globalEDGE Blog: Time is Money: How Time Zones Impact International Business

Time is Money: How Time Zones Impact International Business

The effect of time zones has been a little-known but important issue for international business. Country time zones have been historically influenced by trading patterns and partners. Setting the same time zone to a partner makes it easier to conduct trading since business hours match. Different time zones force businesses to factor in time zone conversion when dealing with international business and can negatively impact worker productivity.

Spain is one country that experiences such problems. Currently on the Central European time zone, Spain should geographically be on Greenwich Mean Time (GMT) with latitudinally similar countries such as United Kingdom, Morocco, Mali, and Portugal, After a recommendation from Parliamentarians, Spain is working on correcting the time zone issue to help boost worker productivity.

But does all of this time zone jumping really matter? It may not appear to be a big deal but it definitely has an indirect impact from a humanistic standpoint, and more importantly, an international business perspective.

When businesses expand across the globe and change time zones, a large communication gap instills. During the waking hours of one country, another across the globe experiences nighttime. This presents an obstacle for companies with speed and customer service as core values since different time zones cause delays. Companies will experience a time gap where they have even less time in their working day to accomplish interdependent tasks. An objective that could take 10 minutes to accomplish in a domestically located company, could take 24 to 48 hours to complete for companies with international offices. Some industry examples include technology companies in California with product designers in China. This issue can be detrimental for company reputations especially if a critical problem arises and demands an urgent resolution from an overseas contractor now in his sleep.

Now back to Spain's issue. A report found a correlation with the Spanish waking hours and low worker productivity. Spain has been suffering from low work productivity and parliament is determined in reversing this trend by changing the time zone. A working day for the Spanish is culturally influenced and differs from countries like the United Kingdom. When people are getting ready to go to bed in London, the Spanish are eating late dinners and sleeping late. Then they are waking up an hour before sunrise to go to work and conclude their work day at sunset.

In essence, their work and sleep schedules are operating on two different time zones - one in Central European time zone and another in the Greenwich Mean time zone that they ought to be in, creating an out-of-sync effect. This negative impact affects measures of productivity such as stress and work accidents. Changing the time zone could allow workers to get into better eating, sleeping, and working habits. However, with a shorter day will workers be more productive and live up to the expectations from the report, or remain the same?

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