Understanding Cross-Cultural Differences for Business Advantage

Understanding Cross-Cultural Differences for Business Advantage

In today’s increasingly global business landscape, employees interact with colleagues, customers and prospects from different parts of the world on a regular basis. The ability to connect with people from various cultures is key to creating strong business relationships. But it can be difficult to form a bond without an understanding of cultural nuances. CEOs of global organizations must have an understanding, beyond just the obvious factors, of the cultural nuances of the different regions in which their business operates. This takes more than just a few weeks of travel to a foreign country. Certain customs are ingrained from birth, which the casual observer probably wouldn’t notice. If not handled correctly, these cultural differences can lead to misunderstandings, conflict in the workplace, and ultimately lost revenue or profit.

In business, the rules have been written by the West, where the characteristics of professionalism can be summed up as: punctual, well put-together, and having the ability to “level” with executives. However, some of these traits that we take for granted can be difficult for employees from Eastern cultures to adopt. Renowned cultural expert Geert Hofstede has carried out extensive comparative research of different countries’ cultures based on six key dimensions that all vary greatly across cultures: scarcity of time, power distance index, individualism, masculinity, uncertainty avoidance and long term orientation.

Leveling with executives can be especially challenging for employees from Eastern cultures such as India, China and Japan, where a hierarchical structure and a respect for elders is ingrained from a young age.  In India, this manifests itself in giving names to relationships even with strangers. For example, someone five years older would be addressed as “older brother,” a person 20 years older would be referred to as “uncle,” and so on. In a business setting, an employee from India would automatically address an older executive as “Sir,” versus the custom in the United States of addressing colleagues by their first names regardless of their age or title. In meetings, younger employees from the East may be quieter and defer to more seasoned colleagues. Without an understanding of the cultural roots of this behavior, this could easily be misconstrued as the employee being reticent and/or unable to add value, rather than a sign of respect.

The view of time and punctuality also differs across cultures. In Scandinavian cultures, if a train is running just a minute late, there will be a palpable tension on the platform. However, closer to the Equator, time is not always as critical. This cultural difference is rooted in scientific fact, as in Northern climates the daylight hours are limited and it is therefore important to fit as much as possible into the day.

Of course, these factors also vary within countries and among individuals. Significant cultural differences exist even among regions across the United States. For example, the West Coast traditionally has a more relaxed dress code. And in the Midwest, the first 15 minutes of a business meeting may be spent with casual chit chat; whereas in New York or on the East Coast, executives are expected to get right down to business within a few minutes.

Hofstede’s measure of certain cultures’ levels of uncertainty avoidance is also important to take note of. For example, in India employees are comfortable with some degree of “fuzziness” when it comes to roles and responsibilities or scope of work. However, Americans tend to prefer much more black and white definitions.

Lack of understanding of these cultural nuances can create frustrations among teams and lead to lower productivity and higher costs. In dealing with customers, a failure to connect may even result in lost opportunities and revenue.

How can you take advantage of cross cultural differences?

As organizations expand globally, partner with foreign companies, or complete mergers and acquisitions, cultural differences are brought to the forefront. Being aware of these differences and modifying behaviors or expectations as a result, can significantly improve relationships among employees in different regions.  

There are a few different ways to improve cross cultural interactions. First, it’s important to take the time to study a colleague’s or prospect’s culture before a meeting. Assume that there will likely be some level of disconnect and ask questions during the meeting to clear up any uncertainties. Organizations should also consider cross cultural awareness programs to teach employees about the differences and how to interact effectively. This is especially important when employees are moving overseas, and trainings should include sessions on greetings, business etiquette and even dining customs. These training sessions usually lead to many ‘aha!’ moments.

By identifying and embracing these cultural differences rather than ignoring them, organizations can create stronger global teams and better relationships with customers and prospects, ultimately leading to a more productive business and improved top and bottom line.


About the Author

Vivek Gupta is Chief Executive, Global Infrastructure Management Services at Zensar Technologies. During his 30 years with Zensar, Vivek has performed numerous roles around the globe. After spending the first 9 years of his career in India, Vivek moved to England in 1993. Over the next nine years, Vivek successfully grew Zensar's business in the UK virtually from its inception to a mature European-wide operation spread across the UK, Central and Eastern Europe, and the Nordic countries. Then in 2001, Vivek moved to the US to head Zensar’s Global Outsourcing Services business. Under his watch the business grew seven-fold over a nine year period. Vivek is an alumnus of The Wharton School and in his current role he is based in Westborough, MA.