Culture + Business
Globalization is an unstoppable process changing the world rapidly. The way that different cultures and individual people adapt to these changes is driven by the deeply underlying shared values.
Language is not enough
Despite the increasing number of international encounters, gained experience and English as widely shared language of business, the world is full of problems, mistrust and broken deals between people and nations who think, feel and act differently in business.
Trust is the basis of all successful encounters
Trust is the main factor to make things moving. It is naturally easier to trust similarly thinking and behaving people. This is why working cross-culturally in a successful way requires both emotional and cultural intelligence.
What is cultural intelligence?
To put it simply, cultural intelligence is the capability to relate and work effectively across cultures (Soon Ang and Linn Van Dyne).
According to the Economist report Global Firms 2020 companies need employees with a global mindset who are able to work across cultures and are motivated to bring the business to new markets. International experience or knowledge without the right mindset are simply not enough.
The value of diversity is recognized by businesses, but diversity is also not easy to manage. Asked about the greatest obstacles to hiring globally, survey respondents pointed primarily to cultural differences (44%), along with differing standards of quality and language barriers.
Culture makes a huge impact on business in national level and organizational level (links to sub-pages).
Culture is often the missing key to success.
National cultures
Culture on national level has many definitions.
The world-famous Professor Geert Hofstede defines culture as “the programming of the human mind by which one group of people distinguishes itself from another group”. The programming on value level happens already in our early years.
“Trust is the lubrication that makes it possible for organizations to work.” - Warren Benis
Organizational cultures
Organizational or company culture has become a hot topic recently as people have understood that the strategic goals of the organization can’t be executed without culture that supports them.
Few things contribute more to business success than culture. The culture of the organization either supports your strategic goals or hinders you from reaching them.
Why should you become culturally competent?
In the globalizing world the number of cross-cultural encounters have grown rapidly. Negotiating or working with people who think and act differently than you think would be ‘right’ is not easy. Trust is needed for things to proceed quickly, to increase productivity, people to give their best, for keeping people motivated etc.
Cultural awareness develops motivation and understanding within individuals and organizations.
With cultural competence you can improve your personal success rate in international business and become more competitive in the job market. As a bonus you surely will like your work more.
Companies also benefit greatly by understanding how to make the needed cultural adaptation to international sales, negotiations, marketing, and management thus getting competitive advantage.
There are several studies about the international expansion of companies and what experienced leaders see as challenges in their global business.
Below there is chart made from Economist report: Global Firms 2020.
Increase operations
70% of leaders believed their operational presence in international markets will increase
Cross borders
78% of leaders said their teams would collaborate more across borders
Cultural norms
50% of leaders said the greatest threats to smooth operations stemmed from the differences in cultural norms
Communication challenges
50% of leaders said that misunderstandings in communication have impeded their international business dealings and have cost their company money
Trainings needed
78% of leaders said that understanding cross-cultural communication better would increase their profit, revenue, market share
Q: Please state the extent to which you agree or disagree with the following statements (% respondents):
Strongly agree/agree
Neutral
Disagree/Strongly disagree
