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Introduction
As the world globalizes and trade liberalizes, the exchange of goods, services has been growing at a rapid rate. This has been made possible by the emergence of new markets in Latin America, Africa and the Asian continent. This has led to increased business both at the national level as well as at the international levels.
The absence of barriers of trade not only has it eased the exchange of goods and services, it has led to countries and big companies (within them) they remain in business and are able to compete with their rivals (Deresky 2000).
The globalization has led to increased rate of interdependence among world countries making world economies over reliant on others. To add to the importance, there has also been migration of people and tourism around the world as well as internationalizing education systems (Raymond Duncan, Jancar- Webster & Switky 2008). As a result of this, there has been increased cultural diversity in most organizations.
Cultural diversity in most countries (developed and less developed) and even the companies found within them coupled with trade liberalization and globalization has now become a reality and business managers and leaders are now being forced by situations to become intercultural competent in order to be able to capitalize their benefits from the limited resources that are available and also from the advantages which are a product of cultural diversity (Livermore & Ang 2009).
The question that runs across many people minds is how often we find people who study business or other careers in abroad countries and then come to utilize them in their own country? What happens to our own business cultural competencies outside our country if within our country we have to rely on other cultures for our business to be competent?
Is cultural diversity the driver or the norm in business success or have we become just over reliant on the different cultures in order to succeed? Or do we just want to create an international recognized business culture covering all the different cultures that exist in the world for us to succeed in business?
Aim
The purpose of this study will be to examine and try and understand to what extent diversity in cultures influence in international business and whether there is anything that can be related to the success seen in most of these international businesses.
The theoretical insights on the effects of cross cultures on business will be provided and with communication being the driver in the exchange of the different cultures, it will be a factor of major concern to the study.
By having a better understanding on communication, the study hopes to identify whether cross cultural and the intercultural communication are major attributes leading to success of businesses in the international arena.
The relationship between culture and communication is very wide and thus the study will not completely cover but it will just try to give an overview of the theories of intercultural communication as well as cross cultural competency. Finally, it is important to note that the study will work on the already established findings trying but it will not be part of this study to investigate or bring about new research findings.
Background
Culture and its Implications
In doing business whether locally or international, culture is a very important factor.
It is very usual for businesses to make the right decisions as long as economic or management issues are concerned but to make sure that these decisions lead to the increased profitability of the company, it becomes very important for the key decision makers to understand and be able to solve and bring together the differences that may arise due to the cultural differences that may arise especially in the international business where laws, regulations and even individual behaviors are different depending on the location(Barrett& George 2005).
It is thus important for the managers to understand the cultural differences and also later to learn them so as to become cultural competent.
Culture is the defined or the patterned way in which people think, behave, act and react depending on the circumstances. Culture is displayed through actions and symbols.
According to Hofstede (1991) culture can be defined as the way the mind of people ( individually or collectively) has been made in such a way one can be able to distinguish a group of people from other due to the way their lives have been programmed to operate ( the way they do their things is different from others).
While the definitions of culture may vary from one expert to the other, the common traits found in culture revolve around norms, mores and values one group holds dear compared to the other.
When it comes to international business, culture may be defined broadly across the regional, religion and linguistic dimensions while in the narrow dimension, distinct cultures may be defined by the established boundaries which are used to distinguish a country from the other and thus a different legal and political structure from the other.
Cultural research theories
No matter how two different cultures appear similar, they are very different. The reason behind this is the fact that there are different forces behind them which influence how a person of a certain culture behaves. It can be due to geographical factors or climate factors. Experts while trying to study the different cultures that exist in the world, have used to dimensions:
The first dimension has been based on the cultural theories while the other dimension has been through institutional theories (Belisle 2007).
The cultural theories dimension tries to investigate the cultural differences based on ones culture while the institutional dimension approaches the differences between cultures through the established institutions such as law and order and other regulations which dictate or govern how people behave.
However, it is worth to understand that two people of the same culture can display different cultural behaviors depending on the level of the embededness (attachment or close ties) one has towards own culture. Nolan (1999) explained this through perceptions. Through which she explained that two people from the same culture can perceive the same thing differently.
She also explained that different people interpret things differently and thus they may have different ways of remembering the same thing. She finally stated that goals, values and methods of achieving different things are defined by our own cultures.
On the cultural theory, different experts have identified different cultures through their distinct behaviors, mores and values. Though the three aspects appear easy to understand, the relationship between the three aspects is not easily understood as the causality of the action does not necessary imply the combination of the three aspects.
To have an overview of what culture entails, we shall cover the Hofstedes five dimensions of culture as well as the Trompennaar and Hampden-Turner seven dimensions of culture and through this we shall be able to understand how a business manager can be able to negotiate successfully by learning and understanding the different cultural dimensions.
Hofstede
While studying cross cultural communication, Hofstede indicated that each of the different existing cultures deals with the issues it is faced by according to several dimensions. The dimensions themselves vary on the intensity depending on the matter at hand. He summarized these dimensions into five.
In his first dimension individualism or collectivism, he explained that how people view themselves whether as an integral part of a group or as an individual was defined by their culture. He explained further that these groups were natural ones, for example where one can relate to a family or a certain community.
This dimension however, did not analyze whether people liked staying in groups or individually rather it was more of how the individual identifies him or herself in relation to a certain group.
The second dimension in which Hofstede used to describe culture was uncertainty or avoidance: He stated that in some cultures, everything has to be clearly understood before proceeding further so as to avoid surprises in future while in some, which ever manner it is done is no ones business.
In the latter cultures where the uncertainty avoidance levels are high, people are never at ease and more often becomes very anxious when some of the factors are not known to the opposite of the cultures which maintain low levels of uncertainty avoidance.
Hofstede also explained culture through power distance. He noted that human beings live in stratified levels. In some cultures, the disparity between the ranked high and the low in the society is such wide that the two groups respect each other.
Movement and interaction across the different levels is not expected while in the cultures where the gap between the high and the low is not that much wide (power distance is low) people expect that those ruling or in power did not just get it due to their stature in the society but it is because they worked, and put efforts for them to gain the stature.
Aggressiveness was Hofstedes fourth dimension and it defines masculinity and femininity that exists within a certain group. Femininity is said to value gentleness and consensus and in such a culture, men also tend to be gentle and less aggressive. On the other hand, masculinity is competition and assertiveness mainly looking for the best among the players in such cultures. In such a culture even women are more aggressive.
The last dimension through which Hofstede defined culture was through orientation. He stated that cultures are either short term or long term orientated. He indicated that cultures that value long term planning are long term orientated while cultures that live for the day or do actions in order to appear better or safe faces are short term orientated (Longatan 2008).
Trompennaar and Hampden-Turner
While studying culture, Trompennaar concentrated mainly on the observed cultural dimensions of leading business executives. In their book Riding the Waves of culture (1997) they identified several dimensions while some dimensions were similar to Hofstedes some had different views about the culture.
How different people get involved in a culture gives the difference between the specific and diffuse cultures. The specific cultures usually have a clear cut distinction between for example the working life of an individual from his personal life.
While in a diffuse culture, there is usually a mix up between the individuals personal and working life. Each activity both in working or personal life seems to be connected. For example your boss may want to know what you do during your free time, what you did after college; aspects which are not official.
Individualism or Communitarianism explains how an individual reacts especially on personal interests or in group interests. Depending on the different cultures, some may place individual interests way above the community interests while the opposite can apply to other cultures.
According to Trompennaar and Hampden Turner (1997) the management of international businesses is greatly affected by the nature of the country policies whether they are more individualistic or communitarian. This key dimension influences how the negotiations or even the decision making is going to take place.
For example in more capitalistic states such as the United States of America one is paid according to the efforts and thus it is more individualistic, this may be in contrast when compared to a communistic setting such as the Chinese where the collective end results defines the final pay thus demanding more cooperation among all the stakeholders.
The achieved status and the ascribed status is more like the power distance dimension experience in the Hofstedes dimensions. The way people attain or are accorded status is very important in understanding culture even before you can enter into business negotiations with them.
The basis for achieving status may vary depending on the age, gender, class and even the education level. If the status is accorded depending on what you have done then it is described as an achieved status while if you are given status depending on who you are or where you come from, then the culture just ascribed the status on you (Thomas- Hunt 2005).
The neutrality/affectivity dimension describes how individuals control their emotions. How one is affected by certain occurrences is observed or manifested by being indifferent or showing the affection and these aspects are deeply affected by the culture one comes from.
Universalism the other dimension describes how individuals follow laws and regulations through the established institutions thus describing the uniformity or the non uniformity of the place you want to conduct your business in.
The other dimension through which Trompennaar and Hampden-Turner described culture was the sequential/synchronic manner of doing things this simply described how things are done whether they are done in an orderly system one by one or they are done all together at the same time.
Finally, the human relationship describes how people of different cultures relate or their attitudes towards the environment (Shaules 2007).
The above dimensions as explained by the two parties are closely related and it is important for any person who wants to conduct and succeed in business both locally and internationally to have these culture dimensions at hand whether Hofstedes or the Trompennaar and Hampden-Turners as they may be needed one time or the other as the business progresses where it will be important to understand what to expect when dealing in a certain country as opposed to the other.
Communication and its implications
Definition of Communication
To most people, communication is about exchanging information from one party to another. However, looking from a deeper perspective there is more to communication than to what we usually perceive. Communication is thus defined as a learned skill since a majority group is born with a talking skill but there is always need to learn how to speak and communicate with others effectively.
These situations depend on observing, teaching in the class, and practicing what is learnt to be evaluated by others (Hamilton 2010). Effective communication is always advisable in order to convey the desired information to the receiving party.
Especially when conducting international business, different cultures might have different ways of communicating. People communicate in different levels and they include: interpersonal, intrapersonal, group and finally public. The levels of communication depend on the content of the information and the desired recipients (Theaker 2004).
Forms of communication
Verbal communication
The process of conveying messages or information through the word of mouth is defined as oral communication. This method of communication is mostly used when discussions are needed and when immediate reaction is needed from the other side.
In the aspect of business, it is a very important method of communication when negotiations are needed to be discussed and some parties need to be convinced (Krauss 2002).
Non Verbal Communication
This is the process of receiving wordless messages from one entity to the other. Non-verbal forms of communication are usually determined by the posture, gesture, body language, eye contact, and facial expression among others. Non-verbal communication plays a key role in every persons day-to-day life from ordinary life to other special engagements in life.
In the aspect of business, one can know when the deal is going nicely and when it is not depending on the way the other party reacts. Speech as a non-verbal communication may contain elements of non-verbal communication such as Para-language, which may include voice quality, emotion, and speaking style.
The features of non-verbal communication can be divided into static and dynamic. Static features of non verbal communication include posture (e.g. lying down, cross legged, seated or standing among others) while dynamic features include facial expressions frowning and yawning among others (Jones& LeBaron 2002)
Visual communication
The process of conveying message in a form that can be read; primarily, it is involved with two-dimensional images e.g. signs, drawings and graphics. Visual communication relies on vision (what can be seen). Visual communication is mostly reliable when a case of future reference is needed or when similar message need to be sent to many receivers and when conveying of the message requires a step-by-step procedure.
Among the above communication methods the best communication method depends on the purpose of conveying the message, resources required when stressing the importance of the information needed among other requirements.
In countries where everything has to be in written form when conducting business, it is the best method to use. To make communication easier, there exist several principals which need to be adhered to (Jamieson 2007).
Principles of communication
Listening
This is an art in communication and has rules to be followed. Listening opens us to the world around us and also to the people who matter. Researchers say that when we listen, we learn, and we grow. Listening involves mutual acknowledgement of the other party and it creates an emotional atmosphere. Acknowledgement of the other person presence enhances better communication.
It is always advisable to listen first to whatever you are being told and then you acknowledge before you can express what your point of view is. Acknowledging at least confirms to the other party that at least you were listening.
Listening and repeating the information in your own words makes it easier to understand the situation by putting yourself in the other persons shoes. If the other party in the business deal feels that your are taking time to listen to his side of the story: the negotiations or what ever you are doing together moves on easily (Henley 2008).
Perception
Among the many problems that are faced in the communication process, perception is one of the worst. It usually happens when we judge people by the way they look but not by their deeds or by the information they present. Some people are written off during presentations just because of the way they appear or the way they are dressed.
Prejudice hinders the effectiveness of communicating with other parties since the cloud is formed at the first instance of what is expected. As a business leader, this is a major aspect to avoid as it can lead to failure of the business no matter how lucrative it appears (Wood 2008).
Audience
To connect with the audience is also a very important principle during communication. The negotiator should always have prior information of who his or her audience will be so as to enable him prepare psychologically in advance of what to present and what the audience expects from him. This leads to avoidance of unnecessary questions arising during the negotiations process (Guffey & Almonte 2009).
Topics
Before the presentation of any information, the businessman should be well versed with all the details about the business deal to avoid embarrassments from the other party of the deal who may be curious about more information and as the conveyor, you find yourself being cowed of not knowing much about the topic.(Hall & Mc Crorie,2006)
Credibility
This is perhaps one of the most important in terms of technical knowledge. How friendly, warm, accessible up to date and knowledgeable is the source of your information or how applicable is the business idea that you are bringing along.
When presenting any information, you must be aware that some of the listeners may not agree with your sentiments thus you should listen to what they may have to say and then you share your opinions.
Finally, you should find a way of convincing your listeners of the credibility or the benefits to what your claims are as a better change agent it is always advisable not to oversell or overstate your case. Clarity and simplicity should also be embraced and you should cover the relevant aspects so as not to have a hard time when trying to convince the other party (Ferguson 1999).
Barriers of Effective Cross Cultural Communication
As a business negotiator, it is important to note that the presence of the following hinders effective communication between parties.
Stereotypes are wrong over generalized mind pictures that are applied universally to all things in a particular class. E.g., the stereo types about urban dwellers, blacks, or whites. When an individual applies a mind picture to a given class without any consideration to the personal differences he or she creates complete absence of truth and tends to create a self-fulfilling prophecy in whatever they present (Moonie& Walsh 2003).
Most of the times the foremost problem in relating with people is distrust with its counterpart being the defensive interpersonal behavior.
Suspicion is created by behavior or acts which suggest that you are making judgment about the other person rather than listening to what the person is saying or you are simply trying to control the other person it makes you feel superior and needless to say such behavior should be avoided completely (Koekemoer& Bird 2004).
It is also worthy to note that most people are better talkers than listeners. There can be no true interaction or mutual influencing of one another without each person taking turns listening and talking by taking into account what the other party is trying to communicate (Ferreira, Erasmus& Groenewald 2010).
Finally, culture determines peoples behavioral patterns, varying cultures can be a barrier to effective communication e.g. a lifestyle way of thinking life concerns and modes of communication may be so different from one another that accurate communication and mutual understanding becomes difficult.
The above factors present among many other barriers which most of the time depend with the situation and the place you are in (Hernandez ND)
Intercultural Communication Competence
For many scholars, defining what exactly intercultural competency is has been a major challenge and thus, it has been defined following several dimensions as we saw in the case culture.
Intercultural communication competence has been defined under the major aspects which include: the flexibility capability (how an individual can adjust), non judgmental or partisan (no creation of stereotypes), how an individual tolerates ambiguity and the ability to pass information using respect as well as the ability to personalize ones knowledge and perceptions about certain views.
Any businessperson who is capable of placing himself in the other persons shoes (empathy) among others characters possesses some degree of intercultural communication competence (Alagic, Nagata& Rimmington 2009). Intercultural communication competence can be divided into its two major components: intercultural competence and communication competence.
Intercultural competence therefore entails having a business manager or leader who possesses the knowledge and the necessary skills which can enable him to interact effectively with any person irrespective of the culture. A person who is intercultural competent possesses the skills of negotiation and respects any cultural symbol or norms that may arise during the time of negotiation.
He or she knows when to stop and when to push further whatever he is advocating for. An intercultural communication competent business person knows when to fulfill their own communication goals by respecting and reaffirming the different cultural identities of the people they interact with (Byram& Neuner 2003).
Possession of the above capabilities enables us to describe intercultural competency easily through three dimensions which are: the cognitive ability (ability to have the hidden meaning), the affective (show all the emotions which are involved) and finally the operational dimension (the flexibility of ones behavior depending on the situation).
A manager who possesses cultural competencies is able to know or develop within himself a capability of knowing and understanding the cultural dynamics as they arise and thus can be able to adapt the different multiple cultural identities in order to be able to co-exist with the others.
Communication competence on the other hand is achieved through two concepts. One is the effectiveness while the other is the appropriateness. If an individual is able to produce the desired end results in relation to how he interacts with the people and everything around him, then he is said to be effective.
Appropriateness on the other hand implies the ability to recognize early what hinders communication and be able to escape the inappropriate responses that may arise as well as possessing the capability of controlling the existing communication functions such as imagining and controlling the direction of the conversation.
The appropriateness can also be measured or assessed in terms of the quality, volume, the importance and the manner in which the manager sends the information (Samovar, Porter& McDaniel 2009)
A business leader or manager communication competence is described by his or her personal verbal behaviors such as sharing with your colleagues information which might have mutual benefits to all the parties involved. Verbal behaviors are the other way through which communication competence can be assessed.
The way a person listens or the eye contact when communicating can tell you of his competency level. Lastly, communication competence can also be assessed through conversation management behaviors. In the aspect of international business, this can be achieved by asking questions about the other person and what goes on in their countries of origin (Greene& Burleson 2003).
For any business person to succeed in his endeavors and make his company a world leader he should possess the both intercultural and communication competence as this eases the way business will perform in a certain country.
Cultural Dimensions and Communication Patterns
Culture has and will always be part of a conflict resolution. Culture shapes our perceptions, attributions and ideas both of own and the other party. Though cultures are strong as often experienced across every place in the world, they are often unconscious and sometimes influence conflicts though they also have their impeccable ways of resolving the conflicts.
Culture is shared in forms of ethnicity, nationality, skin color, sexual orientation among other socio economic factors. The most important factor to note about cultures is that they are not static, they are always changing and relate to certain places but not to all places. Culture includes what one group knows and the other does not that is why culture is not uniform.
The role of culture in an international relations is quite interesting in that cultures prohibits and culture allows e.g. in some cultures the profitability of the business may be preferred to corporate social responsibility while to others the opposite can also be true. Though the occasion is the same the way people act depicts to what their culture demands from them (Fisher 1997).
In order to solve any conflict brought about by culture, we need to practice the following: build trust and respect amongst ourselves, read more about other people cultures and appreciate them the way they are and no matter what never try to make your culture appear superior to the others since that can initiate conflict.
When in possession of these, then we will be able to communicate freely with the other people whom we would like to conduct business with since we already know what to expect and how we can communicate ourselves out without raising conflicts with the other parties.
Conclusion
From the study, we can conclude that intercultural communication competency is a basic requirement to the success of international businesses since it influences the way business decisions are made.
The knowledge of what a different culture entails enables a business person to negotiate the business successfully without any hurdles arising. For a business manager to negotiate successfully, he must know the culture of the group he is dealing with since negotiations are most of the time influenced by the cultures.
We have also noted that for a business person to be a good negotiator, he or she must possess the intercultural communication competency which helps him in changing her identity depending on the arising situation. This competency as we have seen is usually brought about by the cognitive ability of the business negotiator which helps him in noting what is culturally sensitive to the other party.
The communication competency is assessed through the appropriateness and the effectiveness of the communicator and how well effective and appropriate the information is translates into either the business becoming a failure or a success.
It was also noted that intercultural competency is both an individual as well as an interaction based concept where an individual can possess one and not the two however, an individual who possesses the concepts two concepts always has an upper hand when it comes to negotiation.
Recommendations
Since intercultural communication competency is conceptualized differently across the existing cultures, it is important for one to learn and understand the different cultures that exist so as to be able to understand the different cultural competencies that exist.
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