What Does Culture Have to Do with Business?

Occasionally, perhaps even frequently, those of us who have dealings with other cultures have found ourselves in uncomfortable situations, where we recognize something has gone wrong but cannot put our fingers on it. The problem is that we can rarely trace the exact causes of the misunderstanding or dispute.

How about that nightmare meeting with a potential foreign customer last week? Was the agreement with the other company in the little-known country of Erkonia and Damique abandoned because the price of your product was too high, or the quality too low? Or perhaps it had nothing to do with either but it failed because you two just did not hit it off. And if that was the case, was the reason that

• Erkonians were occupied by the Damiquian army fifty years ago, and since then Erkonians have never trusted Damiquians (and you have a Damiquian family name )?

• Following the Erkonian custom, your contact addressed you by your given name although you had never met before, and she was twenty years younger than you were (and you thought this was very rude)?

• Your counterpart misunderstood a word you used? (You said used to and she thought you had said usually. She heard , We usually give credit, but what you actually said was, We used to give credit. )

• Corporate policy meant that she offered you only a simple lunch in the staff dining room, in contrast to the luxurious dinner that you had offered her when she had last visited your company? (You felt this showed that her company was mean-spirited, had no understanding of the concept of reciprocity, and was not showing you or your company the respect your reputation deserved.)

• You had a headache , had forgotten to pack the aspirin, and were in a foul mood even before the meeting?

• You were both having a bad hair day?

So was the contract rejected for cross-cultural, corporate, language, or personal reasons? It is impossible to tell, but probably for a mixture of all of them. But what about the participants reactions to the failure of the meeting? They will vary, of course, but an inexperienced or uninformed Damique national, for example, may react in one of two ways:

• Well, tomorrow s another day, and I m sure she ll see reason then, which is the optimist s reaction.

• Well, they re all like that. What can you expect from people from the Erkonian Republic? We ll never be able to work together, which is the pessimist s reaction.

Of course, both reactions are undesirable. The optimist shares a widespread human failing, that of assuming that his or her own views are automatically the right ones. This is so clear to her that she cannot imagine that any reasonable person can hold a different view. She may believe, for example, like many businesspeople, that making a good profit is the primary aim of a business. But who says that she is right? People can be motivated by loyalty to the workforce, by the aim of manufacturing the best widget in the world, or by creating a business to pass on to their grandchildren. And what is a reasonable decision anyway ”one based on serving one s personal self-interest, on increasing production capacity next year, or on achieving a bigger market share over the next decade ? In thinking that her own view is the only reasonable one, our optimistic friend reveals a lack of self-awareness that is likely to give her problems in future intercultural contacts.

The pessimist s reaction to failure is to find someone else to blame. We have all done it, although if we have any sense we fight against the inclination. But it is easy, and surprisingly common, even among widely traveled and experienced businesspeople, to employ cultural stereotypes of the What can you expect from people from Erkonia? They ve never been any good at R&D/logistics/working to deadlines variety. Our Damiquian may easily accept that there are many people in his own culture with whom he has absolutely nothing in common, but, strangely, he may still conclude that all Erkonians are alike. This pessimist is nevertheless further along the road to cultural enlightenment, despite his worrying ignorance, because he at least acknowledges that cultural differences do influence behavior.

Culture affects how we think and act as individuals, and affects our relationships (business or otherwise ), because the culture factor is of increasing importance in a world where international contacts are becoming more frequent and intense . This globalization of business has been aided by the spread of the Internet and by easy travel and communications, but (as yet) there is no software that automatically translates other people s behavior into terms you understand.

For the sake of our companies futures (and our own as employees ), we have to minimize the possibility of cross-cultural misunderstandings and start making the most of our different backgrounds. The benefits in terms of increased profits and market share as well as the softer ones of a happier workforce cannot be ignored.