The Importance of Cross-Cultural Communication in Business

In 2021, there were an estimated 334 million businesses worldwide.¹ Although they all are in different countries and time zones, advances in technology have made it easier than ever for these businesses to transact with one another. As a result, when you enter the workforce, you will likely interact with coworkers, clients, vendors and customers from all over the world. Understanding the subtleties of cross-cultural communication, as well as identifying and overcoming your unconscious biases, will make it easier for you to work for a global business and successfully build relationships with business partners from other countries.

Learning to communicate effectively isn't as simple as speaking the same language, though. Each culture has its own traditions, communication practices and ways of living that affect the ways that they do business. And since so much of business is relationship oriented, you'll want to try your best to honor the cultural differences of everyone you encounter.

In this blog, you'll learn the basics of cross-cultural communication and find tips on how you can enhance your verbal and nonverbal communication skills.

Cross-cultural communication refers to how people from different cultural backgrounds communicate with one another. Our cultural background directly impacts our language, patterns, attitudes and nonverbal communication tendencies, among many other factors.²

International trade and the global market have made it necessary to approach communication with a degree of cultural intelligence. For example, American businesspeople often see eye contact as a good way to show confidence and convey interest in the conversation.³ However, in many Asian countries, including Japan, too much eye contact is considered disrespectful.⁴ When you understand these differences in perception of nonverbal cues, you can adjust your approach during business discussions.

Developed by Geert Hofstede, the Cultural Dimensions Theory assumes that even in an increasingly global society, cultural norms still impact how we communicate.⁵ Hofstede noted various cultural dimensions that influence how we hear and understand others, including:

• Power distance index
• Individualism vs. collectivism
• Masculinity vs. femininity
• Uncertainty avoidance index
• Long-term vs. short-term normative orientation
• Indulgence vs. restraint

If you’re raised in a culture that values individualism over collectivism, for example, someone who was raised in a collectivist society may consider your actions to be overly selfish or indulgent, whereas you may question why they don’t speak up for themselves as often.

Similarly, Edward Hall’s “high context” and “low context” communication styles may cause misunderstandings and perceived slights in the workplace.⁶ The previous example related to eye contact illustrates this principle.

Language, cultural barriers and translation errors can potentially lead to gaffes that may impact your reputation. Even differences in gestures, symbols and nonverbal cues can lead to potentially catastrophic miscommunications. While encouraging employees to learn more about other cultures and how they communicate can help a company avoid these mistakes, the occasional accident is inevitable in our global economy.⁷

When mistakes occur, PR and marketing teams must understand why the behavior in question was offensive and how to correctly respond to the crisis. It's always better to address the issue than to remain silent. Thus, it's important to place people with high levels of cross-cultural awareness and emotional intelligence in people-facing positions and global marketing and branding roles.⁷

The first step in improving cross-cultural communication is to improve cultural sensitivity and awareness. Cultural intelligence refers to your ability to adapt to different cultural situations.⁹ Cultural intelligence is not limited to people from different countries; you may also need it when interacting with people who are from another racial background or who grew up in a different part of the country. People with high levels of cultural intelligence tend to be more interested in learning about and interacting with people from other cultures.⁸

Cultural intelligence is not a set trait and can be improved through company training programs and initiatives. Here are some tips for ensuring more effective cross-cultural communication.

Each business should establish policies and guidelines related to cultural discrimination. You should be able to access a clear set of rules about what is considered acceptable and potential consequences for disrespecting someone’s culture in the workplace.

Your company may also offer regular training on cultural sensitivity to expose workers to how people communicate in various cultures. These trainings may also cover business etiquette in different areas of the world and other topics that help employees understand the importance of cross-cultural communication in a global business.

Train people in various roles to respect cultural differences when interacting with colleagues, business partners, vendors and customers. Encourage your team to learn about cultural norms and expectations so they can communicate more effectively.

Remind employees about various religious holidays when they may not contact various vendors. If you are in a role in which you are negotiating with people from other cultures, prepare before going into each meeting. For example, if you are in sales, the tactics you use to close clients in North America may not work overseas.⁹

Digital tools, such as email, remote meeting technology and social media have made it easier to communicate with people from all over the globe. Translation services on these channels have further improved cross-cultural and international communication, too. However, you may need to brush up on which communication channels are most appropriate for people depending on their background and preferences.¹⁰

Every aspect of business, from global finance to managing a global supply chain, requires some level of cultural competence. Cultural competence refers to how well you communicate and interact with people whose culture differs from yours, and includes three key components: knowledge, skills and attitudes.¹¹

You can improve your cross-cultural communications competence by learning about the customs of people with whom you interact regularly. Understanding these cultural differences will help you adapt your communication tactics. You can also improve your intercultural competence by actively listening to your colleagues and others with whom you work. Pay attention to their verbal and nonverbal habits, and ask questions if you need clarification.

Improving intercultural competence will help you establish yourself as trustworthy and build relationships with people from other cultures.

The rules of business differ from country to country. In some cultures, you may be expected to offer gifts to potential business partners before they will consider a meeting, while in other places, this is considered bribery and is against the law.

Understanding others’ behavior in light of culture helps you shift your behavior to meet expectations and avoid misunderstandings. It also allows you to craft a value proposition that will likely resonate with someone from a different culture.

Coca-Cola is a successful global brand in part because it knows how to market to people across the world. When expanding into Africa, for example, the company worked with a franchise partner in South Africa to execute its strategy.¹² By working with a partner who understood the continental landscape, Coca-Cola was able to successfully enter the African market.

On the other hand, when Microsoft wanted to buy Nokia, a Finnish company, executives failed to do their homework.¹³ This resulted in several contract errors considered offensive by Finnish executives, ultimately killing the deal.

Communication impacts every facet of business and can give you a competitive advantage over your competition. If your company does business in other countries, you need global marketing strategies to appeal to audiences from various cultures. If you’re hiring a diverse workforce made up of people from various ethnicities and nationalities, you may need global HR strategies to help the team work effectively together.

Cross-cultural communication skills also help you enter new markets. When you understand the nuances of cultural communication, you can partner with native people from places in which you want to work. This will help you understand the local landscape and navigate negotiations and other tricky topics.

Cross-cultural communication skills are imperative in today’s global marketplace. With an online MBA from the Sy Syms School of Business, you will receive a well-rounded education covering all the skills you need to succeed in the modern business landscape. Courses in leadership, negotiations and decision making are viewed through an international business lens and are taught by professors with extensive cross-cultural experience.

Our online MBA program offers a global perspective allowing you to develop all the hard and soft skills you need to successfully launch a business or work for some of the most prestigious companies in the world. Entrepreneurs who want to start their own business and potentially expand will find lots of opportunities for developing an international business plan, networking and much more.

Schedule a call with an admissions outreach advisor to learn more about YU’s online MBA program.