People Innovation Excellence

The Business Cultural Environment

Written by: Novita, S.Kom, MBA

The art and other manifestations of human intellectual achievement regarded collectively; The customs, civilization, and achievement of a particular time or people; The way of life of a particular society or group.

Characteristics of Culture :

  • Culture is shared, because culture is an act, beliefs, attitude, and way of life for not just for one individuals, but whole group of people that shared by living together for a certain time. Therefore culture is shared by one person that have major influence to other.
  • Culture is intangible, intangible means it does not form as an object, it will cannot be seen as thing because it is something that lives inside someone’s behavior.
  • Culture is confirmed by other, before people doing what others do, they somehow need to believe, and accept the culture as something good to be done. Otherwise, if they think that what people do is bad, they won’t accept that to their lives.

What is business culture?

Culture illustrates the accepted norms and values and traditional behaviour of a group. One definition of culture by Deal and Kennedy is “the way a we do things around here”. However, culture also evolves over time. The culture of each country has its own beliefs, values and activities. In other words culture can be defined as an evolving set of collective beliefs, values and attitudes.

Culture is a key component in business and has an impact on the strategic direction of business. Culture influences management, decisions and all business functions from accounting to production. You may now be thinking predominantly about national culture but this is only one aspect, business culture is its own unique dimension that includes getting off on the right foot, meetings, negotiation, formalities, social media use, internships and work placements and other elements which are highlighted on this website.

Culture is the key ingredient in the “liability of foreigness” described earlier as an obstacle to the MNE’s success abroad. Why? Because culture is what make all of us a foreigners to other people. Different culture in each company required each of their employees to learn how people interact, how people do things, which is good which is bad, and mostly determine us as the employee of the company.

The impact of culture at the firm level ranges from strategy formulation to FDI and organization design. Managers must be conscious that markets, supplies, investors, locations, partners, and competitors can be anywhere in the world. Successful businesses will take advantage of opportunities wherever they are and will be prepared for downfalls. Successful managers, in this environment, need to understand the similarities and differences across national boundaries, in order to utilize the opportunities and deal with the potential downfalls.

The globalization of business is easy to recognize in the spread of many brands and services throughout the world. For example, Japanese electronics and automobiles are common in Asia, Europe, and North America, while U.S. automobiles, entertainment, and financial services are also common in Asia, Europe, and North America. Moreover, companies have become transnational or multinational-that is, they are based in one country but have operations in others. For example, Japan-based automaker Honda operates the largest single factory in the United States, while U.S. based Coca-Cola operates plants in other countries including France and Belgium—with about 80 percent of that company’s profits come from overseas sales.

Marketing, accounting, the management of the supply chain, and virtually all other functions of business are influenced by culture.

Correlate of culture:

  • Language

It instills basic socialization themes and determines how value and norms are expressed and communicated.

In business and in the workplace, on the domestic front and in our social lives, we all stand to benefit from more effective communication skills. Every country has its own way of saying things. The important thing is what lies behind people’s words. Communicating across cultures begins with the basic understanding that one size does not fit all. Simply because you practice certain cultural habits or patterns does not mean the rest of the world does as well. Failing to recognise and adapt to this cultural diversity can mean the difference between success and failure.

The main criterion for effective communication is to understand the culture of the country. Culture provides a framework for acceptable behaviour and the differences in ideals need to be recognised, valued and appreciated before any real communication can take place. Gestures and styles of conversation may vary between your country and Germany for example. Topics and gestures you may deem normal and acceptable could possibly be viewed as taboo here. Such errors in communication may have a serious impact on the success of the negotiation process. While Germany is an extremely culturally aware nation, they also have expectations when it comes to others understanding their culture as an independent country – so preparation is a must if you are to build a positive image from the beginning of negotiations or works in German company.

  • Religion

Religion influences international business in many ways. National institution and business firms try to adopt practices that will satisfy religious decrees without undermining modern business practice.

Religion is often included as part of an organization’s overall diversity initiative. Nearly one-half of HR professionals responding to the survey indicated that their organization’s formal written policy on religion in the workplace is included in the overall diversity policy. Only 2% of respondents’ organizations have a written policy regarding religion separate from their overall diversity policy. This is an 18% increase from 2001, suggesting that more organizations are realizing the need to address religious expression and accommodation formally—a trend that may be linked to a focus on religious discrimination and harassment as a result of the terrorist attacks of September 11, 2001. “It is important to understand what a ‘formal diversity policy’ entails,” says Georgette Bennett, Ph.D., member of SHRM’s Workplace Diversity Special Expertise Panel. “The mere inclusion of religion in a list of protected classes in the boilerplate diversity policy does not address the critical issue of accommodation. Of all the protected classes, religion and disability are the only ones that require accommodation. The best practice is to adopt a distinct religious diversity policy.” There were differences by organization staff size regarding a formal written religious diversity policy. HR professionals from medium and large organizations were more likely to report that their religious diversity policy was included in their overall diversity policy than were small organizations. Not unexpected, HR professionals from organizations with multinational operations were more likely than their U.S.-based counterparts to report that their religious diversity policy was included in the overall diversity policy. HR professionals were also asked if their organizations had country/region-specific religious diversity policies for their locations outside of the United States. Only 16% of respondents reported that their organizations had country/region-specific religious diversity policies. HR professionals employed in the publicly owned for-profit sector (37%), compared with HR professionals employed in the privately owned for-profit (10%) and nonprofit (6%) sectors, were more likely to have country/region-specific religious diversity policies for their locations outside of the United States. Privately owned for-profit and nonprofit organizations are less likely to have the resources to establish and manage such a policy outside of the United States. When asked if religion/spirituality was included as a component in any of their employee training, 37% of HR professionals responded affirmatively. A company made by a religious person are also applied some of the regulation based on their beliefs, fitting in such company will cost us additional work.

Key Cultural Issues:

  • Cultural Etiquette

Cultural or business etiquette is the manner and behavior that are expected in a given situation, be it business negotiation, a supervisor-subordinate discussion of a raise, or the behavior expected outside the workplace and after business hours.

  • Cultural Stereotypes

Our view of other people’s  culture is a function of our perception and stereotypes. The definition of a stereotype is any commonly known public belief about a certain social group or a type of individual. Stereotypes are often confused with prejudices, because, like prejudices, a stereotype is based on a priorassumption. Stereotypes are often created about people of specific cultures or races.

Almost every culture or race has a stereotype, including Jewish people, Blacks, Irish people, and Polish people, among others.

Stereotypes are not just centered on different races and backgrounds, however. Gender stereotypes also exist. For example, if you say that men are better than women, you’re stereotyping all men and all women. If you say that all women like to cook, you are stereotyping women.

Sexual orientation stereotypes are also common. These stereotypes occur when you have negative views on gays, lesbians, and transgender individuals. People who have these negative views are often known as homophobic.

Racial remarks, sexual remarks, and gender remarks are the biggest stereotypes. One of the more common stereotype examples is stereotypes surrounding race. For example, saying that all Blacks are good at sports is a stereotype, because it’s grouping the race together to indicate that everyone of that race is a good athlete.

  • Cultural Distance

It is a measure of the extent to which cultures differs from each other. Culture shapes demand. Marketers have to identify different Cultures of the target markets (if they have sub-cultures) , in order to successfully market a product. However, the problem is that almost every region differs in their culture. The target market may be a particular region or regions within the same country, different states or countries in case of international marketing. Every Culture is different from the other.

The reason that culture has such a profound effect on marketing is that the culture of a particular target market affects the business relationships and the type of communication required for the marketing mix. The marketers have to choose the right approach and the perfect marketing plan for each market individually, depending on its culture among the other factors.There can not be a unified approach for all the culturally diverse markets.

However, even though there are differences in the cultures across the world, there are similarities too. The similarities can be in the form of food, music (people from different cultures may listen to the same type of music), clothing, etc. The similarities in cultures is rising due to reasons such as use of internet, television, people travelling to other countries and experiencing their culture and implementing it in their own life, the exposure to fashion across other cultures, etc. Marketing managers often use similarities among markets as a decision rule for when it is appropriate and effective to standardize international marketing activities.


Published at : Updated
Written By
Novita, S.Kom, MBA
LS2 | IBM
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