When Might the Differences Between Law & Cultural Practices Affect Global Business Operations?

Cultural differences can be tricky to navigate when you take your business overseas. Foreign cultures can have different attitudes from the United States on race, sex, ethical business conduct and countless other issues. Adapting to that is tough enough, but it's even tougher when the accepted practice in another culture conflicts with American law.

Federal law forbids American companies from paying bribes to officials overseas. In some nations, however, greasing palms is an accepted practice, even if illegal. In Mexico, for example, "mordida" -- bribery -- is standard if a company wants to set up a factory or get the necessary permits or business licenses processed in a reasonable time. Some business owners say they've never paid a bribe, but others opt to break the law and pay off officials.

American law bans you from discriminating in the workplace, no matter where your business operates. That may cause you trouble in places where discrimination is accepted and approved. Some countries view women or African-Americans in positions of authority with hostility, but if you demote a supervisor because of that, you're in legal trouble. The exception is if you're obeying foreign laws. If you do business in a country where women can't drive legally, you can turn down a female employee for a job that requires driving.

It's just as illegal under American law to sexually harass an employee overseas as an employee in Kansas City. This may be a hard attitude to drum into people you hire in foreign countries. Many countries have no legal concept of sexual harassment or have only passed laws on the subject recently. Foreign administrators in your firm may take it as a given they can get away with harassment, or that nobody will punish them. It's your responsibility to explain that different standards apply in a U.S. firm.

The flip side is that there may be times that what's legal in the United States may clash with what's approved behavior overseas. In some Asian countries, workers expect lifetime employment. Even if you can legally fire your employees, the remaining staff may be shocked you did it. Europe's business culture assumes and in some countries legally requires unions have a say in company operations. If your view is that the union is an adversary, that may be a tough adjustment.