"Unless you know the mountains and the forests, the defiles and impasses, the lay of the marshes and swamps, you cannot maneuver with an armed force. Unless you use local guides, you cannot get the advantages of the land."

– Sun Tzu, 'The Art of War'

International Business Defined

International business consists of transactions and collaborations that are devised and carried out across national borders to satisfy the strategic intent and objectives of companies, organizations, and individuals. Two primary types of international business are trade and investment. These transactions and collaborations take on various forms – export-import trade, co-innovation, consultancy services  and sub-contracting, business process outsourcing (BPO), and direct foreign investment -  which are often interrelated  Direct foreign investment "is carried out in varied forms, including wholly owned subsidiaries and joint ventures. Additional types of international business are licensing, franchising, and management contracts."¹

Managing Cross-Cultural Differences

If you wish to reach foreign buyers or sellers or need to bring joint venture projects to a successful outcome, you must be culturally competent. You must understand intercultural communication and effectiveness if you wish to avoid such serious problems as:

• Unmet commitments from suppliers;

• Stalled joint projects, deals coming undone;

• Frequent miscommunications, failed meetings, and unanswered routine communications;

• Low productivity.

Cultures – both national and organizational – differ along many dimensions. Four of the most important are:

1. Directness (get to the point versus imply the messages)

2. Hierarchy (follow orders versus engage in debate)

3. Consensus (dissent is accepted versus unanimity is needed)

4. Individualism (individual winners versus team effectiveness)²

Bibliography:

1. "International Business", Sixth Edition; Michael R. Czinkota, Ilkka A. Ronkainen and Michael H. Moffett

2. "Cultures and Organizations: Software of the Mind", Geert Hofstede

3. "Control Your Destiny or Someone Else Will", Noel M. Tichy and Stratford Sherman

4. "Improving Board Performance in Emerging Markets," McKinsey Quarterly

5. "Smart Corporate Leader," Vadim Kotelnikov

6. "Smart Business Architect," Vadim Kotelnikov

7. "Corporate Strategies," Vadim Kotelnikov

8. "Competitive Strategies," Vadim Kotelnikov

9. "Strategies of Market Leaders," Vadim Kotelnikov

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