Intercultural awareness is the key to international business success

Global Focus, 2007 by Saee, John

JOHN SAEE EXPLAINS WHY MANAGERS NEED TO DEVELOP INTERACTIVE SKILLS FOR DEALING WITH PEOPLE FROM DIFFERENT CULTURES TO BE ABLE TO CAPITALISE ON BURGEONING INTERNATIONAL MARKETS

The globalisation of national economies has fuelled the need for intercultural communication. The increase in international trade in products and services now far exceeds any single national economy,including major industrialised countries. Rates of growth in international trade increased from $136 bn (euro100 bn) in 1960 to approximately $9 trillion (euro6.6 trillion) at the beginning of this century (not to mention the world financial markets where an amount of $ 1.7 trillion - euro1.2 trillion - is transacted globally each day).

The continued increase in international trade has simultaneously given rise to a situation of growing interdependence of national economies around the world. To compound the matter further, there has also been an increasing degree of migration and tourism around the world coupled with an internationalisation of educational services.

Another related issue has been the presence of cultural diversity in most organisations around the world. For example, most industrial countries (and their organisations) have been undergoing major transformation in terms of cultural diversity, resulting in their populations and workforces becoming highly culturally diverse.

The reality of cultural diversity within corporations coupled with an increasing globalisation of businesses means that managers have to become interculturally competent to capitalise on unlimited opportunities and benefits afforded by cultural diversity within a global economy.

Unfortunately, research has shown that given an absence of intercultural competence too many corporate and government leaders are operating on an old conception of the world around them and of human nature, including the nature of work, the worker and the management process itself.

Similarly, studies on expatriation indicate that international assignments often incur unnecessarily high costs, poor job performance, individual and family adjustment problems, and difficulties in maintaining productive and satisfying social relationships with people from the host culture. In addition, international joint-ventures and mergers frequently do not achieve the expected performance and cultural differences provide the greatest potential to hinder effective interaction within global teams.

A large body of research confirms that the predominant reason for such failure is not lack of managerial technical competence but the dynamics of intercultural experience. These dynamics include differences in cultural perceptions, in values and practices that influence understanding, in attitudinal satisfaction with living in a foreign culture, in relationship development and in the accomplishment of goals.

Thus, to improve intercultural communication, one has to understand that the nuances of international business - defined as any business conducted across national borders - are different from those of solely domestic business. The fundamental principles of domestic business apply abroad but with added complexities.

Intercultural communication is defined here as "involving interpersonal communication between people from different socio-cultural systems and/or communication between members of different subsystems (for example, ethnic or racial groups) within the same socio-cultural system".

Confronted with the complexity of human interactions both in a culturally diverse workforce and ever-growing international trade, organisations have tended to focus on language training to remedy communication problems between domestic management staff and immigrant workers as well as international business people. In other words, most managers saw and see language competency as a panacea for ineffective intercultural communication. Within the international scene, a similar view has gained currency, calling for managers and business leaders involved in international trade to develop language competency.

While an organisation's tendency to focus on language training to remedy communication problems is laudable in itself it is only a partial solution.

It involves a number of false assumptions:

- the assumption that efficient communication between cultures is solely based on linguistic competence

- the assumption that communication, like typing, is a purely mechanical skill, unrelated to emotional and other interpersonal factors

Speaking a language cannot be considered synonymous with communicating in it. Cultural dimensions to communication go far beyond syntax and vocabulary.

Academic Maurice Bloch, writing about cognitive anthropology in 1991, has investigated the relationship of language to the understanding of culture, and has concluded that much of knowledge is fundamentally non-linguistic; that concepts involve implicit networks of meanings that are formed through the experience of, and practice in, the external world; and that, under certain circumstances, this non-linguistic knowledge can be rendered into language and thus take the form of explicit discourse but changes its character in the process.