Why is culture important for businesses?
According to Tylor, the founder of anthropology, culture is composed out of knowledge, beliefs, art, morals and any other capabilities inherited by a person in a certain society. Culture has a great impact on all the areas around us, from economy and politics, from education to social sectors.
As David Landes was stating in The Wealth and Poverty of Nations, “if we learn anything from the history of economic development, it is that culture makes all the difference”.
An explanation of the different perceptions and behavioral aspects among groups and societies would be that sometimes there are internal conflicts or communication problems that determine a differentiation in individual preferences.
Negotiation literature sees these differences as positive aspects that enhance creativity in finding better solutions and agreements. People act and think differently worldwide, but through cultural research a way to end up to a common understanding can be achieved. There is a growing demand for understanding and managing different values, perceptions and organizational behaviour in the business area.
According to The Economist, many companies have suffered massive losses due to bad approaches in the management of international projects. Statistically speaking, more than 75% of acquisitions and international alliances fail because of cultural differences.
As mobility, internationality and diversity are greatly increasing nowadays in all societies, cultural studies will be at the basis of enhancing relationships between people. Moreover, cultural knowledge can help diminish stereotyping and increase mobility among nations. This is a great way to foster development and evolution, as well as improved communication for delivering better solutions.
References:
- Harvard University (2014), People, David Landes
- Weber, E.U., Hsee, C. (1988), Cross-cultural differences in Risk Perception, but Cross-cultural Similarities in Attitudes towards Perceived Risk
- The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor (1999)
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