Intercultural Competence

As an International Business major, we are required to minor in a language. This is part of the reason why I became an IB major, I wanted to minor in Spanish. This being said, most companies that do business abroad speak English. Now, this is both a curse and a blessing. When traveling, you will most likely be able to find someone that speaks English to help you. While living in Spain, I found that many times when I would try to speak Spanish and practice, people would just respond in English. This would frustrate me and I would continue to speak in Spanish while they spoke English. How was I supposed to learn if they spoke to me in English?

Speaking another language is a great asset. I encourage everyone to try to learn a new language, or at least learn some phrases before you travel. People will appreciate your effort. Also, just because you speak another language does not mean that you can communicate successfully. Jane Jackson has conducted many studies concerning intercultural communication and linguistics. She has found that linguistic competence does not necessarily parallel intercultural competence.

In Jackson’s study, Globalization, Internationalization, and Short-term Stays Abroadshe observed 14 full time English students at a Hong Kong University. The university wanted to better prepare their students for a globalized world by internationalizing them. A Special English Stream program was created for students to study abroad in England. All participants were advanced English speakers, yet had taken no previous intercultural communication classes. She observed their progress of each student’s intercultural sensitivity throughout the program.

She found that each student repeatedly had an inflated opinion of his or her own intercultural sensitivity.I think many of us would like to think that we are culturally sensitive and openminded, but our actual sensitivity falls short of our expectations. Just because these students were fluent in English, they still struggled with cultural differences and social English. By the end of the program, most students had adjusted and moved past superficial cultural observations and had a deeper understanding of culture. Those who remained openminded showed more empathy and became ethnorelative rather than ethnocentric.

Jackson’s study proves that language competence does not mean intercultural competence. If you speak another language, you still need to learn about the other culture. It takes time to build intercultural sensitivity, but try to approach each new culture with an open mind, empathy and a willingness to try new things. A combination of language fluency and intercultural competence and sensitivity will help any person or company succeed abroad. Does anyone have any stories of being fluent in a language, but struggled to understand the culture?

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4 Requirements for Exporting

The fact that the United States is in a huge trade deficit is no secret. We have been struggling with this deficit for a while now, and it seems as if it’s not getting any better. The New York Times reported that we hit a 3-Year High in January at a 52.56 billion dollar deficit. So, for all those companies looking to export, you should remember these four things:

1. Commitment. Just like any business endeavor, you have to make a commitment to exporting. Most international marketing plans will not pay off for three to five years, so be patient. The number one reason for exporting failures is lack of commitment. You will fail if you are only in it for the short haul. Pick your market, make your plan and commit to it!

2. Research. Market research is more difficult to come by in other countries. In the United States, we have a plethora of knowledge available to us on the Internet. The government provides many great resources such as the CIA World Factbook. Finding specific market research can be a struggle because many countries don’t have access to the technology that we do. Their information can be out of date, or sometimes governments report better results because they have pride in their country. Try not to use secondary data because it can give you inaccurate conclusions. Know where your data is coming from and be careful collecting it.

3. Organization. If your company is not organized in its export approach, that goes right back to lack of commitment. Companies struggle a great deal with lack of organization because it makes exporting twice as difficult. There are many factors such as documentation, taxes, terms of payment and transportation that makes exporting complex. Have an export plan and keep yourself organized. It will make your life much easier.

4. Flexibility. Realize that you may export your product and not see the results you were hoping for. Maybe your market research didn’t give you an accurate picture of the market. Just because something does well in the domestic market doesn’t mean it will succeed in the international market. Your product might need some tweaking, but also be flexible with the price and terms of sale.

I hope that domestic companies will seriously consider exporting because it is a nationwide effort to reduce our trade deficit. If you want to learn more, the International Trade Administration’s blog has great information for exporting and trade around the world. So, are you be willing to commit to exporting?

Women in International Business

Women in the workplace are no longer a shock in the United States. Our culture is very accepting of the workingwoman, and ever-changing gender roles make it more acceptable for women to go to work while men stay at home to watch the kids. The U.S. has grown a lot in terms of gender equality. Women make up about 50 percent of the workforce in the U.S., but only 20 percent of employees chosen for international assignments. Why is there such a difference between domestic and international?

Women tend to have lower success rates than men with international assignments, making men more popular candidates. This is because many cultures still hold a bias against female managers, which can make it difficult for women to be successful internationally. Cultures that are still male-dominated have an old fashioned view of women’s roles as compared to our progressive women workforce in the U.S. This can be seen in most Asian, Middle Eastern and Latin American cultures where women don’t usually hold management positions. 

Even though these countries tend to be more biased towards women, it doesn’t mean that women shouldn’t be sent on international assignments. Women can be successful internationally if a company does their research. You should always do your homework on the specific country you are working with. Make sure women know what kind of dress is appropriate in that country to not offend anyone. She should receive cultural training just like any other employee, but also prepare her for any prejudices she might encounter.

The most important thing that every company must do to insure success is to show support. A woman will be taken seriously if your international counterparts can see that she is supported and respected by the company. Her title should be a true representation of her status within the company. These cultures generally rely highly on status, so an important title will show her credibility. Once negotiations start, biases are generally forgotten and business can be conducted without difficulty.

If you are a women looking to go into international business (like me) or you are a company looking to send women on international assignments, make sure you know a little more about gender biases in specific cultures. With the globalization of our economy, it makes it ever more important to have a strong presence in international markets. Companies need to send their best employee, be it man or woman, on international assignments. So, have you had any problems with women taking international assignments?

Cultural Imperatives, Electives and Exclusives

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Doing international business requires adaptation. No company will be successful if it tries to go international without adapting. Some American companies get angry about adaptation. Why do we have to be the ones to adapt? Why can’t they adapt to us? The truth is, most companies operating globally speak English, so they are already doing more than their fair share to adapt to us. No one is asking you to renounce your American culture completely take on the culture of the company you are doing business with, but make sure you know what customs you need to adhere to and what to abstain from. There are three groups of business customs that you should be aware of: cultural imperatives, cultural electives, and cultural exclusives.

Cultural imperatives are customs that you must conform to if you want to be successful. An example of a cultural imperative is relationship building. In many Asian countries such as China and Japan and Latin American countries, business understand the importance of building a relationship.  Businesspeople do not do business with companies, they do business with people. If you want to do business in these countries, it is a cultural imperative to spend time building that relationship before you even bring up business. Never underestimate the importance of building trust with your business partners. It will make or break a deal. Another cultural imperative for Asian countries is that you can’t cause someone to lose face. Never raise your voice or correct someone in public. If you aren’t aware of these cultural imperatives you will fail on your business venture.

Cultural electives are customs that you may conform to, but you don’t have to. There are many things in different cultures that can make you feel uncomfortable.  Be aware of what the cultural customs are so you won’t be surprised and you know how to politely decline. In the Czech Republic, liqueur is offered at the start of business meetings, even if it is 8 in the morning. It is to build friendship and trust, so politely accept and take a ceremonial sip. Arabs will offer coffee as a way to signal friendship, so you should also accept it even if you don’t intend to drink it. Most customs fall into the cultural elective category.

Cultural exclusives are customs that are only for locals. You will break a deal if you try to partake in these customs. If you are a Christian, don’t go to the Middle East and attempt to act like a Muslim because that is insulting their religion. Similarly, never joke about a country’s politics or criticize their customs. Just like here, you can joke about your own family, but if someone else does you’ll want to fight them. Be careful with cultural exclusives.

Have you encountered any problems with cultural imperatives, electives or exclusives while doing business abroad?

International Gestures

Going international is the next step for a lot of companies. As with any business venture, domestic or international, do your homework. Make sure to research big cultural differences, as well as the small ones. Nonverbal communication is something that many companies overlook in their research, and it can make the biggest impression on your foreign counterpart. You can make or break a deal with a simple hand movement. Here are six common nonverbal signs to be careful with.

1. Giving business cards in JapanIt is extremely important that business cards are presented upon meeting. Do not simply take the business card and put it in your pocket. Inspect their card and note their title, as status is highly regarded in Japanese culture.

2. Do not use your left hand in the Middle East. This is the unclean hand, which is used for bodily hygiene. It is an extreme insult to give or extend your left hand to your business partner for any reason.

3. Make eye contact with the person you are clinking glasses with during a toast. In countries such as Germany, Czech Republic, Hungary and Poland you must make eye contact with each person as you “cheers” them. If you don’t it leads to bad luck.

4. Do not give an even number of flowers. In countries such as Russia, Latvia and France you should never give someone an even number of flowers. Ironically, in countries such as China, you should only give an even number of flowers.

5. Do not expose the bottom of your feet in Middle east and parts of Asia. It is considered extremely rude to expose the bottom of your feet or the soles of your shoe, even if it is accidental while crossing your legs. Throwing your shoe at someone is even more insulting.
6. Do not use the “O.K” sign in parts of southern Europe and Brazil. In Europe, it means that you are a zero. In Brazil, it is an insult and similar to calling someone an asshole. Either way, your host will not appreciate this gesture.

Of course, these are only six of many simple, seemingly harmless, gestures that can ruin a business deal or an entire business relationship. Make sure you know what gestures you should or should not do in the specific country you are working with. Things you should do in one country may be the exact opposite of what you should do in another country, such as giving an even or odd amount of flowers. Have you had any experiences with gestures that can get you in trouble in other countries?

México Lindo

Mexico is a beautiful country and our bordering neighbor. The United States takes full advantage of their warm climate and beautiful beaches, with 80% of tourists coming from the United States. Americans account for a large portion of their tourism revenue, but what about businesses? Both foreign direct investments and tourism have decreased due to the increased violence in Mexico. Many U.S. companies will no longer consider investment plans in Mexico, and some are even moving out of Mexico due to safety issues.

Mexico currently may not look like the best place for a new investment. There has

been a constant battle between drug traffickers and the army resulting in kidnapping, extortion and murder. If you are looking to newly invest in Mexico, I would say to wait until some peace and order is restored. This being said, you may already be doing business in Mexico, or looking to do business but not set up a new factory. If so, you need to know a few things about Mexico before you go.

The official language of Mexico is Spanish, yet the majority of business people do speak English. It would still be polite to learn some Spanish phrases if you don’t

already know some. One word you should remember is compadre, which means friend. Mexicans, similar to the rest of Latin America, will not do business with you until you have developed a trusting relationship. Expect to be taken to lunch, shown around the city or lengthy conversations about your family and interests. Business is conducted through connections between family and friends. Do not rush the relationship building process because they will not do business with you if you seem untrustworthy.

Family is the most important thing in Mexico’s culture, not only their immediate family, but their extended family as well. Everything they do is centered around the family. The father is generally the head of the family, following a strict hierarchal society.  Do not underestimate the power of status, because it is very important to business leaders. Make sure to send an executive to the initial meeting, but after that an executive is preferred but not necessary.

The Mexican culture follows a work to live mentality, rather than live to work. Don’t be surprised when people are thirty minutes late for meetings, though you should always arrive on time. Likewise, don’t rush negotiations, they will happen, just at a slower pace than in the U.S.

Mexico is a viable place to conduct business, just make sure to do your homework before you go there. Be aware of the drug cartels and the violence issues they are currently having. Mexico is ranked 100 out of 183 (1 being the best) on the Corruption Perceptions Index. Understand what this means if you do conduct business there, and be aware of the society. See for yourself what Mexico has to offer your business. Would you consider going there?

Doing Business in Canada

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Many companies decide to venture out and test the waters of international business in Canada. This shouldn’t be a surprise since Canada may not seem like such a jump from the domestic market. If we had to pick a country most similar to the United States, it would be Canada. Knowing this, do not assume that Canadian culture is exactly the same as the United States.

Canada is home to about 34 million people, where 59% speak English, and 22% speak French. Both are official languages of Canada. Their economy is similar to the United States, in that it is a market-oriented economy. The United States is Canada’s primary trading partner, helped first by the US-Canada Free Trade Agreement in 1989, then in 1994 with the North America Free Trade Agreement. While the United States accounts for three-fourths of Canada’s exports, Canada also supplies the majority of the United States foreign energy, with oil, gas and uranium due to its rich natural resources.

So what could be that different about conducting business in Canada? Well, don’t drop the niceties with Canadians just because you have formed a relationship with them. They are extremely polite and tolerant people so make sure you show them the same respect. Canadians are generally place more emphasis on the individual, like Americans, but they do have a strong feeling of responsibility to their community. Shake hands to greet someone, and to say goodbye.

The main differences in cultures are seen in Quebec, where they speak French and have cultural influences from France. A greeting may be a kiss on both cheeks, you should send flowers before a dinner party, and if you decide to send wine, it better be the finest you can find. To respect the French culture, have business cards printed in English on one side and French on the other when doing business in Quebec.

Canada is a great way to break into international business. The customs are similar to the US, in that they have the same personal space bubbles as Americans, are strict on setting meeting times, make decisions based on facts and logic, greet with handshakes and jump into negotiations after small pleasantries. Two things to take away are to always be polite, and research the differences in the French Canadian customs before doing business in Quebec. Subscribe to my blog to learn more about international business.