Find the three issues and explain them 

Cultural Differences in Business Communication

John Hooker

Tepper School of Business
Carnegie Mellon University

john@hooker.tepper.cmu.edu

December 2008

There is no better arena for observing a culture in action than business. Cultures tend to
reveal themselves in situations where much is as stake, because it is here that their
resources are most needed. Marriage, family obligations, and such stressful experiences
as illness and the death of a loved one bring out much of what is distinctive and
fundamental in a culture. The same is true of business, because economic survival is at
stake. Business practices are shaped by deeply-held cultural attitudes toward work,
power, trust, wealth—and communication.

Communication is fundamental in business, because business is a collaborative activity.
Goods and services are created and exchanged through the close coordination of many
persons, sometimes within a single village, and sometimes across global distances.
Coordination of this kind requires intense communication. Complex product
specifications and production schedules must be mutually understood, and intricate deals
between trading partners must be negotiated. Communication styles vary enormously
around the world, and these contribute to a staggering variety of business styles.

Probably the single most useful concept for understanding cultural differences in business
communication is Edward T. Hall’s (1976) distinction of low-context and high-context
cultures. It explains much about how negotiation proceeds, how agreements are
specified, and how workers are managed. Yet this distinction, insightful as it is, is
derivative. It is best understood as reflecting a more fundamental distinction between
rule-based and relationship-based cultures, which is in turn grounded in different
conceptions of human nature. The discussion here begins by showing how business
practices reflect low-context and high-context characteristics, but it subsequently moves
to the deeper levels to explore how communication styles are integrally related to other
characteristics of the culture.

High and Low Context Communication

In high-context communication, the message cannot be understood without a great deal
of background information. Low-context communication spells out more of the
information explicitly in the message. Let’s suppose I would like to drink some
Löwenbräu Original beer with 5.2% alcohol content by volume. If I order it online, I
specify all these details. This is low-context communication. If I am sitting in a Munich

biergarten, it may be enough to say, “Noch eins, bitte” (“Another one, please”). The
waiter knows that I just drank a stein of Löwenbräu Original, or that customers who
speak with a foreign accent nearly always want the city’s most famous beer. Because my
remark is meaningful only in context, it is an example of high-context communication.

As a rule, cultures with western European roots rely more heavily on low-context
communication. These include Australia, Canada, New Zealand, and the United States,
as well as much of Europe. The rest of the world tends toward high-context
communication. Naturally, high-context communication can occur in a low-context
culture, as the German biergarten illustrates. Communication within a family or close-
knit group is high context in almost any part of the world. Conversely, low-context
communication is becoming more common in high-context cultures, due to Western
influences and a desire to accommodate travelers and expatriates.

One of the more obvious markers of a low-context culture is the proliferation of signs and
written instructions. If I step off the train in Munich, there are signs everywhere to direct
me to the taxi stand, public transportation, ticket offices, tourist information, and
lavatories. Detailed street maps of the area are mounted on the walls, and bus and tram
schedules are posted. In much of the high-context world, there is little such information.
Nonetheless everyone seems already to know where to go and what to do. Much of what
one must know to operate is absorbed from the culture, as if by osmosis. In these parts of
the world, my hosts normally send someone to meet me on the platform, partly as a
gesture of hospitality, but also because they are accustomed to providing information
through a social context rather than impersonal signs. I am much less likely to be greeted
in a German airport or station, not because Germans are inhospitable, but because they
transmit information in a different way.

It may appear that low-context communication is simply an outgrowth of urbanization
and international travel, rather than a cultural trait. These are certainly factors, but there
is an irreducible cultural element as well. The smallest town in the United States
carefully labels every street with a street sign and numbers the buildings consecutively,
even though practically everyone in sight has lived there a lifetime and can name the
occupants of every house. Yet very few streets in the huge city of Tokyo are labeled or
even have names, and building numbers are nonexistent or arranged in random order.
The United States and Japan are perhaps the world’s most extreme cases of low-context
and high-context cultures, respectively.

International travel and migration likewise fail to explain low-context and high-context
behavior, even if they are factors. It is true that international airports are now well signed
in most of the world. Yet there are few areas with a more transient and multicultural
population than some of the Arab Gulf states, in which perhaps less than twenty percent
of the population is indigenous. Communication nonetheless remains largely high
context. Local authorities may post directional signs at roundabouts, in an effort to
accommodate Western tourists and expatriates, but these are remarkably useless—no
doubt because the local people never rely on signs and therefore do not really know what
it means to navigate by them.

Regulating Behavior

Low- and high-context communication styles are, at root, contrasting approaches to
regulating behavior. One way to identify a low-context culture is that behavior norms are
often communicated by putting them in writing them rather than through personal
enforcement. If I am not supposed to enter a particular area or smoke there, posted signs
will let me know. In a high-context culture, there may be no signs, but a guard or
employee may accost me if I break any of the rules. I may take offense at this, because in
a Western country, being called down for bad behavior implies that I should have known
better, and I normally cannot know better unless someone writes down the rules. But in
high-context cultures, being corrected by other persons is a normal procedure for
regulating behavior.

Whereas Westerners live in a world of rules and instructions and are lost without them,
many others live in a social context. A Western or international airport is full of signs
and display screens that direct passengers to the correct check-in counter and gate, update
departure times, and so forth. However, if I enter a crowded departure lounge in a
regional, non-Western airport, I may find no signs or displays to indicate which gate
corresponds to which destination, or if the displays exist, they may be blank or incorrect.
Airline employees standing at the doorways may announce the flights, but they are
inaudible in the din. Somehow, everyone knows where to go. They pick up cues from
the people around them. For example, they may have unconsciously noticed who was in
the queue with them when they checked in, and gravitated toward these same people
when they reached the departure lounge.

There are clear implications for business communication. A manager in New York City
transmits behavior norms through employee manuals and official memos. Employees
who want a week off, for example, are expected to consult these sources, or perhaps their
employment contracts, for whether they are entitled to a holiday. They follow prescribed
procedures for filing a request, which is granted according to company policy. How
employees make use of their holiday is of no consequence. In fact, managers typically
want as little discretion as possible to evaluate the merits of the case, because they feel
more comfortable applying rules than exercising personal judgment that they may have to
defend. Employees in Bogotá, by contrast, will more likely approach the boss, or a friend
of the boss who can plead their case. They will explain how important it is to attend a
niece’s wedding in Miami or grandfather’s funeral in Buenos Aires. The boss is willing
to make such decisions, because this is what it means to be a boss. Ironically, it may also
be necessary to follow bureaucratic procedure that is even more tedious than in New
York City, but the request is ultimately granted on the basis of personal decision. The
role of bureaucracy in high-context cultures is an interesting issue and will be taken up
later.

Because company norms in a high-context culture must be communicated personally,
close personal supervision is essential. Rules that are not personally enforced may be
seen as non-binding. The company may not want employees to use company cars for

personal business, but a failure to monitor vehicle use may be interpreted as granting
them permission. A similar principle applies in education. The instructor may tell
students not to copy homework solutions from their classmates and state this policy
clearly in the course syllabus. Yet if it is easy to copy solutions without getting caught,
the students may feel free to do so. They reason that if the instructor really cared about
copying, he or she would not allow it to occur.

Contracts

The difference between low- and high-context communication is particularly evident in
the area of contracts. Western contracts are marvels of thoroughness. So simple a
transaction as renting a bicycle for a day may require three pages of fine print to spell out
how to deal with every possible contingency. Once a contract is signed, there is no
flexibility in the terms unless both partiers agree to renegotiate. If a party fails to deliver,
the legal system is expected to enforce compliance.

Contracts in high-context societies have a different character, for two reasons. One
reason traces directly to the high-context nature of communication. It is not necessary to
write everything (or perhaps anything) down, because mutual understanding and a
handshake suffice. When there is a written contract, it may be more a memorandum of
understanding than a binding legal document. Because the terms are vague, there is room
for adjustment as the situation develops. As for compliance, the parties are more likely to
rely on a pre-existing trust relationship than a legal system.

A second reason for the lack of detailed contracts is that the very idea of a contract is
central only in certain cultures, primarily those historically influenced by the Middle
East. A Westerner, for example, sees doing business as synonymous with making deals.
The idea of a covenant is fundamental to the culture and even governs the relationship
between God and humankind in the Christian Old Testament. In a Confucian culture, by
contrast, doing business is primarily about developing personal relationships. These can
be based on family or clan connections, or on relationships of mutual obligation
popularly known as guānxì (a Mandarin Chinese word for “connection”). Business plans
develop along with the relationship rather than through formal communication in written
contracts. Managers may draw up contracts to please their Western business partners, but
one should not be surprised if they want to alter the terms the day after the document is
signed. Why enslave oneself to a piece of paper, when the world constantly changes?

Negotiation and Decision Making

Every cross-cultural business manual cautions Western negotiators that, in much of the
world, “yes” does not necessarily mean yes, and “maybe” can mean no. “Yes” can be a
way of indicating that one understands or acknowledges a proposal. If the proposal is
unsatisfactory, the response is likely to be indirect, perhaps consisting of such statements
as, “we will think about it,” a period of silence (as in a Japanese setting, where silence
can have other meanings as well), or simply a failure to pursue the matter in subsequent
meetings.

This kind of indirect speech relies on high-context communication to get the message
across, but there is more involved than simply a tendency to engage in high-context
communication. There is a desire to save face or otherwise avoid giving offense.
Indirect speech occurs generally in situations where parties may disagree, not only in
negotiation, but also when a decision is being discussed or conflicts must be resolved.
Westerners tend to be frank in such settings. Parties who disagree state their views
openly, because their differences are resolved by what are regarded as objective
standards. The winning view is the one backed by the stronger argument, spreadsheet
calculations, or the logic of market forces. The losers may find their predicament
unpleasant, but they are expected to subjugate their personal feelings to objective criteria.

In much of the world, however, there is no such faith in objectivity. Life revolves around
human relationships rather than what are seen as universal rules of logic. Because there
is no independent standard by which to resolve conflicts, it is important not to give
offense in the first place. Such scruples may not apply during transient interactions with
strangers, as when bargaining in a street bazaar. But when dealing with business
associates with whom one must maintain working relationships, it is necessary to
preserve harmony through deference, courtesy, and indirection.

One result of this dynamic is that business meetings tend to serve different purposes in
different parts of the world. In low-context cultures, meetings provide an occasion for
the company to consider pros and cons and perhaps even arrive at a decision on the spot.
Participants in the meeting are expected to express their opinions openly, provided they
back up their views with facts and arguments. In high-context cultures, deliberation and
decision-making tend to take place behind the scenes and at upper levels. A meeting
might be an occasion to announce and explain the decision.

As for negotiation, the very concept, at least as it is understood in the West, may be
problematic in a relationship-based culture. It may be seen as a form of confrontation that
undermines harmony. Westerners view negotiation as a poker game in which players can
lose without hard feelings, as long as everyone plays by rules that are somehow writ in
the sky. Yet when no such rules are acknowledged, and only human relationships are
recognized as real, it is best to foster these relationships and build trust. If there is
common ground for business, it will develop along with the relationship.

Confrontational bargaining can be appropriate in high-context cultures, but again, only in
such settings as a street market, and not between colleagues. High-context
communication remains part of the picture, but it has a different purpose. The object is
not to avoid giving offense but to arrive at a price with as little information exchange as
possible. As a Westerner, I may regard “haggling” as a waste of time, because I believe
the price should be dictated by the logic of the market. However, if there is no well-
defined market price, a price below my maximum and above the seller’s minimum must
somehow be arrived at. This is impossible if I reveal my maximum and the seller reveals
her minimum, because I will insist buying at her minimum, and she will insist on selling
at my maximum. Bargaining tends to be a ritualized activity that reveals just enough

information about the seller and me to allow us to identify a price in this range, or
discover that there is no mutually agreeable price. Hand and facial gestures, tone of
voice, and walking out of the shop can signal intentions that are not explicit in verbal
comments. Westerners often ask how they should bargain in a traditional market, but it is
impossible to say in general. The conventions are very specific to the culture and must
be learned over an extended period, perhaps by going to market with one’s parents.

One-on-one bargaining of this kind can actually be more efficient, in an economic sense,
than low-context Western commerce that explicitly reveals an equilibrated market price
on a price tag or web site. Negotiation may discover a price on the seller and I can agree,
allowing mutually beneficial trade to proceed, even when one of us is dissatisfied with
the market price and no trade would occur in a fixed-price system. In fact, some recent
online auctions and trading are beginning to resemble traditional practices more than
transparency-based Western commerce.

Relationship-based and Rule-based Cultures

This is a good point at which to examine the cultural mechanisms that underlie high- and
low-context communication styles. They may be roughly categorized as relationship-
based and rule-based. Each is associated with a suite of practices that regulate
interpersonal relations and deal with the stress and uncertainty of human existence. This
deeper perspective allows one to understand business communication patterns that are not
fully explained as deriving from high- and low-context communication styles.

Behavior in relationship-based cultures is regulated through close supervision by
authority figures. This requires that authority be respected, and it therefore resides in
persons with whom one has significant relationships, such as parents, elders, bosses, or
even departed ancestors. Improper behavior is deterred by shame, loss of face,
punishment, or ostracism. Because the authority figures are close at hand and form an
integral part of the social environment, behavioral norms are usually implicit in the
cultural situation and need not be spelled out explicitly. Relationship-based cultures
therefore tend to rely on high-context communication.

Behavior in rule-based cultures is based on respect for rules. This is not to say that rule-
based cultures have rules and relationship-based cultures do not; both do. Rule-based
cultures are distinguished by two characteristics: (a) people respect the rules for their own
sake, while rules in relationship-based cultures derive their authority from the persons
who lay them down; and (b) compliance with rules is often encouraged by guilt feelings
and fear of punishment if one happens to be caught violating the rules, rather than shame
and constant supervision. Because personal relationships are relatively unimportant in
the enforcement of rules, the rules tend to be spelled out explicitly, and people are taught
to pay attention to them. The result is low-context communication. One can now begin
to see why high- and low-context communication styles are, at root, contrasting
approaches to regulating behavior.

The distinction of relationship-based and rule-based cultures also underlies differences in
negotiating styles. The frankness of rule-based cultures is possible because of an
underlying confidence that rules have objective validity and can therefore serve as a basis
for resolving disputes. The absence of such confidence in relationship-based cultures
requires that they fall back on courtesy and face saving.

Relationship- and rule-based mechanisms deal with the stress and uncertainty of life as
well as regulate behavior (Hooker 2003). Family and friendship ties provide a sense of
security in relationship-based societies. Loyalty obligations to family and cronies are
therefore strong and may take precedence over one’s own welfare, but it is loyalty well
invested, because these institutions provide a refuge in difficult times.

The ruled-based stress management mechanism is less obvious but equally fundamental
to cultural success. Because social control does not rely so totally on personal
relationships, these tend to weaken, and people must seek security and predictability
elsewhere. Fortunately, the very rules that regulate behavior provide a basis for imposing
order and predictability on society as a whole. The search for universality also leads to
the discovery of scientific laws, which provide a basis for engineering the environment
for even greater predictability and control. Rule-based peoples therefore turn as much to
the system around them for security as to family and friends, or even more so. The
systemic resources range from advanced medical technology to deal with disease to legal
systems to resolve disputes.

Transparency

The issue of transparency comes to fore most obviously in finance and investment, and it
likewise reflects an underlying orientation toward rules or relationships. Western-style
investment places a premium on publicly available information. A capitalist may invest
in family members or friends, but this is not the general pattern and may cause more
strain that the relationships can bear. It is also argued that capital markets are more
efficient if money can flow from any investor any firm that can use it productively, rather
than being restricted by personal connections. Investors must therefore have access to
publicly available information about the condition of a firm and its plans for the future.

These conditions give rise to the Western business world’s most distinctive form of
communication, the accounting statement, as well as such documents as the prospectus
and the annual report. All rely on strongly rule-based activities and are therefore possible
only in rule-based cultures. Accounting, in particular, relies on an entire profession that
develops intricate reporting standards in the form of Generally Accepted Accounting
Principles (GAAP) and certifies its practitioners with grueling examinations.
Prospectuses and corporate annual reports are regulated by law to ensure transparency.

Investment in a relationship-based society typically occurs through pre-existing trust
relationships. The phenomenal growth of the Chinese economy in recent decades, for
example, has been fueled largely through family-based investment, much of it coming
from overseas Chinese communities in Canada, Indonesia, Malaysia, and North America.

Investment can follow guānxì relationships as well. The process is anything but
transparent, and financial statements are of secondary importance. It may even be
insulting to one’s business partners to ask for them.

One must not assume, as is often done in the West, that transparency-based investing is
necessarily superior. Both systems can generate spectacular success, as witnessed by
Western economies on one side and the explosive growth of the Chinese and Korean
economies on the other. Attempts to import Western-style finance can bring disaster, as
demonstrated by the Asian financial crisis. Asian economies that converted quickly to
Western-style loans and equity shares in the late 1990s lacked the cultural support for
transparency. Loans and stock portfolios were poorly selected, and collapse was
inevitable. Meanwhile, China and Taiwan largely averted the crisis by sticking primarily
with traditional finance.

Transparency-based finance has the efficiencies already mentioned, but it tends to be
unstable because it is prone to massive movements of capital (a key factor in the Asian
crisis) and relies on sometimes fragile public institutions to implement its rule-based
structure. Relationship-based finance requires slow cultivation of trust, but it can be
remarkably stable in the presence of institutional turmoil. China was the world’s largest
economy for eight of the last ten centuries (and will become so again in the present
century), despite the succession of many dynasties and much political unrest.

Marketing and Advertising

One might expect global marketing and advertising to homogenize as business globalizes.
There is mounting evidence, however, that this is not the case (Dahl 2004, De Mooij
2003). One might also expect demand patterns and advertising content to become
increasingly Westernized in populations of growing affluence. Again, the reality appears
to be precisely the opposite (De Mooij 2000). Marketing technology supports this
tendency toward heterogeneity by allowing the delivery of different messages to many
subcultures and market segments, even when they live amongst each other.

Although there is a tendency to associate Western marketing with mass advertising, there
is a well established Western practice of “relationship marketing” in business-to-business
commerce, and it can provide a doorway to culturally appropriate marketing elsewhere.
Even here, however, business networking styles differ. Networking in the West often
involves approaching strangers at a trade fair or cocktail party, and the relationship rarely
develops beyond a casual acquaintance. Networking in a relationship-based business
system works through pre-established connections with family and friends to cultivate
new partners and build trust relationships.

A relationship-based style can be very effective for consumer marketing as well, even in
the West, as for example when movies become popular through “word of mouth.” This
approach is particularly appropriate in high-context countries where people are extremely
well connected, and word can spread with remarkable alacrity.

Mass consumer marketing is relies on low-context communication and for this reason
alone is unnatural for relationship-based cultures. People in these cultures traditionally
prefer to take advice from someone they know and trust than from impersonal
advertisements. Most of the world is now accustomed to mass advertising, but the legal
infrastructure for regulating its content and accuracy may be much less effective than in
rule-based cultures.

When Western-style mass advertising is used in high-context cultures, one must
obviously take care that it conveys the intended message. The background and context
can embody more information than the verbal message, perhaps the wrong information.
This is not only due to a general sensitivity to high-context communication, but to the
generally larger role of symbols in many non-Western cultures. Symbolism is at work in
all cultures, as emphasized by Clifford Geertz (1973), in the sense that practices and
institutions have meaning beyond themselves. But most world cultures are more alert to
symbolic meaning than Western European and North American cultures, which are more
sensitive to visual impressions. Thus certain colors may be chosen in a Western
advertisement to give it the right kind of look, while in much of Asia colors powerfully
symbolize abstract qualities—red for happiness and marriage, white for mourning, blue
for immortality, and so forth. The Japanese present an interesting exception, because
they are as visually oriented as the French (which may help to account for the French
fascination with things Japanese), to the point that the appearance and layout of a
Japanese meal are more important than the taste.

Conceptions of Human Nature

The distinction of relationship-based and rule-based cultures sheds light on why the
former prefers high-context, and the latter low-context, communication. It explains the
necessity of indirect speech and face saving in the former, and the preference for
frankness and logic-based argument in the latter. To use the terms of Trompenaars and
Hampden-Turner, it explains why relationship-based cultures are particularist, meaning
that judgments are relative to the social situation, while rule-based cultures are
universalist, meaning that judgments must conform to the universal standards.

It remains to be explained, however, why relationship-based cultures are willing to
recognize the centrality of relationships, and rule-based cultures are willing to recognize
the universal validity of certain rules. This can be accomplished by moving to a yet
deeper level of analysis that recognizes differing conceptions of human nature. This
maneuver will also justify the differing conceptions of power across cultures, which play
an important role in business communication.

In relationship-based cultures, the unit of human existence is larger than the individual,
perhaps encompassing the extended family or the village. Ostracism from the group is
almost a form of death, because one does not exist apart from one’s relatedness to others.
In the Confucian ideal, for example, taking care of parents and grandparents comes first,
followed by caring for one’s children, and only then oneself. Bantu cultures identify
individual welfare with that of the village. The greeting ritual of the Shona people, for

example, begins Maswere sei (How is your day?), to which the response is Ndiswera
maswerawo (“My day is OK if yours is”). The principle is not simply that loyalty to the
group entitles one to loyalty from the group. Loyalty to the group is loyalty to oneself.
Neglecting other members of the group is like neglecting parts of one’s body. The most
extreme example is perhaps the pantheistic doctrine of Hinduism, which regards all
minds as manifestations of a single underlying atman. The centrality of relationships in
relationship-based cultures therefore has an ontological basis, specifically in communal
conceptions of human existence.

Because relationships are fundamental, social control is exercised through relationships.
Certain figures must have inherent authority over others to whom they are related, much
as the head has authority over the body. Parents have authority over children, husbands
over wives, older siblings over younger siblings, village elders over their neighbors, and
so forth. This gives rise to a high power distance culture, in which the subordination of
some people to others is accepted, even by subordinates, as natural and inevitable.

Rule-based cultures regard human beings as autonomous individuals. Autonomy means
in part that no individual has natural authority over another. Social cohesion therefore
demands that there be some authority that is apart from any individual. Originally this
was the godhead in the monotheistic theology that so heavily influenced the West, but
because the godhead was understood as a lawgiver, the conception evolved into
governance by universal rules of conduct. The Greek conception of individuals as
rational beings reinforced this solution by allowing the rules to be understood as self-
justifying because they are inherently logical. The centrality of rules in rule-based
cultures therefore has an ontological basis, namely the conception of human beings as
autonomous, rational individuals.

Due to the fundamental equality of autonomous individuals, rule-based cultures tend to
have low power distance, meaning that no individual is seen as having an inherent
authority over others. This raises a problem of leadership, because it is often necessary
for someone to take charge. Various solutions have evolved, such as the European
concept of aristocracy (rule of the excellent), whereby some individuals earn the right to
lead by virtue of superior talent and learning, or the American idea that people take turns
in positions of power and return to ordinary status as soon as the term of office expires.

Deference

Power distance has a pervasive effect on communication patterns in relationship-based
business. The effect can be seen in both verbal communication and in such nonverbal
signals as body language and other kinds of behavior.

Perhaps the most elaborate verbal cues for power distance are the grammatical inflections
found in such languages as Japanese and Korean. Japanese has special word forms that
show respect or reflect greater formality and politeness. Usage can also depend on
whether one is addressing members of an in-group or an out-group. It is vital to observe
these niceties in business, and companies may even train employees how to use proper

language to show respect to customers or superiors. Korean culture is strongly age
sensitive, and an age difference of a year or less may require deferential language from
the younger party. Two classes of inflections are used: honorific inflections to show
respect to the persons mentioned, and no fewer than seven “speech levels” to show
different degrees of respect to the listener. Nearly every language has resources for
showing deference, if not to the extent of Japanese or Korean, and these tend to be
important in business settings.

Deference is also shown by avoiding remarks that could embarrass superiors or cause
loss of face. High-power distance cultures can operate only so long as authority figures
are respected, and respect is difficult to maintain when the boss appears to be a bungler.
Subordinates may take care not to express their opinions in front of the boss until they
learn what the boss thinks, because a disagreement could be viewed as finding fault with
the boss. Subordinates do not openly point out the mistakes of superiors or even describe
problems in the company, because this could suggest that the boss has failed to manage
properly. It is obviously important for managers to be aware of problems, but these can
be communicated in private or through a third party. In some high-power distance
cultures, it is appropriate for employees to bring problems to management collectively, as
in a petition from the labor union, because this does oblige any employee to challenge the
boss as an individual.

Deference is also shown in body language. Well-known examples include low bows or
lowered eyes in some Asian countries. While Westerners see direct eye contact as
indicating honesty, it may be unconsciously interpreted as threatening in East Asia.
Guidebooks for travelers in the Middle East frequently warn against crossing one’s legs,
because pointing one’s foot toward another is presumably offensive. A more general
principle is that a slouch or relaxed posture reflects the confidence of a highly-ranked
person, while an upright seated posture with feet on the floor are seen as showing
deference. In Turkey, subordinates may be expected to keep their coat jackets buttoned
in the presence of a superior, and in some traditional Bantu cultures, women and children
kneel and perhaps clap their hands when receiving a gift.

The famous business card rituals of East Asian countries can also signal deference. The
cards are always received, and normally given, with both hands, held at the corners
between thumb and forefinger. The card is oriented so that the recipient can read it,
preferably in his or her language. The recipient should take a moment to read the card
and treat it with respect rather than stuffing it in a pocket. These practices are
independent of rank, but one can show deference by presenting cards to more highly
ranked individuals first. In Japan, the lower ranking person holds the card (meishi) at a
lower level than that of the higher-ranking person. The underlying principle is that in
Japan, and to a lesser extent in Korea and China, the business card contains a little bit of
the owner’s soul and must be treated accordingly.

Punctuality is another way of acknowledging rank. Punctuality is generally more
important in what Edward T. Hall (1959) calls monochronic cultures, which are those in
which people generally do one thing at a time, and less so in polychronic cultures in

which people deal with several tasks at once. The underlying causes are again rule-based
and relationship-based mechanisms.

People in rule-based cultures seek security and predictability by structuring their
environment, and in particular by structuring their time. They tend to set aside a time slot
for each activity, resulting in appointments and strict schedules. This kind of structuring
can succeed only if people are reasonably punctual. Punctuality is not required as a
stress-management tool in relationship-based cultures, but it can nevertheless mark rank.
Subordinates may show up on time to make sure the boss is not kept waiting, while the
boss may show up late to make sure there is no loss of face by having to wait, or simply
to display superior status. Supervisors in Indonesia, for example, may habitually arrive
half an hour late to meetings, with the ritual excuse of being held up in traffic. One
should be cautioned, however, that punctuality may be expected of everyone in some
relationship-based countries, such as China and particularly Japan.

Bureaucracy

It was noted earlier that high-context societies may require greater paperwork and
bureaucracy even though they take written rules less seriously. Boye Lafayette De Mente
(1994) reports that, at one point, the U.S. government required the filing of twenty-six
documents, in the course of nine administrative procedures, to approve a joint venture in
pharmaceuticals. For the same type of venture, Japan required 325 documents in forty-
six administrative procedures, and South Korea required 312 documents in sixty-two
administrative procedures. Bureaucracy is bad enough in low-context cultures, but it
tends to be even worse in high-context cultures.

There are several reasons for this paradox. One is the necessity of close supervision in
relationship-based societies, which is often reflected in multiple layers of bureaucratic
checks. A public employee in Mexico who wishes submit a claim for a travel
reimbursement may be required to submit one set of forms to immediate supervisors and
additional forms to a national office in Mexico City. The supervisors relay copies of their
forms to Mexico City, where functionaries compare them with the employee’s forms and
further paperwork obtained from vendors. The goal is to minimize corruption, and if
everything checks out, there is an eventual authorization to reimburse the traveler. The
process can take months.

Another reason is that rule-based societies actually run themselves largely through
written rules, and the bureaucracy must work. If the paperwork gets too complicated, the
system will grind to a halt, and customers or the public will demand better service.

In relationship-based societies, the bureaucracy primarily serves purposes other than
straightforward functionality. One purpose is to cement the power of important
individuals. A department head who signs off on more forms has more power, and so
there is constant maneuvering to enlarge one’s turf in this way. This occurs in all
bureaucracies, but it is less likely to be checked in an organization in which things
actually get done through personal relationships rather than bureaucratic procedure. In

addition, Hall points out that polychronic cultures are already inclined to have
bureaucracies that are organized around personal power than around logical organization
as in Germany or Scandinavia. The networks of personal influence tend to grow like
vegetation, resulting in a sprawling and complex bureaucracy.

Bureaucracy serves still another purpose in what Geert Hofstede (2001, 2004) calls
uncertainty-avoiding cultures. These are cultures in which people feel uncertain about
life and seek reassurance in a predictable or low-risk lifestyle. The notion of classifying
certain countries as uncertainty avoiding is somewhat problematic, because all cultures
have mechanisms for alleviating uncertainty, and it is only a question of how they do it.
Nonetheless, societies that Hofstede classifies as uncertainty avoiding commonly find
reassurance in ritual, which can be remarkably complex and exacting. Strange as it may
seem, bureaucratic procedure can be experienced as a form of ritual and can to that extent
be reassuring, not only to the functionaries to whom it provides reliable employment, but
to anyone who seeks predictability in procedures that are, by definition, always the same.
This is perhaps why military organizations, which must deal with the stress and
uncertainty of conflict, are highly bureaucratic even in a rule-based country like the
United States. One in fact sees dysfunctional bureaucracies in uncertainty-avoiding
countries, such as Greece, Portugal, Russia, several Latin American countries, and so on
down the list, although these are scarcely the only countries to be so endowed.

Variations among Rule-based Cultures

Business communication styles can differ markedly even among rule-based cultures, and
similarly among relationship-based cultures. Consider, for example, a typical business
presentation in which the speaker is trying to attract funding for a business venture. The
presentation would have a very different character in the United States than in Germany,
even though both countries have strongly rule-based cultures.

The American speaker begins with a small joke to “break the ice,” while this is
inappropriate in Germany. Germans wish to be reassured by the professionalism and
seriousness of the speaker. Humor suggests casualness that might translate into an ill-
considered undertaking. The American’s slides contain flashy visuals with such phrases
as “fantastic opportunity,” which strike the Germans as childish. They prefer graphs and
charts to reassure them that proper market research has been conducted. These
differences are due to the fact that Germany is an uncertainty avoiding culture, while the
United States is not. Indeed, the American audience probably contains venture capitalists
who are willing to fund risky startups, while the German audience is more likely to
consist of stolid bankers. The desire for security and predictability go far beyond the
business meeting. Germans pay a premium for high-quality products that are less likely
to break down, and they invest heavily in a highly-engineering physical and social
infrastructure on which they can rely.

The American presentation could also cause problems in Scandinavia. The speaker
delivers a hard sales pitch, sprinkled with buzz words and such terms as “aggressive,”
while Scandinavians prefer a low-key presentation couched in plain language. The

American approach reflects a “masculine” culture that values competition and
aggression, whereas Scandinavian culture is “feminine” and emphasizes cooperation
more than competition.

Western Europeans make much of their different styles, but one should see them as
variations on low-context, logic-based communication. It is true that the British are
normally reserved and understated, while the French gave us the very word frank (which
refers to the Franks, an old word for the French). Yet British can deliver a devastating
comment with scarcely an inflection of the voice. If French and Italians become
animated or emotional in a business meeting, one must bear in mind that Descartes was
French and Galileo was Italian, and at the end of the day the decision is likely to reflect
the logic and pragmatism of a Glaswegian.

The situation changes somewhat as one moves east. Russian society, for example, is
essentially rule-based, but business partners may find it more important to feel
comfortable with each other than to get the financials right. Business people from abroad
should be particularly cognizant of this, due to the uncertainty-avoiding culture and the
tendency of Russians to feel apprehensive about foreigners. Frequent references to
mutual Russian friends and contacts can be reassuring, as can participating in such rituals
as vodka drinking and banya, the Russian sauna.

Variations among Relationship-based Cultures

Themes and variations also occur among relationship-based cultures, and one obvious
theme is saving face. In Confucian cultures, for example, one never utters a word or
takes an action without calculating the effect on face. This is obviously important when
dealing with superiors or colleagues, as when verbal disagreements are muted and
indirect signals are used in negotiation. Yet it can be equally important to respect the
face of subordinates. These are high power distance cultures in which the boss is
expected to be authoritarian, perhaps bark orders, and deal harshly with employees who
disobey. Yet the boss should not embarrass employees in from of others when they make
a good faith effort to do the job right—unless they have bungled so badly as to lose face
already. This can damage morale and may even erode the boss’s authority in the eyes of
other employees. Confucian authority carries with it a paternalistic duty, and careless
disregard of face indicates lack of care for one’s subordinates. Face is a powerful force
and must be used wisely.

Face is likewise important in the more conservative Latin American countries, such as
Mexico, but it is manifested in a somewhat different form—namely, as machismo or
masculine honor. A Mexican business conversation can be very different from one north
of the border in the United Sates. The purpose of conversation is as much to build trust
between business partners as to exchange information, particularly in the early stages of
the relationship. There is much talk about family, because a good family man is a man of
honor who can perhaps be trusted in business as well. The relationship is not based so
much on mutual obligation, as in the case of guanxi, but at its best on an emotional bond
of friendship. Whereas U.S. business people talk business in a business meeting,

Mexican business conversation is about the whole person. It is important to keep the
emotional radar in operation to remain sensitive to how the other party is reacting. In
particular, one should take care not to embarrass the other by alluding to mistakes or
shortcomings, because this brings loss of honor.

Honor is the primary male virtue in machismo cultures. The very word virtue comes
from the Latin for manhood (vir). Toughness and capacity for violence can be part of
machismo, but only in service of an honorable cause, such as protecting one’s family.
Machismo evolved in treacherous environments where courage and a code of honor were
necessary survival traits for men, and successful cultures have a way of making virtues
out of necessities. The sense of honor and self-respect can be very finely tuned, which
may create the impression that men are thin-skinned. In any event, it is essential to
respect this sensibility. This becomes a particularly delicate issue when there are
problems in the company, and so much as mentioning the problems may cast aspersions
on managers who could be held responsible for them. One technique for broaching the
topic is to blame it on outside forces, such as unreliable suppliers or corrupt politicians.
These may not lie at the root of the problem, but blaming them at least allows the
problem to be discussed.

The historical source of Latin American machismo is Arab culture, by way of the
northern African influence on Spain. It remains very much alive in Arabic-speaking
countries today, particularly in Saudi Arabia and the Gulf region. Warm personal
greetings and ceaseless courtesy are a must in business dealings. It is a never a bad idea
to preface one’s remarks with some such nicety as, “Thank you for your comments,” or,
“I learned much from your report.” An impractical proposal or a questionable statement
should be ignored or smoothed over, so that no one appears foolish. The goal is to
protect the male ego. Flattery that strikes Westerners as obsequious is perfectly
appropriate, particularly where superiors are concerned. Power distance is very much
part of the picture, and honorific terms and titles are expected. Such phrases as “Your
Excellency” may be obligatory for government officials or members of a royal family.

Courtesy is integral to business relations throughout the Middle East. Arabic, Turkish,
Farsi, and other Middle Eastern languages contain many resources for polite speech, and
when speaking the languages one should take advantage of this. Above all, it is
important to convey a message that one enjoys the company of one’s business partners.
The Western distinction of professional life from life as a whole is as foreign here as in
Latin America.

A second theme is found in the communication styles that promote harmony and mutual
support in group-oriented cultures. For example, the communalism of the Shona culture
mentioned earlier is reflected in the importance of acknowledging others. If I pass a
colleague in the hallway four or five times a day, I should take care to greet her every
time. To walk past without acknowledgment is seen as cold and scarcely human. A short
conversation with a clerk as I purchase goods in a shop would also be appropriate.
(Situations in which a clerk or functionary deals with hundreds of people a day, so
common in modern life, are experienced as highly unnatural because there is no time to

relate to them.) When making a presentation before coworkers, I should acknowledge by
name any person in the audience who contributed to the project I am discussing at the
moment.

Interestingly, this last example is not so much an affirmation of community as of
individualism. Cultures that rely heavily on one principle tend to compensate by
providing an outlet for its opposite. The communalism of many African cultures is often
counterbalanced by occasions for ego recognition. It is on much the same principle that
highly individualistic Western cultures may develop such communal mechanisms as
volunteerism, patriotism, and support groups.

Another distinctive form of group communication is found in the Japanese practice of
consensus building for a policy decision. The practice is traditionally known as
nemawashi (“going around the roots”), which refers to the practice of preparing a tree for
transplant, much as one prepares an organization for a new policy. A memo would be
circulated among members of the group, each of whom would contribute ideas and
identify them with his stamp. The object is to accommodate everyone’s view and thereby
maintain harmony. Consensus building through informal consultation remains an
important process in the Japanese business world. Decisions in an organizational setting
tend to evolve in the middle ranks and receive ratification by superiors, perhaps at a
formal meeting. This is not a denial of high power distance but actually protects it,
because if the decision turns out to be a mistake, it is impossible to hold a single decision
maker responsible, and face is saved.

Intercultural Business Communication

The key to cross-cultural business is understanding one’s business partners well enough
to make cultural adjustments. This raises the issue as to which side should make the
adjustments. A practical rule of thumb is that business transactions should favor the
cultural norms of the social infrastructure on which they primarily rely. While
Westerners sometime have the impression that business is a self-contained activity, in
reality it depends radically on pre-existing cultural mechanisms to get anything done. If
business is to tap these resources, it must respect the culture that provides them.

Thus if a Western multinational firm that operates in Malaysia is negotiating with local
firms for construction labor, the Malaysian business style should dominate. Construction
is not just a matter of hiring workers. It is a complex undertaking that requires intricate
coordination of activities, sourcing of materials, supervision of workers, and hundreds of
working relationships among the parties involved. All these will occur according to the
norms of the local culture that makes them possible. Conversely, if a Malaysian business
is seeking foreign capital from a multinational firm, it must acknowledge that this capital
will be raised according to rule-based Western mechanisms that require transparency,
accounting standards, detailed contracts, and legal enforcement. The conversation will
therefore take place primarily in the Western mode.

The language of conversation is another matter. Cross-cultural business normally takes
place in a trade language, regardless of which cultural norms otherwise govern the
transaction. The use of trade languages is prehistoric, and bilingualism appears to be
nearly as old as language itself. A trade language can either be the language of a
dominant or once-dominant power, or a pidgin that combines two or more languages but
is no one’s native tongue (such the lingua franca that historically served as the trade
language of the Mediterranean region). Pidgins become creoles when people start
speaking them as a native language, a famous example being Tok Pisin (“talk pidgin”) of
Papua New Guinea. English is currently the leading trade language in most of the world,
but regional trade languages include Swahili, Persian, and Mandarin Chinese. The choice
of trade language is normally a matter of convenience, reflecting the competencies of the
parties involved. Even when everyone seems conversant in a common language, it may
be prudent to use interpreters, because some of the parties may be embarrassed to say
they do not understand.

It is widely believed that globalization implies cultural homogenization, and that
Western-style business is becoming the worldwide standard along with the English
language. This judgment is at best premature, however. The world economic order is
moving away from Western hegemony toward a multi-polar equilibrium, with such
power centers as China, India, South Korea, and Brazil operating alongside North
America and Europe. One might therefore expect a renewed tendency toward cultural
pluralism, a process that one might call cultural de-globalization.

Information technology is widely supposed to hasten homogenization. Yet, it is also a
force for cultural de-globalization, because it supports relationship-based communication
patterns as readily as Western practices. Mobile phones provide an excellent case in
point. Although they were initially popular in Finland, where snowstorms knock down
land lines, they quickly spread to Asia, where they fit the culture hand-in-glove. The
phones not only enable the constant personal interaction on which relationship-based
cultures rely, but they solve the problem of how to provide constant supervision in a
mobile age. Parents are on the phone with their children several times a day, even if they
are overseas, to monitor their activities and make sure they do their schoolwork. Bosses
on a business trip telephone subordinates incessantly to make sure they remain on task.
Text messaging and video technology enhance these functions.

The Internet is equally adept at supporting multiple communication practices. Such web
sites as Facebook and Myplace can facilitate Western-style networking with strangers,
but they can equally well support the family and other trust relationships typical of
relationship-based cultures. For example, the site orkut.com (introduced by a Turkish
employee of Google) allows the user to “connect with friends and family,” according to
the masthead, as well as “discover new people through friends of friends.” It is
extremely popular in Brazil, where it ably serves a relationship-based culture.

Thus despite the globalization of commerce, intercultural communication skills remain
important in business, and may become even more so in an increasingly multi-polar
world economy.

Further Reading

Introductory treatments of cross-cultural business communication include Mattock
(2003), Reynolds and Valentine (2003), Schmidt et al. (2007), and Sellin and Winters
(2005). There are several sources for cross-cultural business in general that discuss
communication issues in some detail, such as Ferraro (2005), Harris and Moran (2000),
Hooker (2003), Lewis (2005), and Schneider and Barsoux (2002). A large collection of
books give cultural advice for specific countries. A list of such books, classified by 134
countries, is provided in Hooker (2003) and updated online at
http://web.tepper.cmu.edu/culture.

References

Chaney, Lillian. 2005. Intercultural Business Communication, 4th ed. Englewood
Cliffs, NJ: Prentice-Hall.

Dahl, Stephan. 2004. Cross-cultural advertising research: What do we know about the
influence of culture on advertising? Middlesex, U.K.: Middlesex University Discussion
Paper No. 28. January.

De Mente, Boye Lafayette. 1994. Korean Etiquette and Ethics in Business.
Lincolnwood, IL: NTC Business Books.

De Mente, Boye Lafayette. 2004. Japan’s Cultural Code Words. North Clarendon, VT:
Tuttle Publishing.

De Mooij, Marieke. 2000. The future is predictable for international marketers:
Converging incomes lead to diverging consumer behaviour. International Marketing
Review 17(2). 103-113.

De Mooij, Marieke. 2003. Convergence and divergence in consumer behaviour:
Implications for global advertising. International Journal of Advertising. 22(2). 183-
200.

Ferraro, Gary P. 2005. The Cultural Dimension of International Business, 5th ed.
Englewood Cliffs, NJ: Prentice-Hall.

Geertz, Clifford. 1973. The Interpretation of Cultures. New York: Basic Books.

Hall, Edward T. 1959. The Silent Language. New York: Doubleday.

Hall, Edward T. 1976. Beyond Culture. Garden City, NY; Anchor Books.

Hampden-Turner, Charles, and Fons Trompenaars. 1997. Riding the Waves of Culture:
Understanding Diversity in Global Business, 2nd ed. Boston: McGraw-Hill.

Harris, Philip R., and Robert T. Moran. 2000. Managing Cultural Differences:
Leadership Strategies for a New World of Business, 5th ed., Houston, TX: Gulf
Professional Publishing Company.

Hendon, Donald W., Rebecca Angeles Hendon, and Paul Herbig. 1999. Cross-Cultural
Business Negotiation. Westport, CT: Praeger Paperback.

Hofstede, Geert. 2001. Culture’s Consequences: Comparing Values, Behaviors,
Institutions, and Organizations across Nations, 2nd ed. Thousand Oaks, CA: Sage
Publications.

Hofstede, Geert. 2004. Cultures and Organizations: Software of the Mind, 2nd ed.
Boston; McGraw-Hill.

Hooker, John. 2003. Working across Cultures. New York: Stanford University Press.

Lewis, Richard D. 2005. When Cultures Collide: Leading Across Cultures, 3rd ed.,
London: Nicholas Brealey Publishing.

Mattock, John. 2003. Cross-Cultural Business Cimmunication: The Essential Guide to
International Business, 3rd ed. London: Kogan Page.

Reynolds, Sana, and Deborah Valentine. 2003. Guide to Cross-Cultural
Communication. New York: Prentice-Hall.

Schmidt, Wallace V., Roger Conaway, Susan S. Easton, and William J. Wardrope. 2007.
Communicating Globally: Intercultural Communication and International Business.
Thousand Oaks, CA: Sage Publications.

Schneider, Susan C., and Jean-Louis Barsoux. 2002. Managing Across Cultures, 2nd ed.
Englewood Cliffs, NJ: Prentice-Hall.

Sellin, Robert G., and Elaine Winters. 2005. Cultural Issues in Business
Communication, 2nd ed. BookSurge Publishing.