By: Mary-Kate Schiffer, Communications Intern
Edited by: Deni Kamper
Challenges Businesses Face When Expanding Internationally
“Worldwide business organizations have discovered that intercultural communication is a subject of importance—not just because of increased globalization, but also because their domestic workforce is growing more and more diverse, ethnically and culturally” (Godman, 2011).
Due to innovative technological breakthroughs, it has become easier for companies to expand their networking and business practices. Now, companies can discuss trade deals and business plans, to expand in an instant, over Skype and Facetime. By using means of technology, companies not only save time but also save money since face-to-face interactions are no longer necessary. The urgency to get deals agreed upon has also led to higher efficiency and effectiveness. Although the new innovative forms of communication have made proposing deals and expansions more convenient, it has also brought challenges to the workplace. Differences in communication practices and cultural preferences have made expanding internationally difficult.
Today, many companies have expanded their business internationally. In order to do so, it is vital for companies to be aware of how other cultures communicate. For instance, high context cultures, such as Asian and Southern European countries, rely more on nonverbal forms of communication such as tone of voice, gestures, and hand and eye movements, and prefer shared personal space and face to face interactions. Additionally, with a concept of “long-term” planning, high context cultures are known as synchronic since they view the past, present and future as interrelated (Goman 2011).
On the contrary, countries like the United States, Australia, and Germany are known as low context cultures. They prefer messages to be specific and direct and they value personal space. Low context cultures also associate one’s identity with one’s accomplishments rather than their groups and prefer to give full attention to one task after another. This makes low context cultures sequential cultures as well. Understanding the cultures that value high or low context characteristics will allow fluidity and will leave little to no room for misunderstanding. Although businesses should also be aware of other factors that may affect international communication.
Another challenge businesses face when communicating internationally is confusion due to words and terms having different meanings in other languages. Businesses need to be aware of their audience and educate themselves on which terms may have a different meaning in another culture. For example, whereas in American-English saying “the first floor” means ground level, in the UK “the first floor” means the floor above the ground level. Businesses should also be aware of how other cultures introduce themselves to others. When exchanging business cards, Arab countries receive with only their right hand whereas Asian countries receive with both hands (Farnen). While keeping differences in communication practices among cultures in mind, businesses face other challenges when working internationally.
Cultural preferences are another aspect companies need to account for when looking to expand overseas. Best Buy disregarded the cultural preferences for smaller, more conveniently located stores and decided to keep the “American superstore” image. By Best Buy failing to accommodate for their consumers when they expanded to Europe the business failed overseas. (“10 Successful American Businesses”). Another American company that failed when trying to expand overseas was eBay. In China, consumers wanted to be able to communicate with sellers in order to build trust through their own experience and interactions (“10 Successful American Businesses”). This function was not instilled in eBay China at the time and therefore failed to satisfy Chinese cultural preferences. Similarly, eBay did not perform well in Japan since it did not offer a cash-on-delivery option (“10 Successful American Businesses”). At the time, inputting credit card information was not popular in Japan and without the accommodation, eBay failed at its first attempt to expand to Asia.
Despite these two business mishaps, many companies have been successful in expanding internationally. In particular, Dunkin’ Donuts has expanded into 30 countries and has over 3,100 stores. To stay successful, they have made sure to evolve their menu to satisfy their global customers preferences.
Acknowledging these differences in communication practices and cultural preferences is vital for any successful business deal or even friendship! To guarantee the meeting or business deal is a success, one must keep these cultural cues in mind.
Farnen, Karen. “Cultural Differences and Communication Problems With International Business.” Small Business. N.p., n.d. Web. 27 June 2016.
Goman, Carol, Ph.D. “Communicating Across Cultures.” Communicating Across Cultures. N.p., Mar. 2011. Web. 27 June 2016.
“10 Successful American Businesses That Have Failed Overseas – International Business Degree Guide.” International Business Degree Guide. N.p., 12 Sept. 2013. Web. 27 June 2016.