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Explaining the Concept of Cultural Values in Global Business

written by: Vikas Vij•edited by: Ronda Bowen•updated: 2/9/2011

Looking to enter the international markets for your business? Take a close look at the concept of cultural values in global business while you deal with people from culturally diverse backgrounds.

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    Cultural Diversity in International Business

    Cultural Challenges for MNCs In an increasingly globalized business environment, it is important for companies to understand and appreciate the concept of cultural values in global business. This is particularly critical for organizations that do business internationally or operate in multi-cultural environments. Almost all people are culturally sensitive at some level. Therefore, a company must have a humane approach in order to connect with people who are present in its internal and external environments. The business cannot de-link itself from the cultural values and emotional needs of people that are associated with it at various levels. A people-friendly approach is crucial to the success of any business anywhere in the world.

    Photo Credit: www.sxc.hu shlomaster

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    Significance of Cultural Values for Employees

    Businesses that operate on a global scale often hire employees that come from different nationalities and cultures. Managing interpersonal conflicts can become a challenge in such organizations unless there are clear HR policies in place that help to mitigate conflict. Furthermore, managers have to be skilled enough and use emotional intelligence to handle their divisions or teams with regard to the cultural sensitivities and needs of different employees.

    Employee training should also involve an orientation towards cultural understanding and a spirit of team work. This can help to ensure that cultural diversities of the organization are leveraged as its strength and do not become its weakness. There should be a basic respect and tolerance for cultural differences and all employees should work together to achieve group goals.

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    Examples of Cultural Sensitivities in Global Business

    The concept of cultural values in global business needs to be understood intimately by businesses that sell their products and services in international markets. Different countries have different cultural, social, linguistic and religious peculiarities and a global business has to sensitize itself to them.Sometimes global companies are caught in a fix due to unique cultural situations.

    For instance, the popular baby food brand “Gerber" could not be sold in France because in French language the brand name Gerber means “Vomiting". Similarly, Pepsico got sued in India for offending the cultural sensitivities of certain customer segments when it showed a young boy serving Pepsi to a team of sportspersons. Another famous example is about former President George Bush who visited Japan with a team of American businessmen. The directness of their business approach and their explicit demands from Japanese leaders did not go well with the Japanese culture and etiquette. Some analysts believe it was the cause of poor negotiations between the two groups and resulted in lesser than expected business.

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    Dealing with International Business Partners

    Global businesses have to contend not only with employees and customers from diverse cultures, but also business partners and other international associates who may come from different cultural backgrounds. It is equally important to adapt the business approach and accommodate the cultural sensitivities and needs of such groups.

    It may include international investors and financiers, global vendors and international government departments and bureaucrats. These groups may have different cultural needs and expectations. For instance, there are starkly different cultural approaches to business between the Japanese, Chinese, Russian, European and American businessmen and governments. So an international business must learn to employ the strategy of “Think Global, Act Local".