The Ultimate Guide to Navigating International Corporate Culture

Much of our economy is now global in scale. Successful local businesses can quickly outgrow their original market, forcing them to move forward on an international scale by reaching out to customers in different regions, countries, and continents. To do this, your company’s culture needs to include embedded knowledge and sensitivity of local customs and specific cultural differences, as well as a framework for working with cross-cultural teams.

What is culture and how does it affect international business?

Culture is generally understood to be a set of beliefs, values, and rules followed by a specific country or group of people within a country. Culture impacts all areas of life from family and social grouping to the workplace and business. The impact of culture on global businesses cannot be understated. It can affect every aspect from decision-making and management strategies to negotiating contracts and interacting with customers. Fundamental company values might not comfortably align with unfamiliar cultures, while an acceptable business practice in one country may deeply offend colleagues in another. 

To avoid offense and costly misunderstandings as well as create optimum working and trading conditions, you need to develop an awareness of the impact of culture in international business. At BLEND, not only do we fully understand cultural nuances that could hinder your business message, but we can also help you create advantageous international strategies. Let’s dive into a few cultural considerations for global business.

1. Cultural identity

While localizing your company culture, products, marketing, and strategies is vital for global business success, this process has to go much deeper than language translation. How your messages are conveyed is just as important as the words used. For example, in countries such as the US, Spain, and Germany, people tend to speak assertively and loudly in the workplace, sharing ideas with confidence. 

In contrast, in Japan, quiet voices and passive sentence constructions are more normal. In fact, across much of Asia, great care is taken not to offend either by the tone of voice or the words used. Topics that are readily discussed during meetings or coffee breaks in places like the US and the UK are reserved solely for the domestic sphere in Asia. 

Another aspect of cultural identity is our mannerisms. Italians use their hands to express themselves and as in many Latin cultures, people are quite happy to shake hands, hug, or even kiss their colleagues. In the Middle East, South Korea, or Japan, such overt displays of affection could be considered intrusive or even offensive. Even shaking hands can be a minefield in international business culture. In the US and Europe, an enthusiastic shaking of hands to cement a fruitful meeting or successful business deal is the norm. However, this isn’t the case in places like the Middle East. Here, a firm grip is frowned upon, while only the right hand is used for handshakes.

2. Ethnic and racial identity

The biology and societal concepts of race and ethnicity are complex and cannot always be separated. Race tends to be viewed as something that sets people apart while ethnicity generally means the sharing of language, country, religion, and other cultural beliefs. In business relations with countries such as China and South Korea, it’s important to be aware of their collectivist culture. An entire cohort of people rather than one dominant individual will need to be persuaded that your product is right for them. This collectivism can also affect how multinational teams work together, influence corporate cultures, and improve employee retention. 

3. Religious identity

It is very often the religious aspect of ethnicity that needs to be addressed when considering the impact of culture on international business. This is especially so if you are dealing with countries such as the United Arab Emirates where Islam is the official religion. Islam pervades every aspect of life in many Middle Eastern countries and this should be respected in all of your business dealings. 

Modesty, generosity, and respect are highly valued within Islamic culture and these should be at the forefront of your mind when conducting meetings and deals or working with a multinational team. A hierarchical, top-down approach to business is also prevalent in the UAE with power and decision-making ability generally assigned to a single individual. This can prove something of a shock for businesses with a strong corporate culture that favors democracy and shared accountability. 

Part of a successful international business culture is recognizing the religious holidays of both colleagues and employees. Your work calendar should take account of both regional and country-wide holiday schedules specific to national cultures. In countries where strict observance prevails, religious obligations throughout the day also have to be observed and respected. Global businesses operating in Islamic countries also need to consider that the weekend begins on Friday, rather than Saturday. Avoid causing offense and creating problems in the workplace by collaborating with localization experts such as BLEND.

4. Gender identity

Sadly, many multinational companies experience the same issues surrounding gender, including pay disparity and representation in senior roles and specific positions. However, there are more subtle factors at play that you need to be able to recognize. For example, countries such as China and Japan have a high “masculinity level” where work is goal-oriented, and money and material possessions are assigned great value. The result is a stoic business environment where emotions and feelings tend to be kept private. 

Other Asian countries such as South Korea have a lower “masculinity level” where the quality of life and welfare of others is prioritized. Furthermore, public displays of emotion and expressing feelings are more socially acceptable. In South Korea, this is reflected in the number of women occupying roles at the high corporate level, with the percentage of female executives far outweighing the numbers encountered in China and Japan. It’s important to familiarize yourself with the gendered character of regions and countries you wish to operate in. Be aware of the status of everyone you come into contact with and treat them accordingly. To avoid causing offense, always follow local nuances, such as whether women are expected (or allowed) to shake hands or not. 

Gender identity also serves as an obstacle when it comes to retail marketing campaigns. Investing considerable time and money in researching consumer profiles can pay dividends for any business thinking about international expansion. In many Western countries, a very high percentage of retail decisions are made by women. However, marketing campaigns have only recently pivoted to accommodate this reality. This is especially true in sectors that are traditionally considered to be masculine, such as transport and technology.

5. Individual identity

From the very first time you meet a potential business contact or team member or enter a meeting room, remember that the way you address someone can have a lasting impact. Americans and, to a lesser extent, Europeans, are generally happy to be addressed by their first names once introductions have been made. However, most Asian countries prefer to keep things formal at all times. It’s wise to err on the side of caution when doing business in these countries, using titles and surnames unless explicitly invited to do otherwise.

6. Social identity

As previously mentioned, some societies are very hierarchical while others are more relaxed. Scandinavian countries such as Sweden, for example, place great emphasis on social equality and this is reflected in the level of organizational culture and hierarchies of its workplaces. In contrast, Japan is more traditional in its approach, with clearly defined hierarchies within businesses and great respect shown for senior members within the company. 

These different approaches impact how meetings are run and teams operate. In Scandinavian models, everyone has a voice and will input their ideas freely. In more traditional organizations with clear-cut corporate structures, a more discreet approach to thought-sharing and idea proposals may be required.

7. Cultural recognition

Being aware of all the different identity strands is an important part of creating a cohesive company culture that is multinational. These strands come together to create regional or national characters that can cause issues if you’re not aware of them. For example, attitudes to time are far more relaxed in the UAE than they are in the US or Northern Europe. Be prepared for meetings to start late or even be rescheduled at the last moment. 

Latin countries such as Spain, Italy, and Mexico can also be flexible with their timekeeping. While punctuality is seen as a virtue in the US and UK, your Italian colleague may arrive way beyond the scheduled start time of a meeting yet still consider themselves on time. Leave plenty of time in your travel itinerary or negotiations to accommodate these discrepancies.

8. Age factors

Finally, different countries and ethnic groups have different attitudes to age. While the UK and America are often accused of ageism with a tendency to value youth and put older staff members out to pasture, the opposite is true in other countries. Seniors are treated with great respect and awarded key responsibilities in the workplace, with younger colleagues treating them with deference and formality. Accommodating these differences and ensuring that everybody feels respected and valued is vital if a global company wants to create successful multinational teams. 

9. Negotiation styles

For a business to be able to capitalize on foreign markets and become a truly international enterprise, negotiations are par for the course. Negotiation styles are heavily influenced by the local culture and the way people communicate with each other. Aggressive negotiation styles may play well in certain countries like the US and the Middle East, but a less adversarial approach is the standard when doing business with different cultures. However, differences in negotiation styles are more nuanced than this. 

In Australia, there’s little time for high-pressure tactics and bartering. In Norway, there’s more of a focus on collaboration, to deliver a desirable outcome for both parties. Patience is required when negotiating deals in China. Here, the initial offer generally falls far short of expectations, although there’s plenty of room for compromise and concessions. However, a tendency to hold back requested information, feigned anger, and constant mentions of a key competitor are familiar tactics to anyone who’s done business in China.

Cultural Nuances Shaping International Business

Recognizing and navigating cultural differences is pivotal for successful international business endeavors. Cultural intricacies influence various facets of business operations, from communication to negotiation styles. Embracing diversity and adapting to local customs can foster fruitful relationships between international businesses and enhance a company’s image in new markets.

Language of Communication Cultural disparities in communication can significantly impact international business interactions. For instance, in some Middle Eastern cultures, nonverbal cues are as important as spoken words, and maintaining eye contact might be considered intrusive. Conversely, Latin American cultures often embrace physical touch and warmth during conversations, which could be misinterpreted as overly familiar in certain East Asian cultures. Being aware of such nuances can prevent misunderstandings and strengthen intercultural business relations.

Decision-making Processes Cultural differences extend to decision-making approaches. In Scandinavian countries like Sweden, decisions are often made through consensus, promoting a collaborative atmosphere. On the contrary, countries like France might emphasize top-down decision-making with a strong focus on authority. When international companies establish teams spanning diverse cultural backgrounds, finding common ground for decision-making processes becomes essential to the organizational culture and maintaining efficiency and harmony.

Business Etiquette and Punctuality Understanding and respecting varying business etiquette norms is crucial. In Switzerland, punctuality is sacrosanct, and tardiness is viewed as disrespectful. Conversely, in some African cultures, time is more fluid, and relationships often take precedence over schedules. Being mindful of these differences can prevent strained relations and ensure smoother business operations.

Negotiation Styles Negotiation techniques differ significantly across cultures. In Japanese business culture, building trust and rapport over extended periods is vital before negotiations even begin. This contrasts with American business practices, where negotiations might be more direct and outcome-focused. Furthermore, cultures such as China might value patience and persistence in negotiations, whereas cultures in the Middle East could prioritize personal connections and reciprocity.

Gift-Giving Customs The practice of gift-giving varies greatly across cultures and can have unintended consequences if not understood. While gifts are often appreciated in many Asian cultures as tokens of respect and gratitude, they might be viewed as bribery in Western contexts. For instance, a lavish gift given to a potential business partner in the United States might lead to ethical concerns and strained relations.

Hierarchical Structures Organizational hierarchy can be perceived differently across cultures. Scandinavian countries, like Denmark, emphasize flat structures and open communication, aiming to minimize power differentials. However, in countries like India, hierarchical structures are more pronounced, and respecting authority is crucial. When collaborating with international teams, aligning expectations about roles and responsibilities becomes imperative.

Importance of understanding cultural differences in business

Culture holds significant importance in the realm of international business, shaping how companies operate globally. It encompasses norms, beliefs, and behaviors that influence societies and individuals. Key elements like religion, language, traditions, and laws contribute to cultural diversity.

In international business, understanding culture is vital:

1. Market Entry: When expanding into new markets, businesses must consider local beliefs and customs. This informs marketing strategies and client interactions.
2. Negotiations: Different cultures approach negotiations uniquely – as contractual agreements or relationship-building processes. Comprehending these viewpoints is crucial for successful deals.
3. Personal Style: Cultural norms influence personal demeanor, attire, and communication. Adhering to these norms fosters positive impressions and enhances deal-making.
4. Team Dynamics: Culture shapes how organizations make decisions. Hierarchical or consensus-driven approaches impact negotiations. Knowing these dynamics aids in effective communication.
5. Diversity: Embracing diverse cultures cultivates inclusive workplaces, appealing to employees and stakeholders alike. This diversity enhances innovation and fosters positive external perceptions.

In essence, cultural understanding in international business ensures respectful interactions, successful negotiations, and diverse and dynamic organizational environments

By failing to recognize the cultural diversity of clients, colleagues, and potential markets, you risk missing out on important future business or fully unleashing the potential of current contacts. The first step to creating a truly multinational company is a sensitive and open awareness of cultural identity. Using experienced and knowledgeable solution providers like BLEND helps you achieve this.

Contact us to schedule a consultation.

Matt Strach

As BLEND’s Director of Enterprise Marketing, Matt brings 14 years in the audio and video production industries to help businesses execute successful voice and video localization campaigns.

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