How Cultural Differences Influence The Business?
Introduction: This academic essay is prepared to enlist the notion of culture in the business world. The study is based on the literature review that outlines the views and perceptions of the various researchers and authors on the specific topic of culture and business. Few journals and articles are deeply studied that are directly or indirectly related to this topic in order to form the basis for the study.
Cross Cultural management to Global leadership: In the view of the Allan Bird and Mark in their article, it is stated that every business faces the need to expand their cultural boundaries. The organization the face cross-cultural management issues while interacting with people from different cultures. Cultures are the integral part of the business sector. Managing cultures are the most significant part as the businesses have now expanded and involve the management of the cross-cultures. Cross-cultural management is exactly the management or adjustment of the cultures, when the business operates in different countries with the different people. The evolution of cross-cultural management took place from the beginning when other fields of management were evolved. Ever since then, the cross-cultural concept has evolved, but it did not come up more like any other field of management due to lack of study in this particular field. But, this field holds an equal and important place in the business world as it has it has own importance and need. Implicit focus was put by the researchers and managers in the earlier times, when American companies tried to expand their business in the foreign markets and faced the issues of cultural differences. Cross-cultural management was considered as the part of the organizational behaviour. Many organizations faced problems and lack the competency to understand the main reason of facing the issues while expanding in the foreign markets. In 1990s, the organizations went to a shift that gave rise to the cultural importance. The change in the organizational structure of the organizations, where the managers loosened the control and upgraded the importance of shared value that is when a rise in the cultural awareness was anticipated. This further leads to the development of the global leadership. With rise to cultural awareness, the organizations now have their focus on global achievement, which is possible only by cross-cultural management. Cross-cultural management brings Unicultural segment to the studies. The Unicultural focus becomes important as managers working outside the home country feel the need to gain knowledge regarding the cultures across the borders that help in achieving leadership effectiveness. Then comes the comparative management that holds equal importance as the cross-cultural management. The understanding and conceptualization of the various cultures become important to understand in order to bring in the importance of multicultural management. With increase in the technologies, ways of marketing business, nature and needs of the business companies, the rise to global management evolved. The increased access of the managers to the foreign markets energized the need to cultivate the knowledge of the various cultures, which is possible by bringing global leadership. The global leadership is based on the idea of selecting the best and needed focus, that is, the willingness to work and live outside the home country. The ability of adjustment is something that brings global leadership as when the adjustments in the cultural differences will take place. Transformation and positive changes help in understanding the cultural differences effectively that in turn leads to global growth (Spencer-Oatey, 2012).
For managing the business at the highest levels, the need to bring cross-cultural leadership increases. The managers need to anticipate the various forms of cultural differences and adjust in such way, that helps in bringing effectiveness to the business organization. Global leadership is based on the criteria of developing global leadership competencies, which involve the development of the intercultural communication. For a global leader, it becomes important for them to first understand and evolve the cross-cultural competencies as reducing the cultural differences leads to global leadership. Global leadership is advantageous to the companies as it brings cross-cultural management where the global managers and leaders have the considerate abilities to manage the cross-cultural complexities and thus, bring effective leadership and management (Bird & Mendenhall, 2015)
Culture impact on Business: According to Yao Mao, the culture is the set of values, beliefs and rules that specify a group of people. With increase in the globalization trend, the cultural importance has increased. In the trend of globalization, the business organization have to expand globally, which inculcates the need for the organizations to understand the cultural importance and cultural differences. The major issue that the organizations face today are the problems of cross-cultural management (Spencer-Oatey, 2012). The culture has varied effects on the business firms as it involves the issues of Mascunality, Feminity, Power, Value, Religion, Distance and many others. Organizations involve various people that come from different sets of cultures, thus it becomes obvious to face issues of cultural differences. Barriers and conflicts arise in a varied form among the employees and the organizations when working globally. It becomes very important to seek better communication abilities for overcoming the cultural differences. Adapting and encouraging better communication skills and abilities will help in transforming the business culture. It is found that indulging sound communication skills in the organization helps in raising cultural awareness (Gamble, 2011). Cultures bring different ways of communication, which brings differences, it is thus considered as an important facet of doing business globally. The managers must seek and inculcate the best ways to communicate in order to reduce the effect of culture on the business firms. Adjustment variables like interaction, general and work adjustment have also been discussed as they are correlated with the development of cross-cultural management. It is the adjustment variables that have to be balanced with the cultural novelty in order to bring better cultural environment in the organization. The organization has to make certain adjustments to reduce the impact of the cultural diversity (Ahmed, et al., 2014).
Cultural differences due to Globalization: With view of various authors, it is found that world is affected with the global economy. The business faces the real issue of going global. The globalization has provided various benefits to the business organizations and bring complexities as well. Going global is something the helps in accessing the outside boundaries. The business firms these days aim at going global but face tremendous issues of cultural disparities as the world is combined with the presence of numerous cultures and religions. Business organizations go through major cultural diversities which brings problems. The culture affects the business firms in varied ways. Any country following the Individualist culture, business faces the issues of working in a group. Language of different cultures is different, which poses a threat to the business while communicating with various people across the world. Religion diversity is also an important aspect of culture, which creates an impact on the organizations varying the differences in the countries (Bird & Mendenhall, 2015). The time perceptions in the culture also affect the business firms. The attitudes and beliefs of the people working in different countries affect the business firms when the businesses go global. It can be inferred that culture has a very deep impact on the globalization. Globalization in the business sense, no doubt brings people close and provides benefits of attaining different avenues but at the same time, increase the issues of cultural disparities. This increases the level of fear among the companies as it disrupts the business firms in a huge form. Cultural dimesions are considered as the critical form in the business world then as it anticipates to a lot many factors of success and failure. It affects the international business with a high level, which then energizes the need for amendment (Junior, et al., 2006).
International business affected due to Culture: In the article of International Culture, it is found that culture has a considerable impact on the international business. It is considered as a debatable context, where the cultural differences and its suggestions can be discussed in a varied way. Elements of culture like value, beliefs, attitude, language and opinion of an individual or a group is considered to affect the business world. The business companies are formed by the presence of people and globalization also involves the concept of interacting with people on a large scale, thus this brings differences based on the cultural norms. This increases the level of issue among the corporates as how to interact with the people of different cultures. This raises the issue of cross-cultural management in the business field. Firms have different cultures and practices that they perform, by interacting with other people and expanding the business in different countries, the business firms face the issue of managing the cultural issues. Cultures exhibit a certain behaviour and norm of the firm or individual, any issue or difference in the culture leads to major problem as the culture shows the behaviour of the people they tend to possess (Padhi, 2016). Cultures are characteristerized on the basis of their dimensions being stated by Hofstede. The Power distance, Uncertainty Avoidance, Masculinity and Individualism portray the cultural values of the particular country or people. It then becomes important to deeply analyze the nature of the dimensions of culture at a particular place to reduce the levels of cultural differences. Cultural differences bring differences in three main areas such as organization, communication and leadership, which must be addressed to reduce the levels of cultural differences. The various styles of communication, organizational structures across the boarders and leadership styles in the organization bring cultural problems (UNICE, 2008).
Cultural differences in Communication: Zahira and Naziha have stated in their article the relation of culture and communication and their impact on the business organizations. Culture and language tend to have a close relationship. They both are the part of each other, where the culture is portrayed by the language used by an individual. Different languages exhibit different cultures, which makes it a complex task. Communication in an organization is must as it results in better performance of the organization. The organizations in the trend of globalization must seek to indulge high levels of communication patterns with different cultures to attain the best. Communication is must in every culture, thus, it is very important to develop intercultural competence among the business firms. Intercultural business communication becomes an important aspect as this helps in learning and understanding a particular lifestyle of the culture which enables the organization in cooperating with different cultures (Singh, 2014). Cross-cultural differences arise in a numerous ways in the business organizations, which are studied through the dimensions of cultures. Organizations face a high level of problems or barriers to cross-cultural communication such lack of intercultural communication, lack of participation by the employees and others, which can be overcome by training them, raising cultural awareness, setting workshops for understanding cultures and bringing cultural education (Hobaya & Benabadji, 2015).
Managing Cultural Diversity: In the article of Diwakar Singh, it is stated that managing the cross-cultural diversity in the global organizations is considered as the most important and viable step. The companies tend to access the international markets in order to achieve competitiveness, which can be achieved by understanding the cultures of various countries. International business operations include an important facet that is cross-cultural management. Organizations are bound to have different values, norms, beliefs and attitudes due to the presence of the people. Organizations are prone to cultural diversities due to the inclusion of diverse beliefs, values, norms and attitudes. No doubt cultural diversity in an organization brings improved morale, community relationships, global impact but also brings certain differences (Singh, 2014). The adaptation of various cultures in the organizations is very difficult due to the idealogies like Parochialism, Individualism, Ethnocentrism, cultural shock and distance. But, it is very important to overcome such barriers in order attain competitiveness and global recognition. Careful selection of employees, training, incentives, orientation and other such strategies must be adopted to overcome the issues relating to cultural diversity.
Conclusion: Thereby, it is clear that cultural importance and diversity in the organizations or MNCs is very significant. Globalization is very important which brings the understanding of the cultural differences and thus, adequate measures must be adopted by the organizations. The communication in the culture also plays a vital role and managing the cultural differences leads to global leadership. Thus, from the above literature review, it can be easily inferred that multicultural organizations must be formed and effective measures must be considered in order to overcome the problems relating to cultural differences. Becoming Multicultural is the trending norm. The managers must be culturally sensitive and should bring creativity through effective leadership in order to achieve global competitiveness and goals.
Ahmed, M., Ullah, S. & Alam, A., 2014. Importance of Culture in Success of International Marketing. European Academic Research journal, 1(10).
Bird, A. & Mendenhall, M., 2015. From cross-cultural management to global leadership: Evolution and adaptation. Journal of World Business, 51(1).
Gamble, E., 2011. How Cultural Differences Influence the Business, Available at:
Hobaya, Z. & Benabadji, N., 2015. Cross-Cultural Barriers to Communication in Multinational Corporations, Available at:
Junior, V., Meyer, B. & Murphy, J., 2006. The Influence of Culture in International Business, Available at:
Padhi, P., 2016. The Rising Importance of Cross Cultural Communication in Global Business Scenario. Journal of Research in Humanities and Social Science, 4(1), pp. 20-26.
Singh, D., 2014. Managing Cross-cultural Diversity: Issues and Challenges in Global Organizations. IOSR Journal of Mechanical and Civil Engineering, pp. 43-50.
Spencer-Oatey, H., 2012. What is Culture?: A Compilation of Quotations, Available at:
UNICE, 2008. International culture, Available at: