Cultural Intelligence & Cultural Competence in International Business

The invisible influence of national culture

Dr Margaret Byrne speaks on cultural intelligence at an Asialink Leaders event, debunking myths about the relative importance of cultural etiquette*when doing business in Asia. Often, reasonably minor matters of cultural etiquette are given undue attention yet they aren't really what matter in the longer term to a healthy business relationship across cultures. For example, an international business relationship is unlikely to suffer as a result of a business card being presented incorrectly or someone not bowing deeply enough!

The more pressing cultural intelligence concern, that Margaret emphasises, is the need for a broader consideration of how to deal effectively with the very present cultural differences in thinking and communicating. Of special note is that most cultures assume (often unconsciously) that what is so intimate and familiar to themselves must therefore be universal, and used by other people. So, when you don't do those 'expected' things it comes as a bit of a shock to counterparts and causes them make a negative evaluation of your behaviour. And, it's these deeper issues that also often causes things to come unstuck in international business.

Communication and thinking challenges, that arise as a result of cultural differences that aren't resolved (or even recognised) in a timely manner, can be fatal to an international relationship. If, for example, you structure your idea in a way that is comfortable for you but peculiar to a counterpart, that can cause them not to understand what is you main point. This can result in tremendous confusion and things unravelling from thereon in.

Business with Asia

Margaret reflects that Australian businesses don't doubt the importance of engaging with Asia. In fact, Australia thanks it's trading relations with Asia in general and China in particular for its relatively strong showing during the recent GFC. Part of this is the tremendous growth in inbound investment, notably from China. She recounts how one CEO commented that they no longer need to go to Shanghai to meet Asian counterparts. "They're here", he said, "they're in the coffee shops and on the streets. And they've bought the company next door." So, Asia is already here, in a big way.

Culturally diverse workplaces

Another concern that people have is how to deal with the cultural diversity in the Australian workforce. Getting that right at home, through building an inclusive culture within the organisation, provides a fantastic springboard into Asia. And, organisations that can't build inclusive cultures are likely to miss out on the big boost from discretionary effort. This comes about when people feel they belong, so they contribute more. Greater contribution leads to an even greater sense of belonging - it's a virtuous cycle. But, where culturally diverse organisations continue with an ethnocentric monoculture, whole swathes of people feel they don't belong - and that's bad for them and ultimately also bad for the business!

Build a cohesive, inclusive culture

Margaret suggests that organisations wanting to prosper in Asia need first to work out how to build a cohesive culture and then use that as a platform for their growth in Asia. Cultural intelligence and cultural competence is also certain to blossom in contexts of those type.


UGM adopts an evidence-based, cultural intelligence approach to the related issues of cultural diversity, cultural awareness and international business. We focus on the cultural competence needed to implement strategic plans. This involves developing specific intercultural (or cross cultural) skills to behave effectively and appropriately in relation to cultural differences.

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