Culture is a vital aspect of most societies, countries, and nations. Not only in their day-to-day activities, but its vitality also extends to the way business is conducted especially when dealing internationally.
Multinational and cross-cultural organizations are more liable to the effects that cultural differences can wage on the affairs of the organizations.
It affects the way relationships are built, the way transactions are made, and the likelihood of sealing a deal across countries. In short, culture can make or break a business that deals internationally and across cultures.
The impact of cultural differences cannot be undermined as it may pose a great risk to the growth and expansion of a business organization. It is, however, essential to understanding, or at least, try to understand the cultural diversity amongst business partners in other countries.
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Differences in cultural elements
Culture is the total and accepted way of life of a particular set of individuals or society. It is the norms and traditions that direct the affairs of a set of people or societies. The elements of culture are mostly the same across cultures, it is the mode of expression that differs. The elements of culture include food, mode of dressing, language, mode of greetings, and festivities.
And mostly, since it is the norms that guide the society, these cultural elements reflect in the way business deals are done too.
The food that a set of individuals eat differs completely from the other individuals, the mode of dressing that is acceptable in a society is deemed inappropriate in another, language in its different forms can only be understood by a certain group of individuals or countries, their mode of greetings differs and is respective to every group, and their festivities are peculiar to each cultural groups across the world.
Culture basically affects every part of an individual’s life and thus, is taken as a great offense when any of its elements is violated in any form.
Impact of cultural differences on Business
Differences in certain cultural elements can influence a business partner’s view about some things. The way business is done by a group of people will differ from the way it is done by other groups of people. It is crucial to know who is who, as regards their stand on culture.
The following are cultural differences which culture can affect business transactions, deals, and proposals across cross-cultural countries:
Building trust:
Understanding the cultural differences of the organization’s business partner is crucial in building trust when making a business deal. An important component of every business deal is the act of socialization.
Learning the act of socializing with the organization’s business partner paves way for a better understanding and helps to achieve a mutual ground at a fast pace.
For instance, Chinas’ do love to wine and dine when discussing business deals and if they realize it comes naturally to you as their business partner even with the cultural differences, it makes for easy communication and helps to build and solidify their trust in you faster which can impact the business deal positively.
Recommendation: How To Understand Your Target Audience
Body gestures/ interactions:
Various cultures are very big on using body gestures to interact, and this can also be seen in the way they conduct their businesses.
Body gestures like handshakes and making eye contact while discussing is a crucial part of a culture that is greatly indulged in the course of conducting business. Through these gestures, it is easier to know the direction that your conversation is leading to, whether in a positive or negative direction.
It is important to research and take note of which body gesture is acceptable to the business partners you are dealing with, especially the ones of a different culture than yours.
Sensitivity to time
The saying, time is of the essence, is paramount to business dealings too. The way a group of people reacts to time differs from other groups of people.
This simply means that time can have a greater value depending on the group of individuals in question. For instance, Germans are known to be punctual and always on time in their dealings, so it is quite disrespectful to come later than the set time for a meeting and can affect the outcome of the meeting.
The Latinos, on the other hand, are known to be habitually late, as they are not that big on keeping to time and being punctual. Understanding how sensitive your business partners are to time is very important to aid the smooth running of the discussion/meeting.
Attitude towards organizational hierarchy
The attitude that is portrayed towards hierarchy in a business organization is also influenced by culture. In some parts, it is considered disrespectful to question the decisions of high-ranked personnel in a business organization. Junior staff are not allowed to contribute to discussions or to be opinionated by higher officials.
In other parts, junior staff are highly encouraged to ask questions and to also contribute their opinions in the organization, as this helps to build strong teamwork amongst the staff and can help increase the business in growth.
However, this cultural difference helps to define the roles of every member of the organization.
Formality and title
The use of formalities and titles differs for various cultures and its influence can be perceived in business as well.
Asian countries like South Korea and China take the concept of title and formality seriously. The use of “Mr./ Mrs. / Miss” to address them when dealing with them is quite important as it is considered a big deal in their culture.
In America, however, they prefer you call them by their first names rather than titles. They prefer to be informal rather than formal. It is essential to learn about the use of formality and title as regards the set of people that you are dealing with.
Culture makes a major impact in our everyday lives as it guides our morals, acts, and principles in the society. The differences exhibited in various cultures should be researched especially when dealing with a different set of people.
Learning about business norms of other people, that have been incorporated from culture, when dealing with them is very essential to ensure a smooth and bump-less conversation amongst everyone.