The Challenges of Cultural Diversity in International Business

Dear readers,

Following the introductions to cultural dimensions and culture clusters, it is now time to discuss about business practices (and business etiquette) around the world.

As briefly mentioned in the post about the Iceberg Model of Culture, some elements of culture are visible and easily accessible to everyone, while some other elements - those hidden below the water line - may not be entirely clear to outsiders. What, for example, should be regarded as disrespectful behaviour: enquiring or not enquiring about one’s private life (e.g., family) before discussing business matters?

Perhaps unsurprisingly, there is no definite answer to such question, as our understanding of what constitutes proper or improper behaviour is culture-bound. While many companies make the mistake of sending their employees on international assignments on the basis of technical skills/performance/role requirements, it is vital to remember that aspects such as cross-cultural communication skills are crucial to the success of overseas tasks (“Cross culture is a concept that recognizes the differences among business people of different nations, backgrounds. and ethnicities, and the importance of bridging them.” - Carol M. Kopp,Cross Culture, Investopedia).

“...I am convinced that all the energy and good intentions in the world cannot trump cultural disconnects. To be effective, we have to ask questions of and listen to the people affected by what we want to do. Then we must engage them early in our planning and keep adjusting our approaches.”

- Howard G. Buffett, 40 Chances: Finding Hope in a Hungry World -

(Image Source: Freepik)

What kind of differences are we talking about?

In the upcoming posts - covering culture and business practices in the Sub-Saharan Africa, Middle East, Latin Europe, Germanic Europe, Eastern Europe, Nordic Europe, Latin America, Southern Asia, Confucian Asia, and Anglo clusters - we’ll be looking at concrete examples of how cultural dimensions impact corporate behaviour. Let’s consider, for instance, the cultural dimension known as Masculinity/Femininity (according to Hofstede’s definitions, masculinity is “a preference in society for achievement, heroism, assertiveness and material rewards for success", while femininity represents “a preference for cooperation, modesty, caring for the weak and quality of life”) and its influence on the hiring process: while in the US - a “masculine” society that values strength, power, competitiveness - employers are likely to expect a certain degree of self-promotion, in “feminine” cultures that value modesty and cooperation (such as the Nordic societies) open self-promotion might be perceived negatively (see post “Overcoming the challenges of cross-cultural recruitment and selection” for clarifications on this particular topic). What about proxemics, “the interrelated observations and theories of man's use of space as a specialized elaboration of culture” (E.T. Hall, The Hidden Dimension, 1966)? How do personal space requirements change across countries? In the Anglo-American and in the Nordic clusters, for example, people have larger space requirements in comparison with people coming from Latin America, Latin Europe, Southern Asia, or the Middle East (note that people  from high-context, collectivist, polychronic cultures - with the exception of some East Asian societies - tend to stand closer and touch more than people from low-context, individualistic, monochronic cultures): in practice, this means that one’s “normal” posture (non-verbal communication) might irritate their interlocutor. Imagine someone backing up while the person they’re having a conversation with keeps moving closer in an attempt to reduce the gap…

(Image Source: Freepik)

 

Other relevant cultural differences we’ll be discussing next are related to time-management (e.g., how do people from different backgrounds prioritize their tasks? In what countries are meetings likely to be highly structured and to follow a predefined agenda?), to problem-solving approaches (holistic vs analytical thinking), to the role of hierarchy in personal interactions (Power Distance Index), to the decision-making process (process that, in collectivist cultures, tends to be longer as it relies on group consensus), to gift-giving etiquette (see post “Gift Giving Etiquette in The Confucian-Asia Cluster: The Luxury Fruit Culture” as an example of such), to gender roles and related challenges and expectations (for example, in some cultures where it is uncommon for women to work, the competence and authority of female employees might be questioned by their colleagues).

To conclude, there is s a lot more to cultural differences in any business scenario than meets the eye: not only “simple” formalities, but also (especially!) sets of culture-bound, unwritten, and unconscious rules and social norms outsiders may not necessarily be aware of.

 

 

SOURCES

- Hall, E. T. (1959). “The Silent Language”. New York: Doubleday 

- Hall E.T. (1966). "The Hidden Dimension" , New York, NY: Doubleday 

- Hall, E. T. (1976). "Beyond culture". New York, NY: Doubleday

- Hofstede, Geert H. (1997). "Cultures and Organizations: Software of the Mind (second ed.)". New York: McGraw-Hill 

- House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W., & Gupta, V. (2004). "Culture, leadership, and organizations: The GLOBE study of 62 societies". CA: Thousand Oaks 

- House R., Javidan, M., Hanges, P., & Dorfman, P. (2002). "Understanding cultures and implicit leadership theories across the GLOBE: An introduction to project GLOBE". Journal of World Business, 37(1), 3–10

- The Globe Project, Online: https://globeproject.com/

- Kopp, Carol M. (2021). “Cross Culture”. Investopedia, Online: https://www.investopedia.com/terms/c/cross-culture.asp