Culture's Impact On International Business: Communication, Hierarchy, And Etiquette Essay.

Defining Culture in International Business

Question:

Discuss about the Impact on the Australian International Business for Communication.

Increased benefits are being derived from cross-cultural and multinational businesses such as knowledge that is diverse and new exciting, insightful approaches to dealing with problems that businesses face. Despite the new derived benefits from carrying out international business their certain stumbling blocks in regards to international business and culture (Hult News, 2017). There are numerous ways that one can define culture, but in simple terms, culture is a set of norms that are accepted and shared by society. However, when looking at culture in the international context that is business oriented, it is notable that what a professional from one country deems acceptable is not acceptable at all in another country. To excel in the global business environment then, recognizing and understanding how culture affects business that operates internationally in three core areas is crucial. The areas include communication, organizational hierarchy, and etiquette, and by understanding the areas, any business working at international levels can eliminate any misunderstanding with clients and colleagues from abroad resulting to good business (Hult News, 2017).

 In any business, local or international communication is fundamental and collaborative activity. Goods and services exchange takes place through close coordination of many people sometimes within a single area and at times across a global distance. To coordinate at such levels, communication becomes essential as specifications of a complex product and schedules of production require understanding that is mutual. Moreover, in any business, negotiating of deals is crucial, and thus effective communication can guarantee success in such deals. Around the world, styles of communication are enormous and contribute to staggering styles of business that are different in a variety of forms. Countries such as Australia and others in the western European roots such as Canada, New Zealand rely heavily on low-context communication while the rest of the world lean towards high-context communication (Hooker , 2008). The paper will look into the communication differences and cultural impact on the International business about Australia with hopes of understanding how contemporary international business issues impact on a country’s business abroad.

In any business, making contacts is an inevitable activity, and the difference in communication context among countries affects the drawing up of contracts. Western contracts such as those drawn in Australia and Canada are very thorough where a simple transaction such as renting a car for an hour may need almost 3 pages of print to state the terms of the deal with any suspectible contingency. In such a contract, when signing takes place, it leaves no room for any sort of flexibility in the terms unless the party to the contract sit down and conclude to alter the terms if they deem that they are both losing. Despite the inflexibility, parties to the contract are always expected to deliver, and failure to do so results in an enforced compliance from the legal systems. On the other hand, contracts that rely on high-context communication have a difference in character due to two major reasons. One reason is that in high-context communication, it is unnecessary to write everything down since a simple gesture as a handshake becomes a mutual understanding. When the contract is written, it becomes a mere memorandum of understanding rather than taking it just as a legally binding document. In such communication, the terms are deemed very complex thus creating room for adjustments if need be as the contracting parties are more likely to depend on the relationships of trust that pre-exist rather than place reliance on legal systems. Secondly, contracts that depend on high context communication understand that the very idea of contracts exists only in partictlar cultures, mainly those which aremanipulated  historically. The view which a Westerner has when it comes to doing deals is the same view such an individual has when doing business. A convents idea is fundamental to the culture and is also seen to govern the relationship between humans and God in the Old Testament as inscribed in the Christian Bible (Hooker , 2008).

The Importance of Communication in International Business

However, in a culture that is Confucian, doing business is mainly about relational development that is personal and that are based on family and clan connections. Also, in such cultures undertaking business relies on mutual an obligation that is known as guanxi, a term in Chinese that indicates connections. Therefore, in high-context communication, business arrangements and  plans grow along with relationships rather than through communications that are written formally in contracts. Managers in other areas of the world that work with Western low-context communication countries such as Australia draw up contracts to please them but not because they require the contract. By going into such contracts with such countries, the organizations feel trapped as they feel that they require to adjust and amend the contractual terms as soon as the next day after signing the document. They feel enslaved by one piece of paper in a world that is constantly changing and in certain extent may not desire to do business with such countries that hold them back due to bureaucracy (Hooker , 2008).

Decision making and negotiation are essential in business and even more important in every cross-cultural business. In the Western negotiations, a “yes” may not necessarily mean yes, it may be a maybe and at times the maybe may mean no. When such countries say “yes” their indication is at times an understanding or an acknowledgment of a proposal. Once the proposal is unsatisfactory, the response that they send indirectly consist of statements such as “let’s take the time to think about it.” In Japanese, for instance, silence or non-follow up of next meeting brings forth a particular meaning to them that were not intended by the other party to the negotiation. When dealing with such indirect high-context communications to pass the message across, reliance is crucial. In the international negotiation, there is always a misunderstanding that is as a result of the way of communication, and most businesses try their best not to offend the other party. Indirect communication that comes forth from indirect speech used by parties to the negotiation occurs in situations where the parties disagree not only in the negotiation but also when discussing a decision or when conflicts require resolutions  (Hooker , 2008).

The Westerners are always open in such settings as their way of communication affects the situation at hand that the parties are making an effort to solve. Parties in a disagreement state their views openly since their difference in resolution relies on objectives standards where the view that wins is that which has plenty of backing from stronger arguments, calculations from a spreadsheet or the market force logic. Despite the closure of the argument and finding their predicament unpleasant, there is always the expectation that they will subject their feelings to a criterion that is objective. In most parts of the world business, people have plenty of faith in objectivity as life revolves around relations that humans build rather than what are seen as universal rules of logic. Since there is no independent standard to resolve conflict, it is essential therefore for parties in a negotiation not to give offense at the very first place. However, it is not easy for such scruples to apply in transactions that are transient especially interacting with strangers. Nevertheless, when dealing with associates in business with whom one must ensure a working relationship, it is imperative for the parties to maintain harmony through courtesy, indirection, and deference. The low context communicators in a negotiation meeting expect consideration of the pro and cons and at times expect to arrive at a decision on the spot. The participants to such a negotiation are expected to openly express their opinion, provide backup for their views with arguments and facts.

Differences in Communication Styles

On the other hand, high context communicators that depend on such culture expect deliberations and decision making to take place behind the scenes and at high levels. To them, A meeting is a venue to announce and explain their decision. In a culture which is relationship-based with regards to negotiations, the very concept as it is understood in the West may result in problems. It is not uncommon for such negotiation to get viewed as confrontations that come to undermine harmony. Negotiations to westerners are a poker game where players can lose without resentment as long as the players adhere to the set rules. Such rules are not acknowledged, and only the relationships that are human are considered as real thus crucial to foster good relations that are dependent on trust. Westerners face difficulties in bargaining in a traditional market set up as the conventions are very specific to the culture and require learning over an extended period.

The difference in the communication styles between the parties is crucial in behavior regulation. The norm in the Western countries is that communication should be in writing while in the high context culture communication is not always written. The westerners’ employees may find it offensive to get punished for unwritten communication as they believe they cannot know better unless someone writes, but in high context cultures, correction by an individual is just a way of communicating and regulating behavior (Okoro, 2012). For instance, differences in culture and communication have affected the way Australia does business with other countries. For example, when doing business with China, eating in a banquet is a common business culture. It is impolite to finish your meal as it symbolizes generosity to the host of the banquet. It is also crucial to bring gifts to the dinner and normally there is the expectation that you will refuse the gift before accepting it. It is hard to carry out business with then Chinese if you are offended by the elders spitting in public as it is an expected behavior for them and the sake of the business deal, it is expected the parties to come into agreement in cognizant with the diverse cultures. When giving a business card to them, there is always an expectation that it is done with both hands. Failure to adhere to such societal set standards of behavior may terminate the business before it starts (International Blog).

The Australian and the Canadians expect employees to participate less in the decision-making process in the organization. Thus, the production in Japan is very hierarchical. In the Japanese setting, individualism is not encouraged in the work setting unlike in Australia as the Japanese show more preference to groups in conferring identity and status. In countries like Japan, masculinity is expected to get portrayed as a sign of competitiveness as opposed to behavior nurturing which is witnessed in Australia. In Japan, the producers prefer clear plans and policies and procedures in any joint while the Canadian and Australian producers prefer discretion that matches with ambiguity. It is evident that the Japanese and the Australian work under different environments and this will affect their international business as employees who work within their international branches may face conflicts and hard times (McFadyen , Hoskins, & Finn ).

Conclusion

Different Cultures have different ways of communication which affect the way parties undertake the business internationally. It is crucial for a business to understand the culture to those countries it conducts business with so as to ensure effective and efficient communication leading to successful partnership. Failure to communicate appropriately results in misunderstanding affecting the contracts, the work environment and the negotiations between the parties from different countries. The miscommunication hinder the progress of business in the contemporary global market, and therefore management cannot ignore the influence to which the different cultures will have on the development of the organization. The Western countries communicate differently with their counterpart in other regions of the world. Western countries communicate using the low cultural context communication which affects the contracts, negotiations, and behavior. Culture and communication. Organizations in Australia are negatively impacted by such communication as it interferes with their business deals. It is thus the role of the management to find ways that can help in adapting to the change and difference in culture to accommodate the rest of the world into their business. It is up to the businesses to adopt training of its employees to enhance the way they carry out business with the world. The global market is not forgiving to those that neglect cultural impact on international businesses.

Reference List

Hooker, J. (2008). Cultural Differences in Business Communication. In C. B. Paulston. Tepper School of Business Carnegie Mellon University.

Hult News. (2017, January 6). 11 Biggest Challenges of International Business in 2017. Retrieved May 10, 2017, from www.hult.edu: https://www.hult.edu/news/international-business-challenges/

Hult News. (2017, January 19). Culture influence international business in 2017. Retrieved May 10, 2017, from www.hult.edu: https://www.hult.edu/news/cultural-differences-impact-international-business/

International Blog. (2015, January 12). Cultural Differences Between Australia and China. Retrieved May 10, 2017, from blogs.acu.edu.au: https://blogs.acu.edu.au/international/16898/cultural-differences-china/

McFadyen, S., Hoskins, C., & Finn, A. (n.d.). The Effect of Cultural Differences on the International Co-production of Television Programs and Feature Films. Communication, 23(4).

Okoro, E. (2012, June). Cross-Cultural Etiquette and Communication in Global Business: Towards a Strategic Framework for Managing Corporate Expansion. International Journal of Business Management, 7(16), 1833-8119.