Importance of cross-cultural awareness in business

To succeed in global business, professionals need to understand and appreciate

cultural values, practices and the various nuances in different parts of the world,
making cross-cultural awareness and training more important than ever.

Why is Cultural Awareness Important?

While globalization has opened many opportunities for business, it has created some
significant challenges. One leading challenge for global managers is learning to understand
and appreciate cultural values, practices and the various nuances in different parts of the
world.

In recent years, researchers have attempted to isolate the criteria that most contributes
to the success of expatriate assignments. Three areas have been identified: assignee’s ability,
knowledge and personality. While ability and knowledge can be “trained,” personality is an
innate trait and, therefore, more difficult to influence.

In 1990, Black and Mendenhall’s review showed overwhelming evidence that cultural
training fosters the development of cross-cultural skills and leads to higher performance.
Cultural training has also been shown to improve an individual’s relationships with host
nationals and allows expatriates to adjust more rapidly to a new culture.

Experts in international business agree that to succeed in global business, managers

should be open to others’ ideas and opinions and have the flexibility to respond positively
and effectively to practices and values that are oftentimes drastically different from what they
are accustomed to. In fact, renowned business leader Jack Welch was quoted as saying, “The
Jack Welch of the future cannot be me. I spent my entire career in the United States. The next
head of General Electric will be somebody who spent time in Bombay, in Hong Kong, in
Buenos Aires. We have to send our best and brightest overseas and make sure they have the
training that will allow them to be the global leaders who will make GE flourish in the
future.”

Assignees need this information in order to better understand cultural similarities and
differences while on an international assignment. The five dimensions of national culture
include:

1. Individualism vs. collectivism – social framework in which people look after their
own interests or embrace a societal view
2. Power distance – extent to which a society accepts the unequal distribution of power
3. Uncertainty avoidance – the extent to which a country’s population seeks
orderliness, consistency, structure, formalized procedures and laws 
4. Masculinity vs. femininity – the extent to which a culture emphasizes or accepts
either the traditional masculine role or the blurring of gender roles
5. Time orientation – value placed on time
When working across different cultures it's critical that you understand the rules and
cultural expectations of others.
If you don't, you can make mistakes. These mistakes can be harmless, or, they can be very
serious.
Cultural competence is valuable throughout life; whether you're travelling abroad for a
holiday, or working across cultures in your professional life.
Working with people from different cultures has become more and more frequent for
many of us and, as a result, more important.
Understanding 'culture' in training is essential because, otherwise, it's easy for people to
underestimate the impact cultural differences can have. 
Underestimating culture is the point at which things can start to go wrong. 
If you think of culture as an iceberg, what we see of a culture is tiny in comparison to what
we cannot see. It is the unseen elements of culture such as values and beliefs, that are
usually hardest for people to understand and deal with. When we interact in cross cultural
situations, a lack of awareness can lead to bad or poor decisions

The Cultural Lens is a good way of thinking about differences - we all wear a pair of invisible
glasses that shape how we see things around us. 
When we come from the same culture, our colours are closer together than when we come
from different countries.

The Importance of Cultural Awareness

These sorts of misunderstandings happen at all levels. The business world is full of
examples of where companies have ventured into foreign countries and
completely failed to understand the local culture.
What these sorts of examples clearly show us is how culture can and does get in the way
when it comes to how we see others and the decisions we make. 
Cultural awareness helps us move beyond this.
An important learning point, that we must stress, is that being culturally aware is not about
compromising your own culture or sacrificing your values or identity for ‘another’s’.
It is simply about helping us understand how we can best adapt our approaches,
thoughts and decisions to ensure we create positive outcomes in cross-cultural
interactions.
It is about respecting others’ cultures as well as our own.
5 Solutions
Here are five keys to successful cross-cultural communications for your business partnerships:
1. Be proactive. Start by focusing on creating trustful partnerships, not on the business at
hand.
2. Use some cultural rapport. Adapt your marketing material and business approach as
needed.
3. Organize productive interactions that ensure a “win-win” for all parties. 
4. Develop strategies for relationships and business cycles based on appropriate levels of
formality, business hierarchy and timing.
5. Learn the “do’s and don’ts” of the country and cultures with which you’re partnering. In
short, be well prepared.