Chapter 10 – Business

Learning Outcomes

When you have completed this chapter you should be able to do the following:

  • Explain how the cultural dimensions influence business.
  • Explore the various communication challenges presented in the intercultural business context.
  • Choose helpful communication behaviors for intercultural business contexts.
  • Explain work-related values and how they impact communication.
  • Apply the concept of negotiation to a business issue.

With the globalization of business, there has been an increasing interest in intercultural communication.  Multi-national companies have expanded to the ends of the earth so to remain competitive in this rapidly changing world, most large businesses are expanding beyond national borders and cultural boundaries.  Insights from studies in intercultural communication can help business professionals understand how cultural differences can be used as assets in the ever-changing corporate world.

Global markets are also changing and expanding as multinational companies play an increasingly important role in the world economy.  To see continued growth and remain competitive, most companies must employ economies of scale.  In other words, if production increases while all other costs remain the same, the company can grow through lower cost per unit.

Yet, it’s not just the global marketplace that can benefit from the insights that intercultural communication can bring.  On the domestic front, there is an increasing demographic diversity within the workplace.  Never have so many people on this planet been on the move.  Whether it be economic opportunity, political strife, changing climate, or war, people are migrating in record number.  Massive relocation means that much of the workforce and small business ownership in any given nation is becoming increasingly diverse.

10.1 – Cultural Dimensions that Influence Business Contexts

To increase effectiveness across cultures, business professionals should learn about the influence of culture on communication.  Having a sense of diverse cultural dimensions and concepts will help in the understanding and motivations of both domestic and global business partners.  Often the greatest challenge is learning not to apply your own cultural values when interacting with people from other cultures.  It is important to remember that there is no right or wrong way to deal with other people—just different ways.

Figure 10.0 – A group of female entrepreneurs in South Africa do some networking

Individualism and Collectivism

Although discussed in greater depth in other chapters, the fact that a culture leans toward individualism or collectivism can be very insightful in cultural understanding.  In an individualistic culture, workers are expected to perform certain functions and have clearly defined responsibilities.  There is a clear boundary that exists between individual workers and job expectations with the idea that individuals work better alone.  Loyalty to the company is not demanded but pay for performance is expected.  Efficiency and productivity are valued above attitude.  (Drake, 2010).

In collectivistic cultures, jobs are assigned to a unit, section, or department.  Legal and other structures often protect the group, so individuals generally defer to the group interests.  Consensus decision-making is preferred.  Individuals are thought to perform better in groups.  Loyalty to the company and/or superiors is more valued than efficiency and performance (Drake, 2010).

Advertising will also reflect a difference between the two dimensions.  In individualistic markets, people tend to refer to themselves as “I” or “we” and prefers for everyone to take care of themselves.  Hence, fast-food giant, McDonald’s advertises to the US audience by focusing on the individual visitor.  In collectivistic markets, people tend to focus on the group and community, prioritizing others while assuming that everyone will look after everyone else.  In collectivistic markets such as Turkey, the focus of McDonald’s advertisements is on the social aspect and highlights the McDonald’s “community” and its popularity among consumers.

Figure 10.1 – A McDonald’s storefront in Turkey

Power Distance

Elements of power exist in every business encounter both domestically and internationally.  Power distance helps us understand how people with different levels of power, prestige, and status should interact with one another.  Communication across power divides can be difficult, especially when there are cultural differences in how power is viewed or expressed.

Cultures that practice high power distance feel that organizations function best when the differences are clearly observed, and there is no confusion as to who the boss is, and who the worker is.  Managers may reject assistance from subordinates, but willingly consult with their peers.  Subordinates may compete for the attention of their superiors, while avoiding disagreements.  Education can signal higher social status whereas being without a degree can mean a lack of power (Drake, 2010).  Leaders in high power distance cultures, are expected to resolve conflict, while subordinates are expected to support the conflict resolution process.

Cultures that practice low power distance, such as the United States, feel that power differences should be minimized.  Managers accept the support of subordinates, with subordinates expecting to have some voice or power in the decision-making process.  Subordinates are relatively unthreatened by disagreeing with superiors, therefore are more likely to cooperate rather than compete.  Education signals accomplishment whereas being seen as degreeless can still mean acceptance and inclusion (Drake, 2010).  In low power distance cultures, managers and workers expect to work together to resolve conflict.

Figure 10.2 – People in military uniforms discussing strategy around a table.

Other power issues that indirectly effect intercultural communication are the benefits and harms of outsourcing, access to information, one-person-one-vote versus consensus decision-making, supervision style, and tension between workers of mixed status.

Did you know?

That Coca-Cola sells more of its product in Japan (population: 127 million) than it sells in the United States (population: 319 million)?

That the nationality of many globally branded products are often difficult to pin down.  For example, Stolichnaya vodka, originally made from grains grown in Russia, uses Latvian spring water, is filtered, blended, and bottled in Riga, the capital of Latvia, then sold throughout the world in bottles made in Poland and Estonia, and is sealed with caps made in Italy?

More than half of US franchise operators (e.g. Dunkin Donuts or KFC) are in markets outside the United States?

The US based computer giant, IBM, has more than 430,000 employees working in some 40 different countries?

(Ferraro & Briody, 2017)



As we have learned previously, there are three major ways in which cultures look at time.  We will briefly consider the business ramifications of two of the three.

Polychronic and Monochronic

Monochronic cultures like to do just one thing at a time.  They will concentrate on the job and take time commitments very seriously.  They do not like to be interrupted and are concerned about not disturbing others so there is great respect for privacy and private property.  They will adhere religiously to the previously agreed upon plan and are low context.  They are accustomed to short-term relationships.  Businesspeople from the US, Canada, and Northern Europe are monochronic.

A business office in a polychronic culture typically has an open door, a ringing phone, and a meeting going on all at the same time.  Though they can be distracted easily, they also tend to manage interruptions and are able to change plans often and easily.  People are their main concern, and they tend to build life-long relationships.  Promptness is based on the relationship rather than the task.  Latin America, sub-Saharan Africa, and the Middle East are polychronic.

Interactions between the two types can be problematic.  Monochronic businesspeople cannot understand why they can’t get down to business rather than always being interrupted.  Such interruptions are often considered insulting.  Polychronic businesspeople cannot understand the separation between the organization and the goal.  Schedules should never impact relationships.

Figure 10.3 – A businessman looks at his watch
Long-term and Short-term

Short-term cultures prefer immediate results and grow impatient when those results do not materialize.  While there is a respect for tradition, there is also an emphasis on identity and integrity.  There is also a greater emphasis on reciprocation of greetings, gifts, and rewards.  Stability and consistency are important.  The UK and US are short-term business cultures.

Long-term values are persistence, thriftiness, and an order to relationships based on age and status.  Having a sense of shame that is reflected on the family and community can also occur.  A Japanese CEO is likely to apologize or take the blame for a faulty product or process.  Many countries in Asia that were influenced by the teaching of Confucius value a long term orientation.

The Use of Space

In the nonverbal chapter, we discussed the use of physical space and our relationship to space.  Cultures are concerned with space in intercultural business contexts.  Examples can include personal body space, space allotted within an office, or even parking spaces.

The Need for Space

Some people need more space, and others who encroach into that space are seen as a threat.  Conversation distances (public, social, personal, and intimate) can vary greatly from culture to culture.  A Japanese person who needs less space will stand closer to others than a US American inadvertently making the American uncomfortable.  A Swedish person who needs at least six feet of space without any conversation while waiting for a bus will find the chatty American too close and too noisy.

Figure 10.4 – An office in London

Some cultures are more territorial than others with a greater concern for ownership.  It might be common to mark out boundaries between workers with tall partitions or walls between desks.  Territory also extends to anything that is “mine” such as a stapler or tape dispenser.  Security becomes a subject of great concern for people with a high need for ownership.  Cultures with high territory needs tend to be low context.

Cultures with lower territory needs have fewer needs to claim ownership and boundaries are less important.  Desks may be located right next to each other, and the use of partitions is unknown.  Office supplies are passed around.  Workers are willing to share and their sense of “stealing” supplies is nonexistent.  Cultures with low territory needs tend to be high context.

Uncertainty Avoidance

Cultures with high uncertainty avoidance generally prefer to avoid conflict and competition.  They appreciate clear instructions.  At the office, sharply defined rules and rituals are used to get tasks done.  Stability and what is known are preferred to instability and the unknown.  Company cultures in these countries may show a preference for low-risk decisions, and employees in these companies are less willing to exhibit aggressiveness.  Japan and France are considered good examples of high uncertainty avoidance business cultures.

In countries with low uncertainty avoidance, people are more willing to take risks, companies may appear less formal and structured.  Thinking outside the box is valued.  Examples of low uncertainty avoidance businesses cultures are Denmark, Singapore, and Australia.

Masculinity and Femininity

Business in the United States has a masculine orientation where assertiveness and competition are highly valued.  Self-promotion is considered normal.  In other cultures, such as Sweden, business values are more attuned to modesty and taking care of society’s weaker members.

Cultures in the World versus the Cultures in Business

For purposes of this book, we have focused on national cultures.  According to Hofstede, his cultural dimensions, which are based on cultural values, are not suitable for comparing organizational “cultures.”  In fact, Hofstede (2007) created a new approach for explaining “cultural” differences within an organization.  Although out of the realm of this course, it is important to be aware of the distinction when considering business communication from an international context.  Those dimensions are:

  • Process-oriented versus Results-oriented
  • Job-oriented versus Employee-oriented
  • Professional versus Parochial
  • Open systems versus Closed Systems
  • Tightly controlled versus Loosely Controlled
  • Pragmatic versus Normative
Figure 10.5 – Business people shaking hands

10.2 – Communication Challenges in Business Contexts

When you are dealing with people from another culture, you may find their language, communication styles, and work-related values are different than which you are accustomed.  Below you will find five communication challenges common to the intercultural business environment.

Language Issues

In a global economy where we are more comfortable communicating with those who are more similar to us than different (Ayoko, 2007), people are often unaware of language misunderstandings that occur when working with people from different cultures.  Effective communication across cultural and linguistic boundaries is difficult, but not impossible.  Martin & Nakayama (2007) offer some behaviors that can help.

  • Don’t assume that people speaking a language other than your own are speaking about you.
  • Speak simply, but not simple-mindedly.
  • Avoid using slang or jargon.
  • Try not to crowd too much into one sentence.
  • Pause between thoughts.
  • Pronounce words clearly and speak slowly.
  • Don’t be condescending and don’t raise your voice.
Figure 10.6 – A group of business people communicating

Communication Styles

Several fundamental communication styles were already introduced in the verbal communication chapter so we will briefly review these styles along with some specific aspects pertaining to a business context.  We will also introduce the idea of honest versus harmony.

Direct and Indirect

A common communication style is direct versus indirect communication.  Cultures with direct styles ask for more information whereas cultures with indirect styles may not feel comfortable either giving or asking for information.  If a manager from a verbally direct culture receives a poorly written report, they might say, “you have made many errors in this report.  Go back and proof-read this report to check for errors.”  A verbally indirect manager who receives a poorly written report, might say, “readers may have questions about this report.  Can you check this over one more time?”

Good intercultural business communication involves slowing down.  You should listen and observe how others get information from one another.  Remember to watch for variations impacted by status and relationship.

High and Low Context

Another common communication style is high versus low context communication.  High context communicators place great importance on the context or nonverbal aspects of communication.  For them words don’t matter nearly as much as the context in which they exist.  Low context communicators prefer to be very explicit and express everything in words.  For them context is ambiguous, so they want to hear verbal thoughts and ideas to be sure of what is being communicated.

Honesty and Harmony

The communication style of honesty versus harmony is tied to the previously discussed notions of face and facework.  In many cultures saving face is a strategy to avoid humiliation or embarrassment and to maintain dignity or reputation.  Faces can be threatened, honored, or maintained (Ting-Toomey & Oetzel, 2002).  The concept of face is often associated with collectivistic cultures and is a consequence of people living in close-knit societies where social context is important (Hofstede, 2011).  Avoiding conflict is a way to show honor and respect to another person.  Giving negative feedback may cause a loss of face.

Harmony includes the notion of preserving or saving one’s face.  For Asians, the concept of saving face is more about achieving mutual honor and respect for the larger group, the business, or the family.  In the US, the concept of saving face is more about maintaining self-pride, reputation, and credibility.  In the business context, harmony may mean allowing other people room to maneuver, and the ability to understand when a “yes” really means “no.”

Cultures that value honesty over harmony are often associated with individualistic cultures.  They are concerned with the ethics of individual trustworthiness and respect.  It’s acknowledged that the truth might hurt, but sincerely believed that it will also set you free.

Please be aware that there are BIG cultural variations in how honesty and truth are defined, and practiced, within cultural norms.

Figure 10.7 – Used car dealership sign, Tucson, Arizona.

How Cultures View the Idea of Work

Cultures have different value orientations for the idea of work.  The first way looks at the purpose of work, and the second way considers the importance of work.  Both of these value orientations are rooted in the cultural dimensions discussed at the beginning of the chapter.

Virtue or Necessary Evil

What does a culture view as the purpose of work?  Work is generally known as an effort directed to produce or accomplish something but does a culture view work as a virtue or a necessary evil?

If work is seen as a virtue, it will pay off.  Over the course of time, hard work can change a character deficiency into a strength.  Luke Skywalker, Harry Potter, Simba in The Lion King are all characters who never gave up.  Michael Jordan, Tom Brady, and Michael Phelps put hours into honing their skills and learning from others.  Tech CEOs Marissa Mayer and Sheryl Sandberg arrived early and left late.  In these cultures, hard work leads to material gain therefore, people who have a lot of material goods, are thought to have been hard workers.  Conversely, for those who see work as a virtue, poor people are seen as lazy.

Sometimes work is viewed as a necessary burden or evil.  Necessary in the fact that there will be some greater good that happens because work occurs.  The benefit of work has value.  Bills can be paid with the money earned from working.  Food can be bought.  Communities need medical care, education, and functioning infrastructure.  Work can be a catalyst of good, but also provide a mild amount of harm.  Parents who work leave their children in the care of others and that might cause a certain amount of guilt.  Working late at the hospital night-after-night might ruin a marriage.  Even fastidious street maintenance can’t prevent automobile accidents from happening.  Cultures that identify and articulate the benefits and challenges of working feel that they provide a realistic framework in which to manage life-altering choices.

Relationship or Task

Cultural values surrounding the importance of task and relationship dimensions are also strongly tied to how business is conducted.  In relationship cultures, people are valued for who they are.  Their personality, character, appearance, behavior, and family ties are all part of the picture.  Social relationships take priority over work relationships.  Family commitments take precedence over work commitments.  Achievement is measured by friendships, peer recognition, and respect.  Criticism is rare and usually interpreted as negative (Drake, 2010).

Cultures with a strong task orientation want to get the job done quickly and right the first time.  Tasks are more important than social relationships and family commitments.  Achievement is measured by accomplishment, possessions, and power.  Professional recognition is determined by expertise.  Constructive criticism is welcomed (Drake, 2010).

Figure 10.8 – Students leveling ground for a new display.

Business Etiquette

Business etiquette is about building relationships with other people and organizations.  Business etiquette is not about rigid rules and regulations but rather creating an environment through communication where others feel comfortable and secure.  Basic business etiquette may vary from culture to culture. Juggling business etiquette and business activities can be incredibly complicated, but success can mean the difference between securing the deal and failure.

Many cultures tend to conduct business much more formally than the US therefore it is preferable to avoid excessive informality especially at the beginning.  Many cultures also emphasize the importance of relationship building for business success.  Nelson (2009) offers some general rules for international business success.

  1. Remembering and pronouncing people’s names correctly.
  2. Using appropriate rank and titles when required.
  3. Knowing the local variables of time and punctuality.
  4. Creating the right impression with suitable dress.
  5. Practicing behavior that demonstrates concern for others, tact and discretion, and knowledge of what constitutes good manners and ethics locally.
  6. Communicating with intercultural sensitivity, verbally and nonverbally, whether in person, electronically, or in writing or printing.
  7. Giving and receiving gifts and favors appropriate to local traditions.
  8. Enjoying social events while conscious of local customs relative to food and drink such as the use of utensils, dining out, and entertaining, and seating arrangements.
Figure 10.9 – Two people shake hands

Virtual Communication

In today’s challenging world of economic restrictions and pandemics, it is not unusual to have important meetings of team members in virtual space.  If you are working on an international team, just setting up a meeting is a major task because of the time zone differences.  This often means that someone must get up really early or work really late into the evening.  In customer interactions, sometimes employees must make or take calls from home which means taking time away from families and being conscious of what background will appear on a screen.

Often small things go a long way towards success.  Helpful tips include putting your time zone in the signature of your email or on the biographical section of your social media profile, getting team members to use 24 hour UTC/GMT time, and using time management apps such as Boomerang.

Other issues to consider are language and translation concerns, internet access issues, and the unique impact of cultural values place on a virtual message.  In high context cultures when relationships are valued, face-to-face interaction is frequently a must.  And sometimes, people are just reluctant to reply to messages from people they don’t know.

10.3 – Negotiation

Negotiation is the face-to-face process of resolving conflict to a mutually satisfying end.  Globalization has resulted in increased business travel to many countries to buy, sell, form mergers or acquisitions, build relationships and more.  Most of these business relationships involve some form of negotiation, but the negotiation process differs from culture to culture because of language, cultural conditioning, negotiation styles, approaches to problem-solving, and building trust.  Differences in work-related values, communication styles, and even business etiquette can also have an impact on the negotiation process.

Figure 10.10 – Manuel Orozco, Director of the Migration, Remittances and Development at the Inter-American Dialogue, speaks in the panel.

The roles individuals play in decision-making vary widely from culture to culture.  In the US, decisions are frequently delegated to a subordinate.  In many Southern European and Latin American countries, there is a strong value place on an individual decision-maker.  When decisions are made by groups, majority rule is common in the US, but in Japan consensus is the preferred mode.

Although much has been written about the intercultural negotiation process, there are four major areas where cultural groups may differ.

  • First, cultural groups may differ in their view of what the negotiation process is.  Cultural groups that prefer harmony over honesty might view negotiation as one group gaining power at the expense of another.
  • Second, cultural groups may differ in task or relationship priorities.  Task-oriented groups will prefer to come to a quick agreement whereas relationship-oriented groups may not even be able to negotiate until they know who their counterparts are as people.
  • This can lead to our third issue, and that is different ideas in what constitutes trust.  Does trust come from a signed agreement or a relationship?
  • And lastly, is the preferred form of agreement a formal written contract approved by the legal department, or an informal agreement based on historical and social contexts?

At this point in the book, you probably understand that cultural differences are likely to be a factor in the negotiation process.  Yet, interestingly enough, new research suggests that negotiators, may give too much weight to cultural factors when preparing for the negotiations.

Researchers (Adair, Taylor, & Tinsley, 2009) surveyed US Americans who had conducted business in Japan and their Japanese counterparts.  So, what happened?  The study participants typically adjusted their negotiating style too far toward the other’s culture.  Each side expected that the other would negotiate as they would in their home cultures, not expecting the counterpart would attempt to adjust their strategy to the foreign counterpart leading to confusion and unintended clashes.  The researchers concluded that the negotiators focused too narrowly on the most obvious information rather than the task at hand.  By focusing only on the cultural differences, the negotiators treated their counterparts as cultural ambassadors rather than business partners.

Obviously, more research needs to be done to solidify this finding, but it’s important to note that there is no one-size-fits-all approach to doing business across national boundaries.  It’s important to be present and attentive to all aspects of the negotiation process.  Though important, culture is only one aspect of a successful business negotiation.

Figure 10.11 – Carlo Angeles advocating for Zero Deforestation Youth Empowerment at the UN

10.4 – Conclusion

The globalization of our world economy often leads to mergers and acquisitions that bring international businesses to your hometown.  Mergers can make companies more productive, better able to handle competition, and lead to lower prices for consumers, but they can also lead to lost jobs and resentments.  When your company has been acquired by a large multi-national corporation, with a CEO that speaks another language, is in a different time zone, and has “strange” business practices, it’s often brings with it great sadness and difficulty.  A community can crumble.  A way of life can disappear.  The loss of a livelihood can harm families for generations.  It’s cold comfort but remember that the process isn’t personal and certainly isn’t an indictment of your work ethic.

It’s also important to remember that each intercultural encounter occurs in a social and political context that extends well beyond the individuals and businesses involved.  Strong feelings and jealousies exist within nations and between nations.  Large political events such as terrorism impact business, but smaller ones such as changes to traffic laws do as well.  Worldwide we are struggling to handle health epidemics, immigration, and climate change—each able to disrupt global business agreements in a blink of an eye.

The real challenge in intercultural business communication is believing that our vast worldwide differences can also be the source for our creative international solutions.

Key Terms

  • Individualism/collectivism
  • Power Distance
  • Poly/Monochronic
  • Long/Short Term
  • Space
  • Uncertainty Avoidance
  • Masculine/Feminine
  • Negotiation
  • National Culture/Business Culture
  • Direct/Indirect
  • High/Low Context
  • Harmony/Honesty
  • Virtue/Necessary Evil
  • Task/Relationship
  • Business Etiquette

Reflection Questions

  1. At your job (now or in the past), how did you refer to your boss, and vice versa?  Is the label for your boss something you were told to say or something you choose to say?  How did this label indicate low or high power distance at your workplace?
  2. International businesses are influenced by social and political events.  Have you ever worked any place that was impacted by an international social or political event?  What was it?  How did it impact your workplace?
  3. Can you think of any examples of workplace differences related to individualism or collectivism?  How did these differences lead to intercultural communication conflicts on the job?  Please explain.
  4. How do you view work?  Do you view work as a virtue or a necessary evil?  What about those you work with?  Do they have a different opinion than you do?  Has this ever cause conflict?  Please explain.
  5. Do you have any experience in intercultural negotiation?  How did you resolve the conflict or deal with a contract?  Did you come to a formal or informal agreement?  Please explain.

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