In a world where being global is quickly becoming a necessity, companies, managers, and even entry level employees are affected by international business more than ever before. As with any business endeavor, there are challenges to successfully market your organization on a worldwide level. A proper understanding and management of cultural differences in business will play a key role in making any attempt at global industry possible.
While many obstacles that a company may face will be product or service specific, cultural differences will exist across all sectors of commerce. In addition to being widespread, cultural differences also possess the capability to greatly impact a business’s profitability. The first step to making sure that your company and its employees are internationally competent is knowing what differences exist and how to be sensitive to them.
Probably the most difficult and damaging of cultural differences is a failure to communicate effectively across cultures. Whether it is in written, spoken, or body language, eliminating cultural differences in communication is a key to success. Many companies have tried to take shortcuts in this area and have assumed that what worked in the United States, for example, could simply be translated and used abroad. These assumptions have cost corporations millions in revenues and have completely severed relationships with strong potential clients.
Another major area for concern is how each culture is accustomed to handling differences and conflicts that arise. Businesses operating in the Netherlands, for instance, will most likely prefer a private place to address conflicts directly and will not appreciate or tolerate a public argument involving others. This is a direct contrast with the way quarrels are handled in the Philippines, however. Filipinos typically prefer a mediator and will avoid direct confrontation in private. Without properly researching the culture of the country or countries you wish the expand business into, a simple disagreement could have dire consequences if not handled in a way that is socially acceptable.
One mistake that many business people make is assuming that all businesses are on equal playing fields in the realm of government involvement. While businesses in the United States may have very little government interference, less developed countries may experience a high level of red tape and bureaucratic control. An organization that has not taken proper steps to educate themselves on the political and government scene may find themselves in a complex and expensive dilemma.
Other areas of cross cultural differences that should be considered are chain of command, gift giving, business etiquette, and meeting planning. Being educated in these areas of diversity is not just a courtesy, but a requirement to ensure a smooth transition into new global markets.