The Importance of Understanding Cultural Differences in Business

February 26, 2014 Customers, International Business, Marketing, Project Management, The Manager's Resource Handbook

Why Your Employees Need to Learn the Local Culture

As technology advances, the world gets smaller and smaller. Email, conference calls and WeChat offer us instant communication to opposite ends of the globe. Whether you routinely jet set to far away places to meet with your customers, or you never leave your comfort of your office, working alongside people from another culture is now a regular occurrence. For this reason, the need to prepare today’s workforce and business leaders to work with other cultures has never been more important. Using a real life example of what can go wrong, let’s take a look at why your employees need to learn the customs and norms of other cultures.

What is Culture?

In Global Business Negotiations by Claude Cellich and Subhash Jain, the authors define culture as “all learned behavior and values that are transmitted through shared experience to an individual living within a society.” The active word here is ‘shared’ which implies that culture is a common thread among people of a given nation, region or belief system. The term ‘shared’ also suggests that people can learn, adapt and absorb a different culture after they are exposed to it.

What Are Characteristics of a Culture? Some Examples:
Common Language
Importance of Family
Communication Tendencies (Direct / Indirect)
Shared Religion or Belief System
Views on Social Issues

To illustrate the reasons why employees and managers need to learn other cultures, here is a real life example of what happens when they are not prepared.

A Business Meeting In China Gone Wrong

Not long ago, I travelled to Beijing to discuss the details of a new project with our Chinese client. By this point in time, I had worked in China extensively, and had spent a great deal of time learning the culture. I was leading the discussion, and five of the six colleagues with me had previous work experience in China. The sixth member of our team, Karen, was in her first month of a two-year expatriate assignment. While Karen did not work with my team directly, she was going to be part of our in-country support network and was asked to attend the meeting. In fact, it would be the first time my team met her.

As was typical of meetings in China, my team sat on one side of the table. Further, as is customary in formal meetings, I sat in the middle of the table across from the highest ranking person from the client’s side. My team flanked me to the left and right, in order or rank. The Chinese team did the same on the opposite side of the table.

Because Karen was coming from a different location in the city, she arrived separately, and a few minutes late. When she did arrive, she took a seat on the Chinese side of the table, disregarding our subtle gestures to have her sit with us. Since this was not our first meeting with the client, and since we had a good relationship with them, I decided that disrupting the discussion to pursue an alternate seating arrangement was unnecessary.

As we continued our presentation to the Chinese client, it was Karen who asked the most questions. While back home it would have been less of a concern, in China, hierarchy is an extremely important aspect of business and society. Undermining or embarrassing someone of higher ranks in a public setting is highly taboo. Karen’s continued questions to us suggested that our team was not aligned, creating a very awkward situation.

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Global Business Negotiations by Claude Cellich and Subhash Jain
Global Business Negotiations is a detailed, yet readable resource that can help you improve your negotiating skills for the global business environment. The book includes strategies, techniques and tips to help you approach, manage and close a cross-cultural negotiation. [/ezcol_3quarter_end]

A Bumpy Start That Only Got Worse

Eventually, it was time to break for lunch. As we talked at lunch with our Chinese clients, Karen was extremely insistent about her food and tried to customize her order. When her food finally arrived, she ended up returning it to the kitchen since she was expecting something else. Unlike at home, sending food back to the kitchen is usually considered offensive in the People’s Republic.

As we finished our meal, Karen proceeded to ask some of our Chinese clients about their families, and if they had siblings. I, along with the rest of my team, were stunned. Given the one-child policy in China, anyone working there knew this line of questioning was to remain off-limits. There was visible discomfort around the table as one of the Chinese clients quietly explained that China had laws against having more than one child.

After the meal, Karen had to leave to go back to the office. Given the severity of the cultural missteps that day, I stepped into the hallway to have a word with her in private. Karen, to her credit, was mortified by her behavior and was embarrassed by her conduct. Fortunately, our relationship with our Chinese counterparts was strong enough that Karen’s lack of cultural awareness had not done any permanent damage. It was, however, embarrassing and distracting to the productivity to our meeting.

Lack of Cultural Awareness Can Damage Business Relationships

I share this story because, while extreme, it highlights the important of knowing and understanding culture when working cross culturally. Had our relationship with our client not been as strong, her actions may have done more damage than they did.

Separated by distance, language and centuries of history, every country and culture has a unique set of norms and protocol.

Ways to Prepare for Working with Another Culture:
Hire an External Company to Conduct Training
Contact the Local Embassy for Help
Have An Employee or Friend From that Culture Teach the Staff

When doing business in or with another culture, we as managers and our employees must work to educate ourselves so that we can adapt to a different set of customs. Know the cultural landmines before you go.