Does Culture Matter?

Making cultural differences work for you

If you lead a company that plans to grow in export markets, I want you to think hard on whether you have the answer to this question: “How do you prepare your company for entering new cultural environments and your managers for good communication with customers, partners and employees from different cultural backgrounds?"


Growth is change. Growth in new markets and cultural environments is radical change. A company that believes its offering could provide opportunities for growth in export markets, needs to understand cultural differences and intercultural communication to succeed and grow in those markets. If the leader of an internationally operating company tells you that cultural differences do not matter – “Business is business!” - you do not want to own shares in that company.


Why are we afraid of change? What is it in human nature that leads some to resist change so fiercely that they lead their companies into bankruptcy? Understanding change is understanding risk. Preserving the status quo may feel like the least risky avenue because we know exactly who we are, what we are doing, what the boundaries are and what is expected of us.  Deciding to expand in a different culture may put all this certainty to the test. Will we be able to do business, make decisions and build relations in the same way in the new culture? Are we ready to let go of some of our strong beliefs on how business should be done? 

In my very first job I was a sales representative for a Norwegian electronics company with customers all over the globe. I came straight from the University and for five years I travelled 200 days a year, sometimes being six weeks on the road, through Europe, Asia and North America. I did not really have a pre-conceived opinion on how to do my business and I was initially, obviously, totally inexperienced in both the trade and technology of the company I represented. Luckily, I had the good idea of not talking too much and rather ask questions, which quickly made it clear to me that my company’s business was a different business in the different cultures I met. I felt like a sponge in those first years, learning how differently Norwegians, Greeks, Singaporeans, Japanese and Americans would think and react, and I kept my custom of asking questions rather than delivering my company’s messages. We did experience quite a good growth and I believe that adapting to the different cultures was a great part of that success.


Culture is about generally accepted and expected behavior. Obviously, people within one culture behave differently - they are human beings. However, there are certain characteristics and behavioral patterns in each culture that I have learned to appreciate and respect, and consequently succeeded in developing my cultural orientation skills. I have found that the Lewis model[1] developed by Richard D. Lewis can be a great help in understanding how for instance negotiations are done in different parts of the world. And they are done differently, if anyone tells you otherwise he has just not been listening and understanding. And he has most probably not made the best possible deal.


In any negotiation, there are at least three things going on from a conceptual point of view. There is the negotiation process itself, there are relations between the different participants being developed and there is a hierarchy. In the cultures we generally characterize as “western”, i.e. rooted in Northern Europe and influenced by protestant Christianity, the process itself is at the center of the stage. Truth is seen as something quite scientific and trust in institutions and law, performance and efficient officialdom are traits that these cultures value. In a negotiation, they will expect that the parties are well prepared, that there has been established a clear agenda, the background material has been distributed and represents a common starting platform for the further process. Discussions go on across and along the table with everyone being empowered to say what they think is the right thing to say. At the end of the meeting the minutes of meeting are read through by all and signed as the output of the meeting. I am of course stereotyping here, but you get the picture.


To keep stereotyping, in the Oriental negotiation, hierarchy will be the main player and the discussion will be a deliberate and often silent dance to arrive at a result without having anyone losing face. Trust in reciprocity and harmony are central traits and the “scientific truth” so often chased by Westerners may be less important if it could disturb the harmony or give a bad impression of somebody on either side of the table. In a negotiation, it will be expected that people listen carefully, that nobody interrupts and that rank is absolute. Discussions are performed from the lower ranks to slowly start understanding where the difficult points are, and time will be taken to get around these points before engaging the next hierarchical level. Very important discussions may take several days and involve ever higher rank until the top manager gives his verdict, which will be the results of the negotiation.


Finally, in the Latin and African cultures, relationship is the protagonist. Establishing a chain of trust is all-important and a lot of time is spent making sure that this chain is solid and working. Long term relationships, person before company, flexibility in all directions and lack of importance of time are traits of these cultures. In negotiations, the most important negotiation table is oftentimes the dinner table. Very few important decisions are made in a meeting room, meetings are merely documentation of what has already been decided through the line of trust and that has been verified is OK to all involved. 


Even if the above descriptions are stereotypes, even if we travel more and become ever more globally savvy, even if the objective of all business is making money, being aware of these intrinsic, cultural differences is important. If you want to bring your business to another culture, make sure you invest enough time in understanding this before you invest cash.

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