Cultural Intelligence: Avoiding Business Blunders

In our last post we talked about what cultural intelligence is. Now let’s look at some concrete examples of how a lack of cultural intelligence can sabotage your business dealings.

• A failure to use chopsticks helped to lose a company a contract in China. A friend translated the remarks of the Chinese interpreters, who expressed their opinion that a company could never do business with people who showed so little respect for their culture by not learning the custom.


• Representatives of another U.S. company sabotaged a Japanese deal at the very beginning by presenting a 50-page contract draft at the start of negotiations. In Asian cultures, establishing relationships is very important before negotiating the terms of a business agreement.


• An American business manager at a Korean company tried to treat his employees as equals and ended up with a substantial loss in productivity because his subordinates did not take him seriously. Perceptions of authority vary across cultures, and taking an American-style approach to management can backfire.


• Home Depot lost a huge investment in China by marketing to a culture that perceived “do it yourself” home improvement not as a “hobby” but as a low-status last resort for people who could not afford to hire professionals.

Subtle errors can also sabotage your efforts, even in countries that have a lot in common with the US. In the UK, your placement of silverware after a meal can mess up a formal dinner. Putting your knife and fork down at the six o’clock position on your plate signals that you are done eating; otherwise the confused waiter won’t take your plate, possibly throwing off the whole carefully planned schedule. And if you don’t know that in Britain “tabling” something at a business meeting means opening the issue for discussion, you might get the opposite of what you’re looking for. (The Anglo-EU Translation Guide is a humorous attempt to explain the understated British way of voicing criticism.)

In other words, a lack of respect and knowledge vis-à-vis other cultures can ruin a business relationship. With cultural training and preparation these businesses could have avoided these mistakes and thus also avoided losing deals and money.

Next week we’ll look at some examples of how cultural knowledge helped some business relationships to thrive.

One of our cultural consultants Carol Cunningham contributed to this article.

Cultural Intelligence: Avoiding Business Blunders