globalEDGE Blog: gE Blog Series: The Cultural Difference Part 5 - How Cultural Differences Impact Global Business

gE Blog Series: The Cultural Difference Part 5 - How Cultural Differences Impact Global Business

The reality of cultural diversity exists not just on the international business scene but also within an organization. As such, if they are to truly make use of the increasing opportunities and benefits that the global economy is providing, they have to make sure that their employees have sufficient intercultural competence. Communication is imperative for success in the business world, and most people would think of the language barrier as the largest hindrance. However, I’m here to argue that just knowing the local language will not help you be successful in an international setting.

Being successful in cross-cultural situations means you must be able to communicate and lead effectively no matter what the background of the person you are working with. A person with a higher cultural intelligence is able to function better in these situations. Having high cultural intelligence can be helpful in avoiding costly mistakes regarding culture, which can damage relationships and ultimately weaken a company’s market position in that particular country. Being able to function cross-culturally can lead to strong decision-making, negotiation, conflict resolution, leadership capabilities, and greater enjoyment from intercultural work. So what are some key cultural situations to be aware of?

You must be aware of another culture’s customs, especially when visiting or on a business trip. Making one large mistake when at a meal or during a greeting can break a key relationship. Non-verbal communication is also a key to communicating cross-culturally. There is the common example of hand gestures not holding the same meaning in one country as another, but there is research coming out that even facial expressions are not culturally universal.

Technology enables easier collaboration between cultures within the same company and between businesses. However just because you may not be face to face with the person, or visiting, does not mean you can ignore key cultural differences. David Livermore, a renowned thought leader in cultural intelligence and global leadership, says there are large issues when you are managing delays and deadlines. Some cultures value punctuality and efficiency, while other place greater value on relationships and flexibility. This can create large problems when managing a project in a cross-cultural team. Check out David Livermore’s blog on how to combat this issue.

Meetings are important in every culture, but are they for gathering information and input, or building relationships and strengthening bonds? For example, in the Netherlands, a meeting is used to identify all the weaknesses and criticisms of a particular approach or plan, while in Japan these alternatives are discussed in private, and the meeting is just used to publicly confirm decisions. As you can see, there are many things to think about when working cross culturally. The more you can instinctively think about these issues, and put a high value on them, the more successful you will be in today’s business world.

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