough to eat.

Drinking and Toasting

Taiwanese are not big drinkers of alcohol and many prefer tea with their meals. Often you see people make a small glass of beer last a whole evening. When going out for a drink with coworkers, you may see Taiwanese buy one large bottle of beer. Everyone shares this by pouring small amounts into their own glasses.

Toasting is common and may take place frequently during a meal. The glass is raised with both hands, one supporting the bottom, and eye contact is maintained. Ganbei, pronounced ghan-bay, means bottoms up. The group is expected to do a shot or empty the glass all at once. If you do not want to continue the bottoms-up approach, politely say "suei yi" (sway-yee), which roughly translates as drink to your liking.

Tipping and Bill-Paying

Tipping is not expected; however, a tip for exceptional service is always appreciated. A 10-percent service charge is usually added to hotel and restaurant bills. Round up to the nearest dollar for taxi drivers.

Smoking

There is a countrywide ban on smoking in all public places, both indoors and outdoors.¹⁹ E-cigarettes are considered controversial and designated as medicines rather than tobacco products.

Taboos

The following behaviors are taboo:

• Winking
• Pointing or beckoning to someone with the index finger
• Loud or rowdy behavior
• Placing your arm around someone's shoulders; placing your feet on a table; moving or touching objects with your feet
• Leaving chopsticks sticking up in a bowl of rice
• Crossing legs at the knee or ankle

Heroes and Sports

Knowing about another country's heroes and sports offers opportunities to incorporate culture-specific references into your conversations and presentations.

1. How Do the Taiwanese Prefer to Act: Individually or as a Group?

Finding the right people with the power to make decisions, especially in local companies, can be a source of frustration in Taiwan, as Gabe Higham, a former hardware development manager with Dell Taiwan, discovered while based on the island for three years. Much of this had to do with the low initiative expected of subordinates, also illustrated by Taiwan's low individualism score in Geert Hofstede's findings.

As Mr. Higham pointed out, “In fast-paced Western-style companies, you expect to find more empowerment at lower levels where, even if you make a decision and it's wrong, there is a lesson to be learned. This is preferable to waiting around being told what to do, especially if you have the experience.”

When working alongside some of the Taiwanese original design manufacturers (ODMs), for example, Mr. Higham found there was a hierarchical form of decision making. At times, it was not possible to make progress on something, whether making changes to a design, scheduling, or spending money, without his boss having to meet with whomever he reported to further up the chain. What helped to circumvent a lot of wasted time, Mr. Higham found, was the nature of the relationships he had developed within the company. Having already had dinner or drinks with a senior-level decision maker, or having spent time on the golf course together, Mr. Higham discovered that it was much easier just to pick up the phone and have some kinds of decisions made directly.

What Mr. Higham and others have found is that although the Taiwanese operate as a group through hierarchical decision maker, this can be bypassed at higher levels within a company when strong relationships are already in place.

2. How Are Power and Authority Viewed in Taiwan?

People here judge you by two things: how much influence you have on other people, and money.

—Taiwanese senior executive, global management consulting firm

We were told that there are three kinds of Taiwanese company cultures you are most likely to come across, each of which regards status somewhat differently, and should be borne in mind as you navigate businesses and industries.

For business cultures adopting a Taiwanese style of leadership—including small- and medium-sized businesses that represent 97 percent of the island's enterprises²⁰—think Jerry McGuire: “Show me the money!” As one leading consultant pointed out: “What is considered status is less where you come from or the school you went to—although these things matter—but the ability to bring them a big order. If you work for HP or Intel, that's what makes you powerful because that's where the real money is.”

Many long-established Taiwanese companies are influenced by the Japanese style of leadership, where seniority is paramount. For more on this, please refer to Chapter 8, which covers Japan.

The U.S. American-style business culture is more typical of the newer industries including high-tech, as well as companies whose owners or senior management may have lived or studied in the West. Demonstrating achievement is the number one way to establish power and authority in these structures. This means emphasizing your international connections, the deals you have done with major global organizations, and your position in your company's hierarchy.

3. How Do the Taiwanese Compare Rules and Relationships?

It's not that you can't do anything without a relationship, but it definitely helps.

—Taiwanese management consultant

One example where it is not advisable to take a rule-bound here's how it needs to be approach in Taiwan is the year-end bonus party.

“The fiscal year is based on the Chinese New Year, which usually falls somewhere between mid-January and mid-February.²¹ That's when there is a huge ‘end of year’ party, and everyone gets bonuses,” explained Jaime Melanson, who worked as an engineering manager in Dell's Taipei office from 2009 to 2012. “The Taiwanese get their monthly salary every month as we do, but the last month—around Chinese New Year—they get double: their monthly pay plus the bonus.

“All employees expect this party, and if you don't have one, people might not work for you. This was awkward for us at a time when in the U.S. there were no parties and we were having layoffs, but were having this huge celebration for Taiwanese employees. What people didn't understand was how this is an important part of the culture and you could lose your best people if you don't do something at the end of the year.”

Employers in Taiwan know to carve out time for preparations for this event. In this example, Ms. Melanson shared that the dancing entertainment was put on by the employees who, “probably spent two months before the party, every day during lunch, going to practice and working with a professional choreographer.” This illustrates the importance of cultural tradition in Taiwanese workplaces. Even though it encroached on company time and took place during a time of recession, this year-end party still needed to be celebrated.

4. How Do the Taiwanese Regard Time?

The Taiwanese work long hours: an average of 2,200 hours a year, 20 percent higher than in Japan or the U.S.²²

David Kuo, director of operations for Taiwan and China for Adexa Inc., confirmed that subordinates are expected to stay later and arrive sooner than their bosses. In the semiconductor industry, which he services, it is typical for people in the industry to leave the office at 1:00 a.m. or 2:00 a.m. and be expected back again by 8:30 a.m..

One of the ways that workplace culture in Taiwan allows for people to catch up on their sleep is during what is referred to here as nap time. As Ms. Jaime Melanson of Dell explained: “At noon, in the ODMs (original design manufacturers), the lights will dim and they play soothing music. This is when everyone lays face down with their jackets over their heads to sleep at their desks. Nap time can last for half an hour to an hour, sometimes an hour and a half, so it's advisable not to schedule meetings or make calls that will run into the time between 12 noon and 1:30 p.m.”

Another time that doesn't work well for arranging important meetings or trying to finalize negotiations is the period known as the Hungry Ghost Festival, sometimes referred to as Ghost Month. Most Taiwanese are unlikely to make important decisions and purchases, both professional and personal, at this time. These range from not starting a new business to deferring buying a house or car. This annually observed period varies according to the Chinese New Year. In 2015, the festival will begin on August 28.²³ Visitors to Taiwan during this period see imitation money burned in the streets and banquet tables of food prepared to appease the hungry spirits. If you find that responses are slow from your Taiwanese counterparts during Ghost Month, it could be because they are taking part in one of the many rituals and ceremonies that honor the spirits of their ancestors. Such respect is hugely important in this culture.

5. How Direct Is Communication in Taiwan?

On the streets, the most common greeting heard (in Taiwan) “Have you eaten?”

—Common Taiwanese Greeting²⁴

In many respects, Taiwan is a hybrid of East and West. Some people are quite comfortable saying ‘no’ to a request they cannot accommodate, whereas others avoid that word at all cost. As this story from a Taiwanese consultant who works for a global management consulting firm illustrates, there is a simple way to read between the lines.

“We were hired by a very large electronics company to do an organization design. Halfway through the project, the CEO was let go. When our senior partners spoke with the new CEO about whether they should continue, they were told: ‘Why don't we think about this?’ which, of course, is fairly ambiguous. All our partners were foreigners and interpreted this as meaning we should keep going. What we discovered later was that the CEO was really saying, ‘Why don't you guys just leave?’ This became obvious when no one was interested in hearing our recommendations.

“What we should have done—to avoid this kind of costly misunderstanding—was to have undergone a debrief with a trusted ally, who was not the decision maker, but could have helped to ensure we correctly understood what was being said, or clarify what the decision maker is thinking.”

When you are dealing with individuals whose responses may not be directly understood, make sure you speak separately with an insider to confirm you have read the situation correctly. Taiwan is a “high context” culture in terms of communication style.

6. How Formal or Informal Do Businesspeople in Taiwan Tend to Be?

It takes sweat to work on things, but only saliva to criticize things.

—Taiwanese proverb²⁵

For companies that can afford their services, market intelligence firms provide valuable insights into industry trends. That kind of financial outlay is not always feasible for small and medium-sized enterprises in Taiwan, whose management is still hungry for in-the-trenches information. David Kuo, who works in the semiconductor industry, uses the informal chatting that tends to take place at the beginning of meetings to share insightful stories. This helps him build trust, inspire respect, and nurture long-lasting relationships with his clients—a practice well worth emulating.

“Obviously it's unethical to reveal anything secret or that violates a non-disclosure agreement, but there are many things you can share about a client's competitors that are hugely appreciated here. For example, at a first meeting when I'm getting to know the CEO, I might start by saying, ‘CEO Lee, I happen to do business with your competitor and they have a new VP of sales with whom I played golf last week. Do you play golf?’ Golf is a popular sport for business executives in Taiwan, so that tends to be a universal topic of discussion. You might then mention that the new guy has a 10 handicap and likes to play at a particular club. Asian people appreciate conversations about positive things. They don't want you bashing the competitor because they'll assume you would do the same about them. The CEO might then say, ‘Tell me more about this guy; I hear he's really good.’ That allows you to elaborate in a way that could be useful to your client or prospect.

“It's the gesture that counts, not the story itself—the fact that you're willing to share information with your client. It shows that you know your stuff and you know it ahead of everyone else. Taiwanese businesspeople will then consider you to be someone they want to get closer to. Most people in Taiwan don't really know much about, or tend to use, the professional networking sites like LinkedIn. You can use this to your advantage by becoming a trusted source of insights and industry information."

7. How Aligned Are Taiwanese Social and Business Lives?

Many Westerners are trapped by the “9 to 5” work model, while many Asians work to the “Beyond 5” model. This is the time when true feelings are expressed, when people's characters are genuinely assessed, and when deals are struck.

—Business Journey to the East, Chow-HouWee and Fred Combe²⁶

One unexpected fact about Taiwan in relation to the crossover between social and business life is the use of social media, especially Facebook. Taiwan boasts the highest penetration rate (65 percent) of Facebook users in Asia, indeed, “in any other market in the world.”²⁷ Although many of us in the West might not use Facebook to send business emails, David Kuo does this all the time:

“Facebook is my customer relationship system (CRM) and where I can get to know people socially to gain their trust. For example, a customer of mine might share something about their dog or their kids. I'll go to their page, leave a comment, and bring that up when we meet physically.”“A lot of senior management in my industry (semiconductors) use Facebook because they are working 18 hours and need some downtime when they can vent and share their emotions. I see it as part of my job to be on there two or three hours a day. It's part of the way we do business here in Taiwan. If you want to be seen as an influencer, to keep people informed, and to offer value, using social media to share articles and insights is one way that social and business come together in Taiwan.”

8. How Is the Concept of Women in Business Handled in Taiwan?

In Taiwan…where family and matriarchal-oriented societies are common—women often help run companies alongside a husband or brother in a family business.

—Do's and Taboos Around the World for Women in Business²⁸

Women decision makers used to be less common in Taiwanese business, but in industries such as high-tech, especially companies run by younger, Western-educated people, few are going to be surprised to be working with or taking instructions from a female these days.

Certainly there are plenty of high-powered Taiwanese businesswomen and prominent female politicians who are role models, their numbers supported by the Executive Yuan's Commission of Women's Rights Promotion established in 1997.²⁹ Examples include Nita Ing, the chair of Continental Holdings, and Judy Lee, the founder and chair of Test Rite International, both of whom were cited by Forbes in their Top 50 Asian Power Women list of 2014.³⁰ In addition, Cher Wang has been called the pride of Taiwan for her standing within the high-tech industry, having cofounded two companies, as well as being featured in Forbes' The World's 100 Most Powerful Women list.³¹

Having said that, this is still a country where men outnumber women in the workplace. When Jaime Melanson worked for Dell in Taiwan, she noticed how businessmen would make personal comments to her that would be considered inappropriate in the West. For example, “One time, I was in a meeting to make a presentation to 15 people and one of the engineers, right in the middle of the meeting, said, ‘Jaime is the most beautiful engineer I've ever worked with.’”

Rather than be offended by this, Ms. Melanson says that it's something she misses now that she's back in the U.S. You may choose to use such admiration to your advantage.