Is Intercultural Competence Important In International Business?

Is Intercultural Competence
Important In International
Business?
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Is intercultural competence important in international business?
Successful international operations of business rely on various factors available external
environment and internal environment of company. The skills and qualities of employees and
managers are major asset of organisation. Intercultural competence as one among those skills
which help in running operations of business in foreign markets without facing major cultural
issues or failures. The diversity and complexity of environment needs additional skills and
knowledge from organisation, its employees and managers (Elo, Benjowsky, and Nummela,
2015). Culture shapes the way individuals think, communicate, interact, judge the situations or
people. In the globalisation era, significance of cultural differences is losing its influence, but in
praxis differences of culture still play significant role in interactions of business. In last some
decades, the significance of culture in business is becoming increasingly important. The
knowledge regarding cultural patterns makes it easy for businesses to navigate in given nation,
but can lead to simplifications in other's perception, formation of stereotypes due to patterns
don't cover all cultural features (INTERCULTURAL COMPETENCE IN INTERNATIONAL
BUSINESS OPERATIONS, 2018).
If culture shapes behaviours, attitudes, perceptions, values and beliefs, cooperating with
individuals from diverse cultural backgrounds can cause issues with collaboration, mutual
understanding on distinct levels and misconceptions takes place. Individuals who belong to
distinct cultures can be perceived as ignorant, incompetent, strange or even as a threat. From this,
it seems that developing intercultural competence is very important for better functioning of a
business organisation in an international environment (Matveev, 2017). As stated by author,
intercultural competence is a process of learning in which an individual from another culture
develops an ability to adapt, change their view point, understand as well as mitigate the demands
and expectations culture of the host nation. In other words, intercultural competence can be
defined as set of skills required for appropriate and effective utilisation in contacts with other
individuals who are culturally and linguistically distinct from each other. In context of
international business, intercultural competence can be considered on organisational as well as
individual level (What is Culture?, 2012). At organisational level, it can be visible with the
success of business through effective management of its operations in different host locations.
And on individual level, it is visible in the form of skills, knowledge and personal attributes and
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