Before we discuss on the term cultural insensitivity let us understand the term culture.
The Dutch writer and academic Geert Hofstede referred to culture as “the software of the mind”-the social programming that runs the way we think, act and perceive ourselves and others”.
A more formal definition is that “culture is a set of learned core values, beliefs, standards, knowledge, morals , laws, and behaviors shared by individuals and societies that determines how an individual acts, feels, and views oneself and others”.[ By Charles Mitchell 2000 ]
Cultural Insensitivity: The inability of a person to accept or to become aware of cultural differences. Insensitivity leads miscommunications, increased stress for all parties involved, and an increased risk of unsuccessful business outcomes. [ By JOHN J. O’CONNELL 1997 ]
Problems: current problems facing American firms abroad
After World War II for 30 years American business dominated the foreign markets but now there is change in the situation Japanese, European, and East Asian corporations are making a gradual entry in to markets which was once dominated by U.S. MNEs, causing concerns and making it a matter of importance to look at major problems facing U.S. multinationals.
These problems are:
Emphasis on short-term profitability
Inadequate long-term plans for foreign market development.
Incentives based upon optimization and a quantification orientation instead of customer satisfaction and service.
Ethnocentrism causing a mental dependence upon the “good old American ingenuity” ideology.
Improper, inadequate, or no use of indigenous human resources.
The last three problems are direct cause of cultural insensitivity because there is neither incentive nor motivation ...