Business Culture – What it is and why does it matter

Studying the cultural context of your market is essential to build a global company.

Published on

July 6, 2020

Business and culture alone are probably familiar words for you. However, when they come together, they represent a more complex concept. Culture is strongly interrelated with business, as it fosters communication between individuals. It also highly influences how people behave and negotiate.

What is business culture?

As mentioned above, culture can have a strong impact on the direction your business is going towards. It can influence decisions, the way in which negotiations are conducted, and the kind of relationships you establish with other people.

What is business culture

According to Ann Zimmermann in her article ‘What is culture?’, culture is the characteristics and knowledge of a particular group of people. It encompasses language, religion, cuisine, social habits, music, and arts.

Also, it is important to know that with different cultures, there comes a different history. This is the foundation of how certain values are perceived, such as honesty, trust, authority, competency, openness, or trustworthiness.

Why is it important?

Now that you have an idea about what business culture is, you might also wonder why this is so important.

If people from different cultures have so many differences when it comes to daily activities, culture also influences the way in which they do business. Some countries like to also build a personal relationship beyond their negotiations. But some others do not value this and are just following their goals. Also, for example, Dutch people tend to be more direct which can seem impolite for other countries.

This takes a broader meaning though, as business culture is also related to the level at which one can empathize and be responsive to cultural differences while doing business. This conducts to good business relationships and long-term collaborations. Also, making your business partners know that you understand them, their degree of respect towards you will grow significantly.

In fact, not understanding cultural differences is one of the most common mistakes companies make when doing business across borders.

Why business culture

Understanding

In the first place, being able to understand someone else’s culture represents a form of respect.  As only with respect you can build trust and appreciation, this is a fundamental reason why understanding different business cultures are important.

As we have mentioned before, different cultures have different ways of communicating and perceiving the world around them. Therefore, when you understand different realities, you have much higher chances of ensuring clear and effective communication with your international prospects.

Awareness

Being aware that not all of your business partners see the world from the same perspectives helps with not creating frustrations while doing business. Similarly, you are less likely to get defensive and to start having an impolite attitude just because you might feel offended.

Here is a list of things that can be influenced by local culture:

Time keeping
  • Time perspective

How people perceive time is a great example of what was mentioned before. It has an impact on the efficiency of communication. According to Business Insider, there is a significant difference between Western and Eastern countries when it comes to how time is thought of. This aspect can create disagreements and tension between two of these countries doing business together.

In America, time is perceived as money, therefore Americans don’t like to waste it as it is highly valuable. Similarly, people from The Netherlands, Switzerland, Germany, and Great Britain share the same concept of timekeeping.

  • Decision-making processes

These are as well an important reason why you should make use of business culture. It is always good to know whether decisions are taken individually or collectively in certain countries.

  • The way leadership works

These have an impact on the decision-making process, as some cultures are submissive and believe that leaders should decide for everything. Some other countries prefer meetings and like to be asked for improvements or to be consulted.

  • Propensity for risk-taking

This highlights how willing some cultures are to take risky business decisions. For example, Americans are more willing to take risks than European countries.

To conclude why business culture matters so much, we will emphasize that all the parties benefit from it. Everyone likes to be given a good feeling of appreciation. This will make them more easy-going and collaborative.

Also, it makes you keep an open eye to all the changes and variations. It keeps you aware that if it doesn’t happen how you would expect it, this is for a reason and you should just try to be understanding. Everything will end up properly if there is respect involved.

7 tips that can offer you some help when interacting with people from other countries:  

Tips to understand business culture

To make you deal better with the understanding of business culture and put it into practice, have a look at these 7 tips:

#1 Research about the culture you will deal with in advance

On the internet, there is plenty of information talking about all kinds of business cultures around the world. It is always helpful to have a look at this before getting in touch with someone else.

Some tools that can help you with this are Hofstede’s dimensions of culture or The Country Mapping Tool, based on Erin Meyer’s book (The Culture Map).

#2 Be respondent to any cultural differences present between you and the other country

Whatever the difference might be, feel ready to welcome and understand it. In the beginning, this might feel a little bit odd, as you are not used to it.

For example, someone from a collectivist culture (for example, South American or African countries) showing up very late at a meeting might be irritating and bothering. However, keep in mind that they have a reason for doing so, as this is the habit they grew up with. And keep in mind your end goal, as this might make your positive attitude return (if you are having a difficult time accepting the situation).

#3 Keep honesty in the first place

This always reflects a good value and stands for a well-mannered person. It is always better to say something that bothers you or that you would like to change throughout your collaboration than just keeping some cold feelings. Also, if you are not honest about something, this can be found out later and will damage respect.

#4 Be polite

Politeness

A polite attitude always enhances positive behaviors. It also encourages other people to act according to how you do. People can be influenced pretty easily. So, if you meet someone that can seem rude or not that friendly, keeping your smile on would help change the situation.  

#5 ‘Thank you’ first

No matter what, this phrase should always come after every meeting, phone call, or agreement. Even a ‘thank you for being here today for conducting our discussion’. It shows appreciation and good manners and it makes you look good in people’s eyes.  

#6 Avoid criticism

Even though you might find an idea being not proper or you disagree with it, always put yourself in the other person’s shoes. Try to see the meaning behind the words and understand why that affirmation or opinion was stated.

We might have the tendency to underestimate sometimes, but if we succeed in thinking beyond the words, we will get a totally different perspective. Try to understand, accept, and respect whatever it is that the other person has to say.

#7 Always be on time for meetings

As we were mentioning earlier, some cultures might have the tendency to come in very late. This is because for them this is not disrespectful. Try to keep your calmness if this happens and think about what you want to achieve after the meeting.

Even though you’re having the third meeting, for example, and you already know that person will be late, still make sure you are there on time.

This being said, we would like to emphasize one more time how important business culture is. There are only benefits when being aware of its importance. Using the above-mentioned tips could represent a small guide if you don’t have experience with it at all and you think to expand your business abroad.

If you have doubts about which is the best country in Europe to try your business culture skills into, have a look at our blog post to find out more about why The Netherlands should be your entry point in Europe.

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