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What is the role of Cultural Sensitivity in International Trade - ilearnlot

What is the role of Cultural Sensitivity in International Trade?

Explanation and Learn, What is the role of Cultural Sensitivity in International Trade?


Learn What? Culture plays an important role in the life of people as it is closely associated with them. It is very necessary to understand what a culture requires and what emotions are attached to it. Different countries follow different culture and because of this, some things will be acceptable in some countries whereas the same things will appear to be rude in other countries because of cultural difference. Also Learned, What is the role of Cultural Sensitivity in International Trade?

What is cultural sensitivity?

Meaning: Cultural sensitivity is conscious that cultural differences are present among the people as well as cultural differences, and these differences and similarities can affect attitude, behavior and communication styles. Cultural sensitivity is often used as a synonym for cultural awareness, which refers to the ability to keep itself in someone else’s shoes. Being culturally sensitive should be able to understand why someone else thinks or feels different things from you.

What It Matters for Trade?

Business owners and managers have generally defined ways to do things – patterns of habits, customs and behavior patterns. In many ways it makes sense. Policies and procedures keep the business running in the right order. However, it is also common to face people from different cultural, religious and social backgrounds in the business world. These people can have different ways of doing business and communicating their thoughts. What can be normal or acceptable for a businessman to be unfavorable or unusual for someone else? When communicating with individuals from a different background, being culturally sensitive, you can become aware of their customs and beliefs and respect them.

People who are culturally sensitive will know that the difference between the culture of different people can create differences in their relationship with respect to the way they behave, communicate etc. Hofstede defined culture as “the manner in which the mind is programmed such that it can differentiate the people of one category with those of other.” a culturally sensitive person should try to adopt the culture of another country, their traditions, their way of living, their lifestyle etc.

Nowadays people are getting closer to each other so toleration, dialogue between people of different culture and respect towards their culture and respect for diversity becomes more important. Learning and trying to understand the customs and culture of the foreign country indicates respect for the other country and for any business relationship to be successful respect for each other is very essential.

Many employers feel and have sensed that cross-cultural sensitivity is an important skill and proper care should be taken when dealing in and trading with the international market. In the domestic market, people will know what to do and how to do but to achieve the same motive in the different country with the same concept and then getting success by using same interpersonal professional skills is more important. Proper training should be provided should to the staff about the nature of the place, its scope, and language, values and aesthetics.

  What are Source of Attributional Information?

When people are traveling from one country to another it is necessary that they do a research about the culture of the country in which they are traveling so that they can go well prepared, which can save them and people around them from an embarrassing situation. Doing business internationally means management of culture of different countries and for maintaining international business relations, people will have to deal with that countries norms, rules, values, and regulations. Overall people need to involve in the culture of different people and try to adapt to their cultural skills and style.

The right type of knowledge for right kind of job is very essential for doing business globally. The ability to negotiate better, understanding the cultural problems and becoming an insider often give a competitive edge in the business. Managers should possess the high level of managerial skills as the relationship between various business networks depends upon the manner in which the manager interact and behave with international clients and how much capacity they are in dealing with crossing cultural boundaries. Cross-cultural training helps in improving success by trying to improve the level of personal cultural awareness and this will help in understanding the culture of other people.

In growing business environment it becomes very essential for the firm to have culturally skilled workers having the ability to work in the international business arena. In the cross-cultural business, sector trust plays a very important role in maintaining a business relationship. Trust can conceptualize as a belief which is influenced by the way the partners behave and how much reliable they are.

The companies should provide training to their staff for each and every situation that they are likely to face as it can also help to develop various strategies that are required for improvement of self-development process. It will enable them to see the world with a different concept through the eyes of their foreign partners. This will help them to learn how to tackle different problems faced by their foreign partners.

In a global economy, culture plays a vital role to make any business transactions successful economically. The firm should be able to cope up with the international differences that arise from different culture and for that, the international culture has to be understood by the managers. The partners must be able to understand each other’s culture and for this, a lot of time and effort is required. By trying to understand the partner’s cultural needs and their culture they will try to solve the cultural differences and in this way, they are likely to behave in a more systematic and sensitive towards the culture. Globally, if cultures are not well understood then the chance of the firm surviving internationally is very low.

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The neglected role of Cultural Sensitivity in International Trade:

In this globalized economy, business is growing very fast and the companies are starting to expand in international markets – advanced technology, strong capital hold, cost-benefit, political influence are some of the factors that help in the growth of the business. Increasing competition causes most of the companies to collaborate with the foreign partner. Most of the companies fail in understanding the importance of cross culture resulting in the failure of cross-border partnerships and collaboration.

Most of the companies that plan to expand globally face two problems, first one is to identify the qualities and the attributes of a successful global manager and the second one are finding executives with those attributes. Thus executives who are given foreign responsibilities are usually selected on the basis of them having proper knowledge of their language and should have knowledge of international experience. Culture basically shows the kind of the behavior that is accepted by the society.

Given below are some examples that show negligence of cultural sensitivity in international trade:

  • In Spain, coca cola had to withdraw its 2 liters of bottles as Spaniards did not have refrigerators having such large compartments for their storage.
  • Coca-cola, when was launched in China the name, sounded like “Cooke-Koula” which means a thirsty mouth which is full of wax naturally this was not accepted by the people and they decided to ban the product.
  • When coloring in 800*800 pixels on an India map, to show disputed Kashmir territory Microsoft colored it in eight different shades and this led to fury in India and they banned the map. The difference in green means that Kashmir is shown as Non-Indian.
  • Pepsodent wanted to sell its toothpaste in south-east Asia by advertising that it “whitens your teeth “but they found out the local there use betel nuts to blacken their teeth.
  • Gerber, a U.S. firm wanting to sell baby food in Africa, displayed a baby on the packet but soon they realize that the product had flopped as in Africa what the content is in the packet that is displayed on the product.
  • At African port of stevedores saw the internationally recognized symbol of fragile which means broken wine glass and the staff working there assumed that the box contains broken glass and they threw it inside the sea.
  • McDonald’s spent the huge amount of money on making advertisement showing Chinese customer kneeling before a McDonald’s staff asking him to accept the expired discount coupon. The ad was called off due to lack of cultural sensitivity on behalf of McDonald’s in China begging is considered to be an embarrassing and shameful act.
  • Green is the favorite color for many Muslim countries but the same color is considered as a symbol for illness in Malaysia. White is associated with death, sadness and mourn in India, China etc but the same color is brides wedding dress in English country.
  • According to Hindu culture cow is considered as divine and sacred and the Hindus see the cow as a gift given by God. When McDonald’s entered in India in 1990 it created a big problem as they use beef and the small amount of beef extract in the oil. The Hindus considered this an offense and they protested by refraining from going to McDonald’s and asking them to stop the use of beef in their food products.
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The company should basically know what is the culture of the country in which they want the deal as this will help in setting a company in that country more easily and successfully. For an international business to be successful the company should make all efforts to try to understand the culture and create awareness about their culture and in this way try to solve the cultural differences mutually. From the above examples we can see that many companies have faced failure by not trying to understand the culture of other country but trying to learn from their failure as to where they went wrong is more important.

Thus understanding the culture of different countries help to develop and establish the business in that country. By creating general awareness and taking extra efforts to know about the culture and to take the keen interest in learning it will help in solving the cultural differences between the partners. Patience, courtesy and a little bit of curiosity will help in proper communication with each other. Due to lack of cross-cultural sensitivity, there are chances of the business failing to a great extent because what may seem to be right in one country may seem to be not acceptable in another country. So proper research has to be done when a company is planning to start a business in the new country.

What is the role of Cultural Sensitivity in International Trade - ilearnlot
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