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However, along with the benefits of insight and expertise, global organizations also face potential stumbling blocks 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.


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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.

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. Everyone has this respect and curiosity for all the cultural and personal differences between us. This environment encourages everyone to strive for excellence. With the opportunity to study alongside peers from all corners of the globe, building cross-cultural communication skills is at the core of our business programs.

Watch Hult Professor Jean Vanhoegaerden discussing why culture is important in international business :. Different approaches to professional communication are just one of the innumerable differences in workplace norms from around the world.

Culture Defined

CT Business Travel has put together a useful infographic for a quick reference of cultural differences in business etiquette globally. In addition culture will have a major influence on the outlook to job of workers, facets of encouragement, devotion to the company, individual inventiveness and group dependability.

While the achievement in Western organization is frequently ascribed to individual enterprise and innovation, the accomplishment in business in Asian nations is more related to a sound work ethic and organizational faithfulness. In a global organization the top management can assume different methods to handle cultural differences. It is critical to emphasize that cultural diversity has to be seen as a basis of prospective positive force for an organization. At the same time it cam be a likely cause for conflict. Cultural differences can result in hostility in groups.

But if managed properly it can be a major supply of the essential inventiveness needed by businesses in the swiftly transforming business environment to sustain competitive advantage.

International Business Culture 101: Corporate Etiquette on a Global Scale

Cultural diversity is thus a feature of global organizations which needs a large amount management care. Management will look for making the culture of an organization into a character that successfully assists its objectives, strategies and functions. There is no doubt that skillfully manipulating cultural differences in the worldwide marketplaces is one of the most important marketing strategies in business globalization literature.

Understanding cultural differences of employees from different culture background helps international business managers manage their people more effectively. As market expansion, MNEs usually hire local employees including senior managers because of their cheaper labor and similarity with local society culture this kind of situation usually occurs in which western developed countries invest into less developed countries.

These employees with different personality traits and need structures might affect their behavior and expectations in the workplace. For example, culture attitudes such as time, age, and status etc.

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On the other hand, in some Latin American and Arab cultures, unscheduled habits are thought of as a commonsense. So do not be offended by your senior managers being late to a meeting. As Mahoney et al. Therefore, understanding sometimes-extreme differences may help international managers build better rapport with employees which could be the first step of managing them effectively.


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The building of harmonious relationship with host country government is a vital part of any venture, and such relationships rely heavily on an understanding of national culture. The premise of establishing rapport with government is obeying local law and custom. Lack of knowledge of local culture may lead to trouble and even lawsuit.

International Business + Culture | Seville | Spain | College Study Abroad | CIEE

Maintaining good relationship with local government is an important part a foreign business remains competitive advantages. Guanxi is a key element of society culture that helps people doing business in many Asia countries, especially in China. Guanxi includes personal connections, relationship between personal and social, and relationship between business or personal and government. It is of no surprises that those who possess good guanxi with governments will benefit especially from some government programs.

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In China, appreciation of the context of guanxi is a key factor for international managers to do business. Globalization is becoming an inevitable tendency in the 21st century; under this tendency, it is obvious for the importance that international business people tend to understand cross-culture impacts.

Many notable companies like Nike have learned some from one clash after another with foreign cultures, but there are still likely beyond the goal- global expansion. This means they need take more time to study culture of the country they try to enter into and reach understanding of mutual cultural attitudes and values. In the sections above, three important reasons why understanding culture is important in doing international business are mentioned as to that understanding culture helps marketing products and services, managing workforces, and dealing with host governments.

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International Business Cultural differences

Why culture is important in doing international business?.