FX International Payments
By Megan Doyle
A global mindset is "the ability to recognize and reflexively adjust to cultural signals so that your effectiveness is not compromised when dealing with people from different backgrounds," according to a recent study by intercultural training company CultureWizard.1 The study found that import-export trading companies "achieve far more of their top strategic business priorities when they are more effective at recognizing, and adapting to, other cultures' work styles and business behaviors."
CultureWizard's research surveyed more than 1,300 professionals from import-export traders around the world, and differentiated respondents based on their companies' business performance. High-performing import-export traders turned out to rate themselves far higher on key global mindset characteristics than did low performers, including "recognizing different cultural values and preferences in business activities," "adapting to other cultures' work styles and business behaviors," and factors such as valuing and promoting employees who demonstrate a global mindset.2
But businesses, like people, have a natural tendency to do what they're used to, or what has worked for them in the past. This elicits an essential question for international businesses wishing to boost results by adopting a global mindset: where is the line between one culture's traditional, tried-and-true business standards and another's?
This is where balancing an organization's conventional business practices and cultural diversity comes into play to help foster an effective import-export trade environment.
As The Economic Times of India points out, while globalization has brought the world closer and blurred boundaries, those factors have actually made it easier for international businesspeople to lose sight of cultural disparities.3 Time zones, foreign currency and language barriers might be obvious obstacles when engaging in international import-export trade. But subtle cultural differences like different management hierarchy structures, decision-making processes,4 and concepts of time are not always readily apparent.5
Of note, according to Arizona State University's Thunderbird School of Global Management, a survey of 1,000 import-export Chinese companies found that 72 percent "believe the biggest difficulties that arise in conducting business overseas stem from cultural differences."6
For example, different cultures defer to authority at different levels. A Harvard Business Review (HBR) article notes that in Australia or Scandinavia, it's customary for employees to disagree with or challenge bosses, as the boss is seen as a facilitator of interactions. However, in China or Japan, it's deemed inappropriate to challenge or contradict those senior to you.7
Additionally, decision-making processes tend to differ between cultures. In the U.S. or India, bosses commonly take the reins, making quick decisions while allowing room for future changes to be made as more information arises. Japan and Sweden, on the other hand, incline towards a long, cooperative decision-making process – and when a decision is made, it's relatively fixed.8
Import-export traders also may be tripped up by the way different cultures often work at different paces and have different concepts of time. Export.gov explains the need for U.S.-based import-export businesses to be patient, because many markets have a slower business pace than the U.S.9 In France, for example, it's not uncommon for workers to take hour-long lunch breaks involving a full meal at a restaurant, while U.S. workers often eat hastily at their desk.10 Punctuality also differs between regions. While it may be considered rude to be late for a business meeting in Japan or Germany, the concept of time in Guatemala is much less stringent: meetings can start anywhere from "10 minutes early to 45 minutes late," says Export.gov.11
Without practicing a global mindset, international businesses may make assumptions or have blind spots that result in confusion or misunderstandings.12 And Thunderbird points out that such "cultural missteps can derail negotiations."13 In response, modern import-export trade business calls for a "subtle reworking of multinationals' strategies, organizational structures, and approaches to societal engagement," according to another HBR article.14
In addition to recommending patience when engaging in cross-border business, Export.gov suggests import-export companies invest in understanding the complex nature of authority and decision-making etiquette in their target markets, so they can plan successful negotiation strategies. Such knowledge of other cultures may ultimately prevent misunderstandings that can bring international transactions to a halt.15
But an awareness of intercultural disparities is not just about preventing problems. A global mindset can create advantages and synergies that come through diversity.16 "Understanding local culture and etiquette can be the difference between making and losing a sale, and can go a long way in making you stand out among the competition," potentially transforming challenges into import-export trade opportunities, according to Export.gov.17 A strong corporate culture that embraces a global mindset puts international businesses in a better position to establish fellowship with colleagues and customers from varied cultural backgrounds.18
By adopting and cultivating a global mindset, import-export traders can improve business outcomes through better understanding the subtle complexities engrained in various cultures. Beyond preventing cultural missteps, the CultureWizard study concludes that "when a company has a global mindset, it also gets significant competitive advantages."
Megan Doyle is a business technology writer and researcher based in Wantagh, NY, whose work focuses primarily on financial services technology.
1. Global Mindset Index Study, CultureWizard; https://www.rw-3.com/global-mindset-index-study
3. “Intercultural awareness, a must for the success of MNCs in India,” Economic Times India; https://economictimes.indiatimes.com/magazines/panache/between-the-lines/intercultural-awareness-a-must-for-the-success-of-mncs-in-india/articleshow/59218790.cms
4. “How Authority and Decision-Making Differ Across Cultures,” Harvard Business Review; https://hbr.org/ideacast/2017/07/how-authority-and-decision-making-differ-across-cultures.html
5. “Navigate Your Market Successfully: Business Travel Abroad,” Export.gov; https://www.export.gov/article?id=Business-Culture
6. “A Global Mindset in Business Is the Difference Between Success & Failure,” Thunderbird School of Global Management; https://thunderbird.asu.edu/knowledge-network/global-mindset-what-international-business-leaders-need-succeed
7. “How Authority and Decision-Making Differ Across Cultures,” Harvard Business Review; https://hbr.org/ideacast/2017/07/how-authority-and-decision-making-differ-across-cultures.html
9. “Navigate Your Market Successfully: Business Travel Abroad,” Export.gov; https://www.export.gov/article?id=Business-Culture
10. “8 things that drive French people nuts about American offices – and vice versa,” Business Insider; http://www.businessinsider.com/differences-between-french-american-work-culture-2017-7
12. “How Authority and Decision-Making Differ Across Cultures,” Harvard Business Review; https://hbr.org/ideacast/2017/07/how-authority-and-decision-making-differ-across-cultures.html
13. “A Global Mindset in Business Is the Difference Between Success & Failure,” Thunderbird School of Global Management; https://thunderbird.asu.edu/knowledge-network/global-mindset-what-international-business-leaders-need-succeed
14. “Globalization in the Age of Trump,” Harvard Business Review; https://hbr.org/2017/07/globalization-in-the-age-of-trump
15. “Navigate Your Market Successfully: Business Travel Abroad,” Export.gov; https://www.export.gov/article?id=Business-Culture
16. “Intercultural awareness, a must for the success of MNCs in India,” Economic Times India; https://economictimes.indiatimes.com/magazines/panache/between-the-lines/intercultural-awareness-a-must-for-the-success-of-mncs-in-india/articleshow/59218790.cms
17. “Navigate Your Market Successfully: Business Travel Abroad,” Export.gov; https://www.export.gov/article?id=Business-Culture
18. “Intercultural awareness, a must for the success of MNCs in India,” Economic Times India; https://economictimes.indiatimes.com/magazines/panache/between-the-lines/intercultural-awareness-a-must-for-the-success-of-mncs-in-india/articleshow/59218790.cms