The impact of culture on international business

As companies continue to expand across borders and the global marketplace becomes more and more accessible to any enterprise from small to multinational, opportunities to work internationally come along.

Global organizations, therefore, should be prepared to face potential barriers when it comes to culture and international business. The building of cross-cultural teams, however, also brings along benefits in the form of an increasingly diverse knowledge base and new approaches to business problems.

What impact does culture have on the international business environment? 

multicultural-teamUnderstanding cultural differences in three core areas: communication, etiquette, and organizational hierarchy can help internationally oriented organizations to succeed in a globalized business environment.


Expressing your message and an effective communication (also internally) is essential to the success of any organisation. It is particularly important that your message is not being misunderstood or gets “lost in translation”. Generally speaking, English is the common language of business. However, more than just the language barrier, it´s how you convey your message that´s crucial. On top of that, understanding the delicate significance of non-verbal communication between cultures can be equally important in international business.

So be aware! While in your culture a firm handshake, making direct eye-contact, or kiss on the cheek might be common, it could be unusual or even offensive to a foreign colleague or client. Therefore, be sensitive to body language and when you are uncertain, ask! Handling cross-cultural communication can be challenging and approaching it with sensitivity, openness, and curiosity can lead you to a more successful way of doing business at international level.



Just to give an example, do you prefer titles and surnames when addressing you or is it being more acceptable to address you in your culture by the first-name? While in Asian countries it is more common to address colleagues and clients in using the formal “Mr./Mrs Surname”, American cultures tend to use first names. diferencias-cultutales-en-negocios-600x390

The concept of punctuality can also differ between cultures. Different ideas of what constitutes being “on time” can often lead to misunderstandings or negative cultural perceptions.

Along with differences in etiquette, come differences in attitude. A different perception of rules and regulations, assumed working hours and the attitude towards the workplace confrontation can differ vastly among cultures.

Organizational Hierarchy

Country´s societal values or level of social equality reflect whether or not those in middle-management positions feel comfortable in speaking up in meetings or questioning senior decisions. Expressing a differing opinion can be dictated by cultural norms. In a country like Japan, for example, a traditional value is the respect for seniority and this approach helps to define roles and responsibilities across the organization – this means in japan a certain respect and level of formality towards senior management is expected. Whereas in Scandinavian countries, a rather flat organizational hierarchy is more present, where a relatively informal communication and the cooperation across the organization is emphasized.

Diverse Business People Discussing About World

Are you prepared to do business in an international context? We at P&L Global certainly feel the need to be prepared for the challenges and opportunities of working across borders. A big part of this preparation is understanding the role culture plays in international business. Most members of our multicultural team have lived and worked across Europe, Asia, and the Americas while gaining experience in life, culture, and commerce in today´s most dynamic business world.




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