Influence of Culture in Different Business Contexts

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A range of business contexts, both within individual firms and between two or more firms, are influenced by the different cultural backgrounds of the individuals involved (see Figure 9.3).

Figure 9.3

Source: Adapted from Phatak/Bhagat/Kashlak 2009, p. 115.

In International Management encounters, a wide array of business contexts raise cross-cultural issues that evolve both within individual companies, e.g. managers and employees from different countries, and between different firms or between the company and its customers, such as in international buyer-seller relationships or cross-border alliances (see Figure 9.4).

Cross-cultural proficiency, therefore, is important in many international business managerial tasks, including (Cavusgil/Knight/Riesenberger 2013, p. 135):

■ communicating and interacting with foreign business partners

■ screening and selecting foreign distributors and other partners

■ negotiating and structuring international business ventures or international alliances

■ interacting with customers from abroad

■ dealing with national institutions in host countries

■ developing products and services

■ preparing advertising and promotional materials.

Figure 9.4

Source: Rugman/Collinson 2012, p. 136.

Cross-cultural differences may complicate communication within the individual firm, for example when managers from a foreign parent company communicate with local employees. In cross-border partnerships, alliances or ventures, there needs to be an understanding of the organisational and cultural differences. Often, cultural compromise is required to establish successful partnerships (Rugman/Collinson 2012, p. 136).

Elements of Culture

There are many components that can be considered integral elements of culture. These components are interrelated. The elements of culture most likely to matter in International Management are: language, social structure, religion, values and attitudes.


Language is considered a primary discriminant of cultural groups as – in an obvious way – countries differ in the languages used within them. Both spoken and unspoken languages are important means of communication.

Spoken language refers to the vocal sounds or written symbols that people use to communicate with one another (Kotabe/Helsen 2014, p. 98). Spoken language structures the way the members of a society perceive the world. It can direct the attention of its members to certain features of the world rather than others (Hill 2013, p. 118) by filtering observations and perceptions and thus affecting the messages sent when individuals communicate with one another (Griffin/Pustay 2013, p. 114).

If one language group dominates a country, it tends to have a homogeneous culture in which nationhood is important. Conversely, countries with more than one language tend to be heterogeneous. For example, Canada has an English-speaking culture and a French-speaking culture. In Switzerland, three main languages are spoken, along with other (sub-)cultural differences (Hill 2013, pp. 118-119).

Unspoken or nonverbal communication includes gestures, facial expressions, moving, touching and other forms of body language that supplement spoken communication. Forms of nonverbal communication include (Griffin/Pustay 2013, p. 118):

■ dress styles, e.g. fashionable, conservative

■ hand gestures

■ facial expressions, e.g. smiles, frowns, nods, eye contact (or lack of it)

■ greetings, e.g. hugs, kisses, bows, hand shakes

■ physical contact, e.g. hand holding, pats on the back

■ time-related aspects, e.g. promptness, early or late arrival

■ walking styles, e.g. fast, slow, in a group or single file.

Many of these silent cues are culturally bound and can lead to misunderstandings in cross-cultural communication.

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