Cultural Challenges in
International Business:
Employment • Business Courtesies• Raising Concerns
Objective: Discuss Challenges Faced When Doing
Business in a Global Environment Where Cultural
Expectations and Norms Vary
Areas for Discussion

Employment
 Values-based

Q&A
Business Courtesies
 Policy,
Perception, Reputation, and Relationship
considerations

Raising Concerns
 Cultural
norms
CULTURAL CHALLENGES IN
INTERNATIONAL BUSINESS:
Employment
Would you hire a 10-year-old in a developing nation?
1.
2.
3.
Yes, if doing so is
compliant with local
laws and company
policies
Yes, even if a waiver
of company policy is
required
No
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
0%
Yes, if doing so is Yes, even if a
compliant with
waiver of
local laws and company policy
company policies is required
0%
No
10
Would you hire a 10-year-old in a developing nation if his/her other
options were extreme poverty, potential starvation, homelessness or
drug trafficking?
1.
2.
3.
Yes, if doing so is
complaint with local
news and company
policies
Yes, even if a waiver
of company policy is
required
No
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
0%
Yes, if doing so is Yes, even if a
complaint with
waiver of
local news and company policy
company policies is required
0%
No
10
You’ve learned a subcontractor selling your company items manufactured in
unsafe working conditions, paying low wages and providing no employee
benefits. Still, they delivered to the agreed quality standard, on time/early and
below estimated cost. What do you do?
1.
2.
3.
4.
Terminate the contract and
seek a more acceptable
subcontractor
Seek to understand local
laws and take no action if
the subcontractor is
compliant with local laws
Provide additional work
scope to the subcontractor
if they are exceeding
performance expectations
Take no specific action and
allow work to carry on
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
0%
0%
0%
Terminate the
Seek to
Provide
Take no
contract and understand
additional specific action
seek a more local laws and work scope to and allow
acceptable take no action
the
work to carry
subcontractor
if the
subcontractor if
on
subcontractor is they are
compliant with exceeding
local laws
performance
expectations
10
CULTURAL CHALLENGES IN
INTERNATIONAL BUSINESS:
Business Courtesies
Your new VP of Sales is on business travel in Asia. After a
meeting with a potential customer, the VP is presented with a
commemorative fountain pen bearing the customer’s logo on
the presentation box. Should the gift be accepted?
1.
2.
3.
4.
Yes, because hospitality
gifts are customary in
Asian culture
No, because the gift
could create a
perception of
impropriety
Yes, because the gift is
permissible under local
law and company policy
No, unless other
potential customers also
offer a similar gift at
their meetings
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
0%
0%
0%
Yes, because No, because Yes, because
No, unless
hospitality gifts the gift could
the gift is other potential
are customary
create a
permissible customers also
in Asian culture perception of under local law offer a similar
impropriety and company gift at their
policy
meetings
10
What if the commemorative fountain pen from the previous scenario
was a Montblanc valued at US $1,200.00 with the customer’s logo on
the presentation box? Should the VP accept the gift?
1.
2.
3.
4.
Yes, it’s an acceptable
promotional item
because it has the
customer’s logo on it
No, it’s too expensive
Yes, because it would
be rude to decline the
gift
No, because the gift
could create a
perception of
impropriety
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
0%
0%
Yes, it’s an No, it’s too Yes, because
acceptable expensive it would be
promotional
rude to
item because
decline the
it has the
gift
customer’s
logo on it
0%
No, because
the gift could
create a
perception of
impropriety
10
Your VP of Business Development is in the first of a five-year assignment in the
Middle East and has developed a strong working relationship with his customer,
the MOD there. The MOD presents him with a birthday gift, a wristwatch valued at
US $5,000. The VP calls Ethics for guidance. What do you advise?
1.
2.
3.
4.
Keep the watch. It’s a
personal gift because of
the personal relationship
with the customer
Decline the gift and tell
the MOD it is
unacceptable under
company policy
Accept the gift but
reduce the cost of the
next order by $5,000 to
offset the value of the
gift
Something else
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
0%
0%
0%
Decline the Accept the gift Something
Keep the
gift and tell but reduce the
else
watch. It’s a
personal gift the MOD it is cost of the
because of unacceptable next order by
under
$5,000 to
the personal
company
offset the
relationship
policy
value of the
with the
gift
customer
10
CULTURAL CHALLENGES IN
INTERNATIONAL BUSINESS:
Raising Concerns
You have recently joined a global organization leading ethics and compliance
across multi-international sites, and learn 98% of Ethics Line calls come from
US facilities. You are tasked with ensuring effectiveness of the line across all
international sites. What is your next step?
1.
2.
3.
Educate leadership on the
cultural differences in
reporting issues across
international locations
Travel to key international
locations to conduct focus
groups
Assign an ethics focal
point at each site with 25+
employees; educate
employees about reporting
issues to their site’s ethics
focal
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
0%
0%
Educate
leadership on the
cultural
differences in
reporting issues
across
international
locations
Travel to key
international
locations to
conduct focus
groups
Assign an ethics
focal at each site
with 25+
employees;
educate
employees about
reporting issues to
their site’s ethics
focal
10
Following up to the previous scenario: You decide to visit the
international sites, beginning with Germany. You conduct focus groups
asking employees why they have not utilized the Ethics Line. What is
your anticipated response?
1.
2.
3.
4.
5.
What is a focus
group?
That is not how we
do things here
Why would I call
you?
I will not denounce
my co-workers
All of the above
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
0%
0%
0%
What is a That is not Why would I will not
focus
how we do I call you? denounce
group? things here
my coworkers
0%
All of the
above
10
From which location would you most likely hear the following
perspective about reporting issues and utilizing an Ethics Line?
Anonymous whistleblowers are untrustworthy and escape
accountability for their denunciations
1.
2.
United States
France
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
0%
United States
France
10
From which location would you most likely hear the following
perspective about reporting issues and utilizing an Ethics Line?
Anonymous whistleblowers are a powerful weapon in the fight against
wrongdoing
1.
2.
United Sates
Mexico
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
0%
United
Sates
Mexico
10
From which location would you most likely hear the following
perspective about reporting issues and utilizing an Ethics Line?
Corporate whistleblowing in our country is unheard of…such actions are seen
as a betrayal of country and carry a social stigma
1.
2.
Korea
United States
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
0%
Korea
United States
10
Where to go for help:

http://www.dii.org