The Impact of Cultural Differences When Making Business Decisions

Introduction

Culture is one of the primary factors impacting business today. Our country is known as “the melting pot” namely for being a place where people have come from all over the world to build a life for themselves and their families. Within the U. S. there are multiple regions with varying cultures; there are even varying cultures within states and major cities. So, we can see how significant understanding culture would be in daily general business operations as well as in global and international practices and operations.

To understand the impact of culture we first need to know what culture is. Culture is the attitudes, customs, and beliefs that distinguishes one group of people from another. Culture is how we think and view things in our daily lives and in business. Culture is formed by our life experiences, our upbringing, and other influences. This encompasses how we talk, dress, think, interact, work, and communicate. Just as our culture is a part of who we are, we have to consider that others are shaped by their cultures. In this lesson, we will look more closely into what culture means and how culture impacts global business.

The Impact of Cultural Differences

Culture is the beliefs, values, mind-sets, and practices of a group of people. This includes, but is not limited to, behavior, patterns, norms, rules, perceptions, logic and reasoning, language, religion, and much more specific to the group. In business it is important to practice cultural awareness. Cultural awareness refers to having an understanding of another culture’s values and perspectives. When doing business with another country (or even within a culturally diverse region within your own country) it is important to be familiar with the country or region’s culture, history, economy, and society. It is important to understand how all of these factors will impact the interactions with business professionals within the enterprise with which you are doing business.

In the following presentation you will review some elements of culture relating to communication in business. You will also review ways that culture can impact how business is impacted by culture.

Let's Review!

Take a moment to participate in the following activity to practice your understanding of the topics in this module. Reach out to your instructor if you have any questions.

Final Thoughts

Even though we are living in a more prominent global society, we still have to consider cultural differences in business dealings. You can’t assume that because people may dress alike in business meetings or that they may use similar business conversation that they think alike or that they share the same values or customs. There are still wide cultural differences and these differences influence how people do business. For businesses that operate from a global perspective, a key for success is to understand the role of culture in international business. Building your awareness of international culture differences in business will help in many aspects of business operations. Having a strong awareness and understanding of culture and customs of other countries will give a company a competitive advantage and directly impact its profitability.

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