Why Understanding Cultural Differences Is Great For Business

Culture refers to the values, norm and traditions that affect the way a member of a group typically perceives, thinks, interacts, behaves and make judgements. One of the biggest downfalls of corporations is not recognising the importance of understanding culture when operating a business. The assumption that culture plays little part in an organisation’s performance is wrong. Because culture shapes the way an individual or group behaves, it can affect certain things. For example, the way organisations should market their brands effectively to attract a global audience, or to handle external stakeholder relationships.

As with any form of understanding, understanding why it is so important is the first step.

Understanding Culture Will Allow You to Truly Connect with Your Customers

People’s purchasing behaviours, ultimately, are shaped by their environment and their values. Therefore, when you are creating new products or services in different countries or regions, it is important to conduct research beforehand about the target market. Consider characteristics like the role of gender in the culture, their decision making process and what they value the most. Having a deep understanding of what motivates them will differentiate you from the other businesses, allowing you to connect more with your audience.

Understanding Culture Will Enable You to Foster Better Relationships with External Stakeholders

If you have investors, or deal with suppliers from other countries (like most organisations), then you know how important it is to foster a good relationship with them. If your company relies on stakeholder money or with foreign suppliers, you should do your best to understand how they do business. After all, without them, your company could be worth nothing.

Different countries do business differently. For example, western cultures are often more informal, where business leaders often refer to each other by first names. In countries like Japan, this is frowned upon as it indicates disrespect. Being aware of the differences is extremely important, as your message can be conveyed differently to you what you intend.

Understanding Culture Is Essential for Organisational Decision Making

Making company-wide decisions without consideration of the cultural challenges can be detrimental. If it affects your whole organisation, consider all of the factors that will affect the success of the organisation-wide decision.

For example, when implementing company-wide decisions like implementing a time tracker to monitor work, it is important to consider how some individuals will be affected by the decision. Some cultures may feel it is an invasion of privacy and others may think it is a great initiative and be motivated by it. Causing a split in the company because of bad decision making will promote bad workplace culture and thus, lower productivity.

Understanding Cultural Diversities Builds Workplace Culture

To sum it up perfectly, understanding different cultural backgrounds is beneficial for internal and external stakeholders. Promoting diversity and implementing policies to support it will inevitably create a positive workplace culture. There is already a heap of research about why workplace culture is so important, the first step is understanding why.

Culture awareness is a large focus of education for us at Innov8. We have held numerous successful seminars before. If you are interested, check this page out or contact us.