Posted: November 27th, 2013

Impact of Cultural on International Business












Impact of Cultural on International Business

The saying that “one man’s meat is another man’s poison” is true and applicable in many areas and fields. The business sector is not an exception. This is mainly applicable when it comes to dealing in cultural matters. Doing business outside a country that is of a different culture other than yours can be quite a daunting task. Lack of knowledge of that particular country’s culture can lead to disaster if not failure in making a deal more often than not. Countries in the Asian continent have very different cultures than countries in America especially the U.S. It is important for one to know the culture of the people one is going to do business with. One might end up doing more harm than good.

The “A-Okay” sign in the U.S., for instance, is a very offensive gesture in Brazil. It is the equivalent of the middle finger sign. Most business people do this sign with the aim of showing the other party that everything is okay but end up loosing a business deal as a Brazilian may see it as offensive: a sign of disrespect and humiliation. In the countries that practice the Muslim religion, showing the sole of the foot is seen as dirty and very disrespectful. It would not be very advisable to cross ones feet or one foot on top of the knee (casual sitting), as the Americans do, when trying to strike a deal with a Muslim in the Muslim countries. Shaking of the head does not necessarily mean “no” in Bulgaria. People shake their heads in order to show that they are listening. Most Americans and other people not familiar with this sign take it as though the Bulgarians are negative towards them.

Alcohol plays a very big role in business dealings in some countries. This is contrary to the American way of doing business. In most Asian countries, liquor or beer may be shared in many business social events at any time of the day. Apricot brandy is served even in the morning in a country like Hungary. Refusing such an offer is seen as if one is being rude or cannot be trusted, unless one has a very good excuse. In other cases, punctuality is not as important in some countries as it is in others. For example, people in Sweden and Germany are strict timekeepers as compared to those in Spain, Costa Rica and Italy who are more flexible. Giving a gift to a Japanese businessperson, especially when wrapped with gold or red, can lead one into getting a good business deal. It is considered a good gesture; however, the gift should not be opened in front of the giver. It is considered disrespectful. When it comes to decision-making, people in a country such as Germany value decisions made by panels while on the other hand, Americans advocate individual decision-making.

The Ann Arbor, Mich., Company had its share of problems when it went international. When the company took its operations to Japan, it had to alter the way it delivered the pizzas from what it was used to in the U.S. Addresses there are determined by a building’s age rather than a particular sequence. The company’s business in Aruba also had to adjust to a number of differences. Motorcycles could no longer be used due to the strong island winds. Trucks had to be purchased in order to solve the problem. The situation in Philippine was not any better. The location of stores was carried out using feng shui, an art from China that positions buildings in accordance to a spiritual flow. The stores had to be kept open for more hours than in other areas as people stayed up more hours. In Italy, the people complained of the way the pizzas were made. The sauce was too bold and there were heavy toppings. Unfortunately, the pizza delivery company closed down and left the country.

All these are cultural challenges that can be overcome if a company does thorough research before moving its business to the appointed location. For example, the company should have enquired about the environmental condition of Aruba before moving there. This could have saved the company the extra expensive of buying the motorcycles then buying the trucks. The inconveniences experienced in that situation would have been absent. It would also be advisable to have collaboration or an alliance with one or two business people who know the cultures of the appointed location and the origin of the mother company. In this way, these people will advice accordingly. For example, the company could have gotten Japanese people who know about the address system of the U.S and of Japan. In this way, the address situation could have been solved earlier. If a solution had not been found, then the business would not have been set at all in that part of the world. This applies to the situation in Philippine as well. The business in Italy had to adjust its way of preparing pizzas to the Italian style. It was necessary to close the business down.


            As Ace, a company that went international even to Shanghai, China did, it is important to adjust to the cultures and business conditions of the country in which one is establishing a business. If it means including a native of China on the team establishing the business in order to get more knowledge and more access to the people in China for instance, then companies should do so. Doing the American way of doing business when trying to establish a business in Spain may not be advisable, if it is at the expense of the business itself. It is important for businesspersons to know the cultures of the countries or places where they are willing to establish a business. It would make business deals and transactions much easier.


Carlo, A. M. (Oct. 2006). Overseas Adjustment: Shanghai DC Lifts Ace’s Prospects. Home Channel News. New York, Volume 32, Issue 13: 26-28

Gibson, R. (Sep. 25, 2006). Small Business. Wall Street Journal, Page R. 8

Wade, J., (2004). The Pitfalls of Cross-Cultural Business. Risk Management, 51(3): 38-42.

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