Intercultural communication is the study of interpersonal communication between people from different cultures. This is more precisely “a transactional, symbolic process involving the attribution of meaning between people of different cultures1
International Business & Economics Research Journal – February 2012 Volume 11, Number 2
Intercultural Communication
In Global Business: An Analysis
Of Benefits And Challenges
Melvin C. Washington, Howard University, USA
Ephraim A. Okoro, Howard University, USA
Otis Thomas, Bowie State University, USA
ABSTRACT
The twenty-first century business environment is expanding and increasingly attracting the
interest of countries from developed and developing nations of the world. As countries of the
world become increasingly interdependent and interconnected because of global market and
diverse consumer needs, it is critically important that participating countries and their
organizations understand and appreciate one another’s cultural differences in order to ensure
growth and sustainability in international business. Recent studies have traced the failure of some
international business ventures to three significant factors: lack of intercultural skills and
competence, inability to communicate effectively at a global level, and failure to practice
acceptable etiquette in business negotiations. Therefore, businesses from different countries need
to appreciate the importance of understanding the cultures and values of their counterparts as
well as develop intercultural communication sensitivity and decorum. This paper then is an
attempt toward analyzing the significance and role of intercultural communication and etiquette
in international business. Recommendations for appropriate practices and acceptable conducts
among nations are provided.
Keywords: International Business; Intercultural Communication; Etiquette; Business Negotiation; Multicultural
Competence; Cultural Diversity
INTRODUCTION
R ecent events and developments have repositioned etiquette and intercultural communication as
fundamental topics requiring critical analysis in light of the increasing number of countries
participating in global business transactions, various strategic international alliances, and
multinational joint ventures. As organizations from developed and developing nations struggle to establish their
ethical identity, business etiquette, and engage in intercultural communication, the business environment becomes
challenging and complex as a result of differing standards, expectations, and language patterns. International
business etiquette as defined by Chaney and Martin (2007) refers to the manners and behavior considered acceptable
behavior in internationally social and business situations. In social setting, proper social behavior includes cultural
differences in making introductions, exchanging business cards, acknowledging position and status, communicating
interculturally, dining practices, tipping etiquette, giving gifts, and traveling. In international business situations,
how competent and competitive firms are both domestically and internationally and how they effectively
communicate to their stakeholders will determine how successful a firm is internationally. Furthermore, as the
authors expound, building global business relationships depends on the innate ability to learn about other cultures
and proper training to help a person adjust once he or she is in another culture. In addition, it refers to the customs
and regulations dealing with diplomatic courtesies expected in official negotiations with persons in various cultures.
Chaney and his colleague explain that when interacting with colleagues or counterparts of other cultures in a
business or marketing context, it is important to know their customs to ensure that an intended meaning is not
conveyed in order to avoid unintentionally offending them. Furthermore, other scholars ( O’Roourke, 2010; Cardon
, International Business & Economics Research Journal – February 2012 Volume 11, Number 2
& Scott, 2003; Brett, 2001) see global business etiquette as a natural outgrowth of business globalization, which in
many significant ways complicate the way people from different backgrounds in organizational and learning
contexts behave in business situations. They explain that employees who work globally should be trained in
technical knowledge, such as import and export laws of other countries, comparative management styles, and
business protocol, etiquette, and ethics.
As today’s marketplace becomes increasingly global, modern business now demands that people travel to
foreign countries, communicate effectively with foreign clients, colleagues, and customers in efforts to take
advantage of the opportunities of a culturally diverse marketplace environment. Chaney and Martin (2007) point out
that many businesses are beginning to have a global mindset by sourcing, producing, importing, or exporting their
products. As a result, addressing the full complexity of intercultural communication has gained substantial
importance in the international business arena. Specifically, international business etiquette (the expected rules of
behavior for intercultural communication) has become progressively more complex. In fact, Bovee and Thill (2010)
argue that learning the skills of proper etiquette on an international level is one of the most important elements for
business success and growth. The authors note that some behavioral rules are formal and specifically articulated,
while others are informal and learned over time, thus influencing the overall behavior of most people in a society
most of the time. As businesses begin to appreciate and respect cultural differences, they develop a better
understanding of why people act in certain ways and give them a better understanding on how they should act while
conducting business. Similarly, O’Rourke (2010) note that the most common factors contributing to failure in
international business assignments is the inability to understand and adapt to foreign ways of thinking and acting as
opposed to technical or professional incompetence. As participation in the global marketplace flourishes, employees
are being asked to do more. Bovee and Thill (2010) maintain that supervisors face the challenge of acknowledging
that expected behaviors of diverse employees, multi-national teams face the challenge of working together closely,
and businesses are challenged to peacefully negotiate with international business partners. Thus, learning and
understanding more about conducting international business has become especially challenging.
Carte & Fox (2008) argue that the challenge in international business is anticipating and understanding
cultural differences in international business etiquette and being able to adapt accordingly is the foundation of any
successful international business. Even though a successful international business hedges largely on how well they
behave as business agents in a foreign culture, little effort has been assigned to understanding global business
etiquette and its role in international business relationships. The authors maintain that customers, shareholders and
the media lose faith and interest in businesses that project an inconsistent image; hence they continually strive to
present themselves to the outside world as a united entity with a single set of beliefs. However, this becomes
increasingly difficult, for the larger a business becomes, the more international they develop into as they cross
national borders in search of growth.
This study therefore attempts to explicate the current opportunities, challenges, and benefits in
understanding and applying proper international business etiquette in an increasingly globally diverse workforce.
Followed by the introduction, specifically, the paper examines the current literature on global business etiquette in
six countries that do business with each other regularly.
REVIEW OF RELATED LITERATURE
Carte & Fox (2008) explain that with the tremendous surge in global trade, it is vital to learn about the
different cultures and behaviors around the world, in order to reduce the risk of failure. Effectively adapting business
etiquette to businesspersons from other countries requires both knowledge about the culture and the ability and
motivation to adapt to different behaviors. For example, the giant retailer Wal-Mart learned this lesson the hard way
when they tried to expand into Germany. Store clerks resisted Wal-Mart’s policy of always smiling at customers
because customers sometimes misinterpreted smiling as flirting. Eventually, because of a number of other cultural
missteps, Wal-Mart had to leave the German market (Bovee and Thill, 2010). Thus, becoming knowledgeable about
different countries business etiquette is the key to having good business relationships with individuals and
businesses in other countries. The following is a review of the current research on the business behavior/etiquette
in four countries (China, England, Germany, and Japan) that conduct business in the United States on a regular
basis.
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