Is Intercultural Communication Competence a Key for Successful Cross-cultural Business?

Term Paper, 2011

30 Pages, Grade: 1,0


List of contents


1 Basis representation – culture, communication, competence

2 Cultural influences on communication situations

3 Cultural implications on management

4 Case studies and examples for intercultural management problems




The closeness between different people has increased through globalization, thereby enabling further intercultural contact. Vast distances can be reached within a short period of time, and people living in faraway countries can become friends. Globalization also leads to an emphasis on cultural differences, so that one's own cultural traits stand in harsh contrast to foreign cultural qualities. Additionally, the clash of different cultures, prejudices, and misunderstandings can result in conflict. In order to avoid such problems, an understanding of cultures through intercultural competence is important; otherwise, rejection or failure may result from not understanding a foreign culture's behavior, or misinterpreting it as threatening. The increase in worldwide networking also forces companies into the international market, in order to remain on pace with their international competition. A crucial factor for the success of intercultural communication is cross-border cooperation. Cooperation with foreign cultures is part of the daily routine for many companies, yet their different ways of thinking and acting may clash rapidly. Even with the best of intentions, cross-border activities still sometimes fail - an indication that problems caused by cultural differences are not sufficiently considered, or that they are much bigger than it had been first thought by the companies. Additional qualifications for employees are a precondition for successful cross-border cooperation, enabling them to better understand the thinking and behavior of the other parties involved and meet the challenges arising in intercultural situations. Intercultural competence can be considered a key ingredient for success, and may reduce difficulties or misunderstandings that often have a decisive influence on profits and losses in intercultural business. Although intercultural knowledge is important for further concept development in intercultural management, there is no universal solution that can be applied in intercultural situations. Nevertheless, companies should continue to further the use and application of intercultural competence.


Why is intercultural competence of such huge importance in today´s world? The growing closeness between people from different cultures throughout the world – caused by globalization and technical progress – not only enables intercultural contact, but makes it unavoidable. However, the effects of these developments are not only positive ones. When very different lifestyles and attitudes clash conflicts between cultures, existing in such close proximity, are inevitable. The inability to understand attitudes of foreign persons, together with gradually dissolving borders, increases the threat of hostility between various groups of people, unless they are able to find ways of connecting through common ground. Moreover, prejudices lead to mistrust and rejection, which in turn can lead to conflicts. To counteract these negative developments, intercultural knowledge is of huge importance, since of course there is not only one universal, worldwide culture. As soon as two cultures come into contact, there is potential for conflict. The people of these different cultures behave in a way that seems “natural” to them; however, the problem is that the “natural” behavior of the two (or more) cultures does not necessarily correspond. Hence, their “truths” are not the same and misunderstandings, problems, and conflicts can arise. (Heringer, 2004, p.108) In spite of, or perhaps even due to progressive globalization, cultural characteristics are emphasized, and should be cultivated and maintained. As a counter move to the increased international network, people are more conscious of the familiar and the local and take comfort in them. Thus, it becomes increasingly important to be aware of the special traits of one´s own and other cultures and to use this awareness to find similarities and differences. A deeper understanding of cultural connections and intercultural competence as part of one's behavior are crucial preconditions for this. The more intensively one deals with foreign cultures, the less they seem to be threatening; on the contrary, they become more interesting, and one wants to get to know more about them. (Interkulturelle Kompetenz online)

Changed basic conditions like the increasing interconnection of the world economy, the economical integration of Europe or the less expensive and time-saving availability of resources force more companies to internationalize their activities. (Herbrand, 2000, p.1) The integration of national markets leads to an increase in cross-border cooperation. However, cross-border activities are a critical factor for success. More and more people cooperate with members of foreign cultures and act in cultural situations, where different thinking and behaving clashes. (Herbrand, 2000, p.2) Intercultural collaboration is, for many companies, part of daily life, not only in top-level management. Because not only expatriates – that is, employees with intercultural competence and work experience across intercultural boundaries - but also employees in the company's home country are constantly in contact with members of different cultures: either as part of an intercultural team, due to cultural diversity within the company, or directly with international business partners and clients. Additionally, modern technology enables contact with foreign colleagues or partners without leaving the confines of one's own culture. Nevertheless, numerous cross-border activities fail; obviously, economic success or the best of intentions and mutual openness are not enough. The problem is that difficulties produced by culturally-caused varieties in thinking and behaving, is insufficiently taken into consideration. (Herbrand, 2000, p.3) An important precondition for a successful cooperative effort is, increasingly, a complete understanding of all of the persons involved. Companies confronted with intercultural problems need additional qualifications and abilities to fulfill their requirements. A capacity for intercultural competence increases the chance of success in intercultural cooperation and reduces initial difficulties, misunderstandings and failures. (Herbrand, 2000, p.4f.)

Companies are expanding worldwide; their subsidiaries are not only in Europe and the USA, but also increasingly in Asia and Arab countries. Despite this rise, the Arab world and Asia are still considered to be the most difficult markets. One reason might be the significant cultural differences separating these two cultures from western industrial nations. This paper explores the question of whether cultural differences have an influence on the success or failure of a business enterprise, and whether intercultural competence is the key for success. In order to demonstrate the difficulties resulting from intercultural variety, I chose to present three very different regions: the USA as a western culture representative, China for the Asian region, and the Arabian Peninsula as a whole region, representing Muslim cultures. In the following paragraphs, I am going to describe the basic concepts of culture and communication which will provide a rudimentary understanding for the further contents. Afterwards I will continue by explaining significant aspects of intercultural communication and intercultural competence. In a second section, the influences of culture on communication situations, with reference to various cultural dimensions, are described. I am going to expand Hofstede´s 5 cultural dimensions by two more dimensions, since these two influence cultural behavior significantly, as well. After demonstrating these pre-existing cultural differences, cultural implications on management and difficulties resulting from a lack of intercultural knowledge are described. And finally, the aforementioned information will be used to describe intercultural management problems, especially in the three chosen regions, and to show solutions. In the closing section, I plan to answer the question of whether or not intercultural communication competence has a positive influence on cross-cultural business.

1 Basis representation – culture, communication, competence

One of the first theories about culture was developed in the 19th century by E.B. Tylor. He defined culture as “that complex whole which includes knowledge, belief, art, morals, law, custom and other capabilities and habits acquired by man as a member of society.“ (Nagels, 1996, p.6 quoting Tylor, 1958, p.1) However, he equates culture and society, although the aforementioned elements are interdependent and are determined by culture. (Nagels, 1996, p.6) Moreover, culture can be seen as „an accumulated pattern of values, beliefs, and behaviors shared by an identifiable group of people with a common history and a verbal and nonverbal symbol system.” (Neuliep, 2000, p.15) This depiction of culture illustrates the modality of how we act and behave within a society, intuitively using culture. These rules, norms, and values are unconsciously familiar to us, build the basis of our lives, and influence our behavior. According to this „culture is not a material phenomenon; it does not consist of things, people, behavior, or emotions. It is rather an organization of these things. It is the forms of things that people have in mind, their models of perceiving, relating, and otherwise interpreting them. As such, the things people say or do, their social arrangements and events, are products or by products of their culture as they apply it to talk of perceiving and dealing with their circumstances.” (Heringer, 2004, p.106) That is why culture influences our communication and vice versa. To be able to interact with other cultures, it is important to understand them and their culture´s influence on communication. (Gudykunst/Kim, 2003, p.17) Culture is all-pervasive and affects every person. However, one is not aware of its influence, because culture is invisible. That is why many people are not able to reflect their own culture. They only recognize pieces of it, when they interact with people from another cultural environment. It is very hard to define the term culture, because this term has changed throughout the course of time and encompasses many different fields. It has been understood differently by various societies, in various places, and at different times. Several meanings of culture have been developed, and many of them still exist. Accordingly, culture seems to be a very abstract and variably applicable term, classified by different meanings. Despite these various definitions, it is not possible to find the one and only culture in a given society, because even within a culture, there are many nuances and exceptions to be found. Culture is a system of collective values, norms and behavior, which are learned from birth and considered natural. It is the mode in which people behave and live, it is the festivals they celebrate, or the products they develop. Culture has an effect on the behavior of members of a certain group, sets limits, and opens possibilities. It does not belong to just one group, nor can it be assigned to one individual; everyone is part of the make-up of their culture.

Communication is a process that develops permanently and therefore differs from one culture to another. (Neuliep, 2000, p.7) Furthermore, it is a mutual exchange of verbal and nonverbal information and a coordination of behavior. As part of this interaction, understanding and making oneself understood takes priority. (Nagels, 1996, p.7) At least two people take part in typical human communication. One produces something in an active way; the other one passively understands it. These roles may change. (Heringer, 2004, p.9) „Communication involves the use of symbols. Symbols are things used to stand for, or represent, something else. Symbols are not limited to words; they also include nonverbal displays and other subjects” (Gudykunst/Kim, 2003, p.5) In this context, the axioms of communication by Paul Watzlawick are significant. (Heringer, 2004, p.18) The most important and well-known axiom should be given special mention: “Man kann nicht nicht kommunizieren” [You cannot not communicate]. The meaning of this axiom is simply that everything that a human being is able to do, can be interpreted. Even if he is doing nothing it can be understood either as an omission or as an intended avoidance, which could lead to misunderstanding. The same goes for silence: one can either remain silent to let another person finish speaking or to make a statement and thereby achieve a desired effect. The interpretation of behavior and what it actually means depends on the context. Especially in intercultural communication, situations such as this can lead to conflicts, because even silence can be interpreted or handled differently in different cultures. That is to say, silence, not looking in someone’s eyes, unexpected inactivity, etc. have very different cultural meanings. Although the speaker cannot be held responsible for how his words are interpreted, he should be aware of his actions and their intrinsic meanings. (Heringer, 2004, p.19) „Because we learned much of it unconsciously, we usually are not aware of our behavior when we communicate.“ (Gudykunst/Kim, 2003, p.9) Communication takes place everywhere and all of the time; that is why it is a primary reason for conflicts.

Intercultural communication takes place when two people from different cultures exchange information. (Gudykunst, 2003, p.260) Many scientists restrict intercultural communication to face-to-face-communication. (Gudykunst, 2003 p.163) „In intercultural Communication settings the communicator cannot simply articulate a message using his own frame of reference and assume that a receiver or audience from a different culture will understand the message in the same way as he meant it originally.” (Herbrand, 2000, p.57) This course of action can even be problematic when the participants in a conversation have the same culture. The communication process in intercultural contexts occurs under complicated circumstances. Every person sees the world in a different light which has different effects on each individual. That is why people may understand a given message very differently than it was intended. With this in mind, the adaptation to a partner´s cultural frame of reference is essential for successful intercultural communication. Still, there is a huge threat of information loss and information distortion. Another obstacle in intercultural communication arises when at least one of the participants has to use a foreign language. (Herbrand, 2000, p.57f.) In this context, it should be noted that our thinking is influenced by the categories and words that are present in our native language. Language content adapts itself based on what is important in a respective culture and thus, forms the basis for the comprehension of the other cultures. As culture has a huge influence on the communication of a society, communication differs from one culture to another. In intercultural situations, it makes us insecure and nervous, since we are not familiar with the other culture. A possible way to avoid these feelings is to anticipate the behavior of the other person and then adjust one's own verbal and non-verbal behavior to this. (Neuliep, 2000, p.21)

In terms of the economy, intercultural communication has a particular significance. Many western companies are multi-sited, with subsidiaries in eastern regions or Third World countries, in order to reduce their costs and to insure their supplies of natural resources. Many international corporations have grown and gained access to the Asian market as a new trading partner. Difficulties arise, since employees of a company have to communicate with people from foreign nations and even foreign cultural environments. In contrast to tourists or exchange students, the employees of these enterprises do not have the possibility to withdraw from intercultural situations. (Nagels, 1996, p.9) Thus, the managers of these firms are under pressure not only to initiate contact, but also to achieve certain results. For this process they only have a minimal amount of time and, therefore, cannot go through the long process of adapting to the foreign culture in question. All these factors have to be considered, when planning a project with intercultural employees or business partners, in order to make sure that the cooperation does not face insurmountable problems. However, only overcoming the language barrier does not solve every problem: misunderstandings and tensions can also be created from the ignorance of nonverbal signals and behavior in the context of communication. (Nagels, 1996, p.10f.) An example of conflict potential in intercultural communication is the "symmetry” respectively “complementarity" of the communication process: in every intercultural situation, symmetrical communication should be present, so that the opportunity for action is equally distributed to the conversational partners, and no dissimilarities exist. Complementary communication arises, when power plays a role. That means that one partner is superior and the other partner inferior in a communication situation. When this happens, it can lead to a detrimental development or international conflict, because one partner does not feel respected or likewise wants to act in a dominant way. (Heringer, 2004, p.22)

The importance of intercultural competence is increased in the course of globalization and through access to new markets. Experience shows that interculturally trained managers are more successful in their foreign dealings. Moreover, it is required in order to associate with unfamiliar ways of thinking and behaviors which occur in the context of intercultural cooperation. Clear knowledge of the key components of human adaptation to foreign culture and, therefore, clarity as to what intercultural competence actually means, simply does not exist. Still, intercultural knowledge - that is, the knowledge of the similarities and differences between cultures - is an essential component of understanding culture. (Herbrand, 2000, p.43) Even so, it is difficult to apply theoretical knowledge to recognize problems in intercultural situations and to react to them. This ability can develop by training intercultural sensitivity - that is to say, empathy, tolerance, openness, and patience. Using this intercultural knowledge, problems or conflicts, when interacting with people from another culture can be avoided or overcome and make the encounter more effective. (Herbrand, 2000, p.44) However, intercultural competence can vary depending on the culture. This means, someone can be interculturally competent while talking to an Asian, but completely incompetent when talking to a Frenchman. In order to achieve successful intercultural communication intercultural competence comprised of knowledge, motivation, and behavior is necessary. (Herbrand, 2000, p.43) In other words, knowledge that goes far beyond the knowledge of a language to behavioral and communicative patterns of foreign cultures, as well as the ability to adjust to these characteristics, is needed.

A possibility to train intercultural competence is the method of the "culture assimilator." This program teaches the participants to change their perspectives and see situations in the light of another culture, without giving up their own identity. (Heringer, 2004, p.222) When you have an idea of why certain incidents and behaviors happen in a certain way, or why your partner in an interaction pursues certain goals, social incidents and interactive processes are foreseeable, easy to influence, and understandable. The "culture assimilator" is based on this same assumption. (Herbrand, 2000, p.189) Normally, the participants read short stories, called critical incidents that portray short and common intercultural situations. Although the stories appear to be units unto themselves, they go far beyond the text and explanations are only logical within the setting. These stories always contain a critical point and discuss cultural differences between the interacting parties or problems with adapting to another culture. Out of four possible answers, the trainees choose the one that would best explain the critical situation. After making their choice, the trainees get a detailed solution and learn if their answer was right. If they choose the wrong answer, they are asked to work on this situation again. (Heringer, 2004, p.225, 233) Critical incidents are a realistic method to teach intercultural abilities and to strengthen the understanding of foreign cultures. The "culture assimilator" puts the participants in situations they could easily experience in a foreign culture. The immediate feedback within this intercultural training allows the participants to learn by experience and to correct their failures on their own. The "culture assimilator" teaches cultural standards that sensitize the participants to the pattern of orientation of their own culture and put them into perspective.

2 Cultural influences on communication situations

A lot of things that we have learned from an early age, we take for granted and consider natural. Indeed, many of them are just learned behavior. That is, what we expect to be cultural in fact is culturally-learned knowledge that is taken for granted and therefore seems natural. This is exactly what makes business abroad so difficult for managers. When we meet someone from another culture, they seem to be unfriendly or strange, and misunderstandings or even conflicts can arise. The Dutch social psychologist Geert Hofstede found out that the differences between national cultures can be attributed to several dimensions. Thus, he distinguishes 5 cultural dimensions of human and social cooperation, according to the moral concepts of different cultures. These dimensions have a crucial effect on the behavior of every person. In the text that follows, I will explain Hofstede´s 5 cultural dimensions: Power Distance, Individualism, Masculinity, Uncertainty Avoidance, and Long-term orientation, as well as a polychronic time use and high context cultures, which also have a huge influence on the respective cultures. The examples of these different values represent polarized statements; however, most of the cultures fall somewhere between these two extremes. The dimensions are revealed differently in every society and are only indirectly visible: in common norms, rules, relationship patterns, or the behavior of people in their families, in school, the public sphere, or at work. (Herbrand, 2000, p.27f.; AFS Interkulturelle Begegnungen, p.5) Although the cultural dimensions mix and overlap in reality, single dimensions are inclined to prevail.

Power distance describes the distribution of power within a society and the acceptance of unequal distribution by less powerful people. The members of a culture understand power as part of society and feel that superiors differ from inferiors. (Gudykunst/Kim, 2003, p.75) The higher the power distance, the more the power distribution differs in school, at work, within the family, or in politics. Unequal rights, respect, and obedience towards superiors characterize high power distance cultures. That is why, in high power distance cultures, the hierarchical order of companies concentrates on few employees, and dependence on superiors is considered normal. Frequently, the powerful people enjoy privileges, and the power distance has an effect on social and economical acceptance. People living in these cultures accept inequality, although they think that power should be restrained by a feeling of responsibility. (Herbrand, 2000, p.28f.) In contrast, people in low power distance cultures take their own initiative, and each individual has the same rights. (AFS Interkulturelle Begegnungen, p.5) An emotional closeness exists between employer and employee - that is, interdependence between less powerful people and their superiors - and an advisory management style is preferred. (Herbrand, 2000, p.28) Members of this cultural characteristic think that only justified and reasonable power should be used. (Gudykunst/Kim, 2003, p.75) Respect is considered a sign of freedom in low power distance cultures, while the other ones regard tact and money as a sign of freedom. The ability to interpret unfamiliar behavior is important in this case, because power distance has a direct influence on the relationships between people, especially when this relationship includes power and authority distinctness. This is important for business relationships, because high power distance cultures accept the order of superiors without questioning it, but members of low power distance cultures prefer decentralization and working in collaboration with superiors. The United States and Germany are examples for low power distance, whereas Saudi Arabia belongs to the high power distance cultures. (Gudykunst/Kim, 2003, p.77 f.; Neuliep, 2000, p.59) According to Hofstede, differences in power distance result in 4 different types of managers. The harshest contrast exists between manager 1 and manager 4: manager 1 decides rapidly and informs his employees about the decision. He expects his instructions to be fulfilled without any difficulty or resistance. Manager 4, however, convenes everybody for a meeting when an important decision has to be made. The whole group studies the matter and tries to find a consensual solution. Only when no agreement can be reached does the manager make the decision by himself. (Neuliep, 2000, p.60f. quoting Hofstede, 1980, p.420) “a) The larger the power distance, the more frequent outgroup disagreements; b) the smaller the power distance, the more likely a manager uses peers to handle disagreements; and c) the smaller the power distance, the more likely a manager uses subordinates to handle disagreements.” (Gudykunst, 2003, p.136f.) In low power distance cultures the manager tries to reduce rank differences, and mediates conflicts with the help of colleagues and employees.


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Is Intercultural Communication Competence a Key for Successful Cross-cultural Business?
European University Viadrina Frankfurt (Oder)
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Intercultural Management
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Susann Hajek (Author), 2011, Is Intercultural Communication Competence a Key for Successful Cross-cultural Business?, Munich, GRIN Verlag,


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