Understanding cultural diversity in the European business environment

One thing is certain: European countries are set on economic growth, which means that there are a great many opportunities. Consumers seek products from all corners of the world; even during times of recession, imports remain strong. Most importantly, there are gaps, which can be filled by companies from outside the European borders. We are not talking only about products but also about services.

The most important thing to take into account when attempting to penetrate the controlled business environment is cultural diversity. Europe encompasses numerous ethnic groups, so it is not akin to cultural decay. When conducting business with people from other countries, misunderstandings can occur due to cultural differences, distinct communication styles, power structures, not to mention the attitude towards work and time. If you are taking into consideration the prospect of getting immersed in the European business environment, please continue reading to get a good understanding of the main challenges.

English is not the dominant business language

In countries such as America, English is the only language spoken in the corporate world. It functions as a lingua franca in the sense that English is the language individuals of different cultural backgrounds resort to. English represents the most widespread language for communication, so it is not absolutely surprising that it is a top choice when conducting business. Attention needs to be paid to the fact that, in Europe, English is not the dominant business language. Individuals prefer communicating in their native languages, even if they have a strong command of English. In order to conduct business in Germany, for example, it is necessary to speak the German language.

As a rule, you must become fluent in the language of the country where you are planning to establish your organisation. This goes a long way for the message you are trying to transmit, as well as the communication channels and formats that you will be deploying. Speaking the local language is a form of respect. The bonds with the locals are immediately strengthened and you are able to access a different level of society. Being able to listen and understand what others are saying could be a great benefit to your organisation. Learning a few words does not represent a great effort.

Differences between participative and hierarchical cultures

The participative style is characterised by the following elements: consultative approach, informality, equality between all members of the organisation, independence, and initiative. Denmark is considered to be the most participative country. As a matter of fact, Denmark is renowned for flat hierarchy – in other words, decision lines are obvious and everyone is expected to function as a team. Action plans are developed together with colleagues and everyone is encouraged to contribute with their own ideas and opinions. In France, on the other hand, you will come across a hierarchical business culture. This practically means that this nation prefers the top-down approach.

Power distance translates into significant differences when it comes down to corporate structure, work environment, and, last but not least, decision-making. It is therefore necessary to research work internationally to get a good understanding of the European cultures and their distinction. The core of the organisational composition remains within the human realm, which is why the study of workplace culture is an integral part of business research, enabling the construction of a successful organisation. The entrepreneur chooses the style of communication for dealing with customers, business partners, and suppliers based on the cultural context. Determining national characteristics is of the essence. Patterns of behaviour do not change overnight, even in nations where political and economic changes are commonplace.

Etiquette: European business meetings

As far as conducting business at an international level is concerned, there is the issue of time. Conflicts frequently arise due to the fact that individuals have a different perception of what it means to be punctual. An American company expanding into the European market needs to be aware of the fact that every minute counts. If you are specified a certain time frame for a meeting, it is recommended to arrive a couple of minutes earlier. Showing up late would be considered an offence. Even if this is culturally accepted in other countries, within the European business environment, it is not acceptable. It denotes a lack of professionalism. Most European cultures are schedule-obsessed and clock-worshiping.

There are some exceptions to the rule. Italy, for instance, it is perfectly acceptable to be late, as punctuality is not necessarily a priority. To be more precise, Italy has a more relaxed, time-fluid culture. If you have been delayed for some reason, it is enough to provide an explanation. More often than not, customers arrive late without even apologising. Behaviour in relation to time is strongly influenced by cultural patterns. The evidence suggests that nations favour economic, objective time; the truth is that they have a cultural orientation in terms of time orientation. The outcome is a great misunderstanding with individuals coming from genuine economic time countries.

Final considerations

Expanding overseas without conducting thorough research is a huge mistake. You are conducting business with those of differing cultures and, given the fact that culture has an impact on everything from the way people communicate to the way they think, it is paramount to conduct market research, which provides a better understanding of the broader market conditions of the nation you are planning to enter. International market research can be considered an invaluable tool because it provides insight for PR campaigns, it helps corporations understand the needs and drivers of individuals, and carry out feasibility studies.

Leaving aside the difficulties encountered, going global offers a great many benefits, including new revenue potential and exposure to foreign investment opportunities. European countries have met with success overseas as well. The most relevant example is IKEA, which has experienced an increase in sales is the United States. The point is that internationalisation can go both ways. American corporations can be successful in Europe and European corporations are more than welcomed in the United States. Regardless of the place chosen for international expansion, it is necessary to do your homework.