Steinbeis: The invisible power of intercultural competence

Creation Date: 12.05.2026 | 0 Comments

Cultural differences are frequently perceived as intangible or secondary considerations; however, their impact on business performance is both substantial and measurable. The success of international collaboration, the capacity for innovation, and even the outcome of negotiations are often determined by an organisation’s ability to understand, interpret, and strategically leverage cultural values and dynamics within specific markets. Dr. Efrat Pan highlights why intercultural competence has become a critical competitive advantage in today’s global business environment and demonstrates how such capabilities can be systematically cultivated. To address this need, Steinbeis School of Management and Technology GmbH (SMT), have developed an intensive seminar on intercultural competence designed to equip future leaders with the knowledge and practical skills required to manage international exchange effectively — both at the corporate and project level.

Differences in communication styles (according to Hall, 1990, in Deresky & Miller, 2022, p. 153).

Overcoming cultural barriers with SMT’s intercultural competence seminar.

Culture refers to the “programming of the human mind that distinguishes one group of people from another” (Hofstede, n.d.). It becomes particularly apparent when problems or misunderstandings arise. This makes culture relevant in any situation involving interaction between people, especially between people from different backgrounds.

According to a study by INSEAD, the promotion of innovation is closely linked to intercultural competence and working in diverse teams. It influences brand building, conflict management and the regulation of desired behaviours and routines that contribute to corporate success (Witt and Redding, 2009). How sensitively misunderstandings are handled depends on the level of intercultural competence. This, in turn, is closely linked to cultural intelligence (CQ),measured by the extent to which an outsider can interpret and reflect on unfamiliar behaviour (Earley & Mosakowski, 2004).

When culture becomes an obstacle

A problem arises because “we do not see things as they are, but as we are” (Anis Nin, n.d.), which leads to a communication gap. “Communication is a process of sharing meanings through the transmission of messages, artefacts, words and behaviours for the exchange of knowledge, motivation and negotiation” (Deresky & Miller, 2022, p. 136). Communication must reflect cultural competence (Morley & Cerdin, 2010). This is particularly true in the international business environment, where people interact with measurable consequences, such as business success or failure, team collaboration or division, and recognised or missed business opportunities. Hofstede establishes a link between corporate culture and the achievement of business KPIs, arguing that culture dictates how things are approached, helps determine motivation, and strengthens the connection with customers (Hofstede, n.d.).

The influence of culture is reflected acriss the industrial spectrum, as companies rely heavily on experience and know-how rather than solely on formal education and knowledge. The way in which business is conducted – for example, the understanding of time, decision-making, or the exchange of information versus information protection – is also culturally shaped. It is therefore fair to assume that “cultural differences are the cause of failed negotiations and interactions, costing US companies over two billion US dollars a year in losses from failed overseas operations alone” (Deresky & Miller, 2022, p. 97). So what can managers do to solve this problem?

Trust and empathy are prerequisites for successful communication

Understanding the art of communication is essential for efficient business interaction. Effective communication requires trust and empathy. Trust is defined as belief in another person’s abilities and integrity, ensuring a sense of security in encounters and in interactions between groups. Trust is therefore the foundation of most successful organisations (Frei & Morriss, 2020). There are two types of trust: Cognitive trust and affective trust. In task-oriented cultures (such as North America and Germany), trust is based on experience, whereas in relationship-oriented societies (such as Japan), it is the result of connection, tolerance and mutual respect (Behr, 2018).

Hall compares Japan and North America and describes differences across various categories: communication style, non-verbal communication and decision-making. Japanese managers tend to be more collectivist and holistically oriented in their culture (Hofstede, n.d.). They prioritise interpersonal relationships and prefer implicit and nuanced communication. This communication is based on affective trust, and demonstrates sensitivity towards others through the pursuit of group consensus (Hall, 1987). In contrast, North American managers are more individualistic, task-oriented, analytical, explicit and direct (Hofstede, n.d.). Their leadership style is assertive, self-assured and context-poor.

SMT seminar with a real-life business case

To bridge cultural differences in the business world, the School of Management and Technology (SMT) has been successfully running a biannual seminar on intercultural competence since the early 2000s. In cooperation with the Tokyo University of Agriculture and Technology (TUAT). The seminar consists of a two-week intensive programme. German Master’s students travel to Japan to learn about intercultural competences and work with Japanese students on a real-world business case. Such a case serves to solve a problem, typically involving the development of a target market, the launch of a product under different regulatory frameworks, communication challenges and brand development. “The benefit lies in the collaboration and exchange that arises from the mix of groups. Local insights are combined with diverse experiences and backgrounds, which benefits the business case company,” says Dr. Peter Schupp, Managing Director of SMT. In this way, SMT promotes intercultural competence and supports students in adapting to new environments. This is beneficial both for their international careers and for a case- company.

Participation as a case study is open to all companies, free-of.charge. We always look to expand the reach and give value to companies interested in a different market. SMT supports companies across a wide range of sectors, from multinational corporations to start-ups. Previous cases have addressed topics such as technology transfer and the regulatory and ethical implementation of AI, manufacturing, marketing, and improvement of internal communication within international departments.

[1] Behr, J. (2018, Oct. 5). Navigating cross-cultural trust barriers in business relationships. www.forbes.com/sites/forbescoachescouncil/2018/10/05/navigating-cross-cultural-trust-barriers-in-business-relationships/;
[2] Deresky, H. & Miller, S. R. (2022). International Management: Managing across borders and cultures. (10th ed.). Global Edition. Pearson Education Limited, London.
[3] Earley, P. C. & Mosakowski, E. (2004). Cultural Intelligence. Harvard Business Review, 139-146.
[4] Hall E. T. & Hall, M. R. (1987). Hidden differences: Doing business with the Japanese. Dell Publishing Group, Inc.: NY, USA.
[5] Hofstede insights a (n.d.). Definition. Abgerufen 29.01.2026, news.hofstede-insights.com/news/what-do-we-mean-by-culture 
[6] Morley, M. J. & Cerdin, J. L. (2010). Intercultural competence in the international business arena. Journal of Managerial Psychology, 25(8), 805-809. Doi: 10.1108/02683941011089099
[7] Quote source (n.d.). „We don’t see things as they are, we see them as we are”. Abgerufen 06.10.2022, quoteinvestigator.com/2014/03/09/as-we-are/ 
[8] Witt, Michael A. & Redding, Gordon. (2009). Culture, meaning, and institutions: Executive rationale in Germany and Japan. Journal of International Business Studies, 40(5): 859-85. Doi:10.1057/jibs.2008.81