In cross-border business, we step into different cultural environments characterized by unfamiliar languages, distinctive motivations, and different values. Culture refers to learned, shared, and enduring orientations of a society, which are expressed in values, ideas, attitudes, behaviors, and other meaningful symbols and artifacts. Cross-cultural risk arises from a situation or event where a cultural miscommunication puts some human value at stake. Ethnocentric orientation refers to using our own culture as the standard for judging how good other cultures are. Polycentric orientation refers to a host country mindset where the manager develops greater affinity with the country in which she or he conducts business. Geocentric orientation refers to a global mindset where the manager is able to understand a business or market without regard to country boundaries.
1. The meaning of culture: foundation concepts
Culture is the collective mental programming of people. It influences consumer behavior, managerial effectiveness, and the range of value-chain operations, such as product and service design, marketing, and sales. Culture is not inherited, right or wrong, or about individual behavior. Culture is like an iceberg in that most of its elements and influence are hidden below the surface.
2. Why culture matters in international business
Managers need to develop understanding and skills in dealing with other cultures. Culture matters in international business in areas such as developing products and services; interaction with foreign business partners; selecting foreign distributors; business negotiations; dealing with customers; preparing for trade fairs; and preparing promotional materials. Cross-cultural differences complicate workplace issues such as teamwork, employment, pay-for-performance systems, organizational structures, union-management relationships, and attitudes toward ambiguity.
3. National, professional, and corporate culture
There are three layers of culture: national, professional, and corporate. Working effectively within these cultures is a major challenge. The influence of professional and corporate cultures grows as people are socialized into a profession and their workplace. Most companies exhibit a distinctive set of norms, values, and beliefs that distinguish them from other organizations. Such differences are often as distinctive as the differences in culture between nations. Managers can misinterpret the extent to which a counterpart’s behavior is attributable to national, professional, or corporate culture.
4. Interpretations of culture
Culture can be interpreted through metaphors, a distinctive tradition or institution that serves as a guide or map for deciphering attitudes, values, and behavior. Stereotypes are generalizations about a group of people that may or may not be factual. An idiom is an expression whose symbolic meaning is different from its literal meaning. Low-context cultures rely on elaborated verbal explanations, putting much emphasis on spoken words. High-context cultures emphasize nonverbal communications and a more holistic approach to communication that promotes harmonious relationships.
Hofstadter’s typology of cultural dimensions consists of
Individualism versus collectivism, power distance, uncertainty avoidance, masculinity versus femininity, and long-term versus short-term orientation.
5. Key dimensions of culture
The dimensions of culture include values and attitudes, which are shared beliefs or norms that individuals have internalized. Deal-versus-relationship orientation describes the intensity with which manager’s get down to business, as opposed to developing relationships. Manners and customs are ways of behaving and conducting oneself in public and business situations. Perceptions of time refer to the temporal focus of life, and dictate expectations about planning, scheduling, profit streams, and what constitutes lateness in arriving for work and meetings. Monochromic cultures tend to exhibit a rigid orientation to time in which the individual is focused on schedules, punctuality, and time as a resource. In contrast, polychromic cultures refer to a flexible, nonlinear orientation to time in which the individual takes a long-term perspective and is capable of multitasking. Perceptions of space represent the area or physical room within which people feel comfortable. Religion provides meaning and motivation and is very significant in defining peoples’ ideals and values. Symbolic and material productions refer to the intangible and tangible meanings, institutions, and structures that individual cultures construct for themselves.
6. Language as a key dimension of culture
Language is a “mirror” of culture. It is essential for communication and provides cultural insights. There are nearly 7,000 active languages, but most have only a few thousand speakers. The major languages include Mandarin Chinese, Hindi, English, Spanish, and Arabic. Language has both verbal and nonverbal characteristics. It is conditioned by our environment. Sometimes it is difficult to find words to convey the same meaning in two different languages. Learning one or more common languages will enhance a person’s international business career.
7. Culture and contemporary issues
While culture is relatively stable, contemporary issues influence culture. In contact-based services such, as found in law and architectural firms, providers interact directly with foreign nationals in culture-laden transactions. Cultural differences may lead to mishaps in the exchange process. Technological advances are a key determinant of culture and cultural change. Improved transportation and the spread of communications technology have removed the boundaries that once separated nations. Technology also promotes culture. The Internet emphasizes the role of language in communications. Globalization promotes common culture and the consumption of similar products and services worldwide.
8. Managerial guidelines for cross-cultural success
Managerial guidelines include the need to acquire
Factual and interpretive knowledge about the other
Culture, and to try to speak their language. Managers
Should avoid cultural bias and engage in
Critical incident analysis to avoid the self-reference
Criterion. Critical incident analysis involves being culturally aware, not making value judgments, and selecting the most likely interpretation of foreign behaviors. Experienced managers develop cross-cultural skills, including a tolerance for ambiguity, perceptiveness, valuing personal relationships, and being flexible and adaptable. Cultural intelligence is the ability to function effectively in culturally diverse situations.