International Business: The New Realities, 5th Edition

Culture’s Effect in International Business

1. 3.4 Describe culture’s effect in international business.

Culture can differ sharply, even between neighboring countries. Exhibit 3.13 examines cultural differences between Mexico and the United States. Effective handling of the cross-cultural interface is a critical source of firms’ competitive advantage. Managers not only need to develop empathy and tolerance toward cultural differences but also must acquire a sufficient degree of factual knowledge about the beliefs and values of foreign counterparts. Cross-cultural proficiency is paramount in many managerial tasks, including:

• Managing employees

• Communicating and interacting with foreign business partners

• Negotiating and structuring international ...