What is Cross-Cultural Business Management

“Culture is the collective programming of the mind distinguishing the members of one group or category of people from others”

Geert Hofstede, PHD.[1]

 

Business leaders today have embraced the impact of cross-cultural challenges on the success of their business. Because of Globalization, today’s executives must address the needs and expectations of their multinational and multi-cultural employees, business associates, and most important their customers. From potentially urban legends like the “Ford Nova”, to the less known but actually true issues of the color of UPS “Brown Uniforms” in Germany (brown color uniforms are still associated with the Nazi regime)[2] ; companies have learned that ignoring the cultural aspects of their business can have dire consequences for their bottom line.

 

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Cross-Cultural Business Blunders

 

Cross-Cultural Communications
Image courtesy of aea.english.com

Even the best companies make mistakes and the best executives fail to understand the nuances of other people’s cultures. This is not an isolated event, and while people always think about the expats company send to their foreign offices but this is a false expectation. In many cases people forget that companies also bring very successful foreign executives into their HQ just to suddenly realize that their foreign star miserably fails in the new cultural business environment.

 

“the road to bankruptcy or professional failure is paved with well intentioned marketing campaigns”.

 

White teeth are not always good

 

Pepsodent tried to sell its toothpaste in Southeast Asia by emphasizing that it “whitens your teeth.” They found out that the local natives chew betel nuts to blacken their teeth which they find attractive.

 

In Japanese culture, even if they can be used in small quantities mixed with other colors, white colors are usually associated with mourning and death.

 

You may  want to wait before you“ask for the business”

 

Many Western nations use rule-centered approaches to building business agreements and settling disputes. In Eastern and Latin American countries, entrepreneurs rely more on establishing individual relationships with their business partners, rather than depending on lengthy contracts and teams of attorneys.

 

For example, when the leaders of one American firm met with a potential Japanese partner, the Americans presented a 50-page contract at the outset. Since the Japanese leaders felt that the Americans did not take the time to establish a relationship with them, they refused to read the contract and cut off the negotiations.[3]

 

We are bounded by our cultural backgrounds

 

Image courtesy of dockstock.com
Image courtesy of dockstock.com

Cultural influence has been in many cases compared to an iceberg, what you see on the surface only represents a small fraction of what really goes on hidden from the public view. On the majority of the case organizations usually behave according to the culture of their headquarters. While in a classical western fashion, when errors happens jobs are on the line and organizations look for scapegoats, in other cultures the reaction may be different because of their own sets of cultural expectations. U.S. companies will react to these failures in an almost black and white mode, and could potentially even dismiss the executive because of one failure based on their normative cultural background. On the other hand a Japanese company may work to develop the executive’s cultural awareness based on their more pragmatic point of view.

 

Pragmatic – Normative, What does that means for your business?

 

Yes you know the words but how do they apply to the business environment. In today’s multi-cultural environments organizations must learn to embrace the needs and expectations of their customers and employees if they want to succeed on a worldwide basis. Culture is not an isolated aspect of human behavior; it is probably one of the strongest indicators of how individuals may perceive their business and personal environment. Based on Dr. Hofstede’s Cultural Dimensions theory, there are six major characteristics that can be used to potentially describe and identify how individuals will behave based on their nationality, and potentially affect how organizations need to address the needs of their multicultural, multinational employee and customer base. The six major characteristics that can impact the business are:

 

  • Power Distance
  • Individualism
  • Masculinity
  • Uncertainty Avoidance
  • Long Term Orientation
  • Pragmatism

 

From employees to executives regardless of their position within a company individuals are bounded by their cultural background. Culture affects almost every single aspect of a business environment, from the way we perceive our bosses (Power Distance), to the focus on personal achievements (Masculinity), and can substantially impact an individual’s contribution to a company. Successful companies have learned to identify and address the needs of their multicultural employees and customers, and that could be one of the strongest competitive advantages in today’s multinational business environment.

 

If you will like to learn more about cross-cultural business management you can subscribe to our site to receive our news, and you can register for our Introduction to Cross-Cultural Business Management Seminar at the University of Phoenix Miami Campus on March 20th, 2014.

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Jorge Mastrapa

Managing Director at Inloso LLC
Dr. Jorge Mastrapa is an international author, speaker, executive coach, and entrepreneur. His areas of expertise include cultural diversity, global leadership, organizational culture, and human capital management.

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CC BY-NC 4.0 What is Cross-Cultural Business Management by Inloso is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

About Jorge Mastrapa

Dr. Jorge Mastrapa is an international author, speaker, executive coach, and entrepreneur. His areas of expertise include cultural diversity, global leadership, organizational culture, and human capital management.

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