The Importance of Knowing a Foreign Country's Culture When Considering Business There

Culture influences how people interact with each other. In the business world, culture guides decision-making, behavior, thinking patterns and values. It is, notes Michigan State University, one of the least understood aspects of international commerce. Each country has distinguishing national and regional cultural characteristics. The success of any prospective foreign business partnership hinges on awareness of and respect for those distinctions.

Although culture encompasses more than etiquette, manners assume heightened importance on the international stage. Handshake practices, expected dress standards and acceptable physical distance during conversation require sensitivity to avoid misunderstandings. Attitudes toward humor, punctuality and gestures, when unknown, can create deal-threatening confusion. Differences in forms of address and name order can lead to unintended insults from greeting people incorrectly, notes business etiquette author Terri Morrison in a USA Today article. Small-business owners and executives who learn the business etiquette of a foreign country strengthen their odds for success.

Being well-versed in a country's culture goes a long way in preventing expensive marketing errors. Consumption patterns and buyer behavior reflect cultural influences and attitudes that differ country by country. They must be considered when interpreting market research used to make decisions on design, color, packaging, distribution and promotion. The act of naming a product, service or company could, if language implications are ignored, derail a promising business venture.

Negotiating challenges a business person's communication skills at home. The process becomes more complex when dealing with parties from a different country. Developing trust requires cross-cultural understanding helped by some ability to speak the language. Risk-taking and decision-making customs that steer negotiations relate to status and, at times, religious beliefs. Familiarity with a foreign colleague's cultural background enables a negotiator to understand how he arrives at a conclusion and what he considers to be important. The negotiator can avoid misunderstandings by learning how people in a country use body language, time and protocol to communicate unspoken messages.

The practice of gift-giving varies from country to country. Some cultures, such as Japan, place significance on exchanging gifts. Many western European cultures such as Belgium and Germany, find it unnecessary. Some view gift-giving as a form of bribery to be avoided. Gift-giving protocol must be understood to avoid cultural mistakes, such as arriving empty-handed or presenting a gift in front of others when the cultural norm calls for a private exchange. Executives can enhance their business-building diplomacy by knowing the importance of using the correct color of wrapping paper, the proper hand for presentation and which products make unacceptable gifts because of religious beliefs.