Addressing the Cultural Barriers in International Business
Clarke Ricks School of Business,
Liberty University
BUSI 690: Policy and Strategy in Global Competition
Dr. Hicks
April 30, 2022
Addressing the Cultural Barriers in International Business
Given the significance of culture in international business and the cross-cultural challenges
involved, it makes sense to ask:
How do we overcome the cultural barriers in international business?
Effective and successful cross-cultural management in international business can be
daunting. It is not enough to be aware of the cultural barriers disrupting international business
relations - you must also be prepared to tackle the issues.
Create a culturally aware workplace
One of the best ways to overcome cultural differences in global business is to create space
for the cultural requirements of your colleagues and employees in a foreign country. For
instance, factor in cultural and religious holidays, customs, and dietary needs and integrate
them into your organization’s policies to make everyone feel included.
Promote open communication
International business and cross-cultural communication go hand-in-hand. Promoting a
culture of open communication is the only way culturally diverse teams can overcome their
differences and work together. Global leaders must lead by example. They should promote
open communications, listen to everyone’s opinions, and create a safe and transparent
workspace. Employees should have a safe space to talk about their challenges without any
judgment.
Engage in diversity training
When companies try to include and accept people from diverse cultural backgrounds, they
take one step in the right direction of overcoming cultural barriers in international business.
Diversity training is an effective tool that allows employees to identify hidden prejudices,
biases, and other obstacles and create opportunities wherein employees can learn how to
embrace diversity.
Cultivate a shared company culture
When you have a culturally diverse team, the best way to unite the members is by
establishing a strong company culture reflecting the interests of all team members. As a team
leader, you must ensure that your team functions like one unit to discuss differences, voice
grievances, and find solutions to business challenges. When members work remotely, it’s
crucial to create a team culture beyond stereotypes.
Understand the local culture
Before you get busy conducting business operations in a new market, focus on
understanding the region’s business practices. Instead of taking a full-blown global approach,
start with a localized mindset and gradually implement changes in your business.
Cultural Differences in International Business
Recognizing how culture influences international business is indispensable to avoiding
misunderstandings among employees and clients and create a stellar image in new markets.
Accepting cultural diversity in global organizations gives you a broad spectrum of business
experience and novel insights to tackle real-world business problems.
Culture in international business differs from the general meaning of culture per se,
affecting global companies in five broad areas: interaction, communication, organizational
hierarchy, and workplace etiquette.
Interaction
Professional gestures and interactions that are acceptable in one culture may be offensive
or inappropriate in a different cultural setup. Thus, if you are accustomed to shaking hands,
making eye contact, and kissing people on the cheek as part of formal interactions in your
country, the same may not apply to foreign clients and business partners. Learning about
acceptable and suitable business etiquette becomes crucial.
For instance, while the Japanese consider addressing someone by their first name in a first
meeting disrespectful, Americans are more comfortable using first names in a formal setup.
Communication
Communication methods vary across cultures. So, understanding the language and
communication style of your target market is an excellent way to bridge cultural gaps in the
international business arena. For example, Israeli and American cultures emphasize
straightforward methods of communication, unlike the Japanese, who rely on indirect
communication. Likewise, Finns tend to be brief and use direct communication strategies,
whereas Indians typically communicate in indirect and subtle ways.
Organizational hierarchy
Different cultures perceive organizational hierarchy differently. When expanding into new
markets, you must realize that your host country’s approach and attitude towards the
corporate structure may differ from yours. Hence, it could be challenging to define roles in
cross-cultural teams or determine who has the authority on the other side.
While Japan has a straightforward organizational structure promoting hierarchy, Sweden
has a flat organizational hierarchy that emphasizes equality. Furthermore, while the Chinese
and Japanese stress consensus decision-making, it is more common for American teams to have
a leader with ultimate authority.
Workplace etiquette
Differences in workplace etiquette are a vital consideration when discussing culture's
impact on international business. When you engage with multinational teams, you will
encounter stark differences in workplace etiquette, reflecting cultural diversity. Let us consider
punctuality. You must reach in time when dealing with American, Japanese, Russian, or South
Korean clients and colleagues. On the other hand, arriving early for an appointment is standard
in Germany. But when in Malaysia, China, Mexico, Ghana, or Nigeria, arriving late for meetings
is acceptable.
Negotiation Style
While engaging in international business, negotiation becomes a principal component. The
way people behave and communicate reflects their negotiation style. Organizations must
understand the accepted negotiation norms in different countries and act accordingly.
For instance, in some Asian countries, negotiations are deemed crucial for building
stronger business relations. However, it is seen as a contract focusing on a win-lose process in
Spain.
