How Culture Works In Global Business

It is culture that influences our everyday life in many ways and this becomes especially noticeable in international business. Learn more about how culture works in global business.
culture works in global business
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Have you asked yourself before what culture has to do with business? After all, we predominantly associate the term “culture” with aesthetic things such as art, music and literature. Or else we might see the term as something generalizing that has to do with the achievements of a people or a nation.

Culture is more than that! It is our cultural character that influences our everyday life in many ways and this influence becomes especially noticeable in international business or collaborations – and not seldom at first in a negative sense at that: Anything that is similar to your own culture, things you know and you are used to are naturally regarded as normal and good. Anything, however, that is different from your own culture is almost automatically regarded as “not normal“ and therefore as “bad“.

Cultural Differences

In general, it can be said that cultural differences are often perceived as something that diverges from the norm and the behaviour that we are used to. Whereby the norm is our own behaviour and therefore the own culture. In other words: Anything that we are used to according to our own cultural character.

In case our anticipated expectations are not fulfilled because we are confronted with other behaviour than expected we are at best irritated. In the worst case, the situation can quickly become problematic and it can be perceived as highly unpleasant. (Tiittula (1999))

Definition Of Culture

How can “culture” be defined? The answer to this question is not that easy since the term describes complex coherencies. This becomes apparent when dealing with culture in different subject areas. Depending on the topic that “culture“ is linked to a different definition will apply.

When talking about international collaboration the following explanations are recognized as established and helpful:

 “Our own culture is like water to a fish. It sustains us. We live and breathe through it.” (Fons Trompenaars: Riding the Waves of Culture: Understanding Cultural Diversity in Business, 1993)

“Culture is not something visible but the invisible bond that holds everything together.” (Joseph Joubert, 1754 – 1824)

“Culture is the collective programming of the mind which distinguishes the members of one category of people from another.” (G. Hofstede, National cultures and corporate cultures, 1984)

“Culture can be understood as a complex system of guidelines for groups, organizations or societies.” (Alexander Thomas, 2013)

Looking at these explanations or definitions of culture it becomes clear that in an intercultural context the term “culture” comprises many different aspects such as:

  • Self-perception
  • Perception of space and behaviour regarding space
  • Communication and language
  • Clothes and appearance
  • Food and eating habits
  • Time and sense of time
  • Relationships (friends, colleagues)
  • Values and norms
  • Opinions and attitudes (animal protection, illness, etc.)
  • Mental processes and learning (perceiving, thinking)
  • Emotions
  • Work habits and labour practices
  • And many more

(Based on Harris/Moran: Managing Cultural Differences and “going international”)

The diversity of all these aspects shows the complexity of the topic. At the same time, if you have a closer look you will notice that the mentioned points cannot necessarily be located all on one level. In fact, some of them such as values, norms and emotions seem to go much deeper than e. g. clothes and appearance which can be perceived immediately.

The Iceberg-Model

One way to show these different levels and to explain “how culture works” is the iceberg model. Imagine a big, white and shiny iceberg in the middle of the blue ocean! Did you know how much you really see when looking at it? Just ten percent! That’s right – 90 percent of an iceberg are usually below the surface of the water. 

And when dealing with culture things are actually quite the same. There are things above the surface of the water that are easy to notice. And then there are things that you don’t notice because they are under the surface.

But what is it that is located above the water? Above the surface are the things that you can see apparently when looking at a culture: Things like buildings, clothing, food, customs and behaviour patterns. This is what can be called explicit culture.

Below the surface of the water is everything that you don’t recognize immediately even though they make up the basis of what you see above the surface: values, norms, assumptions, attitudes etc.

Values And Norms

Since assumptions and attitudes are more or less self-explanatory let’s have a closer look at the terms “values” and “norms”: Values represent what is desired or favoured in society. Thus values give a guideline for what can be considered good and bad in a culture. Norms on the other hand represent explicit rules – for example, laws. They also stand for implicit rules, meaning something that we commonly describe as “unwritten laws”. Norms give answers to the question of right and wrong.

The deeper we dig into the iceberg the closer we get to the core of a culture. And this core we usually don’t even recognize in our own culture since for us it is there as a matter of course. This is what can be called implicit culture.

Although the iceberg model is very suitable, it is at the same time a bit insufficient. One aspect that is not covered by the image, is the fact that cultures are “fuzzy”. This means that all of us are part of different cultures (e.g. corporations, departments, families, sports clubs etc.) – we are aware that these cultures sometimes overlap and that they are ambiguous and frayed. This is why we also talk about the fuzziness of cultures and we always ought to bear this aspect in mind when we describe cultures. The good thing is that we already have all the necessary attributes to move about naturally between different cultures. Still, it is useful to acquire the additional knowledge that we need to deliberately explore other cultures.

What Happens When Cultures Collide?

The iceberg image is no longer suitable when people from different cultures meet – something exciting happens: something new emerges, a third aspect comes into play that is neither identically equal to the one nor the other culture. The involved parties no longer act the way they would in their own cultural context. This leads to a great opportunity: it is possible to find a mutual way to collaborate that lies both beyond one’s own and the other persons’ possibilities.

Culture In Business

In business, we are aware of the fact that culturally heterogeneous teams at first tend to deliver poorer achievements than homogeneous teams. Yet, once they reach a certain level of intercultural synergy, they do hold the potential to deliver considerably better achievements than homogeneous teams once.

To reach this intercultural synergy, it is of course necessary to put energy (usually simply in terms of time) into the system – an aspect that should one always bear in mind when putting together an intercultural team or when working in one.

Key Takeaways

  • Culture is made up of several levels, some of them are instantly visible, others need to be made accessible first.
  • The main challenge when collaborating with people from other cultures often lies in the invisible (the deeper) levels of culture.
  • The level regarding values and norms is the one that forms our behaviour.
  • Different cultures are not only linked to nations but also to regional differen
    ces, corporate culture and other subcultures.
  • In order to reach a synergy of cultures it is necessary to deal with one’s own and with other cultures and as a result find a mutual way to a successful collaboration.
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