How does culture affect international business

Culture is the beliefs, ideas, and social behavior of a particular person or group within society. But how does culture affect international business?


Culture is the beliefs, ideas, and social behavior of a particular person or group within society. But how does culture affect international business? In a business context, culture relates to what behavior is accepted as common practice professionally in a specific location, compared to another. What may be acceptable business practice in one country may be very different from the approach that is used by businesses overseas. Therefore, recognizing how culture can affect international business is something that should be understood in order to avoid misunderstandings and miscommunication between colleagues and clients. Understanding culture also ensures that the business is presenting itself to its new market in the best way it can. 


Scandinavian countries such as Sweden emphasize social equality and therefore they tend to have a relatively flat organizational hierarchy. This relates to their informal approach to communication, and cooperation is normally at the heart of their organizations. In Japan, their traditional values of relative status and respect for seniority are reflected in their organizations as reflected in their clear organizational structure. This means that senior management commands respect at all times and expect a level of formality from junior members of their teams. 

These different cultural attitudes towards management can, therefore, make it difficult to define roles in multinational teams. Therefore, it is important for businesses to be aware of their target market’s cultural approach towards organizational structure, and clearly identify their organizations approach so that all team members can act accordingly.

The formality of address is another key thing to consider within international businesses when communicating with colleagues and clients from different cultures. Are they comfortable with being approached on a first-name basis or do they prefer titles and surnames? Asian countries such as China seem to prefer the latter, whereas Americans usually use first names. Things such as formality of address may not seem that important, but if you get off on the wrong foot with a potential foreign client then that could ruin your chances of ever working with them in the future. Therefore, it is important for businesses to know that their level of formality will differ depending on the culture of the person they’re communicating with. 


Communication plays an important role in international business, and sometimes effective communication can be the difference between succeeding or failing in a new market. Effective communication is particularly important for international businesses as there is the risk of your messages getting ‘lost in translation’. There are several things that need to be considered when looking at how effective your business’ communication is at an international level. 


Another thing to consider are the basic customs, mannerisms, and gestures that are commonly accepted in that culture. Behavior that might be commonplace in one culture could be unusual or potentially offensive to a client or colleague overseas. Professor Jean Vanhoegaerden gives the example of a business handshake being the norm in European and US cultures, but in some Middle Eastern cultures, handshakes are seen differently. 
Businesses who are looking to operate internationally need to be aware of language barriers, tone, and body language. Cross-cultural communication can be a challenge, but approaching cultural differences with sensitivity, openness, and curiosity can help businesses succeed internationally.

Don’t get lost in translation
Don't let an international deal fall apart due to cultural misunderstandings: businesses should do plenty of research and be open to new cultural experiences and expectations when doing business across borders. Businesses aren’t alone in this process, translation and localization services can help businesses communicate internationally ensuring they have the best chance at succeeding in new markets. 



This content was originally published by Language Insight . Visit their website at

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