Understanding Cultural Differences in Business

How Differences in Culture Affect Business Communication and Conduct

May 14, 2009 Susan Brown

Understanding cultural differences is essential for companies involved in international business. Countries vary across several dimensions, affecting workplace values.

When it comes to international business, understanding cultural differences and promoting cultural sensitivity will help ensure that communication across borders is effective and that business transactions are successful.

Each country has its own cultural standards of being, thinking, and acting, and these cultural differences strongly influence workplace values and business communication. What may be considered perfectly acceptable and natural in the workplace of one country, can be considered confusing or even offensive in the workplace of other country.

Business representatives involved in the international business arena should be aware of how other cultures differ across the following dimensions. Many of these dimensions are based on Geerte Hofstede's framework for assessing culture.

Power Distance

In some countries, such as the Arab nations and many Latin American countries, people recognize and respect differences in power. In these high power distance cultures, bypassing a supervisor or any other superior would be considered insubordination. In low power distance countries, such as America, the lines between superiors and subordinates are often blurred. It is perfectly acceptable in America, for example, that supervisors can mingle with subordinates as equals within a social setting.

Explicit Versus Implicit

In some countries, such as America and Germany, people tend to be explicit in communication. Ideas are fully spelled out, and when trying to understand a message, people will depend on what has been actually said or written. In other countries, such as Japan, people tend to speak and communicate in an implicit and indirect manner. In this case, people depend on common understanding in knowledge and etiquette to extract the underlying message.

Monochronic Versus Polychronic

Monochronic cultures prefer to focus on one task at a time. They emphasize order and do not favor interruptions. For these people, time is a precious commodity. Schedules and timetables are greatly valued and are meant to be strictly followed. Polychronic cultures, on the other hand, like to multi-task and are generally less stringent when it comes to establishing or following an agenda. In this setting, the concept of time is more fluid, and the pace of life is more relaxed.

Individualism Versus Collectivism

In individualist cultures, such as America, individuality, independence, and self-determination are valued. In collectivist cultures, such as Japan, people are expected to identify with and work well in groups. In exchange for their loyalty and compliance, people receive a sense of security, protection, and shared responsibility.

Masculinity Versus Femininity

The cultures that are more masculine, such as Japan, value competitiveness, assertiveness, ambition, and the accumulation of wealth. On the other hand, feminine cultures, such as Sweden, place more emphasis on relationships, compassion, and the general quality of life.

Uncertainty Avoidance

This dimension concerns the level of uncertainty and ambiguity that members of a culture are comfortable with. Cultures that are high in uncertainty avoidance prefer rules and structured circumstances. Within their structured environment, these people tend to be more emotional and expressive. Cultures that are comfortable with uncertainty avoid rules and in general are less emotionally expressive and pragmatic.

Every culture possesses a unique mixture of attitudes, values, and social expectations. When conducting business across countries, it is vital that business representatives are provided with an understanding of the cultural differences and are able to be sensitive to them.

The copyright of the article Understanding Cultural Differences in Business in International Trade is owned by Susan Brown. Permission to republish Understanding Cultural Differences in Business in print or online must be granted by the author in writing.

Understanding Cultural Differences in Business

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