Importance of Cultural Sensitivity

In an increasingly globally connected world, cultural differences, and our responses to them, can sometimes create barriers to doing business. As a small business owner, it is up to you to lead your team in developing sensitivity to, and knowledge of, other cultures. Doing so can improve your relationships with customers, employees and vendors while also improving business processes, sales and the quality of the products and services you offer.

Importance of Cultural Awareness in Business

Many experts define cultural sensitivity as the willingness to acknowledge cultural differences without making value judgments about these differences. Culturally aware business organizations operate with the understanding that not every employee, vendor, or customer will share the same culture. In addition, these organizations prioritize positive relationships with employees, vendors and customers by acknowledging and respecting cultural differences.


Internal Cultural Sensitivity: The Standard Plumbing Company has been in business for over 40 years, and most of its workers live within five miles of the company’s office. In recent years, there has been an influx of refugees into the community, most of whom are Muslim. Standard plumbing has hired many workers from the refugee community, who now comprise about 20 percent of its workforce.

Like many businesses, Standard Plumbing offers paid days off to its employees. These days off have usually included Christmas: No regular service calls are scheduled for that day, although a few plumbers remain on call in case a customer has an emergency that needs immediate attention. The company’s after-hours answering service fields the calls and assigns them to the workers on duty.

Recently, however, the owner of Standard Plumbing realized that many of his employees do not celebrate Christmas. In addition, he believes that many of his new neighbors also don’t celebrate the holiday, and may be open to scheduling service calls and appointments on that day.

The owner of Standard Plumbing speaks privately to several employees to learn how they would feel about the business remaining open on Christmas Day, allowing employees who prefer to take the day off to do so, but giving a “floater” holiday to those who work through the holiday.

The employees are very open to flexibility in assigning paid holidays. Those who celebrate Christmas want to continue having the day off, while many others are just as happy to work on that day. The company receptionist indicates that she has no plans for Christmas and can easily handle calls during the company’s normal working hours.

Standard Plumbing changed its paid day off policy to provide an additional personal day instead of simply closing on Christmas. The company sent out a mailing to all of its customers noting that service calls can be scheduled throughout the holidays, including Christmas Eve and Christmas Day.

Many people take advantage of having plumbing work done when they already have a day off, and those who experienced plumbing emergencies were thrilled by the quick response to their calls. Business revenue for the end of December was 30 percent higher than it has been in previous years. In addition, the owner has noticed that employee morale has improved with many workers expressing gratitude for being able to take a paid day off on a holiday of their choosing.

Cultural Sensitivity in Business-to-Business Interactions

Carol Campbell is a new fashion designer who has developed a line of accessories sold through local boutiques. Recently, a popular fashion journalist noticed her collection and featured several pieces in an editorial spread. Suddenly, Campbell’s products are in demand all over the country, forcing her to step up production of her purses, headbands and scarves.

After speaking with several trusted advisors, she decides to outsource production to a factory in China. Although she is able to develop a list of reputable operations, she is told that it is best to fly to China directly to meet with factory owners and to inspect the facilities.

Carol gets her visa and books a ticket to China. In the weeks between deciding to make the trip and actually getting on the plane, Carol spends time learning more about Chinese culture and even begins a course in Mandarin.

When she arrives for her meetings with factory owners, Carol is nervous but more confident than she might have been otherwise. She greets her hosts in Mandarin and they appreciate her taking time to learn some Mandarin. In addition, she is familiar with certain aspects of Chinese culture and business etiquette, which creates a favorable impression.

At the end of her trip, Carol is confident that she is selecting the right factory to manufacture her goods and help her take her business to the next level.

Cultural Sensitivity in Working With Customers

Ellen operates a casual restaurant close to a small, private college. Six years ago, an alumnus passed away, leaving his entire, and very large, estate to the school. In his will, the donor requested that the school establish an international studies program that would actively recruit students and faculty from other countries.

Now in its third year of operation, the program has an excellent administrative team and is attracting top academic talent from around the world. Yet Ellen’s café has experienced a dip in business.

Some visitors to the café have mentioned that Ellen’s menu, largely consisting of American-style diner food such as bacon and eggs, cheeseburgers, creamy soup and meatloaf can be difficult to navigate for some of the international students. The difficulties include lactose intolerance, which is common in many countries, and religious prohibitions against eating meat or certain types of meat.

Realizing that she needs to make changes, Ellen reaches out to one of the patrons who mentioned the need to update her menu and asks for feedback. The patron suggests that Ellen contact the head of the international program and bring together a focus group of students who can give feedback on dietary preferences.

After talking with students in learning about their concerns, Ellen talks to her cooks. After trying out some new recipes and tweaking their offerings, Ellen’s restaurant debuts a new menu that features vegan dishes, customizable burgers (including veggie burgers), build-your-own omelets and an extensive salad bar.

The new menu is a great hit and Ellen’s restaurant is busier than it has ever been. Ellen recently contacted a real estate agent to look into moving to a larger building so that she can accommodate more customers.

Consequences of Cultural Ignorance and Insensitivity

Cultural insensitivity and ignorance can take a toll on your business. The damage may be internal, by alienating and distressing employees, or damaging negotiations and relationships with other businesses. In addition, consumers are increasingly demanding that businesses demonstrate a commitment to cultural respect. Failure to do so could result in loss of reputation and sales.

Disgruntled employees: Employees like to feel appreciated and respected by their employers. When employees don’t feel this way, they can become anxious, angry and depressed. They may also feel uncomfortable bringing up their concerns with management because they feel it will not be taken seriously or may even face retaliation.

Missed business opportunities: Cultural gaffes can derail negotiations and result in missed opportunities. Most business people are professional and understand that not everyone fully understands the nuances of their culture. However, a failure to make an effort to educate yourself, and your team, about the cultural norms of a vendor or retailer could result in giving offense and make negotiations more difficult.

Brand damage: Cultural insensitivity can deeply offend customers and the general public. Exposure to cultural insensitivity can be painful for people from that culture and could result in damage to your company’s image and reputation.

How to Develop Cultural Awareness and Sensitivity

Developing cultural awareness and sensitivity begins within a business’s own culture. Once leadership makes it clear that respect for other cultures is an important part of how the company operates, it can become easier for the company as a whole to reflect these values.

One important part of cultural sensitivity is not making assumptions about other people and their cultures. It can be helpful for companies to contract with third-party consultants who specialize in training organizations in cultural sensitivity.

Human resources professionals can also be helpful in this area. Asking HR staff to stay educated on cultural issues and to be receptive of feedback from employees is another way of putting your company’s values into practice.

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