In this modern era of globalization, the world is becoming intertwined economically, socially, and politically. There are business operations that cut across diverse cultures and borders; communicating across borders and cultures is a multifaceted and complex issue. During the mercantilism era, trade and investment were limited by communication difficulties; among the primary impediments to international business operations are cultural norms and language barriers.
Effective communication among international partners is a necessity for global success. Organizational and cultural differences in an international business environment create hurdles that confront effective communication and hence hinder the performance of a firm to the maximal level. With the increased internationalization of businesses and globalization, there is a growing need to communicate in multiple languages hence international managers should learn more than their native languages for them to enhance their performance through effective communication.
In international business, there are high stakes associated with information deficiencies due to the barriers to effective communication. Inability to effectively communicate will definitely lead to misunderstanding among global players in business; this may escalate to the execution of directives in the wrong manner which might, in turn, cost a business a fortune.
Cultural Dimensions in International Business
Communicating across with overseas trading partners can be made effective by learning the cultural dimensions of the host nations. Geert Hofstede analyzed the various cultural differences and grouped them into five dimensions, these dimensions include power distance index, masculinity, individualism, long-term orientation, and uncertainty avoidance. From the study, for example, it is argued that Japan ranks high on the masculinity dimension and also high on the avoidance index; the implication of this is that while conducting business in Japan, an individual or a firm should be direct, straightforward and should as well provide an explanation on how his or her business negotiation will help the greater society.
Business communication is verbal and non-verbal as well and it is determined by such factors as body language, firmness of a handshake, and eye contact. It is imperative to understand a country’s methods of communication so as to make the process of conducting business simple. Effective communication has the effect and power to instill lasting trust among the partners and to seal a business deal. It is therefore advisable to understand the behavioral and cultural norms of the host country (Capozzi 2012, p. 1).
In international business, understanding different cultures especially those of the people one interacts with is very paramount. According to Hofstede, culture is defined as the collective programming of the mind that serves to distinguish members of one certain group from the other. International managers can learn cultures by acculturation, or socialization (primary or secondary). Effective communication at the workplace can be attached to Hofstede’s dimensions of culture that place a lot of attention on the values and the ethics of the workplace.
These dimensions are individualism-collectivism where individualism explains that people are only concerned about themselves as in the case of western nations while collectivism posits that people are concerned with other members of a group and it is a common feature among the Asian people. Another dimension is power distance where people accept power as unequally distributed while others accept that social ranks are agreeable. There is also uncertainty avoidance which explains the degree of the power structure.
Masculinity or femininity explains the level at which people prefer mannish or feminine ideals. The above cultural dimensions define how managers should conduct an international business transaction by dictating how they should interact with the people of different cultures. There are a lot of differences in the corporate cultures of several countries and this should be placed into consideration when establishing an international business (Mitchell 2000, p. 149).
Effective Communication in International Business
When business partners originate from different nations and organizations, there is a likelihood of cultural inconsistencies which may be an impediment to an effective global business partnership. Effective communication in an international business environment is largely influenced by national and organizational factors, the breadth of cultural diversity among its members, and the ownership structure of the relationships. This is as demonstrated by the diagram below.
National cultures provide a clear theory that concerns behavioral explanation in various situations and when business partners are from two different cultural orientations like Japan and USA, inconsistencies in communication arise; this is because Japan prefers indirect communication while the USA prefers the direct form of communication. This was linked to the coordination problems that were experienced by Matsushita in acquiring MCA and Sony in the acquisition of Colombian pictures.
The two situations suffered from misconceptions between American and Japanese managers. It was established that the Japanese national culture strategies of Matsushita and that of Sony managers were in stark contrast to the national cultures of the American managers in MCA and Columbian pictures which lead to misunderstanding and dismal performance. Consequently, in the context of firms from similar cultural orientations like Canada and the USA, there are minimal communication hurdles and hence they experience enhanced overall relationship efficiencies. The absence of organizational culture has a direct effect on the effectiveness of international business communication (Griffith 2002, p. 257).
In the modern era of globalization, there are various reasons as to why individuals should study intercultural communication; key among these reasons are: to understand the global diversity trends, to get interpersonal learning opportunities, and to comprehend domestic diversity trends. The global diversity trends pose both opportunities and challenges for individuals and organizations. This implies that it is necessary for business firms and international managers to understand the worldwide trends economically, politically, and culturally. Successful businesses nowadays are dependent on globalization which involves dealing with the global workforce.
For a manager to effectively communicate with people of different backgrounds, they should understand the fundamental concepts and skills of intercultural communication. Corporate cultures vary from one country to another so do national business styles; there is a dilemma, for example, in joint business ventures between Japanese and American ventures where the American ventures are interested in making profits while the Japanese ventures are interested in the quantity of the share of the market or when a capitalist company establishes itself in a socialist state. In all business practices, language or communication is an important aspect because it guides communication during meetings and drives business deals and negotiations.
The regional and national cultures can be roughly classified into three categories namely: task-oriented, people-oriented, and highly organized planners. National cultures are categorized into reactive, multi-active, and linear active. Understanding these cultures is necessary for an individual to communicate across the cultures and also in order to govern interaction. A manager of an international firm should understand these cultures so as to enable him to manage and effectively communicate with his workforce (Lewis, 2000, p. 47).
It has been established that the prime barrier for small and mediums sized multinational corporations in export business is difficulties in communication. Effective communication for international businesses is critical in the understanding of international businesses, in the understanding of individual consumers, in comprehending various business practices in overseas markets and it also influences the ability to negotiate and also in enabling a company to effectively manage its subsidiaries. Effective communication contributes greatly to international business successes and facilitates internal communication within firms hence leading to better performance.
Face-to-face communication which characterizes modern business negotiations demands an intensive flow of communication that is hampered by language and cultural barriers. Effective communication in international business is defined by the style of communication, and the ability to interpret certain features of communication. Non-verbal communication in particular has the negative effect of interfering with cross-cultural communication; this is because various cultures have varied interpretations of body movements or physical signs of communication.
Learning non-verbal clues is a very difficult task. It should be noted that non-verbal communication has no relationship with the related cultural concepts or Hofstede’s dimensions of culture which include uncertainty avoidance, individualism-collectivism, etc hence it is very hard to grasp not unless an individual has a deeper understanding of a particular culture. There are some cultures that prohibit physical contact among individuals like hugging and kissing hence there is a need for a certain degree of sensitivity and awareness which will prevent individuals from making mistakes that can offend the other partners (Ghauri 2005, p. 475).
Language is a primary medium of communication and the use of common language defines a group identity within the society. In business, language is the key medium in business transactions whether within a company or during business negotiations. Language also provides insight into the local culture and how culture should be understood and interpreted. The consequence of poor verbal communication can be detrimental to the operations and management of a business particularly if a business is trying to establish itself in an overseas market. English and French have been considered the two languages that are widely used in international business transactions though English is widely used among various cultures.
A common language is not considered a perfect measure of guarantee to effective communication; this is because various words have varied interpretations depending on cultural interference which shapes the interpretations of a language. The difference in the use of common language is an indication of the existence of cultural differences (Johnson & Turner 2009, p. 309). This is the reason why multinational business enterprises seeking establishment in different markets hire local managers to ensure that they adjust to the local culture and business environment and to enable them to realize their business objectives (Johnson & Turner 2009, p. 313).
Cultures vary from one country to another and having an understanding of various cultures is important for an individual to succeed as an international manager. Effective communication among people from different cultures is not an easy task due to the variations in the conveyance of messages in different cultural contexts. Cultural influence has a lot of effect on the ability of a manager to make decisions about planning, leading, and controlling.
Cultures affect the strategy of a company and the communication process hence resulting in ineffectiveness and inefficiencies in the operation of a business. Cross-cultural communication often confronts challenges and more often than not the basis is usually on a misunderstanding that arises out of differences in thoughts. The inability to understand the cultural complexities and the cultural environment of international business in the Asian region made it hard for American companies at first to be well established in that region (Adekola & Sergi 2007, p. 235).
It is an acknowledgeable fact that globalization is here to stay and hence the successes of international business are anchored on the quality of intercultural communication. It is advisable that managers exercise caution in cross-cultural communication. Effective communication is plagued by the problem of ethnocentrism where some individuals believe that their culture is superior to others. This is depicted by the fact that it is morally wrong for American businessmen to stress that their contracts should be in English which may end up prejudicing other partners. Language differences should be appreciated in international business transactions, business negotiations, and contracts.
Effective communication between international partners is critical for global success; there is a need therefore to assist managers to understand the various models of communications in order to make their international business relationship effective. International firms should invest in communication particularly in helping the branch managers of those branches located overseas. Effective communication will necessitate sound management as it eliminates the chances of distorted messages being passed across. Understanding of local cultures also helps managers of international companies deal with situations in a manner that the locals identify with; this would make them feel part of the firm they are working for.
Adekola, A & Sergi, B 2007, Global business management: a cross-cultural perspective, Ashgate Press, Burlington.
Capozzi, C 2012, Effective Communication in International Business, Ehow. Web.
Ghauri, N 2005, International business negotiations, Pergamon Press, Amsterdam.
Griffith, D 2002, ‘The role of communication competencies in international business relationship development’, Journal of World Business, vol. 37, no. 1, pp. 256-265.
Johnson, D & Turner, C 2009, International Business: Themes and Issues in the Modern Global Economy, Taylor & Francis Publishers, New York.
Lewis, R 2000, When cultures collide: managing successfully across cultures, Nicholas Brealey Publishers, London.
Mitchell, C 2000, A short course in international business culture, World Trade Press, Novato.