Deciding to market internationally can be extremely risky and costly for businesses, but the opportunities can be very rewarding. Before a business enters a new market, it should take time to evaluate the country’s laws, customs, languages, preferences, ethical codes, labor force, marketplaces and political systems. A strong knowledge of the similarities and differences of a foreign market to a company’s domestic market is essential in uncovering the threats and opportunities that await.
This article examines the importance of cultural differences in international trade.
Cultural Differences of Foreign Markets
Culture is the set of attitudes, norms, values, symbols and expectations that shape human behavior. These are transmitted from one generation to the next. The cultural identity of a group of people influences ambitions, priorities, attitudes, beliefs and behaviors towards opinions and ideas related to particular situations and concerns. The most successful international business managers identify and incorporate potential areas for cultural conflict in their strategies and decision-making. Some common areas of cultural conflict include differences in language, decision-making, values, ideas concerning status, beliefs regarding time, space, non-verbal language, and religious beliefs. Ignoring or misreading cultural differences and reacting to them inappropriately can be disastrous in business relationships and negotiations.
Stereotyping is another common mistake that can cause irreparable damage in cross-cultural business negotiations. Stereotyping involves assigning generalizations that are sometimes inaccurate and often deemed offensive to an entire population of people in a cultural or social group. Somewhat related to stereotyping is ethnocentrism, which attempts to judge all members of a particular group according to one’s own perceived cultural attributes.
The most successful managers realize that experience, education and open-mindedness are critical to international success. To prepare for international meetings, often managers review journals, books and online content for suggestions about appropriate behavior when traveling and working abroad. Sometimes managers watch live international television programming to familiarize themselves with unique cultural cues for a given society. KODI, a free open-source media player, contains a number of downloadable plug-ins that permit viewing of live television programming from hundreds of countries around the world. Watching the news from any of those countries provides insights into that culture’s religion, politics, and customs. Consulting with others who are native to the country can also offer valuable insights into business rituals, such as gift giving, greetings, business attire, and business conduct.
Improve Your Success in Foreign Negotiations
Here are a few additional suggestions to improve your likelihood for success in foreign negotiations.
- Don’t over read possible non-verbal messages. Much has been written about non-verbal communication. Try to focus on the dominant ways of thinking, expected behaviors, and ways of doing business. When negotiating with different cultures, take a very conservative approach. Likewise, don’t attempt to read non-verbal communication cues of others. You are just as likely to misread the cues as to read them accurately.
- Recognize and respect cultural differences. When meeting people from foreign cultures, count on them having mannerisms, practices, values, and beliefs that are different from your own. Be open-minded to unfamiliar mannerisms.
- Prevent stereotypes from clouding your judgement. Free your mind of preconceptions and stereotypes that may cloud or distort the keys that are truly important in negotiations. Consider each person as an individual with specific goals instead of a member of a group of people who share specific characteristics.
- Ensure your thoughts are interpreted correctly. When dealing with foreign cultures, it is critical that communication is transmitted and received correctly. Whenever you are in doubt, ask questions to ensure complete understanding.
- When in Rome. When you find yourself in an unfamiliar situation, try to adapt to the tone and pace of others. If the other party’s communication seems short and direct, then acclimate to their style. Conversely, if it seems so slow as not to move at all, force yourself to be patient and attentive.
- Welcome and respect appropriately. Identify the protocols for welcoming and showing respect. This may vary, based on the seniority and level of a business executive. Understand how a culture communicates customary gestures through bows, handshakes, smiles, and other rituals.
These are some simple tips for preventing cultural faux pas when conducting international business. The most successful international managers prevent critical mistakes by learning as much as they can about foreign cultures before critical problems can develop.