Summary Intercultural Skills for International Business and International
Relations
S. Paul Verluyten
Chapter 1: Introduction
1.1 What is the use of this book?
After having read this book, you will have learned that, when dealing with non-native speakers and when
using interpreters, it is advisable not to use expressions the meaning of which it is not transparent, because
they can raise various culturally relevant questions.
You will also have learned that, in business, cultural insensitivity costs companies millions of
dollars. In international relations, intercultural skills may make the difference between straining or
smoothening relations between people and countries. Cultural blindness can be one of the main reasons for
problems.
1.2 Resistance to intercultural training
For a long time, communication problems in business, industry and administration that could have been
tracked down to intercultural differences were overlooked because those intercultural differences were not
recognized as such. It was simply assumed that, in international business, everything would go to the
Western (and mainly the American) way.
This attitude is not tenable anymore today, and anyone who is involved in contacts with people from other
cultures can no longer adduce ignorance as an explanation for intercultural mistakes or blunders, now that
training materials are readily available.
Nevertheless, resistance to intercultural training is still rampant in the business world, in some
countries more than in others. Large companies may organize inhouse training for their personnel, but small
and medium-sized companies do not, and independent training and consulting agencies are not widespread
as yet. The situation seems to be different in the Netherlands, where intercultural training is provided by
several agencies and institutions, including the respectable Royal Institute for the Tropics in Amsterdam.
A first reason that is commonly adduced is that expertise is what counts in this domain, rather than
theoretical knowledge as it could be gathered in training sessions. This argument could equally well be
applied to learning how to handle a new machine, how to use a computer program, or to learning a new
language. The argument is spurious, because just as it makes sense to learn a new language by taking classes
rather than sending everyone who wishes to learn it immediately off to a country where it is spoken (totally
unrealistic), and just as it makes sense to train employees before they use the new machine or the new
software that is being installed, it also makes sense to provide training in intercultural communication before
launching employees into contacts with other cultures. No-one will deny the role experience plays in
becoming an expert intercultural communicator. But preparatory training is essential in providing people
with the necessary tools to start, and in avoiding costly mistakes.
A more insidious reason for not facing the intercultural issues and problems, and one which is not
always stated openly, is that some may be afraid of opening Pandora‟s box, and that things may come out of
it which run against the prevailing ideology.
For a long time, the European Community, now European Union, has avoided addressing
intercultural issues. By refusing to acknowledge that intercultural differences between the member states
played a role in the decision making processes and their implementation, one could officially keep up the
pretense of a common European culture with little or no internal variation on the level of politics,
administration and business. Only in 1995 did the EU put out a bid to organize large-scale intercultural
training sessions for its personnel. Fortunately, more and more institutions and companies are following that
trend.
Finally, in some cases people may be worried about the implications of an intercultural diagnosis to a
problem, and they prefer to refuse the diagnosis itself, like the proverbial ostrich which puts its head in the
sand in order to avoid facing the danger. But even if it were the case that cross-cultural research arrives at
pessimistic conclusions in certain cases, the diagnosis that come out of the cross-cultural investigation
should be heeded if one wishes to change things for the better.
1.3 A costly example: Sephora’s failure in Japan
,Sephora is a French chain of cosmetics stores, with over 400 outlets in Europe, including Central and
Eastern Europe, and a large number of stores in the USA and now also in China. Its parent company is
LVMH, “the largest luxury group in the world”.
In 1999, Sephora opened its first store in Japan: it was in Ginza, the luxury shopping district of
Tokyo. Sephora had ambitious expansion plans for the country: it intended to open several dozens of stores
in Japan over a 5-6 year period.
Yet in November 2001, exactly two years after opening the first store on Tokyo, Sephora decided to
abandon its Japanese operations entirely because of blatant lack of success in conquering the Japanese
market. At that time, they had nine stores already open in Japan; they closed them down and left.
What went wrong? LVMH blamed it on „the faltering Japanese economy‟. It‟s true that a recession,
or at least economic stagnation, hit Japan at the time Sephora was opening its first stores in the country. It‟s
equally true, however, that luxury goods typically resist the onslaught of recession rather well; and Luis
Vuitton, also part of the LVMH group, didn‟t close down in Japan.
Several analysts believe however that Sephora‟s own strategy is to blame for its failure in Japan. Even
today, though Sephora sells other products besides perfume: make up products, hair care and skin care
products, and more, her own definition „chaîne de parfumerie‟ reveals that perfume is the central product in
Sephora‟s assortment; and that is because in Western countries perfume is the core product in a line of
cosmetics, the product consumers will most identify with. As this is the case, usually from looking outside
of the store, the only products that are visible on the shelves are perfume. The visual attraction is hereby
stimulated.
In the Ginza store in Tokyo, the ground floor was devoted to perfume only. For all other cosmetic
products, the consumers had to go one floor up. This caused a problem because while in the USA and in
Europe the most important segment of cosmetics sales is make-up, and fragrance on a close second place, in
Japan sales are dominated by skin care, hair care and make-up products. Perfume and related products
account for less than 1% of total sales in Japan.
The majority of our readers will find it inconceivable that the Sephora executives were not aware of the
fact that the vast majority if Japanese consumers do not buy or use perfume. If so, they were presumably
hoping to change the behavior of the Japanese (female) consumer. Of course, sales should pick up within a
reasonable time span; a commercial company is normally unwilling to wait for many years before becoming
profitable in a new market.
If they were hoping to change the habits of Japanese consumers, they should‟ve asked themselves: what
motivates Japanese women not to use perfume? If the motivations are superficial and accidental, it may be
reasonable to expect changing their behavior. If the motivations are profound and strong, this hope is
illusory. Even with the best concept and massive advertising, it is not advisable to open a chain of liquor
stores in a strongly Islamic country: you are unlikely to convince Muslims to start drinking whisky or wine!
On the basis of many interviews Verluyten did with Japanese people, he believes the reasons for not
using perfume include the following:
Cleanliness and naturalness: take your shower every morning, and you‟re clean: no bodily
odors! Otherwise you‟re maybe hiding that you didn‟t take a shower.
Modesty: A „proper‟ Japanese woman is supposed to behave in a modest way. Anything that
enhances one‟s attractiveness goes against this norm.
Individualism: Perfume is supposed to express and enhance your individuality, everyone wears
different ones. However this is against the group orientation of Japanese culture.
Social class: According to his Japanese informers, perfume is also low class.
Sephora‟s loss may well amount to 10 million euros or more, apart from the operational losses they incurred
during the two year period they were in business in Japan.
1.4 The need for intercultural training
Global trade and international relations are not a recent phenomenon. There were international exchanges
even in prehistoric times, though the speed of transmission was slower then. But now more than ever before,
economic success means doing business internationally and globally. And international relations between
interconnected countries have become essential to our planet. The list of situations where intercultural skills
are needed involves almost everyone nowadays.
But there is still the naïve idea that intercultural skills are easily acquired „on the spot‟ through
travelling and experience. The Contact Hypothesis, dating back to Allport (1954) states, in its simplest form
(which may not correspond to Allport‟s position), that more contacts between cultural groups lead to better
,understanding. But there is ample empirical evidence that simply exposing people to different cultures does
not automatically lead to mutual sympathy and improved understanding. The available evidence also
suggests that self-reported intercultural skills bear no relationship to real intercultural effectiveness and that
intercultural sensitivity typically lags far behind language skills.
If you throw someone into intercultural situations unprepared he or she may suffer emotional distress
and the company may lose millions of euros, before getting it right, if ever; and most of this could rather
easily have been avoided through basic intercultural training.
Intercultural skills are needed as soon as you do any of the following:
Having contacts with people from different cultures, whether professionally or privately;
Buy and sell abroad: international negotiations and contracts;
Represent your country at international conferences and meetings;
Welcome foreign visitors to your country or company;
Market goods or services internationally and adapt them to foreign markets;
Work as an expatriate, including in diplomatic service or on UN missions;
Getting into a joint venture or a merger with a partner from another country;
Better integrate migrant workers and minorities into the work force.
For expatriates, failure rates range from 10 to 40%: at least one in ten expatriates returns home prematurely,
and in some companies almost half of them do! The cost of one expatriate returning home prematurely is
likely to be higher than the cost of a fully-fledged intercultural training program for all future expats, which
might have helped avoiding some (though not all) of those premature returns.
Similarly, in the case of joint ventures or mergers and acquisitions, companies sometimes spend vast
amounts of money on the harmonization of their accounting procedures or their product assortment, and fail
to spend one penny on potential intercultural trouble spots which might arise between the two companies.
1.5 Cultural units: countries, religions, languages
In most publications in the field of intercultural communication for business, culture is equated with
national culture, the culture of a country or nation state. This is the case in virtually all the research
frameworks we mention in chapter 12: Hofstede, Trompenaars, Schwartz, the Globe study, d‟Iribarne, and
many many more. A lookt at the articles published in International Journal of Intercultural Relations, the
leading journal in this field, will confirm this impression.
It‟s legitimate to express doubts about the appropriateness of the equation culture = nation state, in
view of the fact that many modern nation states are themselves culturally varied. Does it make sense to refer
to „Belgian culture‟ when there are two linguistic communities in the country which often define themselves
as culturally different one from another, plus a number of other cultural groups (an orthodox Jewish
community in Antwerp, Turkish and Moroccan Belgians in many of the large cities, civil servants from
different parts of Europe who work for the European Union administration, and more)?
Some arguments, however, plead in favor of using country membership as a primary cultural group.
A convenient number: There are about 200 countries in the world, and substantially less if we leave
out the very small micro-states. This is a manageable number. Other groupings may be either too
large, or too small. It‟s possible to study religious groups rather than countries for instance. But there
are at most half a dozen major religions in the world and many of them group people together that
are culturally very heterogeneous. Linguistic groups on the other hand, may well be too numerous to
study culturally: estimates are that some 3000-5000 languages are spoken in the world.
Clear membership: Countries usually have clearly defined borders and clearly defined membership.
A clearly defined societal framework: The bureaucracies of nation-states exert dominant influence
upon individual creation of cultural software and „identities‟. Countries typically have their own
unique legal and political framework, educational and judiciary system, economic strengths and
weaknesses, etc.
Empirical evidence: The work of many researches substantiates the idea that countries are relevant
cultural groupings. Hofstede‟s seminal work is an indirect tribute to the relevance of nation-state,
which wasn‟t obvious at the outset.
If nation-states were primarily collections of subcultures that don‟t have more in common with each other
than with other subcultures inside other national borders, Hofstede and others would never have been able to
ascribe different specific, culturally defined characteristics to the neighboring countries that are included in
various studies.
, This is not to say that other levels of cultural grouping are irrelevant and should not be taken into
account. Many, if not most, nation states are composed of more or less clearly defined subcultures which
may differ with respect to language, religion, ethnic background, etc. It‟s then quite possible to refer to
cultural features of those subgroups separately whenever the need arises, provided the required empirical
knowledge about those subgroups is available.
For the purpose of scientific study, working with national cultures has the advantage of using a clear,
well-known concept and an often unambiguous definition of membership. These advantages may outweigh
the disadvantage of amalgamating different subcultures within one larger group. Simplification of a complex
reality is inherent in any scientific or pedagogical effort, and is acceptable as long as the amalgamated
picture is still accurate and close enough to observable reality for it to yield an insight and understanding
which may, in fact, be blurred in the more complex picture where the stress is mainly on decomposing
cultures into subgroups.
In addition, as we will see later, any characteristic ascribed to a cultural group only makes sense if
interpreted as a statistical truth. They do not apply to individual cases with any certainty. Therefore,
understanding that people differ with respect to their sense of hierarchy and that this may explain some of
their behavior in front of their boss, for instance, is more important than ascribing stronger hierarchy to
France than to Great Britain. Ascribing characteristics of groups to all individuals belonging to that group is
called ecological fallacy.
An examination of the potentially strong relation between language and culture isn‟t complete without a
discussion of the widely quoted Sapir-Whorf hypothesis. It states that the (native) language we use shapes
the way in which we view and categorize our world, including deep-seated cognitive categorization related
to the way we view space, time, etc. If this hypothesis were correct, then the equation culture = language
would be true in the most absolute terms, because the entire cognitive system which equips a human being,
would then depend on the native language that human being grew up with.
At a superficial level, it‟s true that, for instance, the color terms that are available in the language we use
will influence our perception of reality. If a language doesn‟t have a separate term for blue and green, but
uses one term for both (as is the case in many languages, incl. Gaelic, Japanese and Chinese), then the native
speakers of that language may perceive the color of the leaves of the trees and the color of the sky as
belonging to the same category. But to conclude that there‟s a one-to-one relationship between the linguistic
categories that exist in our native language and the cognitive categories we are equipped with, is another
matter altogether. After all, native speakers of Gaelic are able to learn English which does have separate
words for green and blue, and the fact of successful bilingual translation weakens the force of the theory‟s
claims.
The prevailing opinion in contemporary linguistics is to reject the Sapir-Whorf hypothesis, and it‟s in
any case too controversial to be used as a definitive proof that our native language strongly determines our
cognitive structures, incl. the value system we absorbed as part of the culture we grew up in.
1.6 Cultures as partially overlapping entities
The Netherlands and the Flemish part of Belgium share a common language (Dutch) and a good part of
their „high culture‟: literature, theatre, historical heritage, and more. Historically the two regions belonged to
the same cultural entity. At the same time, empirical evidence shows that many of the current values and
practices of the Dutch and the Flemish differ widely. While they share a substantial part of their „high
culture‟, Hofstede‟s data shows that they differ with respect to their sense of hierarchy as well as on two
other cultural dimensions: Uncertainty Avoidance and Masculinity. In fact, on these three cultural
dimensions the Flemish score much closer to francophone Belgians and to the French, than to the Dutch.
These partial overlaps, may be quite complex. For instance a Moroccan Belgian might well claim
membership, depending on the situation of, (a) Morocco, (b) Belgium, (c) Islam, (d) Berber, and more.
1.7 The ecological fallacy
Many authors rightly warn against the error that consists in applying characteristics of groups (such as
cultures) to individual members of those groups. This is called the ecological fallacy because it‟s based on
the assumption that people will by necessity exhibit the characteristics that are typical of the place they
inhabit (or originate from).
Now there can be no doubt that the culture one belongs to is one of the defining dimensions for any
human being, including differences in values and practices. On the other hand, it would be naïve and
dangerous to interpret a human being‟s behavior in terms of cultural origin only, and it‟s essential to warn
