Conducting International Business? Check This Out First:
Culture is a tricky thing. It can be hard enough to do business in your country, let alone to strike deals across international borders, where whole new minefields of unspoken assumptions, pregnant gestures, and deeply held beliefs await. Last May, I spoke with author and INSEAD professor Erin Meyer about the challenges of cross-cultural recruiting, but working with people from other cultures in any capacity poses its own unique challenges.
Luckily, today’s business people don’t have to go blindly into the international market. They have the benefit of extensive sociocultural research on their side, not to mention interactive tools like Towergate Insurance’s “Cultural Guide to International Business.” Created by digital marketing and SEO agency Builtvisible — the same company responsible for the Small Business Skills Challenge we reported on in November — the “Cultural Guide” uses data collected from 101 countries around the world by the Hofstede Centre, as well as input from author and interculturalist Chris Smit, to create a visual representation of the national cultural differences that are relevant to international business.
The “Cultural Guide” measures countries along six metrics, also developed by the Hofstede Centre:
- Power Distance: how willing are people with no power to accept the unequal spread of power in their country?
- Individualism: are individuals loyal to themselves first and foremost, or do they put the group ahead of themselves?
- Masculinity: despite the title of this metric, it’s not strictly a measurement of gender differences. Rather, it measures “the extent to which people value the achievement of goals and the importance of status over the process of goal achievement.” In other words: are people mostly goal-oriented (“masculine”), or do they place more value on the process that leads to achieving the goal (“feminine”)?
- Uncertainty Avoidance: do the people of the country prefer to avoid the unknown via strict rules and regulations, or do they handle ambiguity well and rely less on rigid, codes and structures? Do people take risks or play it safe?
- Pragmatism: are people practical and future-oriented, or do they take a more normative approach to the world, preferring to focus on the present?
- Indulgence: do people value (and indulge in) leisure and self-expression, or do they prefer restraint and strict social norms? (It should be noted that the “Cultural Guide” calls this metric controversial and speculative, as much of the data used to measure it is incomplete.)
Countries are measured on a 100-point scale in each metric; lower numbers mean lower scores in a given metric, and higher numbers mean higher scores. Explanations of each metric also include example characteristics of countries and implications for business in those countries, depending on a country’s scores. For example, the tool states that people in countries with high individualism scores tend to be more task-oriented; people in countries with low pragmatism scores tend to value and respect tradition. Likewise, when doing business in countries with low masculinity scores, the tool says it’s better to reach for compromise than to go for confrontation; when working with businesses in a high power distance country, people need to respect the chain of command.
More useful than checking out each country’s individual scores — fascinating as that may be — is using the tool to compare two countries with one another. A user can choose their country and compare it with a country in which they plan on doing business. The tool then generates a chart that shows the overlap (and differences) between each country and the scores of each country in each metric. Here’s an example comparison between the U.S. and Bulgaria:
Olivia Wiltshire, digital executive at Builtvisibile, says she hopes people will be able to use this tool as means to help them more successfully and confidently enter into business with companies in other countries.
“For example, the guide has the capability of informing the user whether a country has a high level of masculinity or not,” Wiltshire explains. “If a country is masculine, then making decisions — even if they are bad decisions — is seen as better than making no decision at all. Knowing this sort of cultural information before entering business with this country will therefore help you [mold] your approach and perhaps even adapt your strategy before opening up business conversations or beginning meetings.”
Wiltshire says the guide should be beneficial to businesses of all size, entrepreneurs, “and even people [who are] just starting up.”
“Ultimately, I think the information in this guide is something to take note of – especially if these people are looking to go global or do business in/with different countries,” Wiltshire says. “At the same time, I think this guide is also a useful tool for anyone interested in becoming more culturally aware.”