A new study commissioned by EF Education First (EF) found that, as globalisation gathers pace, linguistic and cultural barriers are stifling growth and are risks that board directors need to manage more closely.
This was the key finding from a recent global study entitled ‘Competing Across Borders - How Cultural and Communication Barriers Affect Business’. The report was conducted by the Economist Intelligence Unit (EIU)and commissioned by EF Education First - the leading corporate language training provider.
The study involved a survey of 572 executives from multinational companies around the world and explored the challenges companies face when they have to operate or compete in increasingly international markets. More specifically, it assessed the role that cross-border communication and collaboration play in the success or failure of companies with ambitions to grow overseas.
The study revealed almost two thirds (64%) of businesses globally admitted differences in language and culture make it difficult to gain a foothold in foreign markets and that cultural differences have hampered their international expansion plans. In addition, 70% stated that they sometimes encounter difficulties when communicating with business stakeholders.
Impact on the bottom line
Set against this, the overwhelming majority of executives surveyed agreed that if cross-border communication were to improve at their company, then their profits (89%), revenue (89%) and market share (86%) would each increase significantly.
Despite the realisation that cross-border communications skills are inextricably linked to a company’s financial health, why aren’t companies taking sufficient action to address the root causes of misunderstandings?
Recruitment and Training
It seems the answer to this lies largely with recruitment and training. Overall, just 50% of executives believe that their company invests enough in recruiting and selecting the right people who are suited to cross-border collaboration. In addition, over a quarter (28%) of executives share the view that management time spent assessing the impact of cross-border communications is insufficient once a hire is made.
So, the message is clear, for a business to achieve overseas success, executives need to ensure that their employees get regular and up-to-date training to equip them with the right skills to communicate across borders effectively and efficiently. Only then will businesses be able to fully capitalize on the international opportunities available to them.