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Cross-Cultural Management in International HRM

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Institution

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date
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Abstract

Cross-cultural management refers to investigating what businesses operate in different

cultures. Management culture studies how social norms and values affect management and how
managers and employees bring their cultural perspectives to work. According to the study,
cultural factors influenced internal human resource management (IHRM) policies and processes.
ц Companies expanding internationally should consider cultural differences in HRM. HR
managers must understand and respect their varied Workforce's cultural standards. If
international staff aren't adequately presented, miscommunications may occur. A global
corporation may thrive in fierce international competition if it has the human capital to hire and
position skilled individuals in crucial roles. The report also discusses worldwide cross-cultural
human resource management adoption barriers. It equips readers to operate effectively with their
host country's Workforce. The study requires several data sources. This study may influence
future research and advise multinational firms on cross-cultural human resource management.
International HRM publications, theses, and journals provided the data.
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Table of Contents
Abstract.......................................................................................................................................................2
1. Introduction.........................................................................................................................................4
2. Role of Culture in shaping business practices, IHRM functions, and Strategies..................................5
A. Culture has Accelerated Business and IHRM Entry Into New Markets..............................................6
B. Culture Facilitates Management and Business, and Negotiations.......................................................6
C. Inclusion And Diversity......................................................................................................................6
3. IHRM benefits from cross-cultural populations...................................................................................7
A. Offer Equal Employment Opportunities (EEO)..................................................................................7
B. Provided Cross-Cultural Training Programs.......................................................................................8
C. Promoted Two-Way Communication.................................................................................................8
D. Created Safe Spaces at Work..............................................................................................................8
E. Involvement of Employees in the Process...........................................................................................9
F. Addresses Cross-Cultural Conflicts.....................................................................................................9
G. Discourages Unconscious Cultural Bias...........................................................................................10
4. Challenges Brought About by IHRM Due to a Cross-Cultural Population........................................10
A. Communication................................................................................................................................10
A. Impact on Training...........................................................................................................................11
B. Impact on Compensation and Rewards.............................................................................................12
C. Impact on Recruitment and Training:...............................................................................................12
5. Adapting HRM Strategies:.................................................................................................................12
6. Summary and Conclusion..................................................................................................................14
7. References.........................................................................................................................................16
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1. Introduction

Since the beginning of the 21st century, there has been a significant acceleration in the
Globalization of business. For a global company to function more efficiently and fruitfully,
addressing issues arising from different cultures is necessary (Giorgi et al., 2020). Due to the
high level of competition in today's business environment, effective communication is crucial to
the daily execution of strategies. An organization's staff should consider several factors when
interacting with people from different cultural backgrounds (Farndale et al., 2023). Learning
about and adapting to cultural differences and new norms and acquiring skills that let one
function well in a foreign setting are all essential components of successful intercultural
interaction. Cultural awareness is crucial to human resource management when working
globally. Numerous writers have offered their unique takes on what "culture" means and how it
should be understood. Baporikar, N. (2022) defines culture as "the explicit and implicit patterns
of and for conduct acquired and conveyed by symbols that constitute the distinctive
achievements of human groups, including their embodiments in artefacts." On the one hand,
cultural structures may be seen as outcomes of action and as shaping components for future
action; the essential core of culture comprises traditional concepts and especially their
corresponding values.
As the global economy becomes more interconnected, organizations increasingly conduct
business across borders, bringing their unique ways of doing things. This phenomenon, known as
"cross-culture," is a direct result of the Globalization of the marketplace. Management entails
leading, planning, controlling, and organizing to ensure that the right people do the right things at
the appropriate times (Farndale et al., 2023). Knowledge, language, beliefs, customs, attitudes,
rituals, faith/religions, food, arts/drama/music, behaviour, and many other capacities and habits
required of a member of society all fall under the umbrella term "culture," is an inclusive term.
Cross-cultural interaction occurs when a company from one culture operates in a nation with a
different culture (Farndale et al., 2023). As a result, managing multicultural workforces presents
a unique set of challenges for human resource professionals.
To succeed in today's global marketplace, international companies must learn to navigate
the complexities of doing business across cultural boundaries. Human resource management
(HRM) is essential for continuing, effectively, and completing projects regarding costs and
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benefits. Only things get done with people, and when those people are placed where they can
thrive, they provide a company with a competitive edge on a global scale is the reason why HRM
is so important to any successful business. The results of this research will shed light on how
cultural influences have a bearing on corporate operations and, by extension, IHRM policies and
procedures. HRM methods for firms looking to grow worldwide need to consider cultural
variations. Opportunities provided by a multicultural workforce; risks posed by a multicultural
workforce; HRM strategies must be updated in response to a multicultural workforce. Scholarly
resources have been used to back up this report.

2. Role of Culture in shaping business practices, IHRM functions, and

Strategies

Culture is crucial in developing global business practices and strategies because it affects
how international and cross-cultural teams communicate and work together. It establishes the
business community's standards and evaluates itself, including its morals, ethics, modes of
analysis and judgment, procedures, and methods (Sugiarti et al., 2021). Cultures, manners, ideas,
traditions, and social mores from all over the world come together in today's global economy.
With the rise of Globalization and the prevalence of multinational enterprises and international
partnerships, it is more important for businesses and teams to be culturally aware and sensitive to
achieve global success (Sugiarti et al., 2021). The cultural environment in which a firm operates
significantly impacts its strategic decisions, especially in today's globalized market (Sugiarti et
al., 2021). The broader definition of "business culture" encompasses a company's values, norms,
customs, beliefs, and preferred approaches to problem-solving (Farndale et al., 2023). An
organization's culture is its employees' commonly held beliefs and norms regarding how business
is conducted, how employees should act toward one another, and how the world works.
"Business culture" is often used to describe the accepted ways of doing things within a
company (Sposato & Rumens, 2021). The nature of the company's operations, its size, the state
of the international economy, and the cultural norms of the nations where it is personnel are
located all impact the company's overall culture (Sugiarti et al., 2021). There are many ways to
define culture, but at its core, culture and simply culture can be defined as the shared norms and
practices shaping how a society, an individual, or a group thinks and acts. Faith, linguistics,
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dynamics and social structure, gender roles, traditions, regulations, and conventions are critical
components of culture (Sposato & Rumens, 2021). Adapting to the local business climate and
cultural standards while growing globally is essential. The organizations benefit from knowing
more about regional human resource management and commercial practices.

A. Culture has Accelerated Business and IHRM Entry into New Markets.

As Sposato & Rumens (2021) said, Globalization has necessitated the exploration of new
market opportunities. Businesses must demonstrate cultural sensitivity when working with
international clientele or developing a marketing strategy for a foreign subsidiary. Executives
should begin researching a new market by learning about its culture, values, and beliefs. An
improvement in employee dedication and potential cost savings might arise from management's
adopting tactics that consider cultural variations in international human resource management
(Sposato & Rumens, 2021). Companies with a global presence rely significantly on employees'
contributions from many cultural backgrounds, which can substantially impact workers' ability to
get the job done (Tambe et al., 2019). It sets the standard for company norms across the board,
including ethics, communication, cognitive processes, decision-making, and operational
methodology.

B. Culture Facilitates Management, Business, and Negotiations.

There are culturally specific differences in management and commercial agreements.

Many people perceive the conclusion of discussions as the commencement of a legally binding
contract between the parties involved. Thus, it would help if he learned our counterpart's
perspective on the negotiation's goal, whether they are aiming to establish a mutually beneficial
long-term partnership or a quick and easy one-time transaction (Sugiarti et al., 2021).
Furthermore, it is common knowledge that many enterprises operate internationally (Tambe et
al., 2019). Hence, it is becoming more important to coordinate the efforts of multinational staff.
Successful worldwide businesses often hinge on the skill with which their global Workforce is
managed. In recent years, it has become increasingly challenging for international firms to
recruit, train, and retain employees. Regarding IHRM, cultural considerations are crucial when
supervising workers from various countries and regions.
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C. Inclusion And Diversity

Depending on the context, inclusion and diversity may be stand-alone organizational

purposes or sub-objectives of HR. Workplaces prioritize D&I duties, a culture where all
employees are acknowledged and appreciated, and cultural diversity is actively fostered (Shao,
2019). A company demonstrates its commitment to diversity by providing a friendly
environment for people of diverse identities and cultural origins (Shao, 2019). When employees
learn about and respect one another's backgrounds and perspectives, the result is a more exciting
and talented group of workers. Customers, clients, investors, and other key stakeholders benefit
from adhering to these values in the long run.

3. IHRM Benefits from Cross-Cultural Populations

Cross-cultural management, or the study of administration in various cultural settings, is

frequently mentioned while discussing cross-cultural populations in international human
resource management. Examining the cultural orientations of managers and enterprise members
and the impact of social subculture on management and control techniques is a part of this
(Lopez-Cabrales & Valle-Cabrera, 2020). Leading teams in a global or international company
context while considering clients' various cultural norms, habits, and buying choices worldwide
is an example of cross-cultural management (Lei et al., 2021). Business and other interactions
are becoming increasingly regular online, meaning many companies must rethink their
approaches to compete in virtual spaces (Lo & Nguyen, 2023). The IHRM is better off as an
outcome of the variety of people who use its services because:

A. Offer Equal Employment Opportunities (EEO)

Cross-cultural management necessitates a firm commitment to eliminating discrimination

from the employment selection, remuneration, promotion, and termination procedures (Lei et al.,
2021). One will be setting an example for how their staff members should interact with one
another. Examining past performance reports to see if specific groups are preferred is one way to
eliminate bias when promoting staff (e.g., nationalities, abilities, genders, and races) (Lei et al.,
2021). Take a step back and try to eliminate bias from your future judgments. Forbes further
advises using technology to eliminate discrimination throughout the hiring process is a good
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idea. As part of its cross-cultural management strategy, IHMR creates a diverse and inclusive
work environment to ensure that all employees are treated fairly.

B. Provided Cross-Cultural Training Programs

When an organization's Workforce is exceptionally varied, it can be difficult for people to

find common ground and work together. To address this challenge, IHMR has funded cross-
cultural linguistic training programs to help employees better communicate and work with
people from different cultural backgrounds (Lei et al., 2021). Also, there is an extensive range of
work styles between cultures. Some places value teamwork and consensus more than others,
while others embrace a more hierarchical, manager-led style of operation (Shao, 2019). Every
employee brings a unique cultural perspective to the office. Training opportunities go far beyond
typical benefits packages. IHMR employs them to foster employee agency and facilitate the
management of a multicultural workforce.

C. Promoted Two-Way Communication

Managers deal with more than just language when managing people from different
cultures. Additional difficulties include dealing with staff members who, for several cultural,
psychological, or emotional reasons, are feeling overwhelmed, unmotivated, or disengaged (Lei
et al., 2021). However, managers can foster meaningful relationships among employees in
different teams by opening the lines of communication. The first step will allow employees to
have their voices heard. If managers need to exchange feedback quickly, then use a digital
platform like Slack to do it. Suggestion boxes, physical or digital, are also fantastic because they
allow people to make suggestions without revealing their identities (Malik et al., 2019). Promote
two-way communication by encouraging your staff to be more forthcoming and providing them
with the appropriate channels. Doing so can help both sides open up and learn from one another's
experiences and perspectives.

D. Created Safe Spaces at Work

Employees signing a contract with a company should feel welcome and appreciated
regardless of their history or origin. You and your D&I practices are the first steps in making
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them feel welcome and integrated into the team. Get the recruiting and onboarding process going
right away. Find out what people want and need out of their jobs on a personal level. Regarding
the workplace, some employees may feel more comfortable in the company of people from
similar social circles, while others prefer to work independently (Malik et al., 2019). If managers
want to foster a more diverse and inclusive workplace, they can also establish online and offline
chat rooms where employees can talk to one another informally. It is a great way to ease new
hires into the fold without overwhelming seasoned workers. Giving your staff members a place
to talk freely and openly about their feelings at work can help them bond as a team and push
them to share their all daily.

E. Involvement of Employees in the Process

It takes time to build trusting relationships across cultural divides. They call for intensive
effort, experimentation, and analysis. The Institute for Human Resource Management
encourages employee participation in creating a welcoming and diverse work environment. The
organization regularly consults with its managers, supervisors, and team leaders to develop
effective cross-cultural management practices. Intercultural misunderstandings are stifling the
progress of both teams. It goes out to employees one-on-one when there is a specific cultural
issue they intend to address or a conflict that must be addressed. Encourage them to share their
thoughts on diversity and inclusion initiatives at work and how they might like to see cross-
cultural interactions improved (Baporikar, 2022). It will help you develop a cross-cultural
management strategy tailored to your team's unique demands and working environment.

F. Addresses Cross-Cultural Conflicts

How coworkers of different cultural backgrounds interact in the workplace can vary.
Under the stress and strain of professional obligations, disagreements like this can quickly
escalate. When this occurs, it is essential to find a way to settle the conflict soon to avoid any
adverse outcomes, including legal action. Workplace disagreements can be resolved more
efficiently by identifying their causes and implementing appropriate solutions. To illustrate,
suppose a Chinese lady complains of racial prejudice at work after becoming the target of a
coworker's insults and threats because of her country (Mahadevan, 2020). Given the underlying
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cause of this occurrence (racial bias), it stands to reason that penalizing racist harassment with
suspension or termination will help prevent similar incidents in the future. Restoring peace and
harmony in the workplace through cross-cultural management can help teams to concentrate on
getting their work done and achieving their objectives. However, these problems may be avoided
entirely if D&I programs took preventative action.

G. Discourages Unconscious Cultural Bias

Discrimination occurs at all levels of an organization, not just during hiring and
promotion. Similarly, whether or not your staff is conscious of it, it influences their choices
regularly. Hence, IHRM seeks to lessen or eliminate bias in the workplace so that everyone has
an equal opportunity to achieve. Educating workers through seminars and workshops on
unconscious prejudice is one strategy for reaching this objective (Mahadevan, 2020). The
company's rules might be altered to inspire workers to identify and report instances of prejudice
and to collaborate on resolving these issues. Appointing diversity leaders who can inspire others
to adopt more inclusive policies is essential (Mahadevan, 2020). Leaders in cross-cultural
management should watch for insidious examples of cultural bias in the workplace and do
everything they can to eliminate it from official procedures and regulations.

4. Challenges Brought About by IHRM Due to a Cross-Cultural

Population

In impoverished or developing countries, cultural differences can provide significant

challenges for multinational corporations. International Human Resource Management
Institutions (IHRMs) need help adapting Western human resource practices to underdeveloped
countries' cultural and economic norms (Giorg et al., 2020). The success or failure of an HRM
policy may depend partly on cultural factors, but the management also significantly impacts the
policy's outcome (Lo & Nguyen, 2023). Human resource management practices are more likely
to be implemented if managers and employees view them as appropriate. HR managers must first
familiarise themselves with all the cultural factors to get the most out of their employees.
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A. Communication

According to Mustafa Ozbilgin (2020), It is common for misunderstandings to be the root

of most cross-cultural issues in IHRM. There can be several causes of misunderstanding:
variations in nonverbal communication. In many world places, the same hand motion might
convey distinct meanings. A familiar Bulgarian rejection gesture is a vigorous head shake.
Likewise, different people have different ways of counting on their fingers (Farndale et al.,
2019). In the traditional Chinese method of counting from one to ten, the number eight is
expressed by elevating the thumb and the finger that is adjacent to it. In French, this hand signal
means "two," but it is understood to be a gunpoint in North America—many interpretations of a
single word. Words, like gestures, can carry distinct connotations in various regions. The French
word for "car" in Quebec is "char," which refers to a tank in France (Farndale et al., 2019). When
translated from British to American English, " exciting " has a slightly different meaning. CEOs
in North America are fond of referring to work as "interesting challenges." However, their
British counterparts save the phrase for describing their children's play (children do exciting
things in England, not executives). Disparate premises applied to the same set of facts. Different
people from diverse backgrounds will have different perspectives on the same incident. Seeing a
black cat, for instance, is considered fortunate in Britain but bad luck in many other parts of the
world. In China, dragons are revered, while in North America and Europe, they are seen as
symbols of evil and evildoers (Mustafa Ozbilgin, 2020). These examples highlight significant
cultural differences while being relatively straightforward due to their concentration on a specific
cultural feature whose meaning is unaffected by the surrounding culture. So, such discrepancies
in communication are frequently immediately recognized (Giorg et al., 2020). Discerning
differences, incredibly nuanced or complicated ones, generally occur later in the communication
process when making the necessary adjustments is much more complex and costly. However,
this insight does not always come until after the deadline, leaving no room for manoeuvring.

A. Impact on Training

When a company operates worldwide, educating its Workforce on cultural norms and
practices is standard practice. Training is meant to assist employees in adjusting to their new
surroundings when they are on international assignments. They emphasize foundational skills
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such as communication, cultural awareness, goal-setting, and stress management rather than
learning about cutting-edge technology (Farndale et al., 2019). Although difficulties with culture
are rarely acknowledged in public, the failure of an assignment could be attributed to a manager's
need to be familiar with local customs. For example, Revlon's introduction of a camellia-scented
perfume to the Brazilian market failed because the company was not sufficiently familiar with
Brazilian Culture (Farndale et al., 2019). The management failed miserably because they were
ignorant that Brazil's camellia flower is traditionally used for funerals.

B. Impact on Compensation and Rewards

Companies may choose a universal mode of payment to ease the burden of working
across cultural boundaries. To put it another way, your salary will not change no matter where in
the world you decide to put in some time at work. This tactic, however, overlooks the reality that
living expenses in one country may be higher than in the other. Because of this, most companies
use a regional pay banding scheme to compensate their staff (Farndale et al., 2019). A localized
payment approach is a method used in this case. Both Microsoft and kraft woods employ this
method.

C. Impact on Recruitment and Training

Recruiting for international ventures requires a unique approach not used in domestic
endeavours. Workers are selected from either the home nation or a third country based on their
prior overseas job experience, language proficiency, stress tolerance, culturally savvy, and
general personality qualities (extroverted people are favoured) (Baporikar, 2022). The ideal
candidate will have previous managerial experience, be willing to learn the language and culture
of the host nation and be adaptable to the local way of life.

5. Adapting HRM Strategies

Strategic human resource management is "the process of integrating the human resource
function with the strategic objectives of the company to improve performance" (Yaw Appong,
2017). A business has many positive outcomes when HR practices align with the organization's
overarching purpose. Strategic HRM is an approach to business that establishes a bridge between
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people-focused management and development practices and long-term organizational viability

(Lopez-Cabrales & Valle-Cabrera, 2020). Organizational goals and the evolving nature of work
are factored into strategic plans for the future of a company's resources. Strategic human
resource management, also called "people strategy," is a process of making an overall plan to
ensure that a company's hiring, managing, and training staff members help it reach its long-term
goals (Mahadevan, 2020). It is a valuable tool to adopt for ensuring all the moving parts of
people management are in sync. It drives the culture and attitudes that help businesses generate
value and achieve performance goals. Issues of structure, quality, Culture, deals, and dedication
on a grand scale, as well as people issues with a longer time horizon, are prioritized (Lopez-
Cabrales & Valle-Cabrera, 2020).

Figure 1: Four HRM strategies (Oppong, 2017)

Successful HRM strategies link employees to the organization's mission (Yaw Appong,
2017). With strategic human resource management, businesses may better align their most
precious asset — their employees — with the company's long-term goals. The goals of strategic
HRM include business expansion, a relevant corporate culture, and a sustainable competitive
edge (Mahadevan, 2020). Adopting strategic human resource management can help a company
get an edge over its competitors in numerous ways. The firm will always be prepared to adapt to
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new circumstances because of its demand-driven recruitment practices, gender-balanced

Workforce, high employee motivation, and capable leadership.
As the study of cross-cultural management and international human resource
management has grown in popularity, numerous academics have proposed theories that seek to
explain and account for cultural variations among individuals and how they could be used in
adopting strategic management (Ozbilgin, 2020). These theories now serve as the bedrock of
cross-cultural management, allowing managers in various organizations to better foster the
productivity of their teams via an appreciation of cultural differences (Baporikar, 2022). Hall's
contexting theory of Culture, Hofstede's theory of cultural dimensions, and the model of national
culture differences created by Trompenaars and Hampden-Turner are the primary theories that
are frequently studied in cross-cultural management.
Hofstede's cultural dimensions theory is highly significant in cross-cultural management
due to its ability to compare and contrast the cultures of different countries by focusing on
particular cultural features (Ozbilgin, 2020). In 1980, Hofstede presented his hypothesis, which
tried to compare cultures based on their respective work values.
Hall's context-based cultural theory emphasizes the importance of communication as a
culturally differentiated sphere of human activity. Hall's models suggest that there are only two
types of cultures: high-context and low-context (Ozbilgin, 2020). The actual message conveys
very little information in high-context cultures; instead, the context of the situation or the
receiver's interpretation serves as the primary means of transmission.
In 1963, Trompenaars and Hampden-Turner created another influential cross-cultural
model. This paradigm, like Hofstede's, examines civilizations in multiple aspects. Trompenaars
and Hampden-Turner analyze and compare different cultural contexts using seven domains.
Their strategy can highlight cross-cultural differences and remove cultural obstacles in
collaboration, according to Ozbilgin (2020). This approach helps multinational business
managers customize management techniques to a specific context.
The discussion above demonstrates how the ideas above can help managers better
appreciate the nuances of cultural differences worldwide. Management can use these ideas to
evaluate the impact of cultural differences among international remote workers and develop a
strategy for removing obstacles to communication and cooperation. These theories will prove
especially helpful in bridging cultural gaps in areas such as leadership, inspiration,
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communication, collaboration, decision-making, and interdepartmental connections in the

workplace.

6. Summary and Conclusion

IHRM experts must be aware of the broader context to craft policies catering to the
business's needs and employees' cultural preferences. A manager who ignores external factors
risks alienating employees by failing to keep pace with the ever-changing nature of their business
and industry. Cross-cultural activities and their convergence also shape business benefits and
their desire to make an impact. Supporting multinational corporations in implementing effective
cross-cultural strategies would yield long-term benefits for all involved parties. One of the most
significant challenges for businesses is that employees need shared motivation to solve the
problem. Consulting assistance in employee hiring and development is essential to any business
strategy prioritizing seamless operation. The same idea also requires IHRM to respect the values
and customs of foreign workers. If appropriately used, cross-cultural team members can provide
knowledge and fresh ideas that boost businesses' ability to compete. However, in today's
multicultural global business community, cultural differences can impede the smooth completion
of projects. Managers should be familiar with the culture, encourage innovation, and drive
through adaptable leadership to meet project goals and prevent cultural misunderstandings.
Managers in today's multiethnic, global business community must constantly navigate cultural
differences that threaten to derail even the best-laid plans.
According to my understanding, the primary purpose of "Cross-Cultural Management" is
to develop a body of knowledge essential to effectively managing businesses globally by
examining a radically different approach to corporate management that considers cultural
differences. Studies show that teaching workers how to communicate and resolve conflicts
across cultural lines improves business ties. When businesspeople across borders can anticipate
differences and similarities, they can communicate more effectively with one another. In today's
global economy, communicating effectively across cultural boundaries is crucial. Collaboration
inside and outside of your team, as well as productive negotiations with international business
partners, all require it. Verbal exchanges are one of many means of achieving success in cross-
cultural communication. Reading body language, making eye contact, and using other non-verbal
cues are helpful. The subtleties that distinguish each culture are crucial to understanding and
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communicating across borders. Sharing across cultural boundaries is critical as the world
becomes increasingly globalized and interconnected. The ability to communicate effectively
across cultural boundaries is essential in any field, but especially business.
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7. References

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