Why does culture matter in international business




















This can have a detrimental impact on many factors including sense of well-being and confidence. Anxiety and stress are common reactions for people new to working in a foreign culture. When people find themselves confronted with difference, they feel challenged and therefore build mental walls to help them cope.

These walls, more often than not, do more harm than good. For example, decision making may be impaired or people may withdraw from others, creating even more distance between themselves and a solution. Symptoms may also be physical, with people experiencing headaches, migraines, exhaustion and burnout.

Not being able to manage cultural differences is a common reason cited for failed international business assignments. Which country do you think is the most complex? Working with people from different cultures can present considerable cognitive challenges. Cognitive challenges relate to how we think, process information and essentially how we view the world.

When we come up against a foreign culture, this can cause us real problems, especially if we fail to recognise differences and adapt. Two simple examples of this are the concepts of time and relationships. Time conscious professionals can see lateness in other cultures as unprofessional or even disrespectful.

In reverse, those cultures that are a lot more flexible with their approach to time can see the time conscious professionals as rigid and materialistic, which ties in with the value given to relationships.

In some cultures, it's relationships before business whereas in others, business first. Usually those cultures that are time conscious are less relationship orientated. Now, what happens when you have a professional from a very task orientated culture visit a client or colleague from a very relationship focused culture?

The results is a sort of cognitive dissonance — both sides are looking at one another through their own Cultural Lens which means they are interpreting behaviours incorrectly and attributing erroneous meaning to them. This can happen at many levels, whether we are talking about a general approach to business or in the more specific areas such as how we communicate, manage hierarchy and conduct negotiations. CT Business Travel has put together a useful infographic for a quick reference of cultural differences in business etiquette globally.

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?

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. 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.

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. 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.

A big part of this preparation is understanding the role culture plays in international business. And not only are our students multicultural, our faculty is too. When doing business in the Middle East, the surest indicator of a successful business relationship has very little to do with the content of the contract or the extent to which the language will hold up in court.

Court systems in many of these countries move slowly with inconsistent results, and your business counterparts in many Middle Eastern countries do not put their faith in the legal system to determine the outcome of a conflict. Absolutely essential to the success of the deal is the interpersonal rapport and relationship established during the negotiation stage and at every point thereafter. Failure to understand and cultivate this aspect of the deal increases the risk of failure to a critical degree.

In sending an email to a Japanese colleague with whom may wish to collaborate on a potential business deal, you would be most successful if you. The risk of email is that it lacks certain social contextual cues such as body language, eye contact and intonation and can therefore create misunderstandings.

There is also no way to see the demeanor or reaction of your counterpart and adjust your communication strategy to compensate for a misunderstanding once it is created. When in doubt, it is always safer to err on the side of greater formality and deference. The Japanese have become accustomed to making allowances for informal communication from other countries, but you will proceed with more credibility if you make a sincere effort to adapt to their customs.

Use the last name, followed by the honorific term, followed by extreme clarity and formality in the text, with as few assumptions for context as possible. The cultural nuances that affect international business obviously go far beyond the ability to greet your international colleague or choose the correct gift.



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