How cultural differences influence international business
Clarke Ricks School of Business,
Liberty University
BUSI 690: Policy and Strategy in Global Competition
Dr. Hicks
June 8, 2022
How cultural differences influence international business
As companies continue to expand across borders and the global marketplace becomes
increasingly more accessible for small and large businesses alike, 2023 brings ever more
opportunities to work internationally. Multinational and cross-cultural teams are likewise
becoming ever more common, meaning businesses can benefit from an increasingly diverse
knowledge base and new, insightful approaches to business problems. However, along with the
benefits of insight and expertise, global organizations also face potential obstacles when it
comes to culture and international business.
While there are a number of ways to define culture, put simply it is a set of common and
accepted norms shared by a society. But in an international business context, what is common
and accepted for a professional from one country, could be very different for a colleague from
overseas. Recognizing and understanding how culture affects international business in three
core areas: communication, etiquette, and organizational hierarchy can help you to avoid
misunderstandings with colleagues and clients from abroad and excel in a globalized business
environment.
1. Communication
Effective communication is essential to the success of any business venture, but it is
particularly critical when there is a real risk of your message getting “lost in translation.” In
many international companies, English is the de facto language of business. But more than just
the language you speak, it’s how you convey your message that’s important. For instance, while
the Finns may value directness and brevity, professionals from India can be more indirect and
nuanced in their communication. Moreover, while fluent English might give you a professional
boost globally, understanding the importance of subtle non-verbal communication between
cultures can be equally crucial in international business.
What might be commonplace in your culture — be it a firm handshake, making direct eye
contact, or kiss on the cheek — could be unusual or even offensive to a foreign colleague or
client. Where possible, do your research in advance of professional interactions with individuals
from a different culture. Remember to be perceptive to body language, and when in doubt,
ask. While navigating cross-cultural communication can be a challenge, approaching cultural
differences with sensitivity, openness, and curiosity can help to put everyone at ease.
2. Workplace etiquette
Different approaches to professional communication are just one of the
innumerable differences in workplace norms from around the world. CT Business Travel has put
together a useful infographic for a quick reference of cultural differences in business etiquette
globally.
For instance, the formality of address is a big consideration when dealing with colleagues
and business partners from different countries. Do they prefer titles and surnames or is being
on the first-name basis acceptable? While it can vary across organizations, Asian countries such
as South Korea, China, and Singapore tend to use formal “Mr./Ms. Surname,” while Americans
and Canadians tend to use first names. When in doubt, erring on the side of formality is
generally safest.
The concept of punctuality can also differ between cultures in an international business
environment. Different ideas of what constitutes being “on time” can often lead to
misunderstandings or negative cultural perceptions. For example, where an American may
arrive at a meeting a few minutes early, an Italian or Mexican colleague may arrive several
minutes — or more — after the scheduled start-time (and still be considered “on time”).
Along with differences in etiquette, come differences in attitude, particularly towards
things like workplace confrontation, rules and regulations, and assumed working hours. While
some may consider working long hours a sign of commitment and achievement, others may
consider these extra hours a demonstration of a lack of efficiency or the deprioritization
of essential family or personal time.
3. Organizational hierarchy
Organizational hierarchy and attitudes towards management roles can also vary widely
between cultures. Whether or not those in junior or middle-management positions feel
comfortable speaking up in meetings, questioning senior decisions, or expressing a differing
opinion can be dictated by cultural norms. Often these attitudes can be a reflection of a
country’s societal values or level of social equality. For instance, a country such as Japan, which
traditionally values social hierarchy, relative status, and respect for seniority, brings this
approach into the workplace. This hierarchy helps to define roles and responsibilities across the
organization. This also means that those in senior management positions command respect and
expect a certain level of formality and deference from junior team members.
However, Scandinavian countries, such as Norway, which emphasize societal equality, tend
to have a comparatively flat organizational hierarchy. In turn, this can mean relatively informal
communication and an emphasis on cooperation across the organization. When defining roles
in multinational teams with diverse attitudes and expectations of organizational hierarchy, it
can be easy to see why these cultural differences can present a challenge.
As part of our mission to become the world’s most relevant business school, Hult is
dedicated to preparing our students for the challenges and opportunities of working across
borders and cultures. A big part of this preparation is understanding the role culture plays in
international business. In many ways, the Hult classroom mirrors today’s business environment,
with students of 130 nationalities collaborating and studying together. And not only are our
students multicultural, our faculty is too. Many have lived, worked, and taught across Europe,
Asia, the Middle East, and beyond.
Outside of the classroom, Hult students have the opportunity to experience life, culture,
and commerce in today’s most dynamic business centers through our global campus rotation
program. This international learning environment offers a truly global perspective and unique
insight into culture and business practices from all over the world.
