Cultural Factors Affecting International Business
International business takes place between two or more regions, countries or nation and go beyond any political boundaries. They comprise all commercial transactions that can be private, governmental, involve sales, investments, transportation and logistics. For all international business activities, the involved parties should understand the market properly and how it operates. Any uncalculated move in the international market can cause a lot of harm to any of the parties. There are many physical and societal factors that affect the international business. However, to excel in the global market, there are incredible cultural factors to also hold close.
There has been growth in globalization in the recent decades thanks to advent of technology, good governments, unmatchable competition, good political relationships and great cross-national cooperation and agreements. The international business standards focus on raising awareness of interrelatedness of one country’s economic and political practices. Global trades also have to learn how to improve their international business skills and explore concepts essential in international marketing, management and finance and much more. All in all, there are cultural factors to bear in mind prior to indulging into the international trade.
Culture embraces the set of moral values, language, laws, beliefs and traditions held in common by a community or nation. With an open mind, exceptional observational skills and consummate cultural understanding, it is easy to shine in the international business. Two substantive things drive cultural understanding; objectivity and empathy. Having empathy means that it is easy to recognize and accept one nation’s values as manifested in the social platform. While being objective means that you do not hold prejudices on a certain culture. In general, there are numerous cultural factors that impact international trade and they include;
- Language and communication- Whenever undertaking any international business assigned, communication is usually a barrier especially if you speak in different dialects. The best thing to do and overcome such situation or disasters is to learn a second language that you are comfortable speaking or making transactions on.
- Etiquette- Having a certain code of behavior that defines expectation of the international business platform is the very first step towards successful business career. For instance, when introduced to another business professional in a foreign country especially in U.S you shake hands. However, be careful as there are some nations that have different etiquette cultures. You may hug, kiss each other on check or bow. Any mistake that you make can be costly.
- Negotiation- Negotiators from different cultures may tend to observe the core aim of negotiation contrarily. The goal of international business negotiation is a signed contract between the parties. However, there cultures that tend view the goal as creation of a trust between two sides with different cultures. In some parts of the world agreement is made via Yes or No understandings. It can also be in the win-lose or win-win negotiation attitude, informal or formal.
To succeed in the international business, cultural sensitivity is a great trait to hold close. It is all about understanding the social, cultural and racial differences that exist within a society or multiculturalism. Hence, international business success cannot be achieved without proper understanding of the market and way of life of the targeted personnel or location.
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