Question

What are some examples of cultural differences around the world that can affect business practices? Should a business change practices based on cultural sensitivities? Why or why not?

Answer 1

“Culture is the integrated sum total of learned behavioural traits that are shared by members of a society”. (Terpstra, 1994)

The cultural environment is one of the most challenging areas for most international marketplaces.According to Czinkota (2007), cultural factors have an important impact on the flow of business. Each society has its own elements of culture viz Language ,Religion,Values and attitudes,Manners and customs,Material elements,Aesthetics,Education,Social institutions.During a business meeting, these differences are likely to come to the fore.Some of these are listed below:

1. TIME-Cultural differences become apparent in differing concepts of time. Is the scheduled time frame for a meeting set in stone, or does it allow for some flexibility? Will you jeopardize a business deal by arriving late, or is it perfectly acceptable to let family matters, for example, take precedence over business appointments?

2.COMMUNICATION-There are huge differences in communication between people from one country to another, even one region to another. Some people are loud, direct or even blunt, tend to interrupt others during a conversation whereas someare are polite, use flowery or indirect language and wait patiently for others to finish their sentence.

3.SPACE- Different cultures have varying expectations about personal space and physical contact. Many Europeans and South Americans customarily kiss a business associate on both cheeks in greeting instead of shaking hands. While Americans are most comfortable at arms-length from business associates, other cultures have no problem standing shoulder-to-shoulder with their peers or placing themselves 12 or fewer inches away from the person to whom they are speaking.

4.BUSINESS METHODOLOGY- Islam prohibits the charging of interest. When dealing with contracts in the Middle East, interest is still charged, but it isn't called "interest". Other names are used to apply, and the ways in which they apply are specialized and vary depending on the subject matter of the transaction.

Besides these there are other differences such as Ethics and morality, behaviour and roles and design influence cultural messages.

PART b

Yes a business should change practices depending upon cultural sensitivities.The company must analyze and cope with these cultural differences and harness the tension to bring about reconciliation between these countries. With combining and synthesizing cultural differences, it can integrate different cultural perspectives and seek a dynamic solution to problems that may arise (Bradley, 2002).

Supose language is one of the major issues when it comes to negotiations with trade partners from other cultures. Although it is not always indispensable to know the partner’s language, several studies shows that a link exists between successful company performance in winning new business in foreign markets, and the ability of the company to conduct its business in the language of the customer. Foreign partners not only speak languages other than one’s own, but also have a tendency, for cultural reasons, to think in different ways and have different priorities in the way in which they do business. For example, some people prefer to do their business meetings with foreigners in a formal way, and would be offended to be addressed by their first name; some might believe that the use of an informal style and first name would signal to the partners that they are trusted. Two partners from these different cultural backgrounds could easily misunderstand each other if they negotiate without a previous knowledge of one another’s assumptions and values.

For cultural differences to be lower these should be managed by applying following strategies:

1) Building a strong corporate culture internationally

2) Relying on strong financial or planning systems.  

3) Developing a common technical or professional culture worldwide .

4) Leaving each culture alone

Be prepared ,Slow down ,Establish trust ,Understand importance of language,Respect the culture , Understand components of culture.