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Cross Cultural Challenges in International Business

Culture is the “acquired knowledge that people use to anticipate events and interpret experiences for generating acceptable social & professional behaviors. This knowledge forms values, creates attitudes and influences behaviors”. Culture is learned through experiences and shared by a large number of people in the society. Further, culture is transferred from one generation to another.

Core Components of “Culture”

  • Power distribution: Whether the members of the society follow the hierarchical approach or the egalitarian ideology?
  • Social relationships: Are people more individualistic or they believe in collectivism?
  • Environmental relationships: Do people exploit the environment for their socioeconomic purposes or do they strive to live in harmony with the surroundings?
  • Work patterns: Do people perform one task at a time or they take up multiple tasks at a time?
  • Uncertainty & social control: Whether the members of the society like to avoid uncertainty and be rule-bound or whether the members of the society are more relationship-based and like to deal with the uncertainties as & when they arise?

Critical issues that generally surface in cross-cultural teams

  • Inadequate trust: For example, on one hand a Chinese manager wonders why his Indian teammates speak in Hindi in the office and on the other hand, his teammates argue that when the manager is not around, why they can’t speak in English?
  • Perception: For instance, people from advanced countries consider people from less-developed countries inferior or vice-versa.
  • Inaccurate biases: For example, “Japanese people make decisions in the group” or “Indians do not deliver on time”, are too generalized versions of cultural prejudices.
  • False communication: For example, during discussions, Japanese people nod their heads more as a sign of politeness and not necessarily as an agreement to what is being talked about.

Communication styles that are influenced by the culture of the nation

  • ‘Direct’ or ‘Indirect’: The messages are explicit and straight in the ‘Direct’ style. However, in the ‘Indirect’ style, the messages are more implicit & contextual.
  • ‘Elaborate’ or ‘Exact’ or ‘Succinct’: In the ‘Elaborate’ style, the speaker talks a lot & repeats many times. In the ‘Exact’ style, the speaker is precise with minimum repetitions and in the ‘Succinct’ style; the speaker uses fewer words with moderate repetitions & uses nonverbal cues.
  • ‘Contextual’ or ‘Personal’: In the ‘Contextual’ style, the focus is on the speaker’s title or designation & hierarchical relationships. However, in the ‘Personal’ style, the focus is on the speaker’s individual achievements & there is minimum reference to the hierarchical relationships
  • ‘Affective’ or ‘Instrumental’: In the ‘Affective’ style, the communication is more relationship-oriented and listeners need to understand meanings based on nonverbal clues. Whereas in the ‘Instrumental’ style, the speaker is more goal-oriented and uses direct language with minimum nonverbal cues.

Important nonverbal cues related to the communication among cross-cultural teams

  • Body contact – This refers to the hand gestures (intended / unintended), embracing, hugging, kissing, thumping on the shoulder, firmness of handshakes, etc.
  • Interpersonal distance – This is about the physical distance between two or more individuals. 18″ is considered an intimate distance, 18″ to 4′ is treated as personal distance, 4′ to 8′ is the acceptable social distance, and 8′ is considered as the public distance.
  • Artifacts – This refers to the use of tie pins, jewelry, and so on.
  • Para-language – This is about the speech rate, pitch, and loudness.
  • Cosmetics – This is about the use powder, fragrance, deodorants, etc.
  • Time symbolism – This is about the appropriateness of time. For example, when is the proper time to call, when to start, when to finish, etc. because different countries are in different time zones.


“Cross-cultural challenges in international business management”, has become a keenly followed topic in last two decades. There are enough examples of business failures or stagnation or failure of joint ventures, on account of the management’s inability to recognize cross-cultural challenges and tackle them appropriately. There are also examples of companies having compulsory training on culture management or acculturation programs for employees being sent abroad as or hired from other countries, to ensure that cross-challenges are tackled effectively.

The world is becoming smaller day-by-day and therefore, managers involved in the international businesses will have to become more sensitive to the challenges emanating from the cultural and ethnic landscape of the countries they work in.

Ignoring cultural challenges while managing internal businesses is a risky proposition because the stakes are high. It is cognate to the “Hygiene” factor of the “Dual-factor Motivation” theory developed by psychologist Frederick Herzberg in the mid 1960s. In management of the international business, embracing the cultural diversity of the country may or may not bring success, but not doing so will surely increase the chances of stagnation or failure.

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