How does culture affect international business?

21/05/2019 | Rebecca Twose

In a globalised economy, cultural sensitivity is essential. As more companies grow, and the global marketplace becomes more accessible for small businesses, multinational and cross-cultural teams are becoming more common. This means that it is crucial, now more than ever, for businesses to understand the culture of their foreign market if they wish to succeed internationally.

Culture is the ideas, customs, and social behaviour of a particular person or society. But how does culture affect international business?

In a business context, culture relates to what behaviour is common and accepted professionally in one location, compared to another. What may be acceptable business practice in one country, may be very different from the approach that is used by businesses overseas. Therefore, recognising how culture can affect international business is something that should be understood in order to avoid misunderstandings between colleagues and clients, and also to make sure that businesses are presenting themselves to their new market in the best way they can.

Communication plays an important role in international business
Communication plays an important role in international business

Communication

Communication plays an important role in international business, and sometimes effective communication can be the difference between succeeding or failing in a new market. Effective communication is particularly important for international businesses as there is a risk of your messages getting ‘lost in translation’. There are several things that need to be considered when looking at how effective your business’ communication is at an international level.

The first thing that should be considered when looking into communication is any language barriers that may hinder the communication between you and your new market. However, this goes deeper than just the language that is used to communicate, it’s how the messages are conveyed that’s important. Language barriers not only relate to people speaking different languages, but also to the tone used in those languages. For example, in countries like the US or Germany, it is common for people to speak loudly and be more assertive when sharing ideas amongst colleagues. However, in countries like Japan people typically speak more softly and have a more passive tone when making suggestions to colleagues.

Another thing to consider are the basic customs, mannerisms and gestures that are commonly accepted in that culture. Behaviour that might be commonplace in one culture could be unusual or potentially offensive to a client or colleague overseas. Professor Jean Vanhoegaerden gives the example of a business handshake being the norm in European and US cultures, but in some Middle Eastern cultures, handshakes are seen differently. For example in some cultures, handshakes must involve the right hand only as the left hand is seen to be less hygienic.

Businesses who are looking to operate internationally need to be aware of language barriers, tone and body language. Cross-cultural communication can be a challenge, but approaching cultural differences with sensitivity, openness, and curiosity can help businesses succeed internationally.

Different cultures have different attitudes to organisational structure
Different cultures have different attitudes to organisational structure

Attitude

Businesses also need to be aware that different cultures have different attitudes towards business.

Scandinavian countries such as Sweden emphasise social equality and therefore they tend to have a relatively flat organisational hierarchy. This relates to their informal approach to communication and cooperation normally at the heart of their organisations. In Japan, their traditional values of relative status and respect for seniority are reflected in their organisations and there is a very clear organisational structure. This means that senior management command respect at all times and expect a level of formality from junior members of their teams.

These different cultural attitudes towards management can, therefore, make it difficult to define roles in multinational teams. Therefore, it is important for businesses to be aware of their target market’s cultural approach towards the organisational structure.

Businesses need to be aware of workplace etiquette when working internationally
Businesses need to be aware of workplace etiquette when working internationally

Etiquette

Workplace etiquette is something else that businesses need to be aware of if they are working internationally.

The formality of address is another key thing to consider within international businesses when communicating with colleagues and clients from different cultures. Are they comfortable with being approached on a first-name basis or do they prefer titles and surnames? Asian countries such as China seem to prefer the latter, whereas Americans usually use first names. Things such as formality of address may not seem that important, but if you get off on the wrong foot with a potential foreign client then that could ruin your chances of ever working with them in the future. Therefore, it is important for businesses to know that their level of formality will differ depending on the culture of the person they’re communicating with.

Workplace etiquette in some cultures also means they have a different approach towards workplace confrontation, rules and regulations, and 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 lack of prioritisation of family or personal time.

Don’t get lost in translation

Don’t let an international deal fall apart due to cultural misunderstandings: businesses should do plenty of research and be open to new cultural experiences and expectations when doing business across borders. Businesses aren’t alone in this process, Language Insight can help businesses communicate internationally with our translation and localisation services to make sure they have the best chance at succeeding in new markets. Contact us now for a free, no obligation quote.

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