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Chapter 11: Intercultural Communication and Business

Martin, Experiencing Intercultural Communication, 6e

Chapter 11

Intercultural Communication and Business

Study Objectives

After studying the material in this chapter, students should be able to accomplish the following

objectives.

1. Describe how demographic changes influence intercultural communication in business

contexts.

2. Identify and describe the role of power in intercultural business contexts.

3. Identify the primary work-related values.

4. Discuss how work-related values influence intercultural business encounters.

5. Discuss the role of language and communication style (in both virtual and face to face

encounters) in intercultural business.

6. Give an example of how rules for business etiquette vary from culture to culture.

7. Understand how diversity, prejudice, and discrimination play out in various domestic and

global business contexts.

8. Describe the role and goals of cross cultural and diversity training in business contexts.

9. Describe the impact of social and political events on business encounters.

Key Terms

• Affirmative action (AA)

• Americans with Disabilities Act (ADA)

• Collectivist

• Cross-cultural training

• Diversity training

• Equal employment opportunity (EEO)

• International negotiations

• Mentoring

• Multinational

Detailed Chapter Outline

I. The Domestic and Global Economy

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Martin, Experiencing Intercultural Communication, 6e

A. Domestic Growth

• There is increasing demographic diversity in the United States, and the workforce,

business ownership, and consumer trends are becoming increasingly diverse as well.

Business employees today are older, more likely to be female, include a growing

number of disabled employees, and more ethnically diverse than in the past.

• According to recent reports, the number of businesses owned by minorities increased

dramatically in the past 10 years.

o Latino-owned businesses recorded the largest increase—a 46 percent increase.

o Black or African American-owned firms increased by 35 percent.

o Asian American–owned firms recorded an increase of 24 percent.

• Women are also playing a larger role in the marketplace. There were more than 10

million women-owned businesses in the United States in 2016, generating over $1.6

trillion.

o The number of businesses owned by women of color in the United States has

increased even more dramatically, growing by 215.7 percent and increasing

revenues by 193 percent.

• Consumer trends are also increasingly diverse. African Americans, Latinos, Asian

Americans, and Native Americans have a collective buying power of $2 trillion, more

than doubling in the past 15 years.

o Asian Americans, the most affluent ethnic group, recorded a 180 percent increase

in buying power from 2000.

o Businesses also realize the enormous buying power of people with disabilities.

The U.S. Census estimates that about 13 percent of all Americans are disabled—

and steadily rising with the return of wounded military veterans.

• One other minority group with increasing buying power is the lesbian, gay, bisexual,

and transgender (LGBT) community.

o Regardless of attitudes toward same-sex marriage, many states in the United

States are poised to profit from wedding revenues.

• This increasing diversification in both the workplace and the consumer market has

tremendous implications for intercultural communication—from the supervisors who

manage diverse workers, to employees who work with diverse coworkers and

customers, to marketing and advertising specialists who craft meaningful messages

encouraging diverse customers to purchase products.

B. Global Growth

• While the U.S. economy has recovered somewhat from the devastating recession, its

trade deficit is now the highest since the financial crisis 10 years ago.

Chapter 11: Intercultural Communication and Business

Martin, Experiencing Intercultural Communication, 6e

• A lot of debate exists about the pros and cons of rampant globalization. Americans seem

increasingly skeptical about the benefits of globalization, free trade, and the common

practice of outsourcing.

• The economies of the world are now connected more than ever. One only has to look at

the U.S. economy, where the stock market rises and falls with breaking news of the

latest economic crisis in Europe or the political instability in the Middle East. And in

both domestic and international settings, intercultural encounters occur.

II. Power Issues in Intercultural Business Encounters

• Intercultural communication occurs in many different types of business settings, including

domestic contexts with multicultural workforces and international contexts.

• The pressure to meet expectations of powerful American multinational corporations has

led some Indians to change their language and cultural practices.

• Intercultural communication occurs in encounters with superiors, subordinates, and peers,

and with customers and clients. Power is also evident in these encounters.

• Although customers and workers come from diverse cultures, management ranks and

boardrooms remain almost exclusively white male enclaves and there is some indication

that diversity is actually decreasing—and the “heyday” of diversity in U.S. business

leadership has come and gone.

o Over the past four years, there has been a dramatic decline in the appointments of

“New CEOs” (women, African Americans, Latinos, and Asian Americans) in

Fortune 500 companies.

o In terms of gender and social class backgrounds, men still outnumber women by a

ratio of about 17 to 1 (almost 90 percent of the CEOs in 2015 were White men) and

the large majority of the new CEOs come from privileged economic backgrounds.

o Studies show that diversity is good for business.

▪ Ronald C. Parker, the CEO of the Executive Leadership Council, gives several

reasons. One is the common unconscious biases against people who don’t look

like a “typical” (aka White male) leader.

▪ Parker explains that the White men at the top “are comfortable with their

network of the people that they know, therefore the people that get those

opportunities tend to look like them.”

▪ In addition, some companies committed to diversity haven’t quite figured out

how to effectively recruit, cultivate, and retain women and minority talent.

▪ Finally, and ironically perhaps, an increase in diversity doesn’t seem to

promote more diversity but rather a feeling of “well that’s taken care of,”

which actually leads to less attention to diversity and fewer diverse hires.

• Business experts suggest that truly effective leaders realize that in order to be more

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Martin, Experiencing Intercultural Communication, 6e

successful in a diverse global marketplace, power needs to be shared.

• Power relations can also play out on a more interpersonal level.

• Communication across power divides can be very difficult, particularly when there is a

cultural difference in how power is viewed or how power distance is expressed.

o Cultural groups that believe in high power distance feel that an organization

functions best when differences in power are clearly marked.

o By contrast, cultural groups that believe in low power distance (as in most U.S.

contexts) feel that power differences, though very real, should be minimized and that

an egalitarian view is best.

III. Communication Challenges in Business Contexts

• Communication challenges in business contexts can reflect cultural differences in work-

related values, language issues, communication styles, and business etiquette, as well as

issues related to diversity, prejudice, and discrimination.

A. Work-Related Values

• Many cultures (such as most U.S. cultures) are individualistic, while others (such as

many cultures in Asia and in Central and South America) are collectivist—that is, they

place more importance on the individual in relation to groups.

o In countries with individualistic views, workers are expected to perform certain

functions with clearly defined responsibilities; a clear boundary exists between

their job and another person’s job.

o In collectivist countries like Japan, the opposite is true. That is, Japanese

organizations do not necessarily define the precise job responsibilities assigned to

each individual; rather, it’s the job of a work unit, a section, or a department.

o These cultural differences in values can present challenges to workers and

management.

o These value differences are not always hard and fast; international business

experts acknowledge that, with globalization, many of these differences are

blurred.

• Most Americans think that hard work is a virtue that will eventually pay off. To the

people of many other cultures, however, work is a necessary burden.

o Cultural groups that see work as having a low priority believe that, because work

is necessary and takes up most of the daylight hours, ways should be found to

make it more agreeable by creating a convivial workplace.

o The different attitudes toward work can lead to intercultural communication

conflicts in the workplace.

Chapter 11: Intercultural Communication and Business

Martin, Experiencing Intercultural Communication, 6e

• Another conflict in work-related values is based on the relative value placed on quality

versus efficiency and practicality. For most Americans, efficiency and getting the job

done for the lowest cost are the ultimate goals. However, people in many different

cultures hold different views.

o Americans would rather produce something expediently than elegantly (or

exquisitely). One might explain these U.S. business values partly by the fact that

the United States is a young country and that its people have less appreciation for

history and time.

• A related value has to do with whether the highest priority is placed on relationships or

on task completion. In most work contexts in the United States, the most important

thing is to accomplish the task.

o However, in many cultures, work gets done because of relationships.

o This seems to be the case in China where personal relationships are vital for

business success. The importance of personal relationships is such that there is a

special term, guanxi, which means a personal bond or connection that goes

beyond social and cultural connections.

B. Language Issues

• Language issues can come into play in various ways in business contexts.

• International business is sometimes conducted in English even when none of the

participants speak English as a first language.

• The same can be true in domestic business situations. With the growing cultural

diversity in the workplace comes linguistic diversity.

o To make working with a multilinguistic workforce easier, one shouldn’t assume

that, just because people are speaking a language other than English, they are

talking about one. A second suggestion in working with a multilinguistic

workforce is to speak simple, but not simpleminded, English.

o A non-native speaker can better understand language that is spoken slowly and

clearly, and that includes no big words.

• Another potential language issue involves communication between deaf and hearing

people.

C. Communication Styles

• Several elements of communication style are especially relevant in business contexts.

These include indirect versus direct, high versus low context, and honesty versus

harmony.

• People with a direct communication style simply ask for information from the

Chapter 11: Intercultural Communication and Business

Martin, Experiencing Intercultural Communication, 6e

appropriate person. However, a person with an indirect style might not feel comfortable

giving information, particularly when a problem exists and there is a need to save face.

o One way to obtain information is for one to watch how others who are respected

get information from one another and how they get it from one.

o Observe how subordinates, supervisors, and colleagues give and obtain

information, since the approach may vary with an individual’s status or

relationship.

o In general, to have good intercultural business communication, people need to

slow down and “sneak up” on information. Many Europeans don’t get right to the

point.

• Closely related to indirect/direct communication is the notion of high-and low-context

style.

o Low-context communicators (most U. S. Americans) prefer to make information

very explicit—expressed in words.

o High-context communicators (many Asians and Africans) prefer to communicate

more of the message nonverbally or contextually.

o This difference can result in challenging business encounters.

• Honesty is not always the best policy in intercultural business contexts; relational

harmony is more important in many countries in Asia and, in fact, sets the standard for

communicators.

o Communication scholar Wen Jia describes how effective communication is

defined in China: The kind of communication behavior best at creating and

sustaining harmony is regarded as the most effective and most competent

communication in Chinese culture.

o The focus here is not on truth, per se, but on achieving harmony. Achieving

relational harmony in China and many other Asian countries includes the notion

of facework, especially the importance of saving another’s face.

• U.S. Americans tend to focus on saving their own face—maintaining self-pride,

reputation, and credibility.

o However, for many Asians, the concept of saving face is more about

interdependence, achieving mutual honor and respect, not focused just for the

individual but for the larger group, the family, or organization.

o In a business context, this may mean allowing other persons room to maneuver,

and not saying the unvarnished truth.

o There are also cultural variations in how truth is defined. In many businesses in

Asia, there are a number of behaviors that would be considered acceptable in

everyday practices, whereas in the United States they would be regarded as decep-

tive, perhaps even unethical.

Chapter 11: Intercultural Communication and Business

Martin, Experiencing Intercultural Communication, 6e

D. Business Etiquette

• Business etiquette varies from culture to culture and is related to differences in values

and communication styles.

• In general, most cultural groups tend to be more formal in business contexts than U.S.

Americans are.

o Latin Americans attach great importance to courtesy. A well-mannered person is

described as muy educado in Mexico, and a prescribed set of behaviors is

expected in business settings, including ritual handshaking with and greeting of

staff members each morning. The same is true in many African countries. There,

high-level officials and business executives expect to be treated with the

solemnity and respect due their position.

• In general, when conducting business in most cultures, one should be very careful to

avoid excessive familiarity, especially in initial meetings; this means no slouching,

putting one’s feet up on a desk, or lounging in general.

• Etiquette is a traditional value that pervades French society, and business etiquette is

symbolized by properly engraved business cards, giving a professional title and

academic credentials.

E. Virtual Communication

• As more and more business interaction occurs online, it is worth considering

intercultural communication issues that may arise in virtual communication.

• First, there are access issues.

o The telecommunication infrastructure varies widely around the world, from very

high Internet and mobile technology access in North America, Europe, and the

highly industrialized Asian countries, to less coverage in South America and little

coverage in most of Africa (except South Africa).

o A second issue concerns the language used in e-mails or in videoconferencing/

Skype communication. In general, the guidelines given earlier also work virtually

(e.g., using simple language, avoiding jargon and jokes), whether written or video.

Additionally, communicating by e-mail, rather than video may be preferred when

there are language challenges, because it allows non-native speakers the time to

craft their messages and eliminates misunderstandings due to accent or other

paralinguistic cues.

o A third issue is the unique impact of values on virtual messages. For example, in

many countries where high-context communication is preferred and relationships

are highly valued, businesspeople may actually prefer face-to-face meetings over

virtual contact—especially for initial meetings.

Chapter 11: Intercultural Communication and Business

Martin, Experiencing Intercultural Communication, 6e

▪ In fact, China experts caution that technology should not be used there as a

substitute for interpersonal communication; that businesspeople are likely to

get limited responses if technology is used as the sole mode of

communicating, partly because the Chinese are reluctant to reply to

messages from people they do not know.

o A fourth issue concerns the impact of communication style in virtual encounters.

For example, when communicating virtually with people who prefer indirect

communication, and value harmony over honesty, virtual discussions (including e-

mail exchanges) should avoid direct mention of issues that might cause loss of

face for anyone involved.

F. International Negotiations

• Negotiating is a special communication task that occurs when business groups have

both common interests in working together and conflicting interests which may prevent

them from working together. Negotiation is the process of resolving the conflicts to a

mutually satisfactory end.

• There is abundant evidence that the cultural differences identified earlier (differences in

work-related values, communication styles, and even business etiquette) have an impact

on negotiation processes and outcomes. However, there are no comprehensive lists that

identify all cultural patterns, and negotiators often find themselves relying on

stereotypes and preliminary data.

• Here are some basic dimensions of international negotiations that may be affected by

cultural differences.

o Cultural groups may differ in their view of the basic concept of the negotiation

process. Some cultural groups may view negotiation as one party gaining at the

expense of the other, while others see it as a process where parties place different

values on each of the issue being negotiated and can then find effective trade-offs

with each other.

o Cultural groups may differ in the task or relationship priority: either a focus on

the specific project at hand, where negotiators spend most time exchanging

information regarding various alternatives (relationship is considered unrelated to

task), or a focus on the relationship between the two parties.

• It may be that U.S. American negotiators are recognizing how important relationships

are to some cultural groups.

o There may be a difference in the basis of trust. One side may believe that the other

party will fulfill obligations because of a signed contract (trust is external to

relationship), or because of the relationship between the two parties (trust is

internal to relationship).

Chapter 11: Intercultural Communication and Business

Martin, Experiencing Intercultural Communication, 6e

o There may be cultural differences in the preferred form of agreement. One side

may prefer agreement based on formal written contracts while the other side may

prefer an informal agreement based on the historical and social context of the

relationships.

G. Intercultural Relationship Building

• So many cultures emphasize the importance of relationships in effective business

endeavors that a general guideline for intercultural business success might be: learn how

to develop good relationships.

• A recent study asked business managers for suggestions to develop good

communication and business relationships in different countries around the world and

found some interesting results. The managers all reported that relationships were

important, though individualists (e.g., Europeans, New Zealanders, South Africans)

tended to see relationships as central to achieving business goals, whereas collectivists

(e.g., Chinese, Indians) saw relationships as more worthy just in themselves.

o They emphasized two important general processes, building trust and reciprocal

behavior, which varied along cultural lines.

o In most intercultural business relationships, it’s important to pay attention to

people’s places in the hierarchy and to recognize and respect symbols of authority,

to know whose views may carry more weight and whose opinions must be asked

before decisions are made.

H. Diversity, Prejudice, and Discrimination

• It may be interesting to identify cultural differences in workplace communication styles

and values, but the real challenge is knowing how to work with these differences in a

productive way.

• Until recently, in most U.S. organizations, there was one dominant culture with a

corresponding style of communication—White, Anglo Germanic, mostly Protestant,

and male.

o In terms of communication and values, this means it was individualistic and

emphasized directness, honesty over harmony, and task completion over

relationship building.

o Individuals who held other values and used different communication styles often

didn’t fit in—or worse, were not hired or promoted.

• Sometimes prejudice and discrimination are based on personal characteristics like

names. The discrimination may begin even before one is hired.

• Discrimination may also be based on skin color. There are few cases of blatant

Chapter 11: Intercultural Communication and Business

Martin, Experiencing Intercultural Communication, 6e

discrimination in the workplace today; rather (less explicit), discrimination based on

race and gender now exists more at higher levels of organizations where criteria for

advancement are more subjective—where it depends more on who you know than on

your specific job skills.

• Affirmative action (AA) policies are statutes that direct companies to hire a certain

percentage of women and minorities.

• Some minorities and women are grateful for the emphasis on diversity and the

implementation of affirmative action policies. But other women and minorities, while

grateful for a chance to compete, are troubled by the question of whether they are

viewed as having been given advantages.

• Companies have many reasons for addressing affirmative action and diversity issues.

o There may be moral grounds—a need to address the long history of racism,

sexism, and conflictual intergroup relations in the United States. There may be a

feeling that it is the responsibility of those who have benefited from this historical

pattern to begin to “level the playing field.”

o However, more often it is legal and social pressures—in the form of equal

employment opportunity (EEO) laws, affirmative action (AA), and the

Americans with Disabilities Act (ADA)—that cause companies to address

affirmative action issues.

o Finally, companies may address issues of multiculturalism and diversity because

they think it will have an impact on their bottom line—profit.

IV. Intercultural Communication Training in Business

• How do businesses respond to the challenges that has been outlined so far—cultural

differences in communication style, values, and issues of discrimination and prejudice in

business contexts? The answer is that they often employ intercultural professionals, experts

in an applied field of intercultural communication called cross-cultural training or

diversity training.

• Cross-cultural trainers tend to focus on cultural differences that affect business

effectiveness in international business settings.

o They conduct training sessions to help employees understand how value and

communication style differences—say, between Japanese and German workers—can

affect their working relationships and productivity.

o They also provide guidance and suggestions for managing these differences and

using the differences to improve working relationships and even bottom line profits.

• Diversity trainers tend to focus more on racial/ethnic/gender differences and on power

issues in domestic business context (i.e., in U.S. locations).

o Many diversity trainers help multicultural workforces within the U. S. work more

Chapter 11: Intercultural Communication and Business

effectively.

o They tackle issues of prejudice and discrimination, showing how these issues

sometimes operate at an unconscious level and how workers sometimes

unintentionally express prejudice and discrimination.

▪ A first step for these trainers is to help employees identify some of the negative

behaviors and develop an awareness of the issues; they then show the

devastating effect these attitudes and behaviors can have on a workforce

(conflict, absenteeism, etc.).

▪ They also provide suggestions for improving relationships and productivity

among culturally different employees.

• One response to these cultural differences and communication challenges that is related to

broad organizational strategies is a mentoring program.

V. Social and Political Contexts of Business

• It is important to consider the social and political contexts of business and to think about

how social and political events can affect business encounters.

o For example, terrorist attacks, both physical and in cyberspace, can have a

tremendous effect on business encounters, both domestically and internationally.

These acts can trigger a loss of confidence, and result in lost opportunities for

intercultural contact, fear of contact, and suspicion about particular cultural groups.

• It might also be considered how the current discussion on immigration affects intercultural

communication.

o Many economists have argued that the net impact of immigration is often positive,

particularly in the United States and Britain.

o Immigration issues affect intercultural business relations between immigrants and

native-born citizens. Increased anti-immigrant feelings may lead to increased

discrimination in the workplace.

• Another political issue impacting intercultural communication in business contexts is the

legislation related to same-sex marriage and policies related to transgender individuals,

leading to suspicion, anxiety, and uneasy encounters between LGBT individuals and others

in business contexts.

o Thus, it is important to remember that each intercultural encounter occurs in a social

and political contexts that goes beyond the few individuals involved.

Discussion Questions

1. How many multinational corporations can you name? What is the potential impact of their

product(s) in countries like China or India (or in other specific countries)?

Martin, Experiencing Intercultural Communication, 6e

2. Can your workplace be considered multicultural? Why, or why not?

3. At your present workplace, how do you refer to your boss and vice versa? Is this indicative

of a low or high power distance value in the organization?

4. Think of a few examples of differences related to individualism or collectivism that lead to

intercultural communication conflicts on the job

5. How do you view work? Is hard work a virtue or a necessary evil?

6. How might different attitudes toward work lead to intercultural communication conflicts?

7. Have you communicated with someone who has limited proficiency in the English

language? What strategies did you use? Are there any other strategies that you wish you

had thought of then?

8. What did the authors mean when they said, “To have good intercultural business

communication, people need to slow down and sneak up on information?”

9. How do the communication styles of honesty and harmony differ?

10. What are some of the etiquette roles at your place of business?

11. How do you feel about affirmative action policies? Do you think they are helpful or

harmful to minorities?

12. What are some of the reasons companies address affirmative action and diversity issues?

13. Suggest a few strategies for developing good communication and business relationships.

Classroom Exercises and Chapter Activities

1. Guest Lecture Activity: Invite a local businessperson who can represent both the domestic

and the global marketplace to speak to the class. Potential topics for discussion could

include changes brought about by the growing global and domestic diversity in personnel,

intercultural communication challenges to doing business internationally and domestically,

and global business etiquette. Be sure to allow enough time for students to ask questions to

the guest lecturer. Prepare the class prior to the lecturer’s visit by having students

brainstorm questions to ask him or her.

2. Guest Lecture Activity Variation I: Invite someone from a nondominant group who can

speak about his or her personal experiences in the workplace.

3. Business Etiquette Interview Assignment: This assignment focuses on exploring the

intercultural communication challenges faced by organizations doing business overseas.

Assign students to interview someone who works for a multinational company. Advise

them to follow the suggestions and guidelines below and to answer the following questions

by writing a three- to four-page paper.

a. Whom did you interview? Which company does this person work for, and what is his

or her position?

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Martin, Experiencing Intercultural Communication, 6e

b. In which country or countries does his or her company do business?

c. What does this company do to prepare its representatives for conducting business

proceedings with members of another culture?

d. What kinds of intercultural communication challenges related to language, work-

related values, attitudes toward work, or business etiquette has this person or the

company encountered?

e. Has this company ever contracted the services of a cross-cultural trainer to prepare

its employees for overseas business exchange? Was it helpful?

f. What skills does the interviewee think that you, a student of intercultural

communication, would need to master to work for a company doing business

overseas?

g. What changes does this company anticipate with regard to its overseas markets in the

coming years?

The suggestions detailed for interview assignments in previous chapters may also be

helpful to students.

4. Multicultural Market Assignment. Have students (in small groups or as a class) choose a

real or fictitious product, and have them (in small groups) design a marketing campaign

with brochures or videotaped commercials for two or more distinct consumer markets (Let

them use their imagination.). Students should be able to identify their demographic and the

rationale behind the approach or sales pitch.

5. Simulation Activity: Ecotonos, a multicultural problem solving simulation allows you to

create a variety of cultural variations with regard to communication style, nonverbal, and

values. Creating divergent cultures and then having them make business decisions in

multicultural groups provides the opportunity to understand the frustration and power

dynamics that can result from working together across cultures. Allow them 1.5 to 2 hours

for running and debriefing the simulation.