In this globalised economy, an international business is one of the focal points where different cultures meet with a shared objective. In order for a meeting of this nature to succeed, business must be aware of cultural diversity and the way that it can potentially affect a business relationship.
In different parts of the world culture has dictated a different attitude and a different approach to achieving an end result. Software built to run on one operating system must be adapted before it can run on another.
In much the same way, a business that is moving into the international arena must adapt its processes to incorporate cross culture solutions for its target market and also for any business partners that it becomes involved with. Here are five of the main cultural factors that need to be taken into account.
1) Language and Communication
All too often, the assumption is made that if business communication is undertaken in English, it is likely that both sides will understand what is being communicated. However, business communication is one of the major causes of misunderstandings between business partners that do not share the same native language.
The fact is that language in its written form is open to misinterpretation. The problem is that each language has its own nuances and terminology and without personal interaction that adds voice tone, facial expression and body language into the equation, some expressions that are acceptable in one culture, may come across as harsh or impolite in another and lead to misunderstandings.
2) Efficiency and Work Ethic
If you take the culture of for example, Germany and the UK, efficiency and timely delivery are considered to be very important. The instinct is to put in the extra work and effort to deliver a project on time. In these cultures, stress and pressure are an ever-present factor.
Contrast that with some Latin countries where there is a much more relaxed attitude and “tomorrow” can mean many different things and you have the potential for tension within the business relationship.
3) Attitudes to Contractual Procedures
Within the Western economy, legal and contractual obligations set out in lengthy and weighty documents mean everything. They provide a clear foundation for the way a business relationship should proceed. They provide clarity and a reference point that can be referred to at any stage if a dispute arises.
This is our culture and our way of doing things. It may surprise some people to know that this is not the case in some parts of the world. In the Middle East, and to a certain extent in Japan, the personal relationship of trust that is built up over time has much more meaning than the most extensive written contract, A deal that is sealed with a handshake between two corporations that have decided to trust each other, carries more weight than the longest contractual document.
4) Politics and Organisational Structures
Any business that wishes to expand into the international arena must at some point, engage with the politics of the country it is targeting. We all know that politics takes many forms. From systems similar to our own, through to restrictive dictatorial regimes or overtly corrupt political structures, successful business outcomes can be impeded in many ways.
Within the European Union this has been demonstrated by the fact that when inducting former Eastern Bloc countries into the Union, one of the common problems has been the requirement to tackle top-down corruption. In some countries, even the simplest of processes can become bogged down in time consuming bureaucracy and red tape. These are all cultural factors that need to be taken into consideration.
5) Infrastructure and Topology
When considering expanding into an international market it is worth remembering that cultural influences have as much to do with the emphasis that is placed on infrastructure as does finance. Distribution networks, efficiency and product delivery are all dependent on road, rail and other transport mechanisms. If the topology and infrastructure of a country make it difficult to move goods, materials and people around, this is bound to incur additional expense and affect schedules.
These factors are nothing more than a brief introduction to the idea that culture plays an important part in international business. The whole area is extremely complex and in many cases will require expert input into a business strategy at all stages. With proper preparation, staff training programmes, and appropriate communication processes, international trade is achievable for businesses of all sizes, and is no longer the preserve of large international corporations.
About the author: David writes about international culture in business for sites such as the Institute of Diplomacy and Business (IoDB).