International Business

Cultural Diversity in International Business

In a global business scenario, adapting to cultural diversity has become more of a norm rather than a choice. In the current times, due to technological advancement, national borders are diminishing quickly, and the world is becoming a smaller place.

A company may not have a physical office in another country and yet it can have an international presence. The multi-national presence of numerous companies has become possible due to the internet and online marketing technologies.

Ambitious business expansion plans give rise to the possibility of exploring new market segments globally. In the pursuit of forming global partnerships, or conducting mergers and acquisitions, the corporate companies have realized the importance of adapting to a global culture.

Common Cultural Barriers faced by Multi-national Companies

  • Varied perception about role: In countries such as Japan and China, the role of leadership is more like the role of a mentor or a professional who believes that organizational ends can be achieved, if individual progress becomes part of the team success. On the contrary, in the West, the corporates adopt a hire & fire policy which means there is zero tolerance to non-performance of an employee or performance below a key performance indicator.

  • Group behavioural dynamics: People from different cultural backgrounds behave in a different manner, when they are part of a group. For instance: Employees from certain nations may not feel free to participate in a group discussion. However, they may share a lot of concerns about a particular issue when they are confronted on a one-on-one basis.

  • Cultural sensitivity: A small talk before the meeting or the preference for tea before the meeting can be mannerisms special to a certain global population. On the other hand, in professional countries such as U.S.A. and the U.K. small talk before the meeting could be completely barred.

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