Cultural Principles of International Business

The challenge for international business people is to adjust to different cultures and still hold onto their own personal cultural values. Consider the story of Jesus and the Samaritan woman. No Jewish man would talk to a woman under such circumstances. When his disciples came back, they were shocked to find him speaking to her because of three things: one – Jews never associated with Samaritans, two – they were in a public place and three - she was living in sin. This example shows that Jesus was able to adjust his cultural views of her but still maintain his cultural identity. By appealing to the cultural universal of supernatural belief system (they talked about Jacob and the promise of theMessiah) , he developed a connection with her.  

Some business heroes who have shown tremendous skill in adjusting to cultural differences in international business - in other words they've built culturally-conscious businesses - include:

- Ted Turner, who has not only made CNN extremely successful in over 200 countries but has also made AOL Time Warner the largest communication network in the world. Small wonder that he was named Time Magazine's Man of the Year in 1991 and Cable and Broadcasting's Man of the Century in 1999.

- Muhammad Yunus, founder of the Grameen Family of Organizations, which has empowered over 200 different institutions in more than 100 countries to operate micro-credit programs based on the Grameen Bank model.

- William Gates, better known as Bill Gates, whose entrepreneurship spans the entire world and whose foundation, The Bill and Melinda Gates foundation is advancing development in many different countries of the world. 

- Bono - Has made the transition from music to African debt and trade issues. 

Global Business 

The world has changed in many different ways. A majority of the products that are bought and consumed in any part of the world are usually imported from a different country. To remain competitive, today's businesses have needed to enter into cross-cultural alliances. Most of these alliances have been international in nature, where alliances are formed between people of vastly different cultures and languages, for example GE going into India to establish it's IT department. A few have been national in nature, where alliances are formed between people who may identify themselves as citizens of the same country but possess unique cultures, for example big government in the US soliciting bids from minority firms. In both of these cases, you have to learn how to adapt to the other culture and "speak their language". These kinds of alliances are only a small part of what has been termed as "globalization.

In his groundbreaking book, The World is Flat, Thomas Friedman defines globalization as the interweaving of markets, technology, information systems and telecommunications systems in a way that is shrinking the world from a size medium to a size small, and enabling each of us to reach around the world farther, faster, deeper, and cheaper than ever before, and enabling the world to reach into each of us farther, faster, deeper, cheaper than ever before. One crucial element of globalization that he leaves out is the interweaving of cultures. The power of globalization is that goods and services are making their way into other cultures. Our lives and destinies as citizens of the world have become so interconnected and intertwined by the business that we do across boundaries. 

What really excites me about our generation is how it is increasingly becoming impossible to determine the home countries of people or brands by just looking at them. When I go to the store to buy a Nike shoe today, it's very possible that the shoe may actually be Asian or South American in origin. I drive an Isuzu rodeo but as much as I may want to believe it's Japanese, it's highly likely that my truck was assembled in the US, with many of it's parts originating from as many as a half-dozen different countries. It is because of the globalization of today's business world that many companies are employing cultural anthropologists to assist them with understanding different cultures so that they can operate their various interests in different parts of the world. 

Corporate anthropologists are making a great difference in helping business people understand how to adapt to unique ways of thinking and acting that they come across in foreign countries. Gary Ferraro, author of The Cultural Dimension of International Business, points out that anthropologists play a critical role in helping business people learn how to identify and describe the commonalities of humans amid their great diversity. 

The past two or three decades have seen a marked increase in the number of cultural anthropologists working in the business world. Organizations have continued to realize that if their managers are to function effectively, they need to know about the values, attitudes, expectations, concerns and behavior patterns of their employees.

The success or failure of a company abroad depends on how effectively its employees can exercise their skills in a new location. That ability does not depend only on their job-related expertise. It also depends on their sensitivity and responsiveness to the new cultural environment. The fact that someone is successful in applying their technical skills in one environment does not mean that they will be successful in a different culture. 

It’s amazing how many US business people equip themselves with vast amounts of knowledge about their employees, customers and business partners. However, according to Ferraro, when most American business people go abroad, they frequently go with a dearth of information that at home would be unimaginable.

Robert Rosen, author of Global Literacies and CEO of Healthy Companies, says that organizations that will thrive in the twentieth century will be those that develop globally literate leaders who manage their own cultures and the cultures of others. The greatest need in many business school’s curricula today is an international dimension. In the majority of M.B.A. programs in the US, it is possible to earn a degree without ever taking a single course in international business. Many others have international business courses but they completely neglect the cultural dimension. The Educational Testing Service (ETS) has reported that college seniors in the United States got only half of the knowledge questions on international matters correct, whereas college freshmen got only 40 percent correct.

Closing Thought:

Leadership, at it's marrow is the chronicle of judgment calls. Richard Nixon lost the presidency because of poor judgment, not experience. Experience is no guarantee of good judgment but it can inform judgment. And remember, the bottleneck is always at the top!