The Significance of Intercultural Competence in International Business

This essay delves into the crucial role of intercultural competence in international business. It begins by defining culture and intercultural competence, emphasizing the ability to adapt and understand different cultures. The main body explores the importance of intercultural competence at both individual and organizational levels, highlighting its impact on expatriate success, culturally diverse teams, and international negotiations. The essay emphasizes the need for intercultural competence to navigate cultural differences, enhance team effectiveness, and improve negotiation outcomes. It concludes that intercultural competence is essential for individual success and the overall success of international businesses, enabling them to thrive in a globalized environment. The essay references various scholarly sources to support its arguments.

Essay

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
'Is intercultural competence important in international business?'..............................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Culture has been defined as a collective programming of the mind which differentiates
member of one group or one category from those who are from different group or different
category. Intercultural competence can be defined as a process in which individual from certain
country develops ability to adapt, change their point of view and understand and meet
expectations of the culture of host country (Arasaratnam-Smith, 2017). Intercultural competence
can also be considered as effectiveness of individuals with knowledge, skills and attributes
through which they can work successfully with people from different national culture and
backgrounds both within home country or abroad. This study will discuss whether intercultural
competence is important in international business.
MAIN BODY
'Is intercultural competence important in international business?'
In relation with international business intercultural competence has been considered to be
at two levels that are individual and organisational level. In at individual level it includes
attribute skills and knowledge of individual that associated with Global career success. On
organisational level intercultural competence is effective management of organisational activities
in different host locations or countries. In order to succeed in international business it is
important that organisation ability to adapt to International cultures so that they can be successful
in their international operations. This suggests that intercultural competence for in international
business is highly important at both individual as well as organisational level. This is because it
was associated with international organisation are likely to work with people from different
nations and cultures in such situation it is important to have skills and attributes to adapt different
culture (Zhou, 2017). This also becomes important when individuals are required to work in
other countries. In such situation intercultural competence helps them in effectively working
with people of host country. In international organisation it has become very common to send the
employees that are known as expatriates to work in different countries and because of this they
are also given training about intercultural competency. However, when people have intercultural
competency they will be e more able to deal with cultural shock they are exposed when they are

sent to other countries. Cultural shock includes being in a completely foreign and different
environment distance and separation from family friends and miss understanding of host culture.
This can lead to anger bad mood some and this also includes some time depression and
homesickness. In order to avoid this situation it is important that individuals working in an
associated with international business have intercultural competence. In addition to this
intercultural competence is also important when individuals are working within culturally
diverse teams (INTERCULTURAL COMPETENCE IN INTERNATIONAL BUSINESS
OPERATIONS, 2018). In present business environment because of Technology it is possible to
connect with people from all around world easily and this is why multinational teams have not
been limited to being in same office. This means people can work remotely within a team of
individuals from different cultures. In such situation having intercultural competency can
enhance effectiveness of individual to work within team and participate effectively. This also
enhance is coordination and collaboration with other team members. This way diverse work
teams will also be able to make positive impact on organisation. Team members within a diverse
team when lack intercultural competence they are likely to lead for discrimination, devaluation
of diverse team members contribution and several other problems. This means that intercultural
competence is crucial in success of intercultural teams and members working within teams.
Above discussion outlined certain elements that are working in different countries and working
within intercultural teams and importance of intercultural competence in these situations.
However importance of intercultural competence is also important for negotiations. This means
that general process of negotiation with highly complicated and difficult can be more
complicated when negotiation is likely to take place within International context. This means that
negotiation is considered different in different cultures. This means certain culture considers
negotiation as a competitive process where certain other culture is consider it as an opportunity
for information. Negotiation when is considered as opportunity in that situation culture and likely
to be more distributive and integrative about negotiations (What is Culture?, 2012). On the basis
of this selection of negotiators and degree of protocol and formality between parties also
differentiate. This is why intercultural competence is also important in international negotiations.
Intercultural competence can be a preparation for intercultural negotiations through which
individual can have more impact in intercultural negotiation leading to success in negotiation
process.

CONCLUSION
On the basis of above discussion it can be concluded that intercultural competence is
crucial for success of individual within international business. In addition to this success of
international business is also highly dependent on their intercultural competency. This means
businesses can only succeed in international context when they are having effective intercultural
competence.

REFERENCES
Books and Journals
Arasaratnam-Smith, L.A., 2017. Intercultural competence. Intercultural competence in higher
education: International approaches, assessment and application.
Zhou, X., 2017, June. Analysis on Cross-cultural Competence and the Demands for Compound
International Business Talents. In 2017 2nd International Conference on Education,
Sports, Arts and Management Engineering (ICESAME 2017) (pp. 863-866). Atlantis
Press.
Online
INTERCULTURAL COMPETENCE IN INTERNATIONAL BUSINESS OPERATIONS.
2018. [Online]. Available Through: < https://msed.vse.cz/msed_2018/article/162-
Kuzminska-Haberla-Aleksandra-paper.pdf>.
What is Culture? 2012. [Online]. Available Through: <
https://citeseerx.ist.psu.edu/viewdoc/download?
doi=10.1.1.401.3386&rep=rep1&type=pdf>.