The impact of cultural sensitivity on business growth in the container shipping industry

Landenberg, Y., 2019. The impact of cultural sensitivity on business growth in the container shipping industry. DBA, Nottingham Trent University.

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Abstract

For firms around the world, globalization brings new challenges as well as new opportunities. This process, in which information, products, people, money and technology cross national boundaries, has been rapidly growing (Walters 2001). In the current globalised business environment marked by diverse cultures and multiple interactions, recognition of cultural differences is critical. While globalization seeks to integrate different cultures in one standardized form, the culture, ethics, behaviour and local laws in each country or society serve to maintain local variations (Huff and Smith 2008).

Based on an understanding of the inherent business potential of global markets, global firms have devoted efforts to searching for new markets both for selling their products and for finding more cost-efficient manufacturing opportunities (Johnson, Lenartowicz, and Apud, 2006; Walters 2001). The need to understand the systems involved in international institutions, new markets, and retail business has yielded an ongoing desire to enhance knowledge to support business (Dixon 1982, 1984, 1991). In a global business environment that includes person-to-person interactions, cross cultural gaps can become an obstacle that may negatively affect the outcome of business engagements. Sensitivity to cultural gaps and the ability to bridge them can positively impact the target of business engagements and thus enhance business (LaBahn and Harich, 1997; Su et al. 2008). This research aims to enhance knowledge regarding the impact of cultural sensitivity on business engagements in general and on sales performance in the container shipping industry in particular.

The theoretical model used in this research is a mediation-based model emerging from market observations that were supported and reinforced by the literature review. The model is based on the notion that salespersons who are more culturally sensitive will develop higher level relationships with their customers. These relationships, in turn, will yield higher sales performance.

The initial model was based on the positive effect of cultural sensitivity on relationship level found in the literature (Nguyen and Nguyen 2014). That initial model assumed that the correlation between the predictor variable of cultural sensitivity and the criterion variable of sales performance is mediated by the level of the salesperson-customer relationship. Yet the research findings provided no indication of the involvement of a mediation model. According to the results, relationship level plays no role in the relationship between cultural sensitivity and success in sales performance. Indeed, in cross-cultural business environments the component of cultural sensitivity is so significant in predicting performance that it renders the relationship level component statistically non-significant as a predictor of performance. This finding adds a very important layer of knowledge to global business regarding the importance of cultural sensitivity. Instead, the outcome of this research points to a different proposed model of cross-cultural sales engagements. The dimensions of relationship level, and primarily trust, that were previously assumed to be necessary for building a strong relationship with the business partner turned out to be statistically insignificant in predicting performance when cultural sensitivity is included in the model. In a cross-cultural business environment, sales can flourish without the necessity for a high relationship level with the customer so long as the salesperson maintains high cultural sensitivity.

Furthermore, this study reviews topics complementary to the research: globalization, culture, cultural diversity, cultural sensitivity and relationship level, thus enhancing the body of knowledge regarding the impact of cultural sensitivity on business engagements in general and on sales performance in the container shipping industry in particular. The analysis is based on actual sales performance data and can thus provide global companies with practical knowledge regarding how cultural sensitivity and level of relationship between salesperson and customer are related to success in sales performance—the company's source of income.

Item Type: Thesis
Creators: Landenberg, Y.
Date: April 2019
Rights: This work is the intellectual property of the author. You may copy up to 5% of this work for private study, or personal, non-commercial research. Any re-use of the information contained within this document should be fully referenced, quoting the author, title, university, degree level and pagination. Queries or requests for any other use, or if a more substantial copy is required, should be directed in the owner(s) of the Intellectual Property Rights.
Divisions: Schools > Nottingham Business School
Depositing User: Linda Sullivan
Date Added: 29 May 2020 15:33
Last Modified: 29 May 2020 15:36
URI: http://irep.ntu.ac.uk/id/eprint/39912

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