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Companies undertaking Importing/Exporting in foreign markets need to understand the differences in foreign business customs, values and ethical behaviour to effectively operate in overseas markets. Too often Companies ignore Cultural differences creating problems and lost opportunities. All aspects of a Companies International Business-contract negotiations, production operations, sourcing new products, marketing decisions and human resource management practices and procedures may be affected by Cultural variations. Surviving and achieving business success in foreign markets means accepting and adapting to the local culture within the foreign market.
The Social structure reflects the culture's beliefs about the individual's role in society and the importance of mobility in within that society. Individual's predominately live in family units and work with each other in groups. Social attitude is reflected in the importance of the family to business. In Chinese -owned businesses family members fill important management positions and supply capital from personal savings to ensure business growth and success.
Respect for authority and responsibility is nurtured in the family and practised in a persons working life. In China and Japan children are taught to serve the group. Virtues such as unity, harmony and loyalty to the group are highly valued in society.
Australian and Western Companies value individual initiative and responsibility at work compared to Asian Companies who are orientated to teamwork and group decision-making.
Society differs in the degree of Social stratification. All societies categorise people to some extent on the basis of their birth, occupation, education achievements and other personal attributes-sporting accomplishments. Companies must be aware of the social networks that exist between their employees, agents, suppliers and Customers in order to be morally fair and not to offend individuals.
Social mobility is the ability of the individual to move from one stratum of society to another. Social mobility or its absence often reflects individual attitudes and behaviours towards labour relations, human capital formations, risk taking and entrepreneurship. In Australia individuals are more willing to seek higher education or to engage in entrepreneurial activities knowing that if they are successful, they and their families are able to advance in society in personal worth.
Language is a primary delineator of Cultural groups because it is an important means by which a society's members communicate with each other. There are over 3,000 languages and as many as 10,000 dialects worldwide.
Language organises the way in which members of a society think and communicate about the world. It structures perception, imagination and speech. Different cultures have different languages and thus different ways of seeing and talking about the world.
Language provides important information about the cultural values of a society and helps in understanding the culture within that society. Levels of politeness based on the use of certain words or inflections and tones provide strong suggestion that it is critically important to maintain levels of respect and formality when dealing with business people.
The presence of more than one language group in a society is an important signal of the diversity of that country's population and suggests that there may also be differences in income, work ethic and or educational achievement. India has 16 official languages while there are approximately 3000 dialects. In Southern China Cantonese is widely spoken which is very different to Mandarin.
Language can be a competitive weapon. Linguistic ties and understanding creates important competitive advantages, as the ability to communicate is so important in conducting business transactions.
'Lingua Franca' English has emerged as the predominate common language in order to conduct International Business people must be able to communicate in a common language. This was the result of British economic and military dominance during the 19th Century and due to US dominance since the Second World War.
Language serves at the window to the culture of a society.
Linguistic differences can occur through translation. Companies must be totally aware of cultural differences that exist when a language is translated into another language.
Words can have different meanings in a language. 'Saying No' may not mean 'No' when translated. Many misunderstandings can be compounded because directly uttering 'No' is considered very polite in Japan.
Communication-'What we can have is a lack of Communication!'
Communication across cultural boundaries, whether verbal or non-verbal is a very important skill for Business people.
The context in which a discussion occurs may also play a role in cross-cultural communications.
Experts distinguish between high-context and low context cultures.
A Low context culture is one which the words used by the speaker explicitly conveys the speakers message to the listener. Australia, UK, non-French speaking Canada and Germany are good examples of low context cultures.
A High context culture is one in which the context of the conversation is just as important as the words that are actually spoken, and cultural clues are important in understanding what is being communicated. Japan and Arab countries are good examples. Business behaviour between high and low context cultures often differs.
Non-Verbal Communication. Members of a society communicate with each other using more than words. Research highlights that 80% of all information is transmitted between people by means other than language. Non-verbal communication includes facial expressions, hand gestures, intonation, eye contact, and body positioning and body posture.
Silence has meaning in Business situations.
Space between people and spatial distribution of items is also open for interpretation.
Gift giving and hospitality are very important means of communication. Elaborate meals and after hours entertainment serve to build personal bonds and group harmony among participants. Personal bonds are strengthened by the exchange of gifts.
Negotiating styles vary between cultures are must be appreciated and respected.
Religion is an important aspect of society. Approximately 80% of the world's population claims some religious affiliation. Religion influences attitudes towards work, investment, consumption and responsibility for one's behaviour. Religion may also influence the formation of a country's laws.
Values and Attitudes.
Culture also affects and reflects the values and attitudes of members of society.
Values are the principles and standards accepted by members of a society.
Attitudes that result from a society's values have three components-thoughts, feelings and actions.
Cultural values often stem from deep-seated beliefs about the individual's position in relation to his or her deity, family and social hierarchy. Cultural attitudes about factors such as time, authority, age; education and rewards reflect these values and in turn shape the behaviour of and opportunities available to International Businesses operating in a foreign culture.
Understanding the broader cultural differences and business behaviour that exists in International Markets will help you make a better impression on those that you engage when doing business in a foreign culture.