Business Culture Shock

Preparing for and adapting to Business Culture Shock and simple business cultural differences is a normal part of international growth activities.

Chinese Companies Are Expanding Overseas

The Washington Post Article Chinese companies face culture shock in countries that aren’t like China describes such issues for Chinese entrepreneurs.  Several of their points are summarized below.

  • “Chinese entrepreneurs … as they rush abroad  …  are grappling … with unruly trade unions, independent courts … meddlesome journalists … multiparty politics and … the power of public opinion”
  • “public often demands greater transparency and courts enforce stricter environmental and labor laws”
  • A Chinese company building roads “In Poland … had failed to allow  …  for the cost of compliance with local environmental laws.”
  • “Strict laws against pollution … might pose problems in the West”

International Business Culture Shock

But just expanding a company from Silicon Valley to include sales in Massachusetts can involve adapting to Business Culture Shock and business cultural differences.  California and Massachusetts are 3000 miles apart and the cultures quite different.

From an international perspective, the following issues can differ in business relationships from country to country:

  • Moments of silence during conversations
  • Handling of conflict
  • Gift giving
  • Bowing
  • Exchange of business cards
  • Interrupting and listening
  • When and how to kiss women or shake their hand as you greet them in a business context
  • How soon and how to respond after a first business meeting

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3 Responses to Business Culture Shock

  1. I believe this is a major obstacle that businesses must overcome as they begin to expand into other countries. Of course, major corporations such as McDonalds and WalMart had done an excellent job modifying their goods and services to accommodate the needs of the new target population, but modern companies may not have the luxury (or capital) to easily implement a new system. As every entrepreneur knows, it takes a lot of trial and error to perfect a product that will fulfill the needs of your customers, so when you begin to infiltrate a new market, the game must start all over again!
    Do you think dealing with culture shock, and discovering a new product mix will affect a business financially? What would be the long-term benefits over the short-term losses?

    • Hi Chris,
      Thank you for your comment.

      I made minor edits to the original post as I thought through it and your comment.

      The significance of differences in business culture and the amount of shock which an employee will experience will vary depending on various factors. As examples:
      Some Americans feel that within the US; a sales executive from the Deep South can move to the Northern US and sell successfully. But some say that a salesman from New England can not move to the Deep South and sell successfully. Separately, white is a color of mourning in some countries. So, for those countries white might not be a good color for some products.

      You only have one opportunity to make a first impression. So researching cultural differences in advance of a first meeting, or releasing an offering in a new area, can be very useful.

      The long term benefit of expanding into a new country is increased revenues and profits. Short term costs may well involve research, various localization activities, and other adaptations to the offering, marketing including websites, and staff training.

  2. Even the smallest things can sometimes lead to “culture shock.” After we began expanding, I found that in some countries, people list their last name first and I had no idea what to call people. I have found that it doesn’t hurt to ask people what they prefer to be called.
    Also, we must be aware of local cultural celebrations and holidays when subcontracting or dealing with suppliers abroad.
    One supplier in Bosnia was out of touch for a while and then it turned out that it had been a holiday. In Japan and China this sometimes takes the form of the “Golden Week” where things shut down for a whole week. However, that’s a darn sight better than France, where you can’t get anything done for the entire month of August!

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