Culture and International Business

Doing business internationally presents the opportunity for hazards. Cultural differences can impact decision making, negotiations, and can lead to broken deals. There has been much discussion of American’s being insensitive to other cultures when doing business abroad. It is widely held view that American’s tend to ignore other cultural sensitivities and expect others to conform to us. “In the 1950s, Richard Nixon made a trip to Brazil, and as he was getting off the plane, he greeted a mass of Brazilian officials, journalists and other citizens.

On his way down the stairs to the runway he smiled, waved and gave the “A-Okay” sign to show the people his good intentions. Unfortunately for Nixon, this gesture is the Brazilian equivalent of giving the middle finger in America. (2004). ” There are many cultural differences that can lead to mistakes such as gestures, eating habits, body language used in greetings. All of these things are important but not as commonplace in today’s business environment due to increased international commerce and training.

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“There is probably nothing more common than a Japanese executive extending his arm for a handshake just as his American counterpart leans over to bow. (2004). ” This is one example of how business people from all cultures have taken the time to learn about each other and avoid some of the mistakes of the past. However, it is important for us to look beyond these things to cultural differences that are less apparent. One important thing for people to do is to first learn about your own culture since it may not be immediately apparent to you.

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That way you are better able to understand and appreciate the differences in others. For example, Americans sense of individuality is a large influence in our culture. This is not necessarily true for other cultures. Not knowing this could lead to business people being impatient with longer decision making if the other party needs to consult before making decisions. Americans tend to make decisions quickly and we take pride in our business dealings being rapid and cost-effective. Our sense of efficiency may differ greatly from other cultures.

“Let’s say you go to Germany, where things are decided more by consensus… there is often a panel of many experts from different fields that come to make a consensus decision. Because of this, many see German business as very authoritarian. This is basically true because individual managers don’t have the authority to change decisions made by the panel. (2004). ” That is why it is necessary that when doing business abroad, you find someone who understands the culture which can vary regionally even in the same country.

One example of this is Subway. The sandwich franchise has expanded to India. “You pick some good ones, you pick some that aren’t so good,” Patricia Demarais, director of international operations for the Subway sandwich chain, says of that company’s experience finding partners in more than 80 countries. Trusting a surrogate becomes vital because “we’re very much into delegating decisions,” she says. But, Ms. Demarais adds, “While we want them to be really aggressive and believe in the brand, we don’t want them to reinvent it.

(2006). ” So Subway partnered with two brothers who were able to liaise with the parent company and granted them some decision making to slightly change some of the business practices of American franchises. They sold more vegetarian sandwiches because Indian culture is not big on eating meat. They also found that bread needs to be remarketed because the local population is not aware of the benefits of bread and it was difficult to obtain flour necessary to make the bread of the same quality as is done in the United States.

In this example we can see that taking the time to work with partners can create better success rather than trotting headlong into a new market. If Subway had decided to maintain strict control over practices and enforced adherence to the exact same menus as the United States, for example, it may have failed quickly. Citing clients itching to franchise internationally without having even a dozen franchised units in the U. S. , Ms. Spandorf, a partner with Sonnenschein Nath & Rosenthal in Los Angeles, advises, “Don’t rush into it.

There has to be an enormous amount of research and knowledge about the local market, and the local partner. (2006). ” Beyond simple surface cultural differences it is also important to understand the differences in laws and regulations. All of these things come together to help us when doing business across cultural boundaries. Without the proper research and partnering, international business dealings can fail.


Richard Gibson. (2006, September 25). Small Business (A Special Report); Foreign Flavors: When going abroad, you should think of franchising as a cookie-cutter business; Unless, of course, you want to succeed. Wall Street Journal (Eastern Edition), p. R. 8. Retrieved September 14, 2009, from ABI/INFORM Globl. (Document ID: 1134695111). Jared Wade. (2004). The Pitfalls of Cross-Cultural Business. Risk Management, 51(3), 38-42. Retrieved September 14, 2009, from ABI/INFORM Global. (Document ID: 574079721). Andrew M Carlo. (2006, October). OVERSEAS ADJUSTMENT. Home Channel News, 32(13), 26-27. Retrieved September 14, 2009, from Research Library. (Document ID: 1148093681).

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Culture and International Business. (2020, Jun 01). Retrieved from

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