The Relationship Between Culture and International Business

The Relationship Between Culture and International Business
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The advent and emerging popularity of the Internet changed the way we conduct business. It all but eliminated the geographic limitations of handling business affairs and negotiating trade. Now a corporation in Wyoming can conduct transactions with a company in Shanghai in real time. An automotive plant in Maine can order parts from Japan with the click of a mouse. Despite these advances, some things in the world of business have not changed. To be competitive in business and successful in professional dealings, companies have to understand how another country’s culture affects the way we do business with them.

What is Business Culture?

Why is understanding international culture important? Companies that have to compete with others in the marketplace set themselves apart by their ability to interact on a personal level with their clients and vendors. Companies that conduct business internationally should take precautions not to offend their potential clients. They must understand that the slightest breach in etiquette can destroy years of positive relations.

Customs and Traditions

In Asian business culture, for example, it is customary to bring a gift to your host. Great care must be taken to present the correct type of gift. A gift wrapped in white paper may offend your host, as the color white is associated with funerals and death. Gifts should be appropriate for the seniority level of the recipient and should be perceived as more valuable than gifts given to assistants or subordinates.

In Eastern business culture, there is a high emphasis on relationship building and camaraderie. Many American business people who are unfamiliar with Asian business practices are bewildered at what they perceive to be a waste of time on non-business activities such as social activities, dinners and entertainment. They are unaware that in those societies, business owners are more likely to conduct business with those they trust and feel comfortable with, making these activities a necessary part of making deals.

A North American businessperson should understand that in some Latin American business cultures it is customary to arrive late for a meeting. Armed with this understanding, the North American business person will not be offended and frustrated when their counterpart arrives 40 minutes late.

In Middle Eastern culture, shoes and feet are considered offensive. An ad created by a North American agency came under intense fire from its Middle Eastern consumer base when it featured a man in a suit sitting in his office with his feet on the desk. The ad showed the bottoms of his shoes, which is highly offensive in the region. In the United States this would be equivalent to an ad giving the reader the middle finger.

The relationship between culture and international business is crucial for maintaining positive relations in business. It is important to avoid breaches of etiquette that offend and alienate potential customers. By learning the culture and practices of your business associates, you will be well armed to expand your company’s global reach.


Executive “Gift Giving,” “Successful Entertaining in Japan,”

Photo Credit, MConnors, photographer