How do cultural differences impact on business relationships?

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a)   How do cultural differences impact on business relationships?


1.          Introduction


The forming and enhancement of the business relationship are subject to a number of factors which could be both obvious and hidden as less known to us. This part of the study will focus on the research on the cultural difference in term of a factor influencing the business relationship.


2.          How do cultural differences impact on business relationships?


According to Gary P. Ferraro and Susan Andreatta (2010, p. 29), culture could be defined as people’s non-biological and non-genetic characteristics, and based on their view, all people could be categorized based on their acquired or cultural characteristics. And when people from different cultural background tend to have culture differences, it will have a lot of influences over people’s life and work, in this part, we will talk about impacts caused by cultural differences on the business relationship which is a relation between different business enterprises.


2.1     Power distance


Different culture systems provide different allowance for power distance which measures the acceptance of the inequality in the power distribution, different power distance could result in some irrationality among the both parties in a business relationship and thus damage the good relationship.


2.2     Body language


As we can perceive in our daily life, non verbal communication is usually more effective than the verbal ways because they are more direct and sometimes we can understand another one using a simple gesture. But because different cultures usually come with different body language and in some cases the same gesture will receive different apprehensions in different countries, therefore, they could impact the smooth communication in the inter-cultural business relationship.


2.3     Different visiting culture and the first impression


When two enterprises from two different cultural systems, usually two countries, they would usually need to have meeting together to facilitate their business cooperation, hence travel and visiting become quite routine. Under such situations, the differences in the visiting cultural could be very sensitive to both parties. For instance, in China the social structure is formal and hierarchical. The foreign visitors need to know where they fit in the structure and at the same time abide by the rules there ( 2011). Hence, the gold rule of visiting a foreign country, which is to “when in Rome, do as the Romans do” could also be applied in the business visiting, and foreigner could not be more careful to respect the local business visiting rules and habits such as shake hands with the counterparts in the same level in China and say greetings with the head first before greeting the lower level management. The major meaning of paying attention to the visiting culture is that visiting is the very first step before a meeting and it could be very critical if the first impression is affected by not knowing the visiting culture in the target cultural system.


2.4     Way of expression (direct or indirect) and smooth business relationship


Based on the view of Sven Rosenhauer (2009, p. 27) direct cultures value direct communication and an open atmosphere handling conflicts and problem, and in contract the indirect culture would tend to avoid direct confrontations and conflicts. For example, for many Asian cultural systems, people would avoid the direct conflicts even both business parties are totally can not agree with each other because they would feel that they are made embarrassed when such direct conflicts happen. As a result, the foreign business partners from quite different business culture need to pay attention to the way of expression, whether direct or indirect expression is preferred in the target cultural system.


3.          Impacts on business


Two major impacts could be identified: on one hand, because of the cultural differences, employees who handle the inter-cultural cooperation could have a sense of resistance because of the unknown. This is very natural reaction and it will reduce the effectiveness of the communication; on the other hand, misunderstanding of could be resulted due to the different cultural understanding for one expression such as the body language that we have talked above.


4.          Summary


Therefore, we can see that because of the cultural difference, daily contact and interactions could be affected by the cultural differences within the business relationships.





Ferraro, G. P. & Andreatta, S. 2010, Cultural Anthropology: An Applied Perspective. Bermont, CA: Wadsworth. p. 29 2011. 10 Major Cultural Differences Between China and the United States. Viewed on 25 Mar 2012 [online]—China-and-the-United-States


Rosenhauer, S. 2009, Cross-Cultural Business Communication. Germany: GRIN Verlag, p. 27