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More businesses are entering the global market. It is vital for businesses to understand that
cultural differences can affect how they perform in the local markets they are targeting. One
of the first things to consider is communication because bridging the language gap is
extremely important in business talks.

Cross-cultural challenges

As you learn more about cultural differences, you will encounter several more concepts, such
as low-context and high-context cultures. In low-context cultures like the United Kingdom,
the United States and Canada, communication is explicit and clear while in a high-context
culture like Russia, communication is nuanced and implicit and there is more shared content.
However, the opposite happens when negative feedback is to be given. Russia becomes
direct, while low-context cultures tend to be indirect when negative feedback is called for.

Building trust is another challenge for businesses. The concept may be relationship-based or
task-based. When doing business in China, for example, one of the ways to build good
relationships involves spending time together at the dining table (drinking and eating). It is
akin to building a strong network where gaining trust opens a path to success as cultural
differences are set aside. The Chinese call this type of relationship 'guanxi.' In the United
States, however, people tend not to have drinks with potential business partners often, unless
necessary, so they can avoid embarrassing situations.
Another factor that affects trust building is the comfort of silence. In some countries, a few
seconds of silence make the conversation uncomfortable. This happens in countries where the
comfort of silence is low, such as in France, Italy and the United States. In Asian countries
like Korea, Indonesia and Japan, however, the comfort of silence is high, which often results
in Asians not being able to speak often during business meetings with people from Western
countries. Asians are not likely to feel uncomfortable if the conversation stops for as long as
30 seconds.

Business executives should learn that cultural sensitivity is essential when engaging in cross-
cultural business. Never look at cultural differences as weaknesses. Instead, respect cultural
differences to gain success.
 Gaining benefits from cultural differences

Accepting cultural differences provides you with a wide range of business expertise and gives
you novel business insights to overcome business-related problems. It's your way to cope
with potential barriers regarding international business and culture.

It is vital for a global company to understand that there is a difference in the definition of
culture per se and culture in relation to the context of international business. Culture is
typically defined as a group of common and accepted standards shared by a specific society.
When you put it in international business context, what one society considers as professional
may be different for another foreign society.

You have to understand that cultural differences affect global business in three primary areas
– organizational hierarchy, etiquette, and communication. Understanding them and
recognizing their effects on your business will prevent you from creating misunderstandings
with foreign clients and colleagues.

1. Communication
Effective communication is vital to business success, whether you are a start-up or a big
corporation. Although it is common to hear that English is the language of business, do not
ever assume that you will be able to come across your foreign counterparts by using or
speaking English.

When you venture into the international business arena, one way of bridging the cultural
differences is through language. Understand the language your target market speaks and
know how you use it to convey your message. In India for example, business professionals
typically communicate in nuanced and indirect ways. This is opposite to the Finns who tend
to be direct and brief in their communication.

Aside from the verbal communication, it is essential to learn that non-verbal communication
is also extremely important when dealing with international businesses.

2. Interactions
Gestures that are commonplace in your own country, like kissing people you meet on the
cheek, making eye to eye contact and shaking hands firmly, may be taken as offensive or
unusual by your foreign clients or business partners. As many business coaches will tell you,
it is critical for you to remember the proper professional interactions when dealing with
different cultures. Doing research on accepted and proper business etiquette is important. In
 some cases, you need to be extra observant of body language and at times, it is better to ask
than commit a cultural faux pas.

3. Etiquette in the workplace

When you are working for a multinational company, you are likely to encounter many
differences, which prompt you to learn international business etiquette.

Put high importance on the formality of address when dealing with foreign business partners
and colleagues. In some cultures, it is all right to address a person you've recently met by
their first name, while in other countries, they would rather that you address them by their
surname or their title. Canadians and Americans often use first names, even when dealing
with new acquaintances. But in many Asian countries, such as Singapore, China and South
Korea, you should always address a person formally by adding Mr. or Ms. before their
surname. If you are in doubt, use the formal way of address.

Punctuality is something that is relative. When you deal with business partners, clients or
colleagues from the United States, South Korea, Japan and Russia, you are expected to be on
time. In Germany, you are even expected to be at least 10 minutes early for your
appointment. In Greece, they expect foreigners to arrive on time but just like in Russia, you
may expect your counterpart to arrive slightly late. Brazil is ambivalent. They could either be
late by a few or several minutes unless you indicate that they follow the English time,
meaning they should arrive at the agreed time.

In Malaysia, expect to wait up to an hour if your counterpart will be about five minutes late.
They are not required to give an explanation, either. In China, it is acceptable to be at least 10
minutes late while in Mexico, it is quite normal for people to be late by 30 minutes for a
business meeting. When doing business in Nigeria or Ghana, the appointed hour for the
meeting may be one hour late or within the day. In Morocco, personal meetings could be
delayed by an hour and in some cases, a day. When scheduling meetings in India, understand
that being punctual is not one of their ways.

4. Hierarchy in the organization

Cultural norms dictate how attitudes towards management and organizational hierarchy are
perceived. In some cultures, junior staff and people in middle management may or may not
be allowed to speak up during meetings. In some countries, it is difficult to question decisions
by senior officers or express opinions that are different from the rest.

Attitudes are dependent on social equality or the societal values of a country. In some
countries such as Japan and South Korea where respect for elders and people in positions of
authority is deeply ingrained in the members of society, the concept is applied to the
workplace as well. It helps in defining responsibilities and roles in the company and those
holding positions in senior management expect deference from junior staff and a higher level
of formality and respect.

However, the situation is different in Scandinavian countries. In Norway for example,

societal equality is emphasized so the organizational hierarchy tends to be flat. The
workplace environment calls for cooperation across all departments and informal
communication is prevalent.

Differences in negotiating styles

Negotiation is a principal component of international business. Culture influences the way

people behave, communicate and think. These characteristics are reflected in the way they
negotiate. It is crucial for businesses to understand cultural differences during business
transactions and find ways to hurdle the barriers these differences present.

Spanish speakers view negotiation as the means to have a contract, while in some Asian
countries, negotiations are taken as the way to build stronger and firmer business
relationships. The Japanese regard negotiation as a win-win process while the Spanish look at
it as a win-lose process.

The way one communicates during negotiations should be carefully considered. Israelis and
Americas are very direct, so you immediately know if the transaction is approved or not. The
Japanese, however, tend to be indirect. You have to read and carefully interpret vague signs
to know if they rejected or accepted your proposal.

Some cultures are very emotional like the Latin Americans. Most Asians, on the other hand,
have a tendency to suppress their emotions and keep things formal.

Even the way different cultures handle contracts vary. Americans like to have every detail
included in the contract because they want to anticipate possible eventualities and
circumstances. The deal equates to a contract, therefore everything that was discussed and
accepted during the negotiation should be specified in the contract. The Chinese, on the other
hand, prefer a contract to have the general principles only, because for them, sealing a deal
means forming a relationship with the business partner.