Many American companies have an international presence and it is growing rapidly. From 1983 to 1993, only one company, McDermott International, incorporated overseas. From 1994 to 2004, twenty-eight companies incorporated overseas. From 2005 to mid-2014, 44 companies incorporated overseas (“American Companies,” 2014). In 2016 alone, there were over 46,000 mergers and acquisitions completed world-wide (“M&A Statistics,” n.d.). It is apparent that organizations who wish to globalize their market will have to become proficient with international and intercultural communications. The good news is that organizations will have success if they do so.
Intercultural communications is synonymous with international communications. It is individuals from different cultures or countries communicating (Moran, Abramson, & Moran, 2014). The United States has a fundamentally different culture than China who has a fundamentally different culture than Argentina. The reasons why corporations are going global is to enter new markets or to utilize resources only found in that area. Today, many are utilizing the labor resource because it is cheaper as well as the raw materials to do manufacturing (Roemer, 2015). Moran, Abramson, and Moran (2014) provide a list of cultural differences that need to be learned. Among them are values, social norms, stereotypes, roles in society, language and its dialects, conflict management, negotiation preferences, body language, body gestures, and face-to-face preferences. This is not an exhaustive list which shows how different we really can be.
Within the cultural differences, one also has to be cognizant of individual differences. As we touched upon diversity in the course, that has to come into play as well. At this point, it would seem that it is impossible to learn everything about a culture enough to be successful. This is correct, however, there are a number of steps a corporate can take to be successful. The first an obvious step would be to learn the basics about the culture such as spoken languages, how introductions are handled, how basic human interaction is handled, and then dive into deeper subjects. Moran, Abramson, and Moran (2014) describe the personality similarities that are common across cultures. They provide a few ways to learn about them such as the Myers-Briggs MBTI personality type indicator, the Big Five personality types, and human dynamics which is comprised of three principles of being logical, relating to people, and practicality.
Putting this against real research, we see that the national culture of an organization affects how the “foreign” organization is perceived by the employees. The best method for getting up to speed quickly about another culture or organization is to find a local person to assist. Even when you have all of the steps of an acquisition process detailed and both sides understand, executing the steps will still face cultural barriers including not fully understanding the cultural differences. Focusing one’s efforts in two specific areas has shown to have the best results: targeted learning and experience accumulation (Very & Schweiger, 2001). The targeted learning focuses on acquiring the knowledge about the other culture and the organization. The experience accumulation focuses on a lesson’s learned type of approach and incorporating the local person.
I believe one can pull informational topics from any chapter of the textbook and apply it to the research study. The research indicates that there are cultural barriers to successful negotiations and integration and to overcome those, one must be as educated as possible and acquire as much experience as possible with the other culture. Moran, Abramson, and Moran (2014) discuss the various ways different cultures prefer to handle business. Most of the Asian countries want to get to know you before making any deals. While this may be counter to western cultures who want to close the deal as quickly as possible, spending that extra time may prove beneficial as it will build up the learning and experience.
Corporations who wish to do business in another country or culture need to ramp up their intercultural communication skills. They need to learn about the culture, social norms, and even the personalities of those with whom they will be negotiating. Research shows that by doing so, an organization can increase its effectiveness in closing the deal. The organization needs to have a targeted learning system and needs to get experience with that other culture. Research shows that the best way to accomplish those two tasks is to find a local resource to provide the nuances that are not obvious to the foreigner.
References
American Companies that Have Incorporated Overseas. (August 6, 2014). The Washington Post. Retrieved from https://www.washingtonpost.com/apps/g/page/business/american-companies-that-have-incorporated-overseas/1238/
M & A Statistics. (n.d.). Institute for Mergers and Acquisitions & Alliances. Retrieved from https://imaa-institute.org/mergers-and-acquisitions-statistics/
Roemer, T. (2015). Why it’s time to bring manufacturing back home to the U.S. Forbes. Retrieved from http://www.forbes.com/sites/forbesleadershipforum/2015/02/02/why-its-time-to-bring-manufacturing-back-home-to-the-u-s/#3a933a957026
Very, P. & Schweiger, D. M. (2001). The acquisition process as a learning process: Evidence from a study of critical problems and solutions in domestic and cross-border deals. Journal of World Business, 36(1), 11-31. Retrieved from http://www.sciencedirect.com.ezaccess.libraries.psu.edu/science/article/pii/S1090951600000523?np=y&npKey=c918d9dc28dc8be55ac44399d0912ff315bad015078bdc292de9fa048563e45c
Hello,
Learning about the different culture is definitely something that companies big or small should definitely need to learn more about. We live in a global market which in turns means that eventually we will be conducting business with other countries. As global leaders we need to educate ourselves in other cultures and how they communicate. Communication is key to any success in business, so if we don’t have good communication skills we can very well damage relationships that we might need when working with people from another country. If we look at it from the inside, even companies here at home who have offices in other countries they need to learn to communicate with people from that country. I have work for a company that if I have an issue with something and call in our help line I might get someone from India answering my call for help so I have to learn how to communicate with person and watch what I say because what might not seen bad here at home might bad to that person.