Intercultural communication in the world of business

Globalization and talent flow around the world have resulted in greater demands on managers and leaders to adapt to different cultures. This chapter explores the role of intercultural communication in the world of business. Intercultural competence refers to the interaction that occurs when two or more cultural groups come together and is part of a broader set of global management competencies, which includes culture and communication. We document how intercultural communication, as a part of intercultural competence, is crucial for facilitating international trade and business and managing a multicultural workforce in an era of globalization. Multinational firms benefit when leaders and managers demonstrate intercultural competence in international business activities such as expanding to foreign market expansion, negotiating with host country nationals, and in managing foreign subsidiaries. Intercultural competence is also essential for managing a multicultural workforce and realizing the benefits of diversity such as greater creativity and innovation. We conclude with emerging issues in intercultural communication and identify ways to develop intercultural competence for managers and leaders