Meaning and Elements of Culture:

3.1. Meaning of Culture:

Culture is an aggregative concept which comprises of customs, attitudes, values and beliefs of
people, living in a society. It is the way people lead their lives and controls the way of their
thinking and actions.

According to E. B. Taylor, Culture is defined as “Culture of Civilization is that complex whole

which includes knowledge, belief, cult, morals, law, custom, and any capabilities and habits
acquired by a man as a member of society.”

On the basis of above definition, the concept of culture can be explained through the following
features:

1. Culture is an aggregative concept, comprising of customs, attitudes, values and beliefs of

people, in a society. 

2. Cultural values are essentially learned by a person, during the course of his/her development.

3. Cultural values are developed over a period of time through social interaction amongst people,
living in a society.

4. Culture determines human personality, and its symbolic quality makes it meaningful to people.

5. Culture is cumulative in nature and passes on from one generation to another.

6. There are two types of Culture: a. Material Culture: Material Culture consists of man-made
materials. For example, television, automobile etc. b. Non-Material Culture: Non-material
culture comprises of factors like language, ideals, attitudes, values, beliefs etc.

3.2. Elements of Culture:

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Culture has the following basic elements, as shown in the diagram below

i.Knowledge and Beliefs: Knowledge and beliefs are prevailing notions of reality and refer to
scientific realities, myths and metaphysical beliefs. An example of scientific reality is that earth
revolves around the sun and a person can take rebirth is considered as a myth.
When people share particular cultural values and beliefs, they tend to become hostile towards
others who do not believe in their values.
For example, in the U.S., it is believed that a skilled and hardworking person will get ahead in
life whereas in some other countries, it is believed that outcomes vary more from luck.

ii.Ideals: Ideals refer to norms of the society which determine what is right, expected or
customary in a given situation. These norms are generally enforced through sanctions i.e.
rewards for the right conduct and punishment for the incorrect behavior. Ideals consist of
folkways and mores. Folkways refer to guidelines for proper conduct that are enforced
informally, for example, the manner to greet a friend or respect for elders. Mores, on the other
hand, refer to obligations which are considered important for the benefit of the society.

iii.Preferences: Preferences of people in a society determine those things in life which attract
people or have a greater liking over others. A country‟s culture helps in setting the standards in
food, housing, clothing etc. Preferences vary between different cultures i.e. things which seem to
be attractive in one culture might be unattractive in another.   
For example, Americans have a preference for automatic cars whereas majority of Europeans
have cars with manual gears. Europeans prefer to eat more varied and balanced meals and less
fast food as compared to Americans.

Cultural characteristics play a very significant role in formulation of business strategies. For a
business, ignorance of customs, traditions, preferences and tastes can prove to be very expensive.
For example, Nestle makes a variety of instant coffee to satisfy tastes and preferences of people
of different nations.
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4. Distinctive Features of Culture:

4.1 Cultural Adaptation:

Cultural adaptation signifies the way an individual or a social system adjusts to fit into a
particular culture. The social system can be a small group i.e. the family or a large group i.e. an
organization or even the complete society.

Cultural adaption is required for survival of both an individual and an organization. The changes
in food habits, clothing etc., of individuals, according to the type of weather conditions, are
forms of adaptation. An individual, who changes his religion, has to adapt himself to the cultural
values of the new religion. An Indian, who decides to settle abroad in U.K., must adapt to its
social and cultural environment.

A business firm must also take into consideration the local cultural values before making
important decisions. For example, it is important for a business firm to be aware of cultural and
social background of the target customers while taking decisions related to introduction of new
products, segmentation of market and formulation of product and promotion strategies.

A variation in cultural values or environment implies difference in people‟s habits and patterns
of living. This awareness, understanding of local beliefs and values, can be helpful for a business
firm in the following manner:

i. The behavior of employees, in an organization, is largely determined by their cultural values;

and it can help business managers to understand their behavior and conduct in a better way.

ii. The response and feedback of people, towards new ideas and products, can be easily predicted
by observing their cultural habits and ways of living.

iii. The understanding of cultural differences among people and markets can help business
managers in making effective decisions, and can help them in the improvement of their business
strategies.

For example, McDonald‟s has become a successful brand in India due to its strong adaptation to
local culture and effective pricing strategies.

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4.2 Cultural Shock:

Changes in the cultural environment sometimes lead to cultural shock which is a feeling of
insecurity, anxiety and confusion, caused due to strange culture. For instance, a person who
comes to India from USA, experiences a cultural shock because the cultural environment of
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India is very much different from USA. Similarly, a multinational corporation, from Japan,
experiences a cultural shock when it starts its business operations in India.

Therefore, proper efforts must be made by the global business firms to understand the new
culture of foreign nations and adapt to it in due course of time, if they want to be successful in
their operations.

For example, Starbucks faced lot of difficulties while entering the Chinese markets. The first and
foremost being the non-smoking policy of  Starbucks which was against the high smoking
Chinese customers who would not feel happy to be kept away from smoking while having a cup
of coffee. Secondly, while a majority of US customers drink coffee while walking or driving to
work, Chinese, on the other hand, prefer to drink coffee inside the Starbucks coffeehouse with
their friends or colleagues. Customers in China visit Starbucks not only for the coffee but to
enjoy the relaxing environment inside the coffeehouse. Moreover, as against Americans, they
never drink coffee alone and use to have a meal along with it. So Starbucks had to introduce
great meal options for their Chinese customers.

4.3 Cultural Transmission:

One of the important characteristics of culture is its transmissive quality. Cultural transmission
refers to the process whereby elements of culture are transmitted:

i. from one generation to another;

ii. among members of similar culture;

iii. among members of different cultures.

Transmissive characteristic of culture makes it cumulative in nature. As time progresses, new

ideas, values and beliefs get added to the existing culture.

Transmission of culture takes place both vertically and horizontally. Young generation learns
cultural values and beliefs from their parents, teachers and other important members of their
culture. Similarly, the elders learn new ideas and emerging trends from the young generation.
New ideas, styles, habits and traits are also learnt through contemporaries.

Various forms of media communication help in cultural transmission. Films, theatre, advertising,
literature and social institutions play important roles in the process of cultural transmission.

Cultural transmission also leads to cultural diffusion i.e. spreading of cultural elements from
place to place.

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The process of cultural transmission and diffusion become easy in the cultures which have high
educational levels and efficient communication system. For example, in spite of low literacy rate,
Indian Government is using mass media to transmit new ideas among the masses. TV and radio
are being largely used to transmit important information, related to family planning, adult
education, agricultural practices and techniques, and so on.

It is important for a business firm to understand the nature and process of cultural transmission of
a society because it has a great influence on the business decision-making.
For example, while designing a promotional policy for a product or service, a business firm
should be aware of different elements of transmission, effectiveness of communication media,
different reference groups and the extent of their influence, and so on.

4.4. Cultural Conformity:

Cultural conformity implies individuals of a society conforming to the existing cultural norms.
Each individual has a certain role in a society and cultural conformity occurs when a person
conforms to the responsibilities of the required role. For example, a student is required to
conform to his role obligations of dressing properly, abiding by the rules of the school, and doing
his homework properly. Similarly, an employee, who is hardworking and loyal to the
organization, is conforming to the expected norms. Cultural conformity is achieved when an
individual incorporates his knowledge and skills, required to fulfill his obligations, and
undertakes the responsibility for his actions.

Managers of business firms should know the nature of cultural conformity while making
important business decisions. It becomes difficult for them to market new products, services or
ideas if a society blindly conforms to the existing norms. In such a scenario, special efforts
would be required to change the attitudes of people.

4.5. Cultural Lag:

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William F. Ogburn introduced the concept of cultural lag which implies that various parts or
elements of a culture do not change at the same rate. Since various parts are interdependent, a
change in one part of a culture requires modifications or readjustments in other correlated parts
of that culture. It is difficult, yet not impossible, to carry out these readjustments due to factors
such as ignorance, conservative attitudes, incorrect notions and sentiments. As a result of these
factors, the scope of social change gets reduced. For example, religious sentiments become a
hurdle in the way of population control, even though many techniques are available for birth
control.

The world of international business has numerous cases of cultural lag. This implies that
different markets show different levels of acceptance for a new product or idea.

It is important for business managers to identify the factors leading to cultural lag and overcome
them through appropriate measures. If a product is introduced in the market which is not ready to
be accepted culturally, then it might cause failure to the business. Knowledge of cultural lag is,
therefore, utmost significant for business decision-making.

5. Cultural Traits and its Impact on Business:

India has been, for long, viewed as a country of snake charmers and elephants by many in the
west, even though it is no longer true. Such perceptions, despite its rapid progress, both
industrially and in the service sector, would show India as an industrially backward nation. Such
perceptions can bias the approach of westerners to do business with India.

Cultures can evolve over a period of time. Business representatives must understand the current
cultural nuances to be effective in their roles. The understanding, how cultures in different
societies influence business practices, is important in today‟s globalized economy.

5.1 Low versus High Context Cultures:

Low-context and High-context cultures are terms that were introduced by the anthropologist,
Edward T. Hall, in his book, Beyond Culture. In low context cultures, information is
communicated in a more direct manner and emphasizes the spoken word, unlike in high-context
cultures which relies more on intangibles like, tone of voice, body language, gestures, postures,
etc., to get the message across.

A Low Context Culture emphasizes business dealings on the basis of more quantifiable and
tangible criteria, such as, facts and figures, relating to performance standards, service levels,
quality benchmarks, pricing, etc. Thus, business decisions will be taken on reports with detailed
analysis and recommendations, based on analysis of facts. Investors will rely more on balance
sheet and operational performance indicators for investment decisions.

A High Context Culture will give greater credence to softer intangible aspects while dealing with
business partners. Relationships are therefore important; and the factors, such as, trust, respect,
attitudes, behaviors, become pivotal in generating comfort towards each other, in business
negotiations. Personal interactions are important, unlike in a Low Context Culture, where

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negotiations may even be conducted remotely. Thus, investment decisions are more likely to be
swayed by the degree of comfort, generated by the behavior of participants.

5.2 Neutral versus Emotional Cultures:

    Figure 2: Emotional Culture on Display at a Business Meeting

The extent to which participants, in a business, interact publicly and display emotions, determine
which culture they belong to whether Neutral or Emotional.

People from Neutral Cultures do not openly express emotions and will remain composed and
stoic during interactions. It will therefore be difficult to ascertain what they are feeling about the
ensuing conversation. They may appear disinterested to others but that may not be the case. They
prefer a more formal approach and would like to receive “pre-reads” that they can go through
before they arrive at a meeting. United Kingdom and Japan are considered to be high Neutral
Emotion Cultures. A neutral culture response, during a business meeting, would be- “I agree
with your thoughts.”

People from Emotional Cultures express emotions openly and will appear enthusiastic, excited
and animated, in their interactions. They will smile and greet each other loudly and may often
appear boisterous to their counterparts from Neutral Cultures who would do well to reciprocate
warmly to create a congenial atmosphere and greater degree of comfort, during business

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interactions. Netherland, Switzerland and Mexico are examples of Emotional Cultures. An
emotional culture response, during a business meeting, would be- “I feel the same way.”

People, from emotional cultures, must attempt to be formal and put their thoughts on paper,
when dealing with people from neutral cultures. Those from neutral cultures must respond with
warmth to the animated overtures of people from emotional cultures.

5.3. Masculine versus Feminine Cultures:

Masculine cultures are more assertive as compared to Feminine cultures which are more
nurturing.

One must be aware that people will discuss business anywhere, even at social gatherings, to
succeed in masculine cultures. One must also be prepared to work long hours, take fewer
holidays, and travel extensively. People prefer to get straight to business and are direct, concise
and unemotional, in their communication. People, in such cultures, are evaluated on their
professional identity rather than contacts.

In contrast, Feminine Cultures are more focused on interpersonal relationships, quality of life,
and concern for the not so fortunate. They believe in building long term business relationships,
which may often be a result of comfort derived from familiarity or friendship, rather than very
quantitative decision criteria. Accordingly, decision making is likely to be more collaborative
than hierarchical. One must be aware that trust is more important than projected profitability for
those who are more feminine, to succeed in business environments.

5.4 Monochronic versus Polychronic Cultures: 

The manner, in which societies use time with relation to allocation of tasks, differentiates
Monochronic Cultures from Polychronic Cultures.

Monochronic societies organize time by prioritizing and ordering activities sequentially, that is,
one at a time. They may, therefore, appear more organized and even “programmed”. They
consider schedules and punctuality as an indispensable part of their work day. A business
meeting, which runs over its time, will upset people in such cultures.

Polychronic societies tend to juggle several tasks at the same time, often interacting with many
individuals concurrently or multitasking. People, in such cultures, will not mind having extended
work-lunches or work, while socializing as an opportunity to develop business with clients.\

The developed world is mostly monochronic whereas emerging societies are mostly polychronic.

5.5. Individualism versus Communitarianism Cultures:

The degree to which people, in societies, identify themselves as part of a community, determines
whether they subscribe to Individualism or Communitarianism culture.

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Decision making is faster in Individualism Cultures, as the authority is vested with an individual,
which may be as a result of the respect, commanded by the individual, or confidence generated
over time.

Communitarianism Cultures, on the other hand, subscribe to collective decision making, and are
more likely to go by consensus. Decision making is, therefore, likely to be slower.

Business negotiators, from an Individualism Culture, must exercise patience with those from
Communitarianism Culture, and the latter must appreciate the individual negotiator for the
authority vested in him, by the organization, and endeavor to respond faster. Businesses, from
Communitarian cultures, must take quicker decisions, when dealing with those from
Individualism cultures.

In a business situation, it will help to keep in mind that the approach to conflict resolution will be
very different in the two cultures, and that time to resolve will be higher in cultures, subscribing
to communitarianism.

Figure 3: Individualism versus Communitarianism

5.6. Achievement versus Ascription Cultures:

The extent to which individuals, in an organization, are valued, based on performance alone
rather than other factors, such as, age, gender, social connections or status, determines if it
subscribes to an Achievement Culture or an Ascription Culture.

Business negotiators, from Achievement Cultures, will be more data oriented and seek
information, based on performance metrics, logical reasoning, proficiency and subject matter
expertise. Rewards will be proportionate to achievement rather than seniority of position.

Business negotiators, from Ascription Cultures, will look to interact with senior and older people
who hold high ranks in their organization. Rewards are proportionate to one‟s seniority of
position.
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People, belonging to either culture, when conducting business with the other, must be aware of
the importance, placed on achievement and ascription in the other cultures, and must respect
these even if they doubt the merits of doing so. People, from achievement cultures, will do well
to include senior people with high ranks, in their team, when dealing with businesses from
ascription cultures. Conversely, people, from ascription cultures, should include knowledgeable
people and technical advisors with data backed information when dealing with businesses from
ascription cultures.

5.7. Specific versus Diffuse Cultures:

The degree to which people distinguish between their personal and public space determines if it
is a Specific or Diffuse Culture.

In Specific Cultures, people like to maintain a strong separation between their personal and work
life. A manager would, therefore, segregate the task relationship with the subordinate and
insulate it from other dealings; and the manager‟s authority is limited to the work relationship.
Professional and personal relationships are thus sharply segregated.

In Diffuse Cultures, there is no separation between a person‟s private and public space. Often,
work and private life are linked to each other. A teacher, in a diffuse culture, will influence the
students, not just in the classroom but impact their home life as well. Similarly, a boss is likely to
have a say in the subordinates‟ personal life as well. Employee turnover is lower in diffuse
cultures, due to stronger human bonds.

People from specific cultures must respect age, title, position of people from diffuse cultures and
patiently hear them out when they are long winded in their talks. People from diffuse cultures
must be quick and efficient in their deliberations when dealing with people from specific
cultures.

5.8. Universalism versus Particularism: 

The extent to which people believe that ideas and practices should be applied uniformly,
determines whether they subscribe to Universalism or Particularism.

People, who subscribe to Universalism, will implement and adhere to rules and business
contracts uniformly. They will adopt a rational, no-nonsense business-like professional approach
during business negotiations.

People, from cultures with high Particularism, are not sticklers for rules and will vary the
implementation of ideas and practices, based on the environment. Accordingly, they may modify
the execution of contracts and terms, based on relationships and level of trust. Their interactions
may be informal with the idea of getting to know the other party better, and may sometime
appear to be irrelevant to their counterparts.
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In societies, subscribing to Universalism, for example in USA, one would be frowned up if he
breaks a rule, irrespective of who he is, but in a particularist society, it may be alright, if the
person, who breaks the rule, is a friend.

Businesses, from particularist cultures, should be prepare for a “let‟s get down to business”
approach, when interacting with businesses from Universalist cultures. Similarly, the
Universalists should be prepared for some degree of meandering approach, when dealing with
the particularists

What is Cultural Stereotyping?

Cultural Stereotyping is when someone has an opinion on another person based on who they are,
where they're from, or the language they speak without getting to know the individual.

Examples:
Hispanics:
-Girls: Pregnant at 16, not successful, illegal, drama starters
-Boys: gang members, not successful, illegal, trouble makers
Asians: extremely intelligent, bad drivers (woman)
Blacks: Drug dealers/users, gang members, abusive
Whites: Rich, preps, smart

Why they stereotype others from different cultures, races, etc.

- to make they feel better about themselves
- to "fit it" with a certain group of friends and/or everyone else around them
- to express their feelings
- to take out anger

What is the problem?

-currently hundreds of stereotypes exist, the list is endless
-a stereotyped individuals isn't seen for who they are and what they can contribute
-it affects employee morale and productivity. Employees are more likely to leave an organization
if they believe that stereotypes determine how they are treated
-K-12 educators are unconsciously influenced by negative racial stereotypes
-Psychologists have demonstrated that stereotype threat inhibits the performance of talented and
well-educated  middle-class students on standardized tests because of the anxiety that the tests
will confirm the longstanding negative stereotypes

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6. Socio-Cultural Factors, Influencing Business:

The richness of global socio-cultural diversity means that customs, religions, languages,
practices, preferences and beliefs vary across the length and breadth of the earth. Businesses
must be sensitive to these variations. What works in one geography may not work in another.
Businesses must ensure their messages are appropriate for their target audience and they do not
offend their sensibilities. We look at some of these aspects and their impact on business.

6.1 Religion:

Religious beliefs, customs, rituals and practices have been known to impact consumer buying
behavior. These include practices, such as, not purchasing certain types of assets during certain
periods of the year to heightened buying sprees during others. Hindus generally do not buy assets
during the ‘shraadh’ period whereas hectic buying is seen during Diwali, due to the practice of
gifting. Same is the case among Christians, across the world. Christmas season witnesses huge
upsurge in sales. The same trend is seen among Muslims during Eid.

Religious beliefs can be seen to drive decisions around launch of new products or services.
Business can lose substantial sales if they are not cognizant of these factors and run promotions
during such periods of boom or do not stock well during periods of abstinence.
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Similarly, religious beliefs and practices dictate that certain foods, like, beef or pork are not
consumed either entirely or during certain periods of the year. Businesses, especially restaurants,
run the risk of offending sections of societies if they promote such products.

Weekly offs are also often based on religious practices. While Sunday is observed as a weekly
off in many countries, it is Friday in the Islamic world. The practice of offering „Namaaz’
several times during the day means that many businesses must tune their work hours in these
countries to allow their employees time to do so. Naturally, this impacts the hours during which
business can be conducted. Not tuning business practices accordingly will create negative
perceptions about the organization among the local population and adversely impact their
business potential.

Historically, certain religious beliefs have also determined work ethics. The Protestant (in USA),
Confucian (in certain Asian countries), and Shinto (in Japan) believe in working hard and often
long hours. Businesses must respect such beliefs and tune work practices that are in harmony
with such beliefs.

6.2. Language:

Language presents a big challenge for businesses in reaching out to its target audience.  There
are financial implications in addressing a large population that speaks and understands different
languages. There are sensitivities that result from different meanings attributed to the same word
or phrase in different cultures and geographies.

Businesses are limited by the reach of each language. They must therefore translate their
messages into multiple languages and use multiple channels of communication to reach larger
audiences. There are 18 officially recognized languages in India, 40 languages are spoken in
South America, and over 700 different languages across the African continent. The numbers are
far more if one were to consider the variety of dialects within languages.

While translating a message into different languages may seem an obvious solution to improving
the reach, the problem isn‟t as simple. A harmless word or phrase in one language may mean
something very objectionable in another. Sometimes a particular sentiment cannot be expressed
in another language. Many times the same word in one language has a very different and
sometimes derogatory meaning or connotation in another language. This has significant

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implications when choosing brand names which businesses would prefer to maintain irrespective
of geographies in which they operate.

Business must be very cautious when using advertisements meant for English speaking
audiences in Arabic countries especially while conveying „before‟ and „after‟ scenarios. While
English is read from left to right, Arabic is read from right to left. Hence images that depict
before and after scenarios must be suitably juxtaposed to convey the intended message.

Challenges for business are not just limited to verbal communication. Non-verbal symbols, like,
„thumbs up‟ or the „OK‟ sign formed by the thumb and index fingers forming a circle and the
other three fingers have different connotations in different cultures. Similarly, a pat on the back
is considered a gesture of recognition and encouragement in most countries but offensive in
Thailand. Shaking head from left to right means yes in most countries but no in countries like
Malaysia, Saudi Arabia and Bulgaria.

6.3 Consumer Preferences:

Businesses must develop relevant and appropriate strategies to address diverse markets based on
consumer preferences and beliefs. India is a vast multi-cultural country. Businesses cannot
address this market with one strategy that fits all. This may be true of other countries as well.
Companies that fail to understand the cultural environment – religious beliefs, customs,
traditions, tastes, preferences, buying habits etc. – will fail to develop appropriate business
strategies.

While people in USA prefer large sized cars, US auto manufacturers have realized that the same
strategy will not work in India, as the dominant market in India is for small and midsized cars.
The Japanese have led the Indian market with multiple options for small cars.

Bajaj led the scooter market for many years. Consumer tastes gradually changed and people
started to prefer bikes over scooters. Bajaj was a little late in waking up to this shift in consumer
preference and lost market share for some time till it finally responded to the changing
environment.

Fairness creams are another example of how consumer tastes change. The Indian woman‟s
penchant for fairness has spawned a whole new segment of products that was at one time scoffed
at by the established players. Unable to face up to the challenge from „Fair and Lovely‟, these
businesses have been forced to introduce their own fairness creams.

Markets vary by taste and this is evident from the fact Indians in the northern region prefer tea
and those in the Southern region prefer coffee. Breakfast habits also vary from region to region
and thus dictate business strategies.

Varying packaging size is a great example of how organizations have expanded markets. For a
long time, shampoo was sold only in bottles. Certain organizations introduced shampoos in
sachets so that low-income groups could also afford them. However, shampoos in sachets also
appealed to other consumers looking for convenience of use. Hotels too prefer using smaller
packs to place in rooms for their customers.
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Increasing consumer consciousness towards health has seen lifestyle changes and the demise of
many products. Businesses that did not see the change coming saw their market share erode.
Dalda, once a dominant cooking medium brand, is hardly to be seen anywhere and has been
replaced with other healthier options. Lifestyle changes have brought about the biggest change in
consumer buying patterns – both good and bad. We now have healthier options such as fruit
juices available in tetra-packs eating into the market for aerated drinks. We also have a lot of
junk food such as chips doing well. People are shifting from ammonia based hair dyes to
ammonia free colors. Businesses must respond to these shifts in consumer preferences.

Environment conscious countries, like, the Netherlands prefer to use clean energy and
nonpolluting means of transport. Bicycles are the preferred mode of commuting. Energy and
auto companies can ignore these facts only to their peril when framing business strategies for this
country.

6.4 Etiquettes:

Etiquettes vary vastly across cultures. Businessmen not sensitive to etiquettes will end up
embarrassing themselves or others or jeopardizing their business prospects.

Greetings are common way of welcoming or saying goodbye. These are often quite different in
different cultures. While shaking hands is common in most cultures it is not so in some others.
One also needs to be sensitive to shaking hands with the opposite sex and finer nuance of how
much pressure is exerted while shaking hands. In some cultures, kissing is acceptable while in
others, like, in Japan, you greet by bowing. In Bengal, it is customary for a host to ask the guest
to visit again rather than saying goodbye.

Figure 5: Example of Etiquette Mismatch

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Some cultures emphasize on maintaining eye contact with the other persons, during
conversations, while it may raise suspicion in some cultures, especially with the opposite gender.
Similarly, laughing out loud is an expression of joy in most cultures but in some African
countries it is embarrassing and discomforting.

Gifting is another aspect in many cultures where etiquette demands that gifts are accepted. Not
doing so would be insulting the person offering the gift. Gifting is common business practice in
India during the festive season of Diwali. Many organizations have rules around the value of gift
that may be given or accepted to safeguard against malpractice and bribery. They mandate that
gifts above a certain value are declared in the gifts register.

INTERACTIVE 5

6.5. Social Trends:

Many trends are driven by the geography‟s demographics and have implications for businesses.
Companies must monitor these trends to suitably frame strategies.

India comprises a vastly young population as compared to many developed nations. Businesses
must factor this in their product and marketing strategy.  Women are increasingly taking up jobs
and the family profile has been steadily undergoing change from joint families to nuclear
families. This impacts buying behavior and we see a lot more offtake of household goods like
washing machines, microwave ovens, etc. There is also heightened demand for housing as more
youngsters decide to stay away from parents. In large cities in India, we have seen a
mushrooming of crèches and play schools, as young working mothers do not have their parents
around to look after their children.

With increasing number of working couples, we also see an increasing trend of eating out. This
has resulted in opportunities for restaurants and take-away outlets and we see many new
businesses spawning in the hospitality sector. The options for ready to eat food „cookeasy‟ food
have exploded. Businesses with a keen eye on spotting trends have been able to come up with
new strategies to address this fast developing market segment.

In many developed countries, like, the USA, there has been an increase in divorce rates.
Commitment to marriage is low and this results in greater stress induced binge buying.

Businesses must carefully monitor evolving social trends and position their products based on
several diversity factors if they have to sustain credible performance.

SUMMARY

 The globalization of the economy has brought into sharp focus the importance of
factoring in cultural issues in the business plan. Culture varies even within nations and
businesses need to fine tune their strategies to respective target markets within the same
geography as well. The manner of conducting business among different cultures, the
diversity of values and etiquettes impact how people from different cultures must interact
with each other to build trust and comfort. 
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  There are several aspects of cultural diversity, based on historical societal trends, religion
and language which call for businesses to adapt while doing business withother cultures.
Adaptation is important if business is to be conducted successfully in the long term.
 Tastes and preferences tend to change with time and businesses must also remain aware
of its dynamics. Not doing so would result in gradual loss of market share. Consumption
patterns can also change with changes in government policies that trigger buying
behavior.
 Culture sensitivity and awareness is therefore a prerequisite for conducting business
successfully in a multicultural environment.

How cultural differences impact international business in 2017

As companies continue to expand across borders and the global marketplace becomes
increasingly more accessible for small and large businesses alike, 2017 brings ever more
opportunities to work internationally.

Multinational and cross-cultural teams are likewise becoming ever more common, meaning
businesses can benefit from an increasingly diverse knowledge base and new, insightful
approaches to business problems. However, along with the benefits of insight and expertise,
global organizations also face potential stumbling blocks when it comes to culture and
international business.

While there are a number of ways to define culture, put simply it is a set of common and
accepted norms shared by a society. But in an international business context, what is common
and accepted for a professional from one country, could be very different for a colleague from
overseas. Recognizing and understanding how culture affects international business in three core
areas: communication, etiquette, and organizational hierarchy can help you to avoid
misunderstandings with colleagues and clients from abroad and excel in a globalized business
environment.

1. Communication

Effective communication is essential to the success of any business venture, but it is particularly
critical when there is a real risk of your message getting “lost in translation.” In many
international companies, English is the de facto language of business. But more than just the
language you speak, it’s how you convey your message that’s important. For instance, while the
Finns may value directness and brevity, professionals from India can be more indirect and
nuanced in their communication. Moreover, while fluent English might give you a professional
boost globally, understanding the importance of subtle non-verbal communication between
cultures can be equally crucial in international business.

What might be commonplace in your culture — be it a firm handshake, making direct eye
contact, or kiss on the cheek — could be unusual or even offensive to a foreign colleague or

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client. Where possible, do your research in advance of professional interactions with individuals
from a different culture. Remember to be perceptive to body language, and when in doubt, ask.
While navigating cross-cultural communication can be a challenge, approaching cultural
differences with sensitivity, openness, and curiosity can help to put everyone at ease.

2. Workplace etiquette

Different approaches to professional communication are just one of the innumerable differences
in workplace norms from around the world. CT Business Travel has put together a useful
infographic for a quick reference of cultural differences in business etiquette globally.

For instance, the formality of address is a big consideration when dealing with colleagues and
business partners from different countries. Do they prefer titles and surnames or is being on the
first-name basis acceptable? While it can vary across organizations, Asian countries such as
South Korea, China, and Singapore tend to use formal “Mr./Ms. Surname,” while Americans and
Canadians tend to use first names. When in doubt, erring on the side of formality is generally
safest.

The concept of punctuality can also differ between cultures in an international business
environment. Different ideas of what constitutes being “on time” can often lead to
misunderstandings or negative cultural perceptions. For example, where an American may arrive
at a meeting a few minutes early, an Italian or Mexican colleague may arrive several minutes —
or more — after the scheduled start-time (and still be considered “on time”).

Along with differences in etiquette, come differences in attitude, particularly towards things like
workplace confrontation, rules and regulations, and assumed working hours. While some may
consider working long hours a sign of commitment and achievement, others may consider these
extra hours a demonstration of a lack of efficiency or the deprioritization of essential family or
personal time.

3. Organizational hierarchy

Organizational hierarchy and attitudes towards management roles can also vary widely between
cultures. Whether or not those in junior or middle-management positions feel comfortable
speaking up in meetings, questioning senior decisions, or expressing a differing opinion can be
dictated by cultural norms. Often these attitudes can be a reflection of a country’s societal values
or level of social equality. For instance, a country such as Japan, which traditionally values social
hierarchy, relative status, and respect for seniority, brings this approach into the workplace. This
hierarchy helps to define roles and responsibilities across the organization. This also means that
those in senior management positions command respect and expect a certain level of formality
and deference from junior team members.

However, Scandinavian countries, such as Norway, which emphasize societal equality, tend to
have a comparatively flat organizational hierarchy. In turn, this can mean relatively informal
communication and an emphasis on cooperation across the organization. When defining roles in
multinational teams with diverse attitudes and expectations of organizational hierarchy, it can be
easy to see why these cultural differences can present a challenge.
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As part of our mission to become the world’s most relevant business school, Hult is dedicated
to preparing our students for the challenges and opportunities of working across borders
and cultures. A big part of this preparation is understanding the role culture plays in
international business. In many ways, the Hult classroom mirrors today’s business environment,
with students of 130 nationalities collaborating and studying together. And not only are our
students multicultural, our faculty is too. Many have lived, worked, and taught across Europe,
Asia, the Middle East, and beyond.

Outside of the classroom, Hult students have the opportunity to experience life, culture, and
commerce in today’s most dynamic business centers through our global campus rotation
program. This international learning environment offers a truly global perspective and unique
insight into culture and business practices from all over the world.

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