People Innovation Excellence

Cross-Cultural Management in International Business

A major challenge of doing business internationally is to adapt effectively to different cultures. Such adaptation requires an understanding of cultural diversity, perceptions, stereotypes, and values. Culture consists of shared mental programs that condition individual’ responses to their environment.

A culture is a way of life of a group of people that they accept naturally and are passed along by communication from one generation to the next.  Culture is acquired knowledge that people use to interpret experience and generate social behavior. The word “culture” is used in many ways, such as national culture, organizational culture, political culture or youth culture.

National cultures are particularly important in international business because of the concept of national sovereignty and the need to conduct business affairs within national, legal, and political framework.

Culture has the characteristics of being learned.  For example, a child was born in China but he grew up in Brazil.  He may learn behavior pattern characteristic of Brazilian child, including language.  Culture can be shared by a group of people.  Even if some behavior is commonly appropriate, it is cultural if most people think it is appropriate.  Like the idea of marriage involves only a man and a woman.  Culture also cumulative as the new knowledge is being added to what is existing.  Culture is ideational, dynamic, and diverse, too.  Culture gives us a range of permissible behavior patterns.

Based on some theory of cross culture, there are many dimensions of cultural diversity, including centralized versus decentralized decision making,  safety versus risk, individual versus group rewards, informal versus formal procedures, high versus low organizational loyalty, cooperation versus competition, short-term versus long-term horizons, and stability versus innovation.

Cross-cultural training has focused on differences: differences in communication styles (like how Japanese workers are less direct than Germans) or differences in values (like how Americans have more individualistic values than those in China).  It may have even focused on differences in etiquette — like how in the United States you can write on the back of a business card, but in Japan, that would be a taboo.  It looks simple and small mistakes, but it is the mistake most managers make with cross cultural training.

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  1. Written By: Ng Scherly Hansopaheluwakan, S.E, MIB

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