A Study of Cross Cultural and Communication Barriers that Exist when Trying to Conduct Business between U.S. Based Companies and South America

Abstract

In today’s business environment, companies face difficulty growing their market share due to a highly competitive business environment. This competitive environment is attributed to globalization, which has reduced borders and allowed free flow of merchandise from one country to another. Globalization creates more competition for companies making it difficult to continuously grow and compete at a high level. Therefore, companies looking to achieve the desired growth have been forced to devise different strategies. These strategies include expansions abroad into international markets. An example can be seen with companies based in the United States looking to South America in hopes of gaining a competitive edge. Companies that choose South America can see the numerous advantages to operating in the region, appearing as an attractive destination for their international endeavors. Amongst the many advantages to operating in the region, some of the most apparent include a highly skilled population, reduced labor costs, favorable tax regulations, and overall reduction in operating costs. From a financial standpoint, favorable numbers is one of the primary determinants for companies that select South America for their expansion. Although it is important that the financials make sense, another aspect that should be looked at with equal importance is the culture. Culture can have a large impact on employees and companies when trying to expand into a region like South America, this is heavily driven by deep rooted traditions and culture.

This study took a qualitative approach through semi-structured interviews to gain a better understanding of best practices taken by South American companies when conducting business with foreign, United States based companies. The results from the interviews are intended to raise awareness for the need to improve cross cultural awareness for companies based in the United States, as they attempt to become multinational corporations. Furthermore, this study is intended to raise the concern for the improvement of cross cultural training, and the findings considered during development of cross cultural training, development, and coaching programs. Collectively, the strategies and tools developed using this study will enhance cultural knowledge and assist in successful completion of employees sent on international assignments.