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Main Point 2: How Cultural Differences Impact On The International Business

Cultural differences can significantly impact international business interactions in key areas like communication, etiquette, and organizational hierarchy. Effective communication is essential but can be challenging across cultures, with some preferring brevity while others are more indirect. Workplace etiquette from addressing colleagues to punctuality norms varies widely. Additionally, organizational hierarchy and attitudes towards management roles differ substantially depending on a culture's values around social status and equality. These differences must be understood to avoid misunderstandings and succeed in global business.

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53 views

Main Point 2: How Cultural Differences Impact On The International Business

Cultural differences can significantly impact international business interactions in key areas like communication, etiquette, and organizational hierarchy. Effective communication is essential but can be challenging across cultures, with some preferring brevity while others are more indirect. Workplace etiquette from addressing colleagues to punctuality norms varies widely. Additionally, organizational hierarchy and attitudes towards management roles differ substantially depending on a culture's values around social status and equality. These differences must be understood to avoid misunderstandings and succeed in global business.

Uploaded by

ariel black
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Main point 2: How cultural differences impact on the

international business
While there are a number of ways to define culture, put simply it is a set of
common and accepted norms shared by a society. But in an international business
context, what is common and accepted for a professional from one country could
be very different for a colleague from overseas. Recognizing and understanding
how culture affects international business in three core areas: communication,
etiquette, and organizational hierarchy can help you to avoid misunderstandings
with colleagues and clients from abroad and excel in a globalized business
environment.
1, Communication
Effective communication is essential to the success of any business venture,
but it is particularly critical when there is a real risk of your message getting “lost
in translation.” In many international companies, English is the de facto language
of business. But more than just the language you speak, it’s how you convey your
message that’s important. For instance, while the Finns may value directness and
brevity, professionals from India can be more indirect and nuanced in their
communication. Moreover, while fluent English might give you a professional
boost globally, understanding the importance of subtle non-verbal
communication between cultures can be equally crucial in international business.
What might be commonplace in your culture — be it a firm handshake,
making direct eye contact, or kiss on the cheek — could be unusual or even
offensive to a foreign colleague or client. Where possible, do your research in
advance of professional interactions with individuals from a different culture.
Remember to be perceptive to body language, and when in doubt, ask. While
navigating cross-cultural communication can be a challenge, approaching cultural
differences with sensitivity, openness, and curiosity can help to put everyone at
ease.
2, Workplace etiquette
Different approaches to professional communication are just one of the
innumerable differences in workplace norms from around the world. For
instance, the formality of address is a big consideration when dealing with
colleagues and business partners from different countries. Do they prefer titles
and surnames or is being on the first-name basis acceptable? While it can vary
across organizations, Asian countries such as South Korea, China, and Singapore
tend to use formal “Mr./Ms. Surname,” while Americans and Canadians tend to
use first names. When in doubt, erring on the side of formality is generally safest.
The concept of punctuality can also differ between cultures in an
international business environment. Different ideas of what constitutes being “on
time” can often lead to misunderstandings or negative cultural perceptions. For
example, where an American may arrive at a meeting a few minutes early, an
Italian or Mexican colleague may arrive several minutes — or more — after the
scheduled start-time (and still be considered “on time”).
Along with differences in etiquette, come differences in attitude,
particularly towards things like workplace confrontation, rules, and regulations,
and assumed working hours. While some may consider working long hours a sign
of commitment and achievement, others may consider these extra hours a
demonstration of a lack of efficiency or the deprioritization of essential family or
personal time.
3, Organizational hierarchy
Organizational hierarchy and attitudes towards management roles can also
vary widely between cultures. Whether or not those in junior or middle-
management positions feel comfortable speaking up in meetings, questioning
senior decisions, or expressing a differing opinion can be dictated by cultural
norms. Often these attitudes can reflect a country’s societal values or level of
social equality. For instance, a country such as Japan, which traditionally values
social hierarchy, relative status, and respect for seniority, brings this approach
into the workplace. This hierarchy helps to define roles and responsibilities across
the organization. This also means that those in senior management positions
command respect and expect a certain level of formality and deference from
junior team members.
However, Scandinavian countries, such as Norway, which emphasize
societal equality, tend to have a comparatively flat organizational hierarchy. In
turn, this can mean relatively informal communication and an emphasis on
cooperation across the organization. When defining roles in multinational teams
with diverse attitudes and expectations of organizational hierarchy, it can be easy
to see why these cultural differences can present a challenge.
4. Differences in negotiation styles

Negotiation is a principal component of international business. Culture


influences the way people behave, communicate, and think. These characteristics
are reflected in the way they negotiate. Companies must understand cultural
differences during business transactions and find ways to hurdle the barriers
these differences present.

Spanish speakers view negotiation as the means to have a contract, while in


some Asian countries, negotiations help build firmer business relationships. The
Japanese regard negotiation as a win-win process while the Spanish look at it as a
win-lose process.

The way one communicates during negotiations should be carefully


considered. Israelis and Americas are very direct, so you immediately know if the
transaction is approved or not. The Japanese, however, tend to be indirect. You
have to read and carefully interpret vague signs to see if they rejected or
accepted your proposal.

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