Context

Ch. 11: Business

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 in 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  For example, Stolichnaya vodka, originally made from grains grown in Russia, uses Latvian spring water, is filtered, blended, and bottled in Riga, the capital of Latvia, is sold throughout the world in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)

World economies and cultures are becoming more complex and interconnected as never before.  To remain competitive in this rapidly changing world, most businesses will need to enter the global marketplace because information, technology, investors, and customers are no longer restricted by national borders or 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.

Principles fundamental to intercultural communication can be used to navigate both the domestic and global economies.  On the domestic front, there is an increasing demographic diversity within the workplace.  Never before 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.   Such diversity is driving major changes in consumer trends as well.

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.  If a domestic market has achieved market saturation, and everyone who wants a product or service has bought the product or service, the next step is move into the global market.

Power in Intercultural Business Encounters

Elements of power exist in every business encounter both domestic and international.  Kluckhohn and Strodtbeck (1961) along with researchers through the present day, have created value orientations that have relevance for international business.  The equality-hierarchy dimension, also referred to as 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 signals greater social status although being average means 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.  Overall in high power distance cultures, the division between superior and subordinate is clear.

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 with each other.  Education signals accomplishment whereas being seen as average means acceptance and inclusion.  (Drake, 2010)  In low power distance cultures, managers and workers expect to work together to resolve conflict.

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.

Communication Challenges in Business Contexts

To increase effectiveness across cultures, everyone should learn about the influence of culture on communication.  Having a sense of diverse cultural traits and concepts will help you to appreciate the perspectives and goals of your domestic and global business partners.

Work-Related Values

There are three major work related values that impact the workplace in significant ways:  individualism and collectivism; views of the value of work versus material gain; plus, the relative importance of tasks versus relationships.

As discussed in greater depth in the cultural foundation chapter, 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).

Another dimension of a culture is its attitude toward work.  Work is generally known as an effort directed to produce or accomplish something, and can be comprised of the types of work, the division of work, along with work habits and practices of a culture.  Cultures also vary in how they view the material gain that comes from working.  Material gain might mean that all members of a culture are expected to engage in cultural pursuits while in other cultures, the material gain is measured in terms of income produced.

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.  Kobe Bryant, 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.

Cultural values surrounding the 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).

While each person is unique and different, work-related values are so closely tied to fundamental cultural values that form individual cultures, it’s often difficult to separate the culture from the person.

Language Issues

Communication, both verbal and nonverbal, is often used to distinguish one culture from another.  International business professionals often have to deal with many languages, including those nations that have more than one “official” national language.  On a planet where the population exceeds 7 billion, linguistic diversity is alive and well.

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.

Communication Styles

Effective communication across cultures is crucial in the global economy.  Several fundamental communication styles were introduced in the verbal communication chapter, but one more will be added for the business context.

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.

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.

The communication style of honesty versus harmony is tied to the notion of facework, and one that has not been discussed yet.  In many cultures saving face is a strategy to avoid humiliation or embarrassment and to maintain dignity or reputation.  Face is a symbolic resource in any social interaction.  It 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 (John 8:32).  US women’s rights activist, Gloria Steinem, is famously attributed with saying, “the truth will set you free, but first it will piss you off.”  Please be aware that there are BIG cultural variations in how honesty and truth are defined, and practiced, within cultural norms.

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 regarding prohibitions, the use of utensils, dining out and entertaining, and seating arrangements.

Virtual Communication

In today’s global economy, it is not unusual to have important meetings of team members in virtual space.  If you are working on a team, just setting up a meeting is a major task because of the time zone differences.  This often means that someone has to get up really early or work really late into the evening.  In customer interactions, sometimes employees have to make or take calls from home which means taking time away from families.  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 infrastructure access issues, and the unique impact of cultural values on 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.

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 in order 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.

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?

The Dark Side of the Business Contexts of Intercultural Communication

The global 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 located in a different time zone, and has “strange” business practices, it’s best to accept that you have not control over the situation.  Remember that the process isn’t personal and certainly isn’t an indictment of your work ethic.

The real challenge in workplace communication is knowing how to work with cultural differences in a productive way, but not all differences are seen as equal.  Certain communication styles may be viewed as childish, naïve, or less advanced.  Often those holding the most power control the desired form of communication leaving little room for other communication traditions.

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.  Intergroup, or co-cultural, resentments and jealousies exist within nations and dominant cultures.  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.

To Wrap It All Up…

Culture matters.  We must understand the concept of culture and its characteristics so we can appreciate the impact of our specific cultural background on our own mindset and behavior, as well as those of colleagues and customers.  According to Hirsch (1987), business literacy requires more than knowing how to read, it also requires a certain level of comprehension of background information about the culture.

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