How do cultural contexts specifically in communication styles,

hierarchical structures, business etiquettes and cross-cultural

differences impact the growth of small business in a developed
country (Spain) vs developing country (Pakistan)
Table of contents
List of Tables
List of Figures
List of acronyms
Executive Summary
1. Introduction
1.1. Background of the Problem
1.2. Background of the Study

2. Objectives of the Study

2.1. Chapter Introduction
2.2. Problem Statement
2.3. Objectives of the Study
2.4. Research Question
2.5. Hypothesis Statement
2.6. Limitations.
2.7. Chapter Conclusion

3. Literature review

4. Collection of Primary Data

4.1. Chapter introduction
4.2. Research design
4.2.1. Research Paradigm
4.2.2 Conceptual framework
4.2.3. Design of the Research Instrument
4.2.4. Population and Sample
4.2.5. Sampling Technique
4.3. Research Execution
4.4. Descriptive Statistics
4.4.1. Respondent Descriptive Statistics
4.4.2. Descriptive Analysis of Data
4.5. Chapter Conclusion

5. Analysis and Conclusions

5.1. Chapter Introduction
5.2. Hypothesis Testing
5.3. Interim Conclusion

6. Conclusions and Recommendations

6.1. Chapter Introduction
6.2. Summary of Findings
6.2.1. Summary of Primary & Secondary Research
6.2.2. Overall Summary and Conclusions
6.3. Areas for future research
6.4. Lessons Learned
 6.5. Ethical Considerations
6.6. SDG Implications
7. References

List of Tables

S.N Table Page Description

o. Name no.

1 Table 1 27 Independent and dependent variables in the

study

2 Table 2 28 Independent and dependent variables in the

study

3 Table 3 33 Descriptive analysis (Gender Split)

4 Table 4 42 Importance of building personal

relationships in business (Overall)

5 Table 5 43 Importance of building personal

relationships in business (Pakistan)

6 Table 6 43 Importance of building personal

relationships in business (Spain)

7 Table 7 57 ANOVA single factor analysis

(Communication styles)

8 Table 8 57 ANOVA single factor analysis (Cross cultural

communication)

9 Table 9 59 ANOVA single factor analysis (Business

Hierarchy)

10 Table 10 60 ANOVA single factor analysis (Business

Etiquettes)
List of Figures

S.N Figure Page Description

o. Name no.

1 Fig. 1 24 Hofstede´s Model Spain vs Pakistan

2 Fig. 2 33 Pie Chart (Gender Split)

3 Fig. 3 34 Pie Chart (Employee Split)

4 Fig. 4 35 Bar Chart (Age Split)

5 Fig. 5 37 Bar Chart (Industry Split- Overall)

6 Fig. 6 37 Bar Chart (Industry Split- Pakistan)

7 Fig. 7 38 Bar Chart (Industry Split- Spain)

8 Fig. 8 40 Pie Chart (Communication Style Overall)

9 Fig. 9 40 Pie Chart (Communication Style Pakistan)

10 Fig. 10 41 Pie Chart (Communication Style Spain)

11 Fig. 11 41 Bar Chart (Communication style across

industries)

12 Fig. 12 44 How do you solve communication problems

(Overall)

13 Fig. 13 45 How do you solve communication problems

(Pakistan)

14 Fig. 14 45 How do you solve communication problems

(Spain)

15 Fig. 15 48 Dealing with conflicts from etiquette

 differences (Overall)

16 Fig. 16 48 Dealing with conflicts from etiquette

differences (Pakistan)

17 Fig. 17 49 Dealing with conflicts from etiquette

differences (Spain)

18 Fig. 18 50 Effectiveness of strategies dealing with

cultural differences

19 Fig. 19 51 Effectiveness of strategies dealing with

cultural differences

20 Fig. 20 51 Effectiveness of strategies dealing with

cultural differences

21 Fig. 21 53 Imp of cultural awareness for long term

business relationships (Overall)

22 Fig. 22 53 Imp of cultural awareness for long term

business relationships (Pakistan)

23 Fig. 23 54 Imp of cultural awareness for long term

business relationships (Spain)
Chapter 1
Introduction

1.1 Background of the Study

Globalization has fundamentally transformed the way businesses operate,

compelling companies to function within a highly interconnected world
where even small enterprises can expand beyond national borders. The
liberalization of markets, advancements in digital technology, and the ease
of international trade inspire many small businesses to pursue global
opportunities, access new markets, establish diverse supply chains, and
attract new customers. While globalization presents numerous growth
avenues, it also brings significant challenges, particularly in navigating
cultural differences. Understanding cultural nuances is crucial for businesses
looking to establish strong international relationships and sustain long-term
success in foreign markets. Cultural awareness refers to recognizing,
respecting, and effectively responding to cultural differences. It extends
beyond language and includes customs, values, traditions, and social
behaviors. Businesses that prioritize cultural awareness enjoy numerous
advantages, including improved communication, enhanced customer
relations, and expanded market reach. Communication is the backbone of
any successful business. Misunderstandings due to cultural differences can
lead to conflicts, inefficiencies, and lost opportunities. For instance, what is
considered direct and assertive communication in one culture may be
perceived as rude or aggressive in another. Businesses must tailor their
communication styles to fit the cultural expectations of their stakeholders.
Establishing trust and rapport is crucial in business dealings. Cultural
awareness helps businesses navigate relationship-building in diverse
markets. For example, in many Asian cultures, business relationships are
built on personal trust and long-term connections, while Western cultures
often prioritize efficiency and contract-based dealings. Recognizing these
differences allows companies to build stronger partnerships. Understanding
cultural nuances enables businesses to develop products and services that
resonate with diverse customer bases. Companies like McDonald's and
Starbucks have successfully adapted their offerings to fit local tastes,
demonstrating cultural sensitivity. A culturally aware business can avoid
marketing blunders that may alienate customers or cause reputational
damage. Diverse workplaces bring different perspectives, creativity, and
problem-solving approaches. However, cultural differences can also lead to
misunderstandings and workplace conflicts. By fostering cultural awareness,
businesses can create inclusive work environments where employees feel
valued and respected, boosting morale and productivity.

Challenges of Cultural Awareness in Business

While cultural awareness offers many benefits, businesses also face
challenges in implementing it effectively.
1. Overcoming Stereotypes and Biases
Cultural stereotypes and unconscious biases can lead to misjudgments and
miscommunications. Businesses must actively work to overcome these
biases through education and exposure to diverse cultures.
2. Managing Cross-Cultural Conflicts
Differences in work ethics, negotiation styles, and decision-making
processes can create tension in international business interactions.
Companies need to develop conflict-resolution strategies that acknowledge
and respect cultural differences.
3. Adapting to Local Regulations and Norms
Each country has its own set of business regulations, etiquette, and
expectations. Failure to comply with these norms can result in legal issues
and reputational damage. Companies must conduct thorough research and
seek local expertise to navigate these complexities.
4. Language Barriers
Even in English-speaking countries, variations in dialects and idiomatic
expressions can create misunderstandings. Businesses operating in
multilingual environments must invest in translation services and cross-
cultural training to bridge language gaps.

Cultural awareness is a key driver of business success in today’s

interconnected world. By understanding and respecting cultural differences,
businesses can improve communication, build strong relationships, expand
their market reach, and enhance employee engagement. However,
achieving cultural awareness requires effort, training, and strategic
adaptation.
Companies that prioritize cultural sensitivity are better positioned to thrive
in the global marketplace, fostering long-term success and positive brand
reputation. Investing in cultural awareness is not just a moral obligation—it
is a strategic advantage that can set businesses apart in a competitive
landscape.
Cultural Influence on Business in Developed and Developing
Countries
Cultural differences impact various aspects of business operations, from
management styles to consumer behavior. In developed countries, cultural
contexts are often characterized by individualism, a strong emphasis on
innovation, and the pursuit of personal success. These cultural attributes
create an environment conducive to entrepreneurship, where risk-taking is
encouraged, and failure is perceived as a learning opportunity. SMEs in
developed nations benefit from structured and regulated business
environments, where work ethics, transparency, and innovation serve as
fundamental drivers of growth. In contrast, developing countries often
emphasize community, family, and social networks. This collective culture
can be both an asset and a challenge. Close-knit communities and strong
local ties provide a sense of security and reliability in business relationships.
However, cultural conservatism, traditionalism, and limited access to formal
education or technology may hinder entrepreneurial growth. Furthermore, in
some cultures, failure is heavily stigmatized, discouraging risk-taking and
innovation.
Business Relationships and Networking
In developed countries, business relationships are typically formal and
transactional. Networking follows established protocols, such as industry
events, professional organizations, and digital platforms. Business
interactions are governed by professionalism, punctuality, and direct
communication, shaping how SMEs engage with customers, suppliers, and
partners. In contrast, developing countries often rely on informal, trust-
based networking. Relationship-building is deeply rooted in personal
connections, mutual respect, and long-term trust. The importance of family
and social networks is particularly pronounced, and SMEs may rely on word-
of-mouth recommendations, community ties, and traditional methods of
communication. This informal networking can be advantageous in
navigating local markets but may also limit opportunities for global
expansion or collaboration.
Management Styles in Developed and Developing Economies
Management approaches differ significantly between developed and
developing economies. Leadership in SMEs within developed countries is
often democratic or participative, focusing on employee empowerment,
work-life balance, and autonomy. Many developed cultures expect
transparency and inclusivity in decision-making, where employees are
encouraged to contribute ideas and feedback. In contrast, SMEs in
developing countries often adopt hierarchical and centralized management
structures, particularly in cultures where authority and seniority are highly
valued. Leadership styles tend to be more top-down, with decision-making
concentrated at the upper levels of business. While this approach may slow
down innovation, it ensures efficient decision-making in uncertain business
environments.
Consumer Behavior and Market Dynamics
Consumer behavior and market structures also vary across developed and
developing nations. In developed countries, SMEs emphasize consumer-
centric marketing strategies, product differentiation, branding, and superior
customer service. Consumers in these economies generally possess higher
purchasing power and access to a diverse range of products and services,
making them more discerning in their choices. Consequently, SMEs must
cater to niche markets and respond proactively to evolving consumer
preferences.
Conversely, SMEs in developing countries face unique challenges in
understanding consumer behavior due to lower disposable income levels
and different value systems. Consumers in these regions often prioritize
essential needs over luxury or specialized products, and purchasing
decisions are influenced by social norms, religion, and traditions. Cultural
preferences and local customs significantly impact the types of products and
services that SMEs should offer. Recognizing these distinctions is crucial for
businesses aiming to succeed in international markets.
The Role of Cultural Awareness in Business Success
Cultural differences play a critical role in shaping business practices,
consumer behavior, and workplace dynamics. Small businesses, which
typically lack the extensive resources and international experience of large
corporations, must be especially cognizant of these differences when
entering foreign markets. Unlike multinational firms with well-established
global strategies, small enterprises often rely on flexible, relationship-driven
approaches. Business success or failure in new markets frequently hinges on
a company’s ability to interpret and respond to cultural nuances, including
communication styles, hierarchical norms, and business etiquette.
Cultural awareness affects all aspects of business, from conventional
business practices to negotiation styles, leadership structures, decision-
making processes, customer relationships, and overall business operations.
Miscommunication and misunderstandings due to cultural differences can
lead to business failures, whereas companies that successfully navigate
cultural intricacies build trust, establish strong networks, and gain a
competitive advantage in foreign markets.
Communication Styles: Spain vs. Pakistan
Communication styles vary significantly across cultures, influencing
business interactions and relationships. Spain, a developed European nation,
is known for its direct and open communication culture. Spanish business
professionals typically engage in frank discussions, express opinions openly,
and encourage debate. This transparency fosters a collaborative work
environment and enables efficient decision-making processes.
Pakistan, on the other hand, exhibits an indirect and context-dependent
communication style. Business conversations in Pakistan often involve a
high level of politeness, subtlety, and an emphasis on preserving harmony.
Indirect communication can lead to ambiguity in business negotiations,
requiring foreign entrepreneurs to be adept at reading between the lines
and interpreting non-verbal cues.
Hierarchical Structures in Business
Hierarchical structures also influence workplace dynamics and decision-
making processes. Spain’s corporate culture tends to be more egalitarian,
promoting teamwork, inclusivity, and open communication. Employees are
encouraged to participate in discussions, and businesses operate with
relatively flat organizational structures.
Pakistan, by contrast, adheres to a more hierarchical business culture,
where seniority and authority play pivotal roles. Respect for authority is
deeply ingrained in the business environment, and decision-making is
usually concentrated at the top levels. While this approach ensures order
and efficiency, it may hinder creativity and slow down adaptability.
Business Etiquette and Professional Conduct
Business etiquette, including formalities, gift-giving customs, and meeting
protocols, also varies between Spain and Pakistan. In Spain, business
interactions typically emphasize punctuality, structured meetings, and a
balance between professional and personal relationships. Gift-giving is not a
common practice in professional settings, and business discussions often
follow a structured format.
In Pakistan, business etiquette is more relationship driven. Building personal
rapport is essential before engaging in formal business discussions. Gift-
giving is sometimes practiced as a gesture of goodwill, and meetings often
follow a flexible structure, with a focus on building trust and understanding
before delving into business matters.

1.2 Background of the Problem

Small businesses face a multitude of challenges when expanding into

international markets, with cultural adaptation being one of the most
significant barriers. Unlike large multinational corporations, small businesses
often operate with limited financial capital, which restricts their ability to
invest in necessary market research, localization strategies, and business
expansion initiatives. Additionally, they typically lack comprehensive market
knowledge about foreign consumer behavior, industry trends, and economic
conditions, which makes entering a new country particularly challenging.
Moreover, small businesses often do not have the same level of experience
in cross-cultural operations, making it difficult for them to navigate the
complexities of diverse business environments effectively. In contrast,
multinational corporations benefit from abundant financial resources and
well-established market entry strategies, allowing them to mitigate these
challenges more efficiently.
The cultural divide is one of the most overlooked yet critical barriers to
success in the international market. Communication styles that are not
compatible can lead to misunderstanding of business intentions thereby
causing obstacles in decision making, or on the contrary influence the speed
with which decisions are made. Expectations around professional etiquette,
things like punctuality, meeting protocols, relationship building practices are
misaligned and it can lead to a strained partnership or a lost opportunity.
Research on globalization, multinational corporations, and strategies for the
expansion business has expanded considerably, but comparatively little
has been done to understand the impact of cultural differences on the
growth of the small business [9]. Much research on cross cultural business
interactions is done on large entities that have standardized frameworks of
international operations. While not new, small businesses, or those that are
heavily reliant on adaptability, relationships and local market integration
have different challenges than large businesses and need a more nuanced
understanding of the cultural influences.

Comparison is therefore necessary between a developed economy, such as

Spain and a developing economy such as Pakistan, to know how cultural
elements are responsible for successes or failures of small business in a
different socio-economic environment. Unlike Pakistan, Spain's structured
business environment and open communication culture means that Spain's
business relationships are completely different [IO]. Comparing these
differences will yield insight into the handicaps that small businesses in each
country must overcome and the challenges encountered to each country.
This study will help entrepreneurs identify communication styles,
hierarchical structures and business etiquette that plays a role in small
business operations to develop culturally informed strategies. This will
address these cultural gaps to improve cross border collaboration, minimize
misunderstandings, and promote sustainable business growth in
international markets. One of the major hurdles’ small businesses face is the
language barrier. The inability to communicate effectively in a foreign
language can lead to misinterpretations and confusion, making it difficult to
build rapport with local stakeholders. Language barriers can result in
misunderstandings in negotiations, miscommunications in contracts, and
difficulties in marketing efforts, all of which are critical for success in foreign
markets. Additionally, small businesses may struggle with negotiation
tactics that do not align with the local business culture. What may be
considered a standard practice in one country may be viewed as aggressive
or unprofessional in another. Furthermore, unfamiliarity with local business
customs and practices can make it difficult for small businesses to establish
trust with potential partners, attract new customers, and form long-lasting
relationships. Without an understanding of the social and cultural
expectations that govern business interactions, small enterprises may find
themselves at a disadvantage, struggling to integrate into the new market
effectively. The cultural divide is often an overlooked yet highly critical
barrier to success in the international market. Business communication
styles vary significantly across different countries, and incompatibility in
communication can lead to misunderstandings and misinterpretations of
business intentions. If business partners from different cultural backgrounds
do not share the same communication norms, they may struggle to develop
mutual trust, leading to unnecessary conflicts and delays in decision-
making. In some cultures, decision-making is a slow and hierarchical process
requiring consensus from multiple stakeholders, whereas in others, quick
and decisive action is favored. This difference in decision-making speed can
lead to frustration and inefficiencies in business dealings, affecting
productivity and the ability to close deals efficiently.
Moreover, expectations surrounding professional etiquette, such as
punctuality, meeting protocols, and relationship-building practices, vary
widely from one country to another. In some cultures, being late to a
meeting is seen as highly unprofessional, while in others, it may be
considered acceptable or even expected. Similarly, the level of formality in
business interactions can vary. Some cultures prioritize building personal
relationships before discussing business matters, while others prefer to get
straight to the point. Misalignment in these expectations can result in
strained partnerships, lost opportunities, and difficulty in maintaining long-
term business relationships.

Chapter 2: Objectives of the Study

2.1 Introduction
While globalization research has extensively covered the operations of
multinational corporations, there is comparatively little understanding of
how cultural differences specifically impact small business growth. The
majority of cross-cultural business research has focused on large companies,
which have standardized frameworks for international operations and
dedicated departments for managing cross-border challenges. Small
businesses, however, operate with a high degree of adaptability and rely
heavily on personal relationships and local market integration. Their
challenges are different from those of large corporations, and they require a
more nuanced understanding of how cultural influences shape business
interactions, decision-making, and market success.
To gain deeper insights into the impact of cultural differences on small
businesses, it is essential to compare business environments in developed
and developing economies. For example, comparing Spain, a developed
economy, with Pakistan, a developing economy, can provide valuable
information on how cultural elements contribute to the success or failure of
small businesses in different socio-economic contexts. Spain has a well-
structured business environment characterized by transparent regulations, a
high degree of openness in communication. In contrast, Pakistan’s business
environment operates within a more informal structure, where business
relationships are often built on personal trust and networks rather than
formal agreements. Understanding these differences can help identify the
particular challenges that small businesses face in each country. For
instance, in Spain, small businesses may struggle with intense competition
and high operational costs, whereas in Pakistan, they may face challenges
related to bureaucracy, corruption, and informal business practices.
Comparing these two different settings will offer insights into the strategies
small businesses can use to overcome cultural barriers and successfully
expand into foreign markets. This study will help entrepreneurs develop
culturally informed strategies by identifying key factors such as
communication styles, hierarchical structures, and business etiquette that
influence small business operations. By recognizing the cultural
expectations of foreign markets, small businesses can adapt their
approaches to communication, negotiation, and partnership-building,
reducing the risks associated with cross-border expansion. Culturally aware
business strategies can also improve collaboration between international
business partners, minimize misunderstandings, and enhance trust-building
efforts. Additionally, understanding cultural differences can help small
businesses navigate regulatory and bureaucratic challenges more
effectively. By familiarizing themselves with the administrative requirements
of their target market, entrepreneurs can proactively prepare for compliance
issues and reduce delays in business operations. Small businesses can also
leverage cultural awareness to tailor their marketing strategies, ensuring
that their messaging resonates with local consumers and aligns with cultural
preferences. In conclusion, while small businesses face numerous challenges
when expanding into international markets, cultural adaptation remains one
of the most critical and often underestimated factors. Language barriers,
unfamiliar business customs and differing communication styles all
contribute to the difficulties faced by small businesses in foreign markets.
Unlike large multinational corporations with abundant resources and
established global strategies, small businesses must rely on adaptability,
relationship-building, and a deep understanding of cultural nuances to
succeed. By comparing the business environments of developed and
developing economies, such as Spain and Pakistan, entrepreneurs can gain
valuable insights into the role of cultural elements in shaping business
success. Ultimately, equipping small businesses with the knowledge and
strategies to address cultural barriers will help foster stronger cross-border
collaborations, minimize risks, and promote sustainable business growth in
international markets.

2.2 Problem Statement

As already described above, Cultural contexts significantly influence small

business growth, particularly in communication styles, hierarchical
structures, and cultural frameworks. In Spain, communication is direct yet
relationship-driven, and hierarchies are flexible, fostering collaboration. A
stable system supports entrepreneurship. In contrast, Pakistan’s
communication is more indirect, with rigid hierarchies where decision-
making is centralized. Bureaucratic hurdles often require informal networks
to navigate other administrative complexities. These differences impact how
businesses establish trust, operate, and expand. Understanding and
adapting to these cultural and structural factors is crucial for entrepreneurs
and investors seeking success in either market.
Thus, the paper will focus on the following problem
How do cultural contexts specifically in communication styles,
hierarchical structure, business etiquettes and cross cultural
communication impact the growth of small business in a developed
country (Spain) vs developing country (Pakistan)

2.3 Objectives of the Study

The specific aims of the study is to uncover these questions:
1. To examine the role of communication styles in small business
operations.
Communication styles vary significantly across cultures and can
directly impact the success of small businesses. In Spain,
communication tends to be direct, expressive, and open, facilitating
clear negotiations and quick decision-making. In contrast, Pakistan’s
communication style is often indirect, relying heavily on non-verbal
cues, relationship-building, and respect for authority. Understanding
these differences is crucial for entrepreneurs, as effective
communication enhances collaboration, strengthens partnerships,
and reduces misunderstandings in business transactions. This study
aims to explore how these distinct communication styles influence
employee interactions, client relationships, and business negotiations
in both Spain and Pakistan, and how small businesses can adapt to
these cultural expectations to foster growth.

2. To analyze the impact of hierarchical structures on business

growth.
Organizational hierarchy plays a crucial role in shaping decision-
 making processes, employee motivation, and leadership styles within
small businesses. Spain has a relatively flat hierarchy, where
employees are encouraged to share ideas and participate in decision-
making, fostering innovation and agility. On the other hand, Pakistan’s
business culture follows a more rigid hierarchical structure, where
authority figures hold significant decision-making power, and
deference to seniority is expected. This study will analyze how these
contrasting approaches to hierarchy influence business efficiency,
employee satisfaction, and long-term sustainability of small
businesses. Additionally, it will explore how businesses in each
country can leverage or adapt their hierarchical structures to enhance
productivity and competitive advantage.

3. To compare business etiquette norms and their influence on

professional relationships.
Business etiquette dictates the formal and informal rules governing
professional interactions, from initial meetings to contract
negotiations. In Spain, business etiquette is characterized by a blend
of professionalism and social engagement, where building personal
connections is essential for successful collaborations. In Pakistan,
etiquette is deeply rooted in tradition, with strong emphasis on
respect, trust, and patience in business dealings. The differences in
greeting customs, meeting protocols, negotiation strategies, and
expectations for punctuality can significantly impact professional
relationships. This study aims to compare these norms and assess
how they influence networking, trust-building, and long-term business
partnerships in small business environments.

4. To understand how cross-cultural communication plays a

pivotal role in setting up a business in two countries.
As globalization continues to shape modern economies, cross-cultural
communication has become an essential skill for entrepreneurs
looking to establish businesses in foreign markets. Spain and Pakistan
present distinct cultural challenges for foreign investors and
entrepreneurs due to differences in language, communication styles,
business expectations, and negotiation tactics. This study will
examine the role of cultural intelligence, adaptability, and linguistic
competence in navigating cross-cultural interactions. It will also
explore common barriers such as misinterpretations, differing
expectations, and conflicts that arise from cultural
misunderstandings. Understanding these dynamics will provide
valuable insights into the strategies needed to successfully integrate
into and thrive in foreign business environments.

5. To provide practical recommendations for entrepreneurs

entering Spain or Pakistan.
 Given the significant cultural differences between Spain and
Pakistan, entrepreneurs entering these markets must adopt tailored
strategies to succeed. This study will offer practical recommendations
on communication adaptation, hierarchical management, etiquette
awareness, and cross-cultural negotiation techniques. It will explore
best practices for networking, leadership approaches, and conflict
resolution in both business environments. Additionally, it will provide
case studies of successful small businesses that have navigated
cultural challenges effectively. By offering actionable insights, this
study aims to equip entrepreneurs with the tools needed to establish
and grow their businesses in either Spain or Pakistan, ensuring long-
term sustainability and success.

2.4 Research Questions

Primary Research Question:

 How do cultural contexts-specifically in communication styles,
hierarchical structures, cross cultural communication and business
etiquette-impact small business growth in Spain vs. Pakistan?

Secondary Research Questions:

 What are the main differences in communication styles between

Spain and Pakistan? The focus will be specifically on Verbal, Non-
Verbal Communication styles
 How do hierarchical structures influence decision-making and
business growth in both countries?
 What role does business etiquette play in networking, negotiations,
and professional interactions?
 How can small business owners adapt to cultural differences to
maximize business success?

2.5 Hypotheses
To examine the role of cultural contexts in small business growth, this study
tests the following hypotheses:
  Null Hypothesis (Ho): There is no difference in growth of SMEs in
Pakistan and Spain based on - Communication style, hierarchical
structures, business etiquette and cultural differences.

 Alternative Hypothesis (H.): There is a difference in growth of

SMEs in Pakistan and Spain based on - Communication style,
hierarchical structures, business etiquette and cultural differences.
A comparative analysis of business operations of the two countries, namely,
Spain and Pakistan have been done to evaluate the hypothesis on which the
research analysis is dependent. The analysis will use quantitative data from
the entrepreneurs, and business consultants, to study how cultural factors
influence decision processes and operational efficiency, as well as market
expansion approaches. Through the comparison between levels of cultural
setting of Spain and Pakistan, the research aims to identify its level of
impact on business success.
Research focuses on the four independent variables namely communication
styles, hierarchical structures, and business etiquette and their role in
efficient business processes and interactions. Communication methods
chosen to have a bearing on the way in which organizations make their
commercial deals, partnerships, client relationships and in promoting trust-
based work relationships [12]. Leadership distribution and decision process
are controlled by Organization structure, which controls the worker
engagement across different business situations in different cultural
environments. Professional relations are controlled by business etiquette
which determines how professionals should behave in relation to when and
how to be punctual, and when and how to do the negotiations and build
relationships.
The research determines cultural challenges from four points of view
providing extensive information on success of small business in the
international market. The findings of the research will guide entrepreneurs
and the policy makers in developing business strategies to meet the cultural
demands that would accelerate the business expansion in Spain and
Pakistan.

2.6 Research Scope and Limitations

The research investigates how cultural elements such as communication
protocols, organizational hierarchy, and workplace customs affect small
business development across Spain and Pakistan. The study also evaluates
these cultural disparities to determine essential hurdles faced by small
businesses when they adjust to overseas markets so it can suggest methods
for better international expansion.

Even though it will try to generalize the findings for all SMEs there will
definitely be limitations in addressing needs of all types of SMEs based on
different sectors, no. of employees those SMEs have and what type of
markets/customers they cater to. Though this study and data collection will
try to diversify its reach as much as it can, it would still not be an exhaustive
study.
The research still contributes significant knowledge about cultural elements
that influence small business international market performance even with
the mentioned constraints. Future studies should develop broader research
parameters that will include secondary field research and examine new
cultural elements which shape business results throughout different
geographical areas.

2.7 Expected Contributions of the Study and Conclusion

The findings of this study will help entrepreneurs navigate cultural

challenges when expanding their businesses internationally. By identifying
key cultural differences in communication styles, hierarchical structures, and
business etiquette, small business owners can develop strategies to build
strong professional relationships, negotiate effectively, and adapt their
operations to fit local expectations in Spain and Pakistan. From a policy
perspective, the study offers insights that can help governments and
business associations design training programs, create networking
opportunities, and establish regulatory frameworks that support small
business internationalization. Understanding cultural barriers can enable
policymakers to develop initiatives that enhance cross-cultural trade and
investment. Academically, this research contributes to cross-cultural
business studies by addressing a gap in how cultural contexts impact small
businesses rather than large multinational corporations. It provides a
framework that can be applied to other developed and developing markets,
offering comparative insights into international business challenges.
Ultimately, the study equips businesses with practical knowledge to operate
successfully in an increasingly globalized world. The research offers value to
the studies of international business cultures by exploring the effects of
such cultural factors in the expansion of small businesses across various
economic regions. Existing articles that research international business
interactions focus on multinational corporations that have a great deal of
resources even as globalization is making such interactions possible. Since
small businesses rely mostly on flexibility as well as local integration, more
comprehensive research needs to be performed to handle their individual
issues. The research comparing Spain with Pakistan serves as a reference to
the business achievement based on cultural communication styles and
hierarchical protocol of a country-in a developed versus a developing
economic environment. Small business owners need to know these cultural
dynamics to be successful in market entry and sustainable operations in the
business. When entrepreneurs extend abroad, cultural barriers lead to
miscommunication, missed opportunities and failed partnerships. This
analysis will provide actionable insight to entrepreneurs in order to
negotiate business relations in Spain, Pakistan or indeed anywhere. All of
these create awareness of differences in negotiation styles, leadership
structures and professional etiquette and can further strengthen relationship
building, making it easier to collaborate and therefore the chances of
succeeding increase. This research also assists policymakers to understand
cultural challenges that could prevent foreign investment and business
growth. However, if such barriers are well understood by governments and
business associations, then they can put forth support programs in the form
of cross cultural training workshops, networking opportunities and, policies
adjustments, which makes the business of small enterprises much easier.
Greater cultural adaptability can then enhance trade relations, attract more
foreign direct investment and contribute to greater economic integration.
Moreover, the findings of the research fill the gap in entrepreneurial
education. Many business owners do not get deeper training about how one
should adapt culturally to the target market when entering it. Based on
evidence-based research, comparative, detailed guidance and practical
frameworks are provided to enable entrepreneurs to develop necessary
skills to function in various business environments. However, the research
findings of the study can be directly applicable to Spanish Pakistani business
operation; wider possibilities of use can contain international business
cooperation globally. Findings of the study can be used by industry
professionals in development of cross-cultural marketplace models for both
developed and developing market environments. Growing cultural
awareness combined with adaptability skills are vital to the success of long-
term business operations over the international boundary at a time when
business networks are rapidly expanding.

Chapter 3. Literature Review

Levitt (2022) explores high- and low-context communication styles in
international teamwork, offering insights applicable to small business
operations in developed and developing countries. High-context cultures,
common in developing nations like Pakistan, rely on implicit communication
and strong relationship-building, which can slow business processes but
foster trust. In contrast, low-context cultures, typical in developed countries
like Spain, favor direct communication, streamlining operations but
sometimes neglecting relationship nuances. These differences affect
decision-making, power dynamics, and business etiquette, influencing how
small businesses navigate challenges. Understanding these cultural
contrasts is crucial for entrepreneurs operating across different markets.
In their 2022 study, "Authority and Consensus in Group Decision Making
with Fallible Individuals," Sáenz-Royo, Salas-Fumás, and Lozano-Rojo
examine how different organizational structures affect decision-making
performance when individuals are prone to errors. Utilizing agent-based
modeling, they analyze combinations of decision mechanisms (authority and
consensus) and communication networks (star, tree, and full network). The
findings suggest that authority-based decision-making is preferable in time-
sensitive situations and environments characterized by high risk and growth
potential. Conversely, consensus-based decision-making is more effective
when time constraints are less critical, and the organizational environment
entails lower risk and growth prospects. The study also recommends that
organizations transitioning from authority to consensus decision-making
should adopt high-density communication networks to enhance
effectiveness. This is relevant to our study between SMEs in Spain vs
Pakistan to see if hierarchical differences exist and how they affect decision
making. (2) With regards to culture, the Pakistani culture appears as a
collectivist one, which promotes uncertainty avoidance, short-term
orientation, and high-power distance, and where managers in corporations
follow rigid rules and regulations, planning, punctuality and security.(3). This
is researched in a comparative analysis study done across 6 nations (3)

In her 2021 article, "Cross-cultural Issues in Business Ethics: A Review and

Research Agenda," N. Ermasova explores the complex interplay of culture
and business ethics across different societies. The article reviews existing
literature on cross-cultural ethical challenges in business, emphasizing how
cultural values, norms, and practices influence ethical decision-making in
global business environments. Ermasova identifies key areas where cultural
differences impact ethical perceptions, including corporate social
responsibility, bribery, and fair trade. The article proposes a research
agenda to further understand how these issues evolve in multinational
corporations, suggesting that future research should focus on the
intersection of ethics, culture, and globalization. By examining cross-cultural
variations, Ermasova advocates for more culturally nuanced approaches to
business ethics that account for the diversity of values worldwide.

Geert Hofstede's Culture’s Consequences: International Differences in Work-

Related Values (1980) is a foundational study on how national culture
influences workplace behaviors and organizational practices. Based on
extensive research across multinational corporations, Hofstede identified
four key cultural dimensions: Power Distance, Individualism vs.
Collectivism, Masculinity vs. Femininity, and Uncertainty Avoidance
(later expanding to six dimensions). These dimensions help explain how
cultural values shape decision-making, authority structures, teamwork, and
risk-taking in different societies. The book highlights the importance of
understanding cultural differences in global business and management.
Hofstede’s framework remains widely used in cross-cultural research,
influencing both academia and international business strategies. Cruz et al.
(2022) explore the role of women in sustaining family businesses in rural
Honduras, highlighting their entrepreneurial stewardship. The study
examines how women contribute to business continuity through resource
management, community engagement, and innovation, despite facing
socio-economic challenges. It emphasizes the intersection of gender, family,
and entrepreneurship, showing how women navigate cultural expectations
to ensure business longevity. The findings reveal that women’s leadership
fosters resilience and adaptability in rural family enterprises. The study calls
for greater recognition of women’s contributions and suggests policy
support to enhance their impact on rural economic development and
business sustainability.
Geert Hofstede’s cultural dimensions theory is a framework for
understanding how cultural values influence workplace behavior,
organizational structure, and business interactions across different
countries. The six dimensions of national culture identified by Hofstede
provide insights into how businesses operate in various cultural contexts.
Below is an overview of these dimensions and how they relate to Spain (a
developed country) and Pakistan (a developing country).

1. Power Distance (PDI) – Extent to which power is distributed

unequally and accepted by society.
 Spain: Moderately high-power distance, indicating some hierarchical
structures, but with a growing emphasis on participative leadership
and employee empowerment. While authority is respected,
employees often expect some degree of involvement in decision-
making.

 Pakistan: Very high-power distance, meaning hierarchical structures

are rigid, and authority is concentrated at the top. Employees
generally do not challenge superiors, and business decisions are
typically made by senior management or business owners.

Impact on Small Businesses: In Spain, small business owners may

involve employees in discussions and encourage teamwork, while in
Pakistan, leadership is more authoritative, and employees may hesitate to
share opinions or challenge decisions.
2. Individualism vs. Collectivism (IDV) – The degree to which
individuals are expected to look after themselves versus belonging
to a tight-knit group.
 Spain: Moderately individualistic, meaning personal achievements
are valued, but social relationships and teamwork are also important.
Business relationships often blend profesionalism with personal
connections.

 Pakistan: Highly collectivist, where family, community, and social

networks play a significant role in business decisions. Trust is
essential, and business dealings are often based on personal
relationships rather than contractual agreements alone.

Impact on Small Businesses: In Spain, small businesses can thrive

through professional networking and merit-based opportunities, while in
Pakistan, building long-term relationships and trust is crucial for business
success.
3. Masculinity vs. Femininity (MAS) – The degree to which a culture
prioritizes competitiveness and success (masculine) versus quality
of life and social well-being (feminine).
 Spain: Considered a feminine society, where work-life balance,
collaboration, and employee well-being are prioritized over aggressive
competition. Business success is important, but relationships and
quality of life are highly valued.

 Pakistan: A masculine society, where success, ambition, and

assertiveness are emphasized. Business competition is strong, and
social status plays a role in professional interactions.

Impact on Small Businesses: In Spain, small businesses may focus on

workplace harmony and flexible structures, while in Pakistan, businesses
might emphasize growth, competition, and achieving high social status.
4. Uncertainty Avoidance (UAI) – The extent to which people feel
uncomfortable with uncertainty and ambiguity.
 Spain: Very high uncertainty avoidance, meaning Spaniards prefer
clear rules, structured environments, and risk-averse decision-
making. Bureaucratic procedures and regulatory frameworks are
strict.

 Pakistan: Moderately high uncertainty avoidance, where people

value traditions and established ways of doing business, but
adaptability exists due to economic and political instability.

Impact on Small Businesses: In Spain, small businesses may struggle

with complex regulations but benefit from stability, while in Pakistan,
businesses must navigate uncertainty but are often flexible in adapting to
challenges.
5. Long-Term vs. Short-Term Orientation (LTO) – Whether a culture
focuses on long-term planning and perseverance or short-term
results and traditions.
 Spain: Moderately long-term oriented, meaning a mix of respect for
traditions and forward-thinking innovation. Businesses balance
maintaining established practices with adapting to new market
trends.
  Pakistan: Strongly short-term oriented, where businesses prioritize
immediate gains, uphold traditions, and rely on established ways of
working rather than long-term strategic planning.

Impact on Small Businesses: Spanish businesses may invest in

sustainable growth, while Pakistani businesses often focus on immediate
profitability and traditional business models.

6. Indulgence vs. Restraint (IVR) – The extent to which people

control their desires and impulses.
 Spain: Highly indulgent society, meaning people enjoy leisure, social
interactions, and a high quality of life. This influences business
culture, where work-life balance is emphasized.

 Pakistan: A restrained society, where strict social norms dictate

behavior, and business dealings are conducted in a more reserved
and formal manner.

Impact on Small Businesses: Spanish small businesses may prioritize a

relaxed and creative work environment, while Pakistani businesses may
operate in a more disciplined and socially controlled setting.
Fig 1
Hofstede’s cultural dimensions illustrate the deep-rooted cultural differences
between Spain and Pakistan. Spanish businesses operate in a relatively
open and balanced environment, where structured processes coexist with
personal relationships. Pakistani businesses, on the other hand, are heavily
influenced by hierarchy, collectivism, and traditional values. Entrepreneurs
entering either market must understand these cultural nuances to adapt
effectively, build strong professional relationships, and ensure long-term
business success.

Other sources are mentioned in references talk about the variation in terms
of hierarchy, culture and communication styles which can impact developed
and developing countries and their SMEs differently but there is still a gap of
study that can show what factors are significant vs not to help SMEs learn
and progress better especially in these times of global expansion and also in
times of unpredictability at global and local level.

Chapter 4. Collection of Primary Data

4.1 Introduction
In accordance with the research problem and the secondary research
questions outlined in this study, the primary objective in progressing with
this research was to develop a comprehensive design study. This design
study was essential to ensure the research was conducted in a systematic,
reliable, and structured manner. Several critical parameters were considered
when designing this study, as these factors would directly influence the
reliability and validity of the research outcomes. The parameters considered
included the feasibility of data collection, the accuracy of data collection
methods, the ability of different segments of the target population to
understand the research questions, and the selection of appropriate data
collection methods. The feasibility of data collection was a crucial
consideration, as it was necessary to ensure that the study could be
practically executed within the given constraints, including time, budget,
and resource availability. This involved assessing whether the required data
could be effectively gathered from the target respondents, ensuring that the
study design was not only theoretically sound but also pragmatically
achievable. Another key aspect was the accuracy of data collection, which
involved ensuring that the data collected was both reliable and valid. This
required careful selection of data collection tools and methodologies that
minimized bias and errors while maximizing the precision of the gathered
information. Understanding the research questions by different strata of the
target population was another significant factor. Since the study was
conducted in two different countries, Spain and Pakistan, it was imperative
to acknowledge the variations in how individuals within these regions
interact with and perceive technology. The access to technology and the
ability to comprehend technological concepts vary widely across different
demographic groups, particularly in Pakistan, where economic disparities
can significantly influence technological literacy. For instance, individuals
from urban centers with higher income levels may have greater exposure to
technology, while those from rural or lower-income backgrounds may have
limited access and understanding. These discrepancies necessitated a
carefully designed study that took into account the varying levels of
familiarity with technology among different segments of the population.
Moreover, selecting appropriate methods for data collection played a pivotal
role in the study design. Since our research spanned two countries with
distinct socio-economic and technological landscapes, it was essential to
choose methods that were both effective and inclusive. After evaluating
various approaches, surveys were identified as the primary data collection
method. This decision was guided by the Survey-Based Studies (SBS)
standard, which provides a structured framework for designing and
implementing surveys to ensure the reliability and consistency of collected
data. To maximize the effectiveness of the survey method, particular
attention was given to the formulation of survey questions. The goal was to
make the questions as clear, simple, and unbiased as possible, ensuring
that respondents from diverse backgrounds could easily comprehend and
respond accurately. The wording of questions was carefully reviewed to
eliminate any ambiguity or potential for misinterpretation, particularly given
the linguistic and cultural differences between Spain and Pakistan.
Additionally, efforts were made to ensure that the survey questions did not
contain any leading or suggestive language that could unintentionally
influence responses.
In conclusion, the design study was developed with meticulous attention to
various critical factors to ensure the smooth execution of the research. By
prioritizing feasibility, accuracy, comprehension, and appropriate data
collection methods, the study aimed to obtain reliable and meaningful
insights from both Spanish and Pakistani respondents. This comprehensive
approach helped mitigate potential challenges related to regional disparities
in technology access and literacy, thereby enhancing the overall credibility
of the research findings.
4.2. Research design

4.2.1. Research Paradigm

This study aims to quantitatively assess these cultural influences in Spain, a
developed country, and Pakistan, a developing country, to understand how
they shape the growth trajectories of small businesses. By focusing on key
cultural factors such as communication styles, hierarchy in decision-making,
and business etiquettes, this research seeks to establish an empirical
relationship between these cultural variables and business growth.
To achieve these objectives, a quantitative research approach will be
adopted, employing structured surveys and secondary data analysis. The
primary data collection method involves surveys distributed to small
business owners and managers in both Spain and Pakistan.
The survey will consist of Likert-scale questions, enabling respondents to
rate the impact of various cultural factors on their business operations.
These questions will assess aspects such as the level of formality in
communication, the degree of hierarchical decision-making, and the role of
business etiquettes in networking and client relationships. The target
respondents will be chosen through stratified random sampling to ensure
representation across various industries, including retail, services, and
manufacturing. The study aims to gather responses from minimum 25
respondents who are SMEs from each country.
Secondary data sources such as government reports, SME performance
reports from the World Bank, OECD, and Global Entrepreneurship Monitor
(GEM) might be analyzed and substantiated further to have a
macroeconomic perspective on small business growth and regulatory
frameworks in both countries, complementing the survey findings with
statistical and economic data.
4.2.2 Conceptual framework
The study identifies both independent and dependent variables to structure
the analysis effectively. The independent variables, which represent cultural
factors, include communication styles, hierarchical structures, and business
etiquettes. Communication styles will be measured based on the degree of
formality, directness, and indirectness in business interactions. Hierarchical
structures will assess the centralization of decision-making and the extent to
which authority is delegated in small businesses. Business etiquettes will
focus on norms related to negotiations, networking, and relationship-
building. The dependent variables, representing business growth, will
include revenue growth rate (percentage increase in revenue over the past
three years), business expansion (increase in the number of employees or
branches), and market reach (the proportion of local versus international
customers).

Variable Type Variable Name Description

Independent Communication Degree of formality,

Variables Styles directness, and indirectness
(Cultural Factors) in business communication

Hierarchical Degree of centralization in

Structures decision-making and
authority delegation

Cultural differences Dealing with intercultural

differences

Business Etiquettes Norms related to

negotiations, networking,
and relationship-building
 Dependent Expansion/Growth/ A general perception of
Variable Reach business growth
(Business
Growth)

Table 1
The study aims to focus on collecting data for the above-mentioned
variables as accurately as possible and then trying to find differences in
cultural context between two countries- Spain and Pakistan.

4.2.3. Design of the Research Instrument

As indicated above, a quantitative research approach will be used to
measure the impact of cultural variables on small business growth through
statistical analysis. For data collection, Structured questionnaires with
Likert scale type of responses (qualitative range) to assess perceptions
of cultural impact on growth will be determined. Our survey holistically tried
to identify demographics, type of business, how long the business is
running, location, size etc of business.
There were then very detailed sets of questions which indirectly assess the
four parameters of - communication, hierarchical structure, business
etiquettes and cross cultural differences.

Variable Type Variable Name Measurement way

Independent Variables Communication Likert Type Scale

(Cultural Factors) Styles (Qualitative)

Hierarchical Likert Type Scale

Structures (Qualitative)

Cultural differences Likert Type Scale

(Qualitative)

Business Etiquettes Likert Type Scale

(Qualitative)

Dependent Variable Expansion/Growth/

(Business Growth) Reach

Table 2
The survey altogether consisted of 39 questions that included questions
around demographics and variables mentioned above. The aim was to
indirectly gather information on 4 independent variables by giving
situational open ended questions and also gauge qualitatively how SMEs in
two countries adjust, react and act in various situations that indirectly point
to top 4 variables.
Eg: Under communication one of the questions asked was: how often do you
have misunderstandings in day to day business.
Along with this survey for data collection, government reports on SME
performance and other reports from organizations such as the World Bank,
OECD, and Global Entrepreneurship Monitor (GEM) may be analyzed
and read to substantiate the information and provide strategies and
conclusions.
Survey Link:
https://docs.google.com/forms/d/e/1FAIpQLSfTlyf2Mna--
XIKGf3aWDPF1p3uPZli8VH8eulADxKqH3AJ6g/viewform
4.2.4. Population and Sample
A minimum sample of 50 responses will be collected, with at least 25 from
each country, in accordance with SBS standards.
The target population for this study will consist of small and medium
enterprises (SMEs) from various industries, provided they have significant
dealings with international clients. This selection criterion ensures that
businesses participating in the study are directly affected by cross-cultural
communication, hierarchical decision-making, cross cultural communication
and business etiquettes when operating in a globalized environment. The
rationale behind this selection is that businesses dealing with international
clients face unique challenges that are shaped by cultural expectations and
regulatory differences across countries. Therefore, their perspectives will
provide valuable insights into how cultural contexts influence business
growth.
Additionally, an ideal candidate for this study would be an SME that has an
established presence in both Spain and Pakistan. This would allow for a
direct comparison of how the same business navigates cultural and
regulatory differences in two distinct economic settings. While such
businesses might be difficult to find, their inclusion would significantly
enhance the study's validity and reliability, offering firsthand insights into
how cultural contexts influence business operations, growth strategies, and
decision-making processes in different regions.
Based on prior research and industry trends, several sectors have been
identified as particularly suitable for this study. The food and hospitality
sector is an excellent candidate due to its extensive interaction with
international customers, suppliers, and regulatory bodies. This industry
often requires cross-cultural communication, adaptation to different
customer preferences, and compliance with international standards, making
it an ideal subject for assessing cultural influences. Similarly, arts and crafts
businesses frequently engage with international buyers, exhibitions, and
online marketplaces, requiring business owners to navigate cultural
differences in customer interactions, branding, and product presentation.
Supermarkets are another relevant sector, particularly those that import and
sell international brands. These businesses must comply with international
trade regulations, negotiate with suppliers from different cultural
backgrounds, and adapt to diverse consumer expectations. Understanding
how hierarchical structures, legal complexities, and communication styles
affect these businesses will provide valuable insights into the broader
impact of cultural factors on SME growth.
Freelance designers, including graphic designers, web developers, and
fashion designers, also qualify as an essential part of the study's sample
population. This industry relies heavily on remote collaboration with
international clients, making communication styles and business etiquettes
crucial factors in their success. Differences in cultural expectations
regarding deadlines, payment negotiations, and project feedback can
significantly impact their business growth and sustainability.
By selecting SMEs from these industries, the study ensures a comprehensive
analysis of how cultural contexts influence business operations in different
sectors. The findings will contribute to a deeper understanding of the
challenges and opportunities small businesses face when operating in
international markets. This research will also provide practical
recommendations for business owners, policymakers, and investors looking
to optimize business strategies in culturally diverse environments.
4.2.5. Sampling Technique
The sampling technique which was originally planned was stratified random
sampling. This, as mentioned above, would have been an ideal technique to
make sure each type of industry as per the requirement was randomly
selected, ensuring that data collection was as accurate and representative
as possible. However, during the data collection phase, several unforeseen
challenges arose, making it difficult to proceed with stratified random
sampling
One of the major roadblocks was the language barrier, particularly when
reaching out to SMEs in Pakistan, where English was not always the primary
language of communication for business owners. In Spain, although English
proficiency is relatively higher, cultural differences in willingness to
participate in research studies made it difficult to obtain responses.
Additionally, there were challenges related to access and reach. Many SME
owners, especially in developing economies, were reluctant to participate in
a study that did not provide immediate benefits to their business. Motivating
respondents to take the time to answer surveys proved to be more
challenging than anticipated, leading to lower response rates than initially
expected.
Due to these difficulties, the sampling technique was changed from
stratified random sampling to quota sampling. In this revised approach, a
list of potential participants was compiled based on personal contacts,
industry networks, and referrals from friends and colleagues. A total of 70
such contacts were gathered, with roughly 35 from Spain and 35 from
Pakistan. These included small business owners, artisans, freelancers, and
individuals working in the food and hospitality sector. The decision to use
quota sampling ensured that data collection remained manageable while
still meeting the key inclusion criteria set for the study.
Most of the responses collected fell under the four primary business
categories identified earlier: artisans, food & hospitality, freelancers, and
small shop owners. This alignment with the originally intended industry
representation helped maintain the study’s integrity despite the shift in
sampling methodology. The contacts were carefully selected to ensure that
all SMEs met the eligibility criteria of engaging in international client
interactions. This helped in maintaining a high level of data accuracy and
quality, reducing potential biases that might arise from convenience
sampling or purely voluntary participation.
Once this predetermined list of contacts was compiled, approximately 6-7
participants from each sector were randomly selected. This step helped
introduce an element of randomness within the quota sampling framework,
ensuring that data collection was as unbiased as possible given the
circumstances. Thus, our study shifted to quota sampling.
The revised sampling method also helped address practical limitations in
data collection. Since the participants were gathered through referrals and
industry connections, they were more likely to be receptive to the study,
reducing the likelihood of incomplete or non-serious responses. Additionally,
since these participants were already familiar with the study’s purpose
through mutual contacts, there was a higher level of trust and willingness to
provide honest and detailed answers.
Despite the necessary change in methodology, efforts were made to uphold
the validity and reliability of the study. The core objective remained the
same: to analyze how cultural factors such as communication styles,
hierarchical structures, legal frameworks, and business etiquettes impact
the growth of small businesses in Spain and Pakistan. The adapted sampling
approach ensured that these insights were still captured effectively, allowing
for meaningful comparisons between the two countries.
By selecting SMEs from these industries, the study ensures a comprehensive
analysis of how cultural contexts influence business operations in different
sectors. The findings will contribute to a deeper understanding of the
challenges and opportunities small businesses face when operating in
international markets. This research will also provide practical
recommendations for business owners, policymakers, and investors looking
to optimize business strategies in culturally diverse environments.
4.3. Research Execution
Over the course of three to four weeks, a comprehensive survey was
administered to targeted Small and Medium-sized Enterprises (SMEs) in both
Pakistan and Spain. The survey was designed with the intent of gathering
valuable insights into the current state of SMEs and their operations, and it
was distributed through multiple channels, including WhatsApp, email, and
LinkedIn. These platforms were selected to maximize accessibility and
reach, ensuring that business owners could participate in the survey in a
way that was most convenient for them. Additionally, word of mouth played
a significant role in spreading the survey to more participants. When
necessary, references were sought to obtain new contacts and encourage
further participation. This approach helped ensure that the survey reached a
diverse and relevant pool of business owners across different regions.
In order to accommodate a wide audience, the survey was written in simple,
clear English. The language was carefully chosen to ensure that the
questions were easily understandable by business owners from both
Pakistan and Spain, even if they did not have English as their first language.
This was particularly important as it allowed respondents to complete the
survey without facing any significant language barriers, thus making the
process smoother and more efficient. The intention behind using plain and
straightforward language was to minimize any confusion and ensure that all
participants could provide accurate and relevant responses to the questions
asked. The focus was on making the experience as accessible as possible,
so that all SMEs, regardless of their geographical location or linguistic
background, could contribute valuable insights.
While there was no direct contact with the participants during the survey
process, the option to reach out for clarification was always available. In
cases where a participant encountered any doubts or ambiguities regarding
the survey questions, they were encouraged to contact the survey
administrators via call or text. However, this was an edge case scenario, as
there were no reported instances where participants actually needed to
reach out for further clarification. This suggests that the survey was clear
and easy to understand, and the design was effective in minimizing
confusion or misunderstanding. Nonetheless, the availability of support
ensured that participants had a way to resolve any issues if needed,
contributing to a positive and supportive survey-taking experience.
To maintain the highest level of data privacy and integrity, all information
collected from the survey participants was stored securely through Google
Forms, and the data was transferred into an Excel sheet for analysis. The
survey responses were kept confidential and were not shared with any third
parties. This approach adhered to ethical and legal standards concerning
data privacy, ensuring that sensitive information shared by business owners
remained protected throughout the entire process. By treating the data with
the utmost care and respecting the privacy of the participants, the survey
maintained trust and transparency with those who contributed their
insights.
In addition to the technical and procedural aspects of the survey
administration, the ethical considerations surrounding the handling of
participant information were of paramount importance. All survey responses
were anonymized, and participants were reassured that their contributions
would be used solely for research purposes. This approach helped build a
sense of security and confidence among participants, allowing them to
share their experiences and perspectives freely, knowing that their data
would not be misused or exposed to unauthorized individuals. By adhering
to these ethical principles, the survey process not only gathered meaningful
data but also maintained the integrity and trust of the participants involved.
We were able to receive the target 50 responses - 25 from each country and
across the sectors we identified. All the responses were complete, valid and
with proper information so none of the responses were rejected.

4.4. Descriptive Statistics

4.4.1. Respondent Descriptive Statistics

Demographic data- Gender and Age

The survey encompassed a diverse group of 25 small and medium-sized

enterprises (SMEs), freelancers, and artists from Spain and Pakistan,
providing valuable insights into business trends, challenges, and growth
factors in these two regions. The respondents represented various
industries, allowing for a broad perspective on the factors influencing SME
success. The responses collected offered informative and intriguing
observations, helping to understand the entrepreneurial landscape in both
countries.
One of the key demographic insights from the survey was the gender
distribution among respondents. A significant majority—86%—of the
participants identified as male, while 12% were female, and the remaining
2% preferred not to disclose their gender. This distribution highlights a
considerable gender imbalance within the respondent pool, which may
influence our interpretation of the factors contributing to SME growth and
success. A predominantly male-dominated dataset can introduce a skewed
perspective, as gender-specific challenges, opportunities, and experiences
may not be equally represented.
However, a deeper analysis of the gender distribution revealed that the
proportion of male and female respondents was consistent across both
Spain and Pakistan. This finding suggests that despite the gender disparity,
the data still maintains a balanced representation in terms of national
demographics. It also allows for a more meaningful comparative analysis
between the two regions, as both countries share a similar gender ratio
within the survey sample.
To provide a clearer breakdown of the respondent demographics, the table
below illustrates the gender distribution. Among the total of 50 survey
participants, 43 were male, 6 were female, and 1 respondent chose not to
disclose their gender. This data is crucial in understanding how gender
dynamics play a role in business operations, decision-making, and growth
strategies within SMEs.
While the gender imbalance presents some limitations in the analysis, it also
reflects the broader entrepreneurial landscape in many regions, where male
participation in business ownership and freelancing tends to be higher.
Future studies could benefit from a more balanced gender representation to
provide a more inclusive understanding of SME challenges and opportunities
across different demographics.

What is your Dat

gender a

Female 6

Male 43

Prefer not to say 1

Grand Total 50

Table 3

Fig 2
Most of the small and medium-sized enterprises (SMEs) surveyed had a
workforce of fewer than 10 employees, accounting for approximately 72% of
the total sample. This indicates that a significant majority of the businesses
surveyed were micro-enterprises, which typically operate with lean
structures and limited personnel. The remaining SMEs, constituting 28% of
the respondents, had between 10 and 50 employees, reflecting a slightly
larger but still relatively small business size.
In numerical terms, 36 of the total responses came from businesses with
fewer than 10 employees, while 14 responses were from SMEs with a
workforce ranging between 10 and 50 employees. The predominance of
responses from smaller firms ensures a more homogenous dataset, making
inferential analysis more robust and meaningful. Since most of the surveyed
businesses share similar operational challenges, resource constraints, and
market dynamics, the consistency in company size helps in drawing clearer
and more reliable conclusions.
Additionally, maintaining a well-defined target audience was crucial to the
study. The primary objective was to focus on smaller enterprises, ideally
those with a maximum of 50 to 70 employees. By achieving this target
range and ensuring data accuracy, the study provides insights that are
specifically relevant to small businesses. This focus enhances the validity of
the findings, as it eliminates biases that might arise from including larger
enterprises with significantly different structures, resources, and operational
scales.
Overall, the carefully curated dataset ensures that the conclusions drawn
from the research are both credible and applicable to the intended segment
of SMEs, providing valuable insights into the challenges and opportunities
faced by small businesses.

Fig 3
The survey included respondents from a diverse range of age groups,
reflecting the varying levels of experience, expertise, and perspectives
within the SME, freelance, and artistic communities. However, a significant
majority of the surveyed SMEs were managed by individuals within the 24-
35 age bracket, making this the most prominent demographic among
business owners and freelancers in the study. This finding aligns logically
with the overall characteristics of the survey sample, as many of the
respondents were young entrepreneurs, freelancers, and emerging artists,
who typically operate smaller businesses with lean structures.
The strong representation of this particular age group can be attributed to
multiple factors. Firstly, individuals in their mid-20s to mid-30s are often at a
career stage where they are exploring entrepreneurial ventures, setting up
independent businesses, or working as self-employed professionals. This age
group is more inclined toward innovation, adaptability, and leveraging
digital platforms for business growth, which aligns well with the nature of
modern SMEs.
Secondly, the connection between age and business size becomes evident
when considering that younger entrepreneurs generally start with limited
resources, opting for smaller teams and manageable business models. Many
freelancers and artists, in particular, operate as sole proprietors or run small
teams, which naturally places them in the category of SMEs with fewer
employees. This correlation between age and business size further validates
the demographic trends observed in the survey.
Additionally, young business owners are often more open to adopting new
technologies, social media marketing strategies, and remote work models,
which have become key drivers of success for small enterprises in today’s
digital economy. Their ability to quickly adapt to market trends and digital
tools enhances their business operations and allows them to compete
effectively, despite their smaller scale.
Overall, the predominance of the 24-35 age group in the survey is a
meaningful indicator of the entrepreneurial landscape among SMEs,
freelancers, and artists. It underscores the growing role of younger
professionals in shaping the modern business ecosystem, with many of
them leveraging creativity, technology, and innovation to drive their
enterprises forward. Future studies could explore how different age groups
approach business challenges and whether older business owners adopt
similar strategies or face different hurdles in the SME sector.

Fig 4
Industry Split in survey
The small and medium-sized enterprises (SMEs) that participated in our
study came from a diverse range of industries, spanning multiple sectors,
including technology, the creative field, hospitality, supermarkets, freelance
consulting, and small entrepreneurship. This diversity provided a well-
rounded representation of SMEs across different business domains, offering
valuable insights into their distribution and significance within their
respective industries.
Upon analyzing the data, it became evident that the technology sector
accounted for the highest proportion of SMEs, both in terms of the overall
dataset and within specific regions. Approximately 30% of the SMEs
surveyed belonged to the technology sector, highlighting the rapid growth
and increasing dominance of technology-driven businesses. The second
most significant category was that of freelance consultants, which made up
around 26% of the total SMEs. The hospitality sector, particularly
restaurants, closely followed, representing 22% of the SMEs surveyed.
Meanwhile, businesses within the arts and crafts industry, as well as
supermarkets, each accounted for 10% of the overall SMEs.
A deeper examination of the freelance consultant category revealed that
these professionals specialized in various fields, including finance, legal
consultancy, design, and other advisory roles. Unlike other sectors, there
was no clear thematic pattern within the freelance consultant segment,
except for the commonality that all of them operated independently,
offering their services to clients globally. This finding underscores the
increasing prevalence of the gig economy and the rise of independent
professionals who cater to international markets across different industries.
When breaking down the data by country, the distribution of SMEs followed
a similar trend. In Pakistan, the technology sector stood out as the dominant
industry, encompassing approximately 40% of the total SMEs in the region.
This strong presence reflects Pakistan’s growing focus on the technology
and service sectors, which align with its development trajectory as a country
investing in digital transformation and IT services.
On the other hand, Spain demonstrated a strong representation of the
hospitality sector, with nearly 32% of the total SMEs in the country falling
into this category. This aligns well with Spain’s global reputation as a top
tourist destination, where hospitality-driven businesses thrive. Additionally,
Spain has a rich cultural heritage and a strong emphasis on design, art, and
craftsmanship, particularly in regions like Barcelona, Seville, and Granada.
These regions are known for their vibrant art scenes, architectural marvels,
and flourishing creative industries, which further contribute to Spain’s
entrepreneurial landscape.
The distinct SME distribution in both countries reflects their economic
foundations and industry strengths. Pakistan, as a developing country, sees
a significant focus on the technology sector and freelance consultancy
services, given its increasing reliance on digital and service-based
industries. Spain, on the other hand, capitalizes on its well-established
tourism industry, making hospitality a key sector for SMEs. Additionally,
Spain’s emphasis on creative fields, including art and design, further
influences its SME ecosystem.
In conclusion, the data collected from SMEs effectively illustrates the key
industries and business activities that each region thrives on. The
prevalence of technology-driven SMEs in Pakistan highlights the country’s
digital growth, while Spain’s strong representation in the hospitality and
creative sectors underscores its rich cultural and tourism-driven economy.
This analysis not only provides a clear snapshot of the SME landscape in
these regions but also reflects broader economic and industry trends that
shape the business environment in both countries.

Overall

Fig 5

Pakistan
Fig 6

Spain

Fig 7

4.4.2. Descriptive Analysis of Data

Based on the survey responses, a significant proportion of small and
medium-sized enterprises (SMEs) prefer a direct style of communication.
Specifically, 54% of the respondents indicated that they primarily adopt a
direct approach in their communication. The second most common
communication style, as reported by the survey participants, is somewhat
direct. This suggests that the majority of SMEs favor clear, straightforward
interactions when conveying information, providing feedback, or engaging
with clients and customers.
An interesting observation from the survey data is that both Spain and
Pakistan exhibit the same distribution when it comes to communication
styles. The SMEs from these two countries align closely in their approach,
demonstrating a similar preference for direct and somewhat direct styles of
communication. This commonality may stem from cultural or business
norms in these regions that emphasize clarity and efficiency in professional
interactions.
When analyzing the distribution of communication styles across various
industries, it becomes evident that certain sectors are more inclined toward
direct communication than others. Notably, SMEs operating in the
technology and restaurant industries have the highest proportion of
businesses that favor a very direct style of communication. This prevalence
contributes significantly to the overall dominance of the direct
communication style observed in the survey.
One possible explanation for this trend is that the technology sector often
involves precise, technical discussions where clear and unambiguous
communication is essential to ensure smooth operations, product
development, and service delivery. In the restaurant industry, direct
communication is crucial for maintaining efficiency in a fast-paced
environment, where quick decision-making and immediate responses to
customer needs and internal coordination play a critical role in daily
operations.
Both these industries also had a high overall response rate in the survey, as
seen in previous graphical analyses. This high participation could indicate
that SMEs in these sectors are more engaged in industry discussions or
more inclined to share their insights regarding business communication
practices. Their strong preference for direct communication further solidifies
the overall trend observed in the survey results.
Interestingly, not all industries follow the same pattern. SMEs in the arts and
crafts sector tend to prefer an indirect communication style when
interacting with clients and customers. This divergence may be attributed to
the nature of the industry, which often involves creative and personalized
interactions. The artistic domain might require a more nuanced and subtle
approach to communication, allowing for flexibility, interpretation, and
relationship-building rather than strict directness.
Freelance consultants, another distinct group in the survey, exhibit an equal
split between very direct and direct communication styles. However, despite
this balance, the general tendency still leans toward direct communication.
Since freelance consultants typically work with diverse clients across
different industries, their communication approach might vary based on
context, client preferences, and project requirements. While some
consultants may adopt a straightforward approach to establish clarity and
professionalism, others may adjust their communication style depending on
the specific needs of their clients.
Overall, the survey findings highlight the predominance of direct
communication styles among SMEs, with variations across industries and
geographic locations. The emphasis on directness, particularly in the
technology and restaurant industries, underscores the importance of clarity
and efficiency in business interactions. Meanwhile, industries like arts and
crafts, which rely on more creative engagement, tend to favor indirect
communication. Understanding these patterns can provide valuable insights
for businesses looking to optimize their communication strategies based on
industry norms and cultural influences.

Fig 8
Fig 9

Fig 10
Fig 11

How do Respondents Build Personal Relationships?

Almost 54% of overall respondents agree that they sometimes build
personal relationships with their business partners. This indicates that while
relationship-building is considered important, it is not necessarily a constant
priority for every SME. The responses at the two extremes—those who never
build relationships and those who always do—stand at 12% and 14%,
respectively. Meanwhile, approximately 20% of respondents fall into the
"rarely" category, indicating that while some level of engagement exists, it
is not a dominant practice for them.
Analyzing the country-specific data, we notice some interesting trends. The
data from Spain appeared somewhat skewed due to an equal distribution of
responses for "always," "never," and "rarely," each standing at 12%.
However, a significantly larger proportion of respondents—64%—selected
"sometimes." This suggests that in Spain, while there are businesses that
take extreme stances on relationship-building, the majority fall somewhere
in the middle, opting to build relationships on a selective basis. One possible
explanation for this could be that respondents viewed relationship-building
as a spectrum rather than a binary choice. Consequently, they might have
found it challenging to decide on a response that accurately reflected their
approach. In hindsight, a more clearly defined set of response options could
have helped clarify the distribution of preferences.
In contrast, the data for Pakistan presents a more evenly distributed pattern,
highlighting a stronger inclination toward building business relationships. A
higher proportion of Pakistani respondents—16%—stated that they always
build relationships with their business partners. Additionally, there is a
noticeable tendency to foster relationships in this region, as nearly 60% of
respondents fall into the "sometimes" and "always" categories combined.
This suggests that relationship-building is a more ingrained aspect of
business culture in Pakistan compared to Spain, where a larger segment of
respondents remains in the "sometimes" category without leaning strongly
toward one extreme.
The observed differences between these two countries may be attributed to
cultural and business norms that shape professional interactions. In some
business environments, establishing personal relationships is seen as a
crucial element for trust-building and long-term collaboration. In others,
businesses might operate in a more transactional manner, where
professional relationships are maintained primarily on a need-based basis
rather than as an integral part of business strategy.
From a broader perspective, the data underscores the importance of
understanding regional and cultural variations in business relationship
dynamics. The fact that a significant proportion of SMEs across regions fall
into the "sometimes" category suggests that while relationship-building is
valued, it is not always prioritized consistently. This finding highlights the
need for businesses to assess and tailor their networking strategies based
on industry norms, cultural expectations, and individual preferences.
Future surveys could improve clarity by refining response categories to
better capture nuances in relationship-building tendencies. Providing
respondents with clearer distinctions between frequency levels may help
yield more precise insights into how SMEs across different regions approach
professional networking and partnership development. By recognizing these
trends, businesses can better align their communication and networking
efforts to match regional expectations and optimize professional
collaborations.

Do you build personal relationships with partners before

Overall doing business?

Always 14%

Never 12%

Rarely 20%

Sometim
es 54%

Table 4

Do you build personal relationships with partners before

Pakistan doing business?

Always 16%

Never 12%

Rarely 28%

Sometim
es 44%

Table 5
 Do you build personal relationships with partners before
Spain doing business?

Always 12%

Never 12%

Rarely 12%

Sometim
es 64%

Table 6

How do respondents solve communication Problems?

When it comes to resolving communication problems with business
partners, small and medium enterprises (SMEs) employ various techniques
to bridge language and cultural gaps. Two prominent methods observed are
the use of translators and mediators, as well as internal training and
adaptation. These strategies help SMEs navigate complex interactions with
international partners, ensuring that business processes remain smooth and
effective.
One of the key approaches utilized by SMEs is the use of translators and
mediators. This external focus allows businesses to facilitate communication
without making drastic internal changes. By employing professional
translators or language mediators, companies ensure that messages are
accurately conveyed between parties. This method is particularly useful in
cases where language barriers are significant and miscommunication could
lead to operational inefficiencies or misunderstandings. The reliance on
external translation services is especially prevalent in developed countries,
where businesses have access to greater financial resources and
technological tools to support such measures.
In contrast, another common approach involves training internal teams
through structured programs, external resources, and practical learning
experiences. Almost 26% of SMEs report using this strategy to enhance their
employees’ linguistic and cultural competencies. This inward-focused
approach allows organizations to build long-term capabilities within their
workforce, reducing dependence on external resources. By investing in
training programs, businesses foster a deeper understanding of their
partners' languages, business etiquettes, and cultural nuances, leading to
more effective communication and stronger partnerships over time.
Interestingly, the approach to resolving communication problems varies
significantly between countries, particularly between Spain and Pakistan. In
Spain, SMEs tend to prioritize an external focus by leveraging mediators and
translators. This preference aligns with the country’s access to professional
translation services and technological tools that facilitate cross-border
interactions. Since Spain is a developed economy, businesses often find it
more convenient to outsource translation needs rather than invest
significant resources in extensive employee training.
On the other hand, SMEs in Pakistan adopt a more internal-focused
approach, emphasizing training and adaptation. The preference for internal
training over external translation services may be driven by multiple factors.
Firstly, SMEs in developing countries often face financial constraints that
limit their ability to afford professional translators. Instead, they invest in
upskilling their workforce, ensuring employees are equipped to handle
cross-cultural interactions independently. Secondly, cultural attitudes
towards learning and adaptability may influence this preference, as
businesses in Pakistan may view in-house skill development as a more
sustainable and cost-effective solution in the long run.
The disparity in communication strategies between SMEs in Spain and
Pakistan highlights broader economic and technological differences between
developed and developing nations. However, advancements in technology,
particularly in artificial intelligence (AI) and online translation tools, offer
promising solutions to bridge these gaps. AI-powered language translation
tools, real-time speech recognition, and machine learning-driven
communication platforms are becoming increasingly accessible, even for
SMEs with limited financial resources. As these technologies continue to
evolve, businesses in developing countries may find it easier to integrate
external translation solutions into their operations without significant
financial burdens.

Fig 12

Pakistan
Fig 13
Spain

Fig 14

How do you deal with etiquette related conflicts?

When it comes to resolving communication problems with business
partners, small and medium enterprises (SMEs) employ various techniques
to bridge language and cultural gaps. Two prominent methods observed are
the use of translators and mediators, as well as internal training and
adaptation. These strategies help SMEs navigate complex interactions with
international partners, ensuring that business processes remain smooth and
effective.
One of the key approaches utilized by SMEs is the use of translators and
mediators. This external focus allows businesses to facilitate communication
without making drastic internal changes. By employing professional
translators or language mediators, companies ensure that messages are
accurately conveyed between parties. This method is particularly useful in
cases where language barriers are significant and miscommunication could
lead to operational inefficiencies or misunderstandings. The reliance on
external translation services is especially prevalent in developed countries,
where businesses have access to greater financial resources and
technological tools to support such measures.
In contrast, another common approach involves training internal teams
through structured programs, external resources, and practical learning
experiences. Almost 26% of SMEs report using this strategy to enhance their
employees’ linguistic and cultural competencies. This inward-focused
approach allows organizations to build long-term capabilities within their
workforce, reducing dependence on external resources. By investing in
training programs, businesses foster a deeper understanding of their
partners' languages, business etiquettes, and cultural nuances, leading to
more effective communication and stronger partnerships over time.
Interestingly, the approach to resolving communication problems varies
significantly between countries, particularly between Spain and Pakistan. In
Spain, SMEs tend to prioritize an external focus by leveraging mediators and
translators. This preference aligns with the country’s access to professional
translation services and technological tools that facilitate cross-border
interactions. Since Spain is a developed economy, businesses often find it
more convenient to outsource translation needs rather than invest
significant resources in extensive employee training.
On the other hand, SMEs in Pakistan adopt a more internal-focused
approach, emphasizing training and adaptation. The preference for internal
training over external translation services may be driven by multiple factors.
Firstly, SMEs in developing countries often face financial constraints that
limit their ability to afford professional translators. Instead, they invest in
upskilling their workforce, ensuring employees are equipped to handle
cross-cultural interactions independently. Secondly, cultural attitudes
towards learning and adaptability may influence this preference, as
businesses in Pakistan may view in-house skill development as a more
sustainable and cost-effective solution in the long run.
The disparity in communication strategies between SMEs in Spain and
Pakistan highlights broader economic and technological differences between
developed and developing nations. However, advancements in technology,
particularly in artificial intelligence (AI) and online translation tools, offer
promising solutions to bridge these gaps. AI-powered language translation
tools, real-time speech recognition, and machine learning-driven
communication platforms are becoming increasingly accessible, even for
SMEs with limited financial resources. As these technologies continue to
evolve, businesses in developing countries may find it easier to integrate
external translation solutions into their operations without significant
financial burdens.
In addition to communication conflicts, another major area where
differences arise is business etiquette. Etiquette-related conflicts can stem
from differences in workplace behavior, formality levels, communication
styles, and business negotiation practices. When respondents were asked
about their strategies to deal with conflicts arising from etiquette
differences, two main approaches stood out: changing their approach (42%)
and discussing the conflict openly (42%). These two strategies reflect the
varying attitudes businesses take in handling cultural misunderstandings,
with some preferring adaptation and flexibility while others emphasize direct
conversation and resolution.
Interestingly, ignoring etiquette conflicts was also identified as a strategy,
with 12% of respondents admitting to taking this approach. This suggests
that, in some cases, businesses may choose to overlook minor cultural
differences rather than address them directly. This could be due to a variety
of reasons, including a lack of awareness, a desire to maintain harmony, or
the perception that such conflicts are not significant enough to warrant
discussion.
When looking at regional differences, the data reveals that ignoring
etiquette conflicts is more common in Pakistan (16%) than in Spain (8%).
This trend may be influenced by the general business culture in Pakistan,
where maintaining relationships and avoiding confrontation are often
prioritized. In contrast, Spanish businesses may be more inclined to address
such conflicts directly, ensuring that misunderstandings do not escalate into
larger issues.
Moreover, Spain demonstrates a stronger preference for open discussions
when resolving etiquette-related conflicts, with 60% of respondents
indicating that they address such issues with their partners through direct
communication. This aligns with Spain’s broader cultural tendency toward
open dialogue and transparency in business dealings. Open discussions help
businesses clarify expectations, establish mutual respect, and prevent
future misunderstandings.
On the other hand, SMEs in Pakistan tend to adopt a more customized and
adaptive approach, with 56% of respondents indicating that they rely on a
hit-and-trial format when handling etiquette differences. This suggests that
instead of addressing conflicts through structured conversations, businesses
in Pakistan prefer to experiment with different approaches, adjusting their
behavior and strategies based on their partners' reactions. This method
allows for a flexible resolution process but may also lead to inconsistencies
in conflict management.
Interestingly, this trend in Pakistan’s approach to etiquette conflicts mirrors
its strategy for resolving communication conflicts. Just as Pakistani SMEs
prioritize training and adaptation over external translators, they also prefer
to modify their business etiquette practices rather than rely solely on open
discussions. This reflects a broader pattern of adaptability within Pakistani
SMEs, where businesses are willing to adjust their methods dynamically
rather than adhere to rigid protocols.
The divergence in conflict resolution strategies between Spain and Pakistan
underscores the impact of cultural and economic factors on business
interactions. While Spain’s structured and discussion-based approach aligns
with a developed market environment that values transparency, Pakistan’s
flexible and adaptive strategies reflect the resourcefulness required in a
developing economy. These differences highlight the importance of cultural
awareness and sensitivity in international business partnerships.
However, as global business interactions continue to evolve, technology is
likely to play a crucial role in bridging these gaps. AI-driven communication
tools, digital etiquette training programs, and online cultural awareness
resources can help businesses navigate etiquette differences more
effectively. By leveraging these technologies, SMEs in both Spain and
Pakistan can develop more structured and efficient strategies for handling
cultural conflicts, ultimately fostering stronger international collaborations.

Fig 15

Spain
Fig 16
Pakistan

Fig 17
Effectiveness of the existing strategies for dealing with Cultural
Conflicts

Cultural differences are an inevitable part of any ecosystem, whether in

business, education, or society. The ability to effectively manage these
differences is crucial for fostering harmony, collaboration, and productivity.
Our survey findings indicate that close to 50% of respondents in both Spain
and Pakistan, as well as overall, believe that their current strategies for
dealing with cultural differences within their respective ecosystems are
effective. While this suggests that half of the respondents have confidence
in their approach, it is equally concerning that the remaining half lack
confidence in their strategies, particularly when it comes to handling
conflicts arising from cultural diversity.
The data highlights a significant gap in understanding and implementing
effective conflict resolution strategies in multicultural environments. Despite
efforts to integrate cultural sensitivity into policies and practices, the
uncertainty among nearly half of the respondents underscores the need for
further research. Understanding why a considerable percentage of
individuals doubt their strategies can provide insights into the challenges
they face, the limitations of existing approaches, and the areas that require
improvement.
Spain and Pakistan, though vastly different in their cultural, economic, and
social landscapes, share common challenges when addressing cultural
conflicts. Spain, being a European nation with a rich history of cultural
convergence, has seen increasing diversity due to globalization, migration,
and regional cultural identities. Issues related to linguistic differences,
immigrant integration, and regional autonomy continue to be sources of
tension. On the other hand, Pakistan, a South Asian country with a deeply
rooted traditional and religious culture, faces conflicts primarily due to
ethnic, linguistic, and sectarian differences. The contrast in these nations’
cultural landscapes makes it even more crucial to identify adaptable
strategies that work in varying contexts.
A key concern is the lack of confidence in conflict resolution strategies. This
could be attributed to various factors, including the rigidity of existing
policies, inadequate training on cultural competence, and insufficient
emphasis on cross-cultural dialogue. Many organizations and institutions
focus on implementing diversity policies but often neglect equipping
individuals with practical skills to manage and resolve conflicts effectively.
Additionally, cultural biases and deeply ingrained stereotypes may hinder
open communication, further escalating tensions rather than mitigating
them.
Given these challenges, it is essential to explore what constitutes an
effective strategy in each of these two countries. Are the strategies
currently employed based on empirical research, or are they reactive
measures taken in response to conflicts? Do they incorporate active
listening, mediation, or intercultural training? More importantly, are they
adaptable to different scenarios and stakeholders? These questions highlight
the research gap that needs to be addressed to develop more refined,
context-specific approaches.
To move forward, further research should focus on identifying best practices
in conflict resolution within multicultural settings in Spain and Pakistan.
Comparative studies analyzing successful case studies, expert opinions, and
grassroots initiatives could provide valuable insights. Additionally,
incorporating frameworks that promote inclusivity, empathy, and
adaptability could enhance the effectiveness of cultural conflict
management strategies.
By addressing these gaps, organizations, policymakers, and individuals can
develop more confident and effective approaches to managing cultural
differences and conflicts, ultimately fostering a more cohesive and
harmonious ecosystem in both Spain and Pakistan.

Fig 18

Pakistan

Fig 19
Spain
Fig 20

Importance of Cultural awareness in building long- term

relationships

Cultural awareness has emerged as a critical factor in building and

maintaining long-term business relationships. In the survey, close to 70% of
respondents acknowledge the importance of cultural awareness in fostering
long-term business relationships. This strong agreement underscores the
widespread recognition that cultural competence plays a crucial role in
sustainable business growth.
However, an interesting observation from the study is that around 10% of
respondents believe that cultural awareness is not an important factor in
building long-term business relationships. A closer look at this segment
reveals that they primarily belong to professions such as freelancing in
finance, delivery services, and small-scale legal matters. These fields
typically involve transactional interactions with minimal emphasis on
relationship-building, which may explain their perception that cultural
awareness is not essential in their professional engagements.
The significant disparity in viewpoints between the majority who value
cultural awareness and the minority who do not suggests that the
importance of cultural awareness is highly contextual. In industries where
collaboration, negotiation, and ongoing partnerships are crucial—such as
international trade, marketing, consulting, and corporate management—
understanding cultural norms, values, and communication styles can be the
key to long-term success. Businesses that operate in multicultural
environments must navigate varying expectations regarding
professionalism, hierarchy, time management, and even business etiquette.
A failure to recognize these cultural differences can lead to
misunderstandings, damaged relationships, and lost opportunities.
On the other hand, freelancers working in highly transactional roles often
function independently and may not require long-term relationship-building
with clients. For instance, a financial analyst who provides one-time reports,
a courier who delivers goods, or a legal consultant handling minor cases
may not see the necessity of cultural awareness in their work. Their
business interactions are often limited to short-term engagements, where
efficiency and technical expertise are prioritized over interpersonal
connections.
Nonetheless, even in these professions, cultural awareness can still offer
advantages. A finance freelancer dealing with international clients may
benefit from understanding different countries’ attitudes toward money,
risk, and investment. A legal consultant working with diverse clients might
improve their service by being aware of cultural sensitivities surrounding
legal matters. While these professionals may not rely on cultural awareness
as heavily as those in relationship-driven industries, dismissing it entirely
could limit their opportunities for growth and broader engagement.
Given the overwhelmingly positive consensus on the importance of cultural
awareness in business, companies and professionals should consider
investing in cultural competence training. This could include language
training, cross-cultural communication workshops, and exposure to different
cultural practices to enhance global business interactions. As businesses
continue to expand across borders, those who prioritize cultural awareness
will likely have a competitive edge in establishing trust, fostering
collaboration, and maintaining long-term partnerships.
In conclusion, while the significance of cultural awareness varies across
professions, its role in fostering long-term business relationships remains
undeniable. Organizations and individuals who integrate cultural
understanding into their business practices are better positioned to succeed
in an increasingly interconnected world.

Overall
Fig 21

Pakistan

Fig 22

Spain
Fig 23

4.5. Chapter Conclusion

Cultural awareness and conflict resolution play a crucial role in fostering
long-term relationships, both in business and broader societal ecosystems.
The findings from recent studies highlight key trends in how individuals and
organizations perceive cultural differences, manage conflicts, and leverage
cultural awareness for sustainable engagement. While a significant
proportion of respondents believe that their strategies for dealing with
cultural differences are effective, an equally large percentage lacks
confidence in their ability to resolve cultural conflicts. This gap indicates the
need for further research into what constitutes effective conflict resolution
strategies, particularly in countries like Spain and Pakistan, where cultural
dynamics vary significantly.
Additionally, SMEs employ a range of strategies to manage both
communication and etiquette-related conflicts. While some prioritize
external resources like translators and mediators, others focus on internal
training and adaptation. The variation between Spain and Pakistan
highlights the influence of economic and cultural factors on business
practices, with Spain favoring direct discussions and structured approaches,
while Pakistan emphasizes flexibility and trial-based learning. As technology
continues to advance, new tools and resources will further support
businesses in overcoming these challenges, ensuring more seamless and
productive international partnerships.
SMEs employ diverse strategies to overcome communication barriers, with
some favoring external mediators and others emphasizing internal training.
While economic conditions and resource availability influence these choices,
the rise of AI and digital tools presents new opportunities to streamline
communication across global business landscapes. By leveraging these
technologies, SMEs in both developed and developing nations can enhance
their international collaborations and foster more seamless business
relationships in the future.

5. Analysis and Conclusions

5.1. Chapter Introduction
Based on our survey responses, we did see differences in how conflicts
related to communication & etiquettes are handled in Spain and Pakistan.
Also, we identified that there is a variation in how much importance is given
to cultural awareness for fostering long term relationships in these two
regions.
This brings us to our next step in analysis which is focusing on our primary
question and the hypothesis derived from it. As per our hypothesis we are
trying to identify if our four main factors- communication style, hierarchy,
etiquettes and cultural differences play any part in the growth of SMEs.

Null Hypothesis (Ho): There is no difference in growth of SMEs in Pakistan

and Spain based on - Communication style, hierarchical structures, business
etiquette and cultural differences.

Alternative Hypothesis (H.): There is a difference in growth of SMEs in

Pakistan and Spain based on - Communication style, hierarchical structures,
business etiquette and cultural differences.

5.2. Hypothesis Testing

As mentioned in previous chapters, the primary statistical tool employed to

identify and analyze the differences in perception between respondents
from Spain and Pakistan was the Analysis of Variance (ANOVA). This
technique was particularly suited to our study's objectives, as it is used to
determine whether there are statistically significant differences between the
means of three or more independent (unrelated) groups. However, in our
case, although we only had two countries under comparison—Spain and
Pakistan—we applied ANOVA because we wanted to assess whether the
average ratings for each of the four factors under consideration—
communication, hierarchy, business etiquettes, and culture—differ
significantly between the two populations. By conducting this analysis, we
hoped to determine whether the cultural and professional priorities among
small and medium-sized enterprise (SME) stakeholders in Spain and
Pakistan exhibit statistically meaningful differences.
Our survey aimed to capture the perceived importance of the four key
factors in the growth and sustainability of SMEs. Each respondent was asked
to rate these factors on a Likert-type scale ranging from 1 to 5, with 1
representing “not important at all” and 5 representing “extremely
important.” These quantitative measures enabled us to compute mean
values for each factor across both countries and apply statistical testing to
determine whether the observed differences in these averages were
significant or could have occurred by random chance.
The results of our analysis revealed some fascinating insights. For the factor
of communication style, the p-value derived from the ANOVA test was 0.14.
This figure is above the conventional significance threshold of 0.05 (also
known as the alpha level), which is typically used to assess whether a result
is statistically significant. Because the p-value is greater than 0.05, we do
not have sufficient statistical evidence to reject the null hypothesis in this
case. The null hypothesis posits that there is no difference in the means of
the two populations. Thus, we conclude that there is no statistically
significant difference in how respondents from Spain and Pakistan perceive
the importance of communication style in the context of SME growth.
A similar trend was observed in the analysis of cultural differences. In this
case, the p-value obtained was 0.75—significantly higher than even the 0.14
value observed in the communication factor. Once again, this value is well
above the alpha threshold of 0.05, reinforcing the notion that we fail to
reject the null hypothesis. In other words, the data does not provide
sufficient evidence to assert a statistically significant difference between
how respondents from Spain and Pakistan view cultural factors in the
development of their SMEs. This consistency between both variables—
communication and culture—strengthens our confidence in the validity of
the findings and suggests a certain level of cross-cultural alignment in these
particular dimensions.
To provide further context, we can examine the mean scores given by
respondents from each country for these two factors. For communication
style, the average rating given by Spanish respondents was 2.96,
whereas Pakistani respondents rated it slightly higher at 3.4.
Similarly, for cultural differences, the mean score was 3.08 in Spain
and 3.16 in Pakistan. While these values do indicate a trend of slightly
higher average ratings in Pakistan for both factors, the differences were not
substantial enough to be considered statistically significant. It is worth
noting that the p-value takes both the difference in means and the
variability of the data into account. In our case, the relatively small
difference in average values, combined with the likely presence of
overlapping standard deviations in both datasets, led to high p-values and
the inability to confirm significant differences.
The results highlight the importance of going beyond mere averages when
conducting cross-cultural research. While the mean values for each factor
provide a snapshot of overall trends, the statistical analysis (via ANOVA)
allows us to draw more reliable conclusions about whether observed
differences are meaningful or simply due to chance. In this study, we have
demonstrated that although Pakistani respondents tend to give slightly
higher importance ratings for communication and cultural differences
compared to their Spanish counterparts, the differences do not reach a level
of statistical significance. Consequently, we must exercise caution in
interpreting these trends as indicative of actual divergence in attitudes.
In summary, the ANOVA analysis conducted on our survey data has provided
valuable insights into the perceptions of SME stakeholders in Spain and
Pakistan regarding communication style and cultural differences. For both
factors, the high p-values (0.14 for communication and 0.75 for culture)
indicate that the null hypothesis cannot be rejected, suggesting that there
are no statistically significant differences in how these factors are perceived
across the two countries. Despite minor variations in average ratings, the
similarities in perception may reflect underlying commonalities in how SME
leaders in diverse regions conceptualize the drivers of business growth.
These findings emphasize the importance of combining statistical rigor with
contextual understanding in cross-cultural research and open the door for
further investigation into other factors that may exhibit stronger divergence
or convergence across international settings.

Table 7
Table 8

When examining the remaining two factors from our study—Hierarchical

Structures and Business Etiquettes—the analysis reveals particularly
compelling and statistically significant results. Unlike the previous two
factors (communication style and cultural differences), where the p-values
exceeded the threshold of 0.05 and led us to retain the null hypothesis,
these two factors demonstrated p-values less than 0.05, allowing us to
confidently reject the null hypothesis. This statistical outcome provides
evidence that there is a significant difference in how respondents
from Spain and Pakistan perceive the importance of hierarchy and
business etiquettes in the context of SME (Small and Medium-sized
Enterprises) growth.
To begin with, let us consider the factor of hierarchical structures. The
average importance rating given by respondents in Spain for hierarchy was
2.96, while their counterparts in Pakistan rated it significantly higher, at
3.56. This difference in the mean values is not only numerically notable but
also statistically significant, as confirmed by the p-value falling below the
0.05 threshold. This result indicates that there is a meaningful divergence in
how organizational hierarchy is viewed in these two regions.
Such a finding is consistent with broader socio-cultural understandings of
hierarchy in work environments. In many developing countries, including
Pakistan, hierarchical structures are deeply embedded within the
fabric of corporate and societal norms. Respect for authority, seniority,
and structured chains of command are often seen as essential to
maintaining order, discipline, and productivity within organizations.
Employees and business leaders alike may view a well-defined hierarchy as
a marker of professionalism and a framework that ensures decision-making
efficiency.
In contrast, Spain, as a developed and relatively egalitarian society,
may place less emphasis on rigid hierarchical systems. European business
culture, particularly in Southern and Western Europe, has increasingly
leaned toward flatter organizational models, promoting open
communication, team collaboration, and participative decision-making.
While hierarchy is still present, it may not be considered a critical
component for SME growth in the same way it is perceived in Pakistan. This
difference in perspective explains the lower average score among Spanish
respondents and underlines a broader cultural divergence between the two
countries regarding authority and organizational control.
Now turning to business etiquettes, the gap is even more striking.
Spanish respondents gave this factor an average rating of 3.04, whereas
Pakistani respondents rated it much higher at 3.88. Once again, the p-value
associated with this comparison was less than 0.05, signifying that the
difference is statistically significant and unlikely to be due to random
variation in the data. This means we can confidently conclude that business
etiquettes are perceived as more critical to SME growth in Pakistan
than in Spain.
To understand why this might be the case, it's important to reflect on the
role of business etiquettes in emerging economies. In many
developing nations, personal relationships, formal behavior, and
adherence to traditional business protocols often play a crucial role
in establishing credibility and trust. In Pakistan, for instance,
demonstrating proper etiquette—whether through punctuality, dress code,
respectful communication, or formal greetings—can be seen as a sign of
reliability, professionalism, and business acumen. These elements are not
merely cosmetic but are woven into the operational dynamics of business
transactions and collaborations.
Moreover, in environments where institutional frameworks might be less
robust or standardized than those in developed nations, informal norms
and interpersonal etiquette often act as substitutes for formal
systems. This reliance on etiquette as a stabilizing force in business
relationships could explain why Pakistani respondents assign greater
importance to it in the context of SME success. SMEs, being more vulnerable
and reliant on close-knit professional networks, may especially depend on
proper business behavior to secure opportunities, build partnerships, and
sustain growth.
On the other hand, Spain—like many Western economies—has seen a shift
toward more relaxed and flexible norms in professional settings.
While etiquette is certainly still valued, it may not carry the same weight in
determining business outcomes as it does in developing contexts. In Spain,
other factors such as innovation, market strategy, access to technology, and
financial management may be seen as more pivotal to the growth of SMEs
than formal conduct. This may partly explain why business etiquette is rated
as moderately important, but not to the extent observed in Pakistan.
Table 9

Table 10

5.3. Interim Conclusion

These results are particularly interesting when considered in light of the
broader context of international business and cultural diversity. One might
expect that communication styles and cultural perspectives would differ
more markedly between countries like Spain and Pakistan, which have
distinct historical, social, and linguistic backgrounds. However, our findings
suggest that, at least within the professional domain of SME management
and growth, stakeholders in both countries may converge on similar views
regarding the relevance of these factors. This could be due in part to the
effects of globalization, the spread of common business practices, or the
influence of shared challenges and goals among SME operators regardless
of geographical location.
Another interpretation of the findings could be that while communication
and culture are undoubtedly important aspects of business management,
their perceived role in driving SME growth may not vary much between
countries with different cultural contexts. This could indicate that SME
leaders in both Spain and Pakistan place more emphasis on other
operational or strategic areas—such as access to finance, market
competition, or regulatory frameworks—when evaluating the keys to their
business success. As a result, even if there are cultural and communicative
distinctions in day-to-day interactions, these may not be viewed as primary
growth drivers in either national context.
The significant differences in perceptions of hierarchy and business
etiquette between respondents from Spain and Pakistan highlight
deeper cultural, economic, and institutional contrasts between
developed and developing nations. The data suggest that in developing
countries like Pakistan, traditional social values and respect for
formal structures remain influential in shaping business practices.
These values are not only preserved but are considered critical to the
growth and sustainability of small and medium enterprises, which often
operate in environments with limited access to formal business support
systems.
In contrast, developed nations like Spain appear to be more
influenced by modern managerial practices, global trends in
organizational design, and less reliance on traditional forms of
professional conduct. This does not suggest a lack of professionalism but
rather a different interpretation of what contributes to business success. The
organizational cultures in such countries may place more emphasis on
innovation, adaptability, customer satisfaction, and decentralized decision-
making processes.
Furthermore, these findings have practical implications for international
business and cross-cultural management. For multinational companies
or partnerships between Spanish and Pakistani SMEs, understanding these
differences is crucial for effective collaboration. Misalignments in
expectations regarding hierarchy or business decorum could lead to
misunderstandings or inefficiencies if not properly managed. Training
programs that foster cultural awareness and adaptability could mitigate
such risks and promote more harmonious business relationships across
borders.
In conclusion, the analysis of hierarchical structures and business etiquettes
in our study yielded statistically significant results, marking a sharp contrast
to the earlier factors of communication and culture, which did not
demonstrate significant divergence. The lower p-values for hierarchy
and etiquette firmly establish that these factors are perceived
differently in Spain and Pakistan, with respondents from Pakistan
attaching greater importance to both. These findings support the conclusion
that in the context of SME growth, traditional values and formal
structures remain more central in developing economies compared
to developed ones. As globalization continues to shape the business
landscape, recognizing and respecting these cultural nuances will be
essential for fostering sustainable and inclusive international partnerships.
6. Conclusions and Recommendations
6.1. Chapter Introduction
To conclude the findings of the research statement, ¨How do cultural
contexts specifically in communication styles, hierarchical structures,
business etiquettes and cross-cultural differences impact the growth of
small business in a developed country (Spain) vs developing country
(Pakistan)¨ the data and analysis clearly showed that the communication
styles and cross cultural differences didn't have much difference in how
these two factors are perceived for the growth of SMEs. However,
differences in developing and developed countries can clearly be seen in
business etiquettes and hierarchy, indicating that the importance to these
two factors is given more in developing country such as Pakistan vs a
developed country like Spain.

6.2. Summary of Findings

6.2.1. Summary of Primary & Secondary Research
To summarize the entire findings from the survey, it can be concluded that
Hofstede’s cultural dimensions—particularly higher Power Distance and
lower Individualism—are clearly observable in a developing country like
Pakistan. These cultural attributes help explain why hierarchical structures
and formal etiquettes hold greater significance in the context of perceiving
growth and success, especially in small and medium enterprises (SMEs).
Although the statistical difference in the averages for these two cultural
dimensions between Spain and Pakistan is not large, the variance in
significance levels points to meaningful cultural distinctions that influence
business practices and decision-making.
The survey results highlight that, in Pakistan, employees and business
owners tend to operate within rigid hierarchies, where respect for authority
and top-down leadership are common. In contrast, Spain, which ranks lower
in Power Distance and higher in Individualism, reflects a more egalitarian
structure and places greater emphasis on personal autonomy and self-
expression. These differences play a crucial role in how growth is perceived
and pursued in each country.
Despite these contrasts, the impact of globalization cannot be ignored. The
rapid spread of technology, communication tools, and global trade has
reduced many traditional barriers, enabling SMEs to explore and thrive
across diverse geographies and cultural contexts. More businesses are now
operating internationally, adapting their strategies to align with both local
and foreign expectations. However, the survey suggests that deep-rooted
cultural values remain influential in shaping how businesses grow and
operate. These underlying norms continue to affect organizational behavior,
leadership styles, and strategic choices, even in an increasingly
interconnected world. In essence, while globalization has brought
convergence in many areas, the essence of cultural identity still plays a key
role in defining the developmental paths of SMEs in different countries.

6.2.2. Overall Summary and Conclusions

Summarizing our overall learnings it can be concluded that globalization has
played an important role in reducing communication and cultural barriers.
Due to advancement in technology, access to books and expertise around
cultures and the training provided internally in organizations, these
communication and cultural barriers are reducing. However, there are still
deep rooted values that separate Western individualistic style of work vs
collective nature in a developing nation and also power distance which is
seen in the form of hierarchical structure importance given in developing
countries, these factors if learnt and managed well can be very helpful in
the success of SMEs in both nations.

6.3. Areas for future research

When examining the dynamics of hierarchy and etiquettes in the context of
developing and developed countries, several key distinctions emerge,
particularly in the domains of business culture and interpersonal
communication. In developing countries, such as Pakistan, hierarchical
structures are typically more rigid and deeply embedded in organizational
and societal norms. Seniority and titles are emphasized, and decisions are
often made by top management without much input from lower levels. This
contrasts with many developed countries, where flatter organizational
structures are more common, and collaborative decision-making is
encouraged. In such environments, open communication, innovation, and
individual accountability are valued more than strict adherence to hierarchy.
Etiquette also differs notably. In developing countries, formal protocols in
meetings—such as greetings, seating arrangements, and the use of
respectful language—play a significant role in establishing trust and
credibility. These norms are often shaped by cultural values such as
collectivism, respect for elders, and traditional customs. On the other hand,
developed countries often adopt a more informal approach to business
interactions, with a focus on efficiency, time management, and directness.
Understanding and adapting to these differing expectations is crucial in
cross-cultural business engagements.
The success of small and medium enterprises (SMEs) in Pakistan—many of
which operate in diverse sectors such as textiles, IT, and manufacturing—
can be closely tied to their ability to adapt to the needs of international and
local partners. A critical factor contributing to this adaptability is the
awareness of cultural expectations and business etiquettes in foreign
markets. SMEs that exhibit flexibility in communication styles, negotiation
tactics, and delivery expectations often find it easier to form lasting
partnerships abroad. This adaptability becomes a competitive advantage in
global markets where responsiveness and cultural sensitivity are valued.
There is indeed a strong correlation between the global success of Pakistani
SMEs and their adaptability levels to partners’ needs. Those businesses that
can effectively navigate hierarchical expectations—both domestically and
internationally—while respecting diverse etiquettes, are more likely to thrive
in cross-border partnerships. For instance, a Pakistani SME working with a
German partner may need to adopt a more punctual, process-oriented, and
transparent approach than it would in its local context. Similarly, when
dealing with East Asian partners, understanding the importance of saving
face, indirect communication, and long-term relationship building can be
instrumental in fostering trust.
In summary, hierarchy and etiquette influence business operations
differently in developed and developing countries, and understanding these
factors is critical for international collaboration. For SMEs in Pakistan,
success on the global stage is often determined by how well they can bridge
these cultural gaps. Their ability to adapt—while still maintaining core
business values—enhances their credibility and effectiveness in diverse
markets. As globalization continues to blur traditional boundaries,
adaptability to partners’ cultural and professional expectations becomes not
just beneficial, but essential for sustained success.

6.4. Lessons Learned

Both Spain and Pakistan generally lean toward direct communication,
especially in business settings where clarity and efficiency are prioritized.
However, the interpretation and implementation of directness can vary
between the two cultures, particularly when layered with their respective
approaches to hierarchy and etiquette. While both countries value structure
and respect within professional environments, the significance and
expression of these elements differ in meaningful ways.
In Spain, hierarchical structures exist but are relatively flexible. There is a
notable emphasis on egalitarianism, and it is common for junior team
members to express their opinions openly in meetings. Although titles and
positions are respected, interpersonal warmth and informality often
characterize business interactions. Communication tends to be open, and
conflict is addressed through dialogue, discussion, and mutual
understanding. Spanish professionals are generally comfortable engaging in
direct conversations to resolve misunderstandings or cultural clashes,
viewing open communication as a healthy and effective tool for conflict
resolution.
In contrast, Pakistan places a stronger emphasis on hierarchy and formal
etiquette. Age, seniority, and professional titles carry significant weight, and
deference to authority is deeply ingrained in both societal and
organizational structures. In business settings, decisions are typically made
by senior leadership, and junior staff are expected to follow directions with
minimal questioning. Etiquette, including the proper use of greetings,
honorifics, and respectful language, is highly valued and plays a critical role
in building trust and maintaining relationships.
When cross-cultural conflicts or misunderstandings arise, the approach to
resolution differs notably between the two countries. In Spain, such issues
are often addressed through open communication, where all parties are
encouraged to express their perspectives honestly. There is a belief that
transparency and dialogue can lead to mutual understanding and
consensus. On the other hand, in Pakistan, open confrontation or direct
criticism—especially toward superiors—can be seen as disrespectful or
disruptive. Therefore, adaptability becomes a preferred strategy.
Rather than initiating potentially uncomfortable conversations, Pakistani
professionals tend to adjust their work style or behavior to align with the
client’s or partner’s expectations. This flexibility is seen as a diplomatic way
to preserve harmony and demonstrate commitment to the business
relationship. Adapting one’s approach to suit the cultural or professional
needs of a partner is considered a sign of respect and maturity in Pakistan,
especially when dealing with international collaborators.
In this context, Pakistani businesses, particularly SMEs, often find success by
customizing their communication and operational strategies to match the
cultural preferences of their partners. Whether working with European, East
Asian, or Middle Eastern clients, their focus on adaptability over direct
confrontation enables smoother interactions and long-term partnerships.
In summary, while both Spain and Pakistan value direct communication, the
influence of hierarchy and etiquette introduces distinct nuances in their
conflict-resolution styles. Spain favors open dialogue as a means to resolve
issues, whereas Pakistan leans toward flexibility and adaptive strategies,
especially in hierarchical contexts. Understanding these cultural preferences
is key to fostering successful international collaborations.

6.5. Ethical Considerations

As the study was limited to a sample size of only 50 responses—25 from
each country (Spain and Pakistan)—the findings should be interpreted with
caution. While the responses provide valuable insights into the
communication styles, hierarchical preferences, and etiquette norms in the
two countries, the small sample size restricts the generalizability of the
results. Given the diversity within each country in terms of industries,
regions, organizational cultures, and individual experiences, it is not feasible
to consider the outcomes of this study as comprehensive or universally
applicable.
Different sectors may exhibit varying degrees of adherence to hierarchy and
cultural norms. For example, the corporate or public sector may follow
stricter hierarchical protocols compared to creative industries or startups,
where flatter organizational structures and informal communication might
be more common. Similarly, international companies or export-oriented
SMEs may already be more familiar with adapting their practices to meet
global standards, unlike smaller or locally-focused businesses that might
operate strictly within traditional frameworks. These nuances cannot be fully
captured in a study with such a limited sample size.
Moreover, the findings do not account for generational, gender-based, or
regional differences, which could also influence how hierarchy and etiquette
are perceived and practiced in business environments. Young professionals
in urban areas may have very different perspectives compared to older
employees in more traditional or rural settings.
Therefore, while the study serves as a useful starting point for
understanding the cultural dynamics of communication and adaptability in
Spain and Pakistan, it is not sufficient for drawing broad conclusions. Further
research with a larger, more diverse sample pool—spanning multiple
sectors, regions, and organizational types—is essential for a deeper and
more accurate understanding. Future studies could also incorporate
qualitative interviews and case studies to provide richer, context-specific
insights.
The study also didn´t aim to generalize any cultural and hierarchical
practices or citing one is better than the other. It just wanted to highlight
how different factors were given importance in developing vs developed
country context.

6.6. SDG Implications

Through this study and its key findings, the primary objective has been to
foster global partnerships and contribute to the success and sustainable
growth of small and medium-sized enterprises (SMEs) across the world. In
alignment with the United Nations Sustainable Development Goal 17 (SDG
17) — which emphasizes strengthening the means of implementation and
revitalizing global partnerships for sustainable development — this study
seeks to highlight the critical cultural and organizational factors that
influence the success of SMEs in both developed and developing countries.
SMEs form the backbone of most economies, playing a vital role in
employment, innovation, and economic development. However, when it
comes to international collaboration and cross-border partnerships, cultural
misunderstandings and differences in business practices can create
significant barriers. By examining and comparing countries like Spain (a
developed nation) and Pakistan (a developing one), this study brings to light
how communication styles, hierarchical structures, and etiquette norms can
influence professional interactions and business outcomes.
One of the main takeaways from the research is that while both Spain and
Pakistan utilize direct communication, their approaches to hierarchy and
etiquette differ. Spain tends to resolve cross-cultural issues through open
dialogue and transparent discussions, reflecting a more egalitarian work
culture. Pakistan, on the other hand, often favors adaptability and tailoring
work processes to meet the client's or partner’s needs, showing greater
deference to hierarchy and formal etiquette. Understanding these
differences is crucial for building effective international partnerships.
This study, although based on a limited sample, serves as a starting point to
identify key factors that SMEs need to consider when entering global
markets or forming international alliances. Once these cultural and
organizational factors are recognized, SMEs can begin to evaluate their
current practices, identify potential gaps, and implement adaptive
strategies. These strategies may include staff training on intercultural
communication, revising internal decision-making processes, or creating a
more inclusive company culture that respects diverse norms and values.
Creating such an environment of inclusivity and shared learning not only
enhances collaboration but also boosts innovation, employee engagement,
and long-term sustainability. Global partnerships that are based on mutual
respect and cultural understanding are more resilient and effective,
especially in a world that is increasingly interconnected.
Ultimately, this study supports the broader goal of SDG 17 by encouraging
SMEs to become more globally aware, culturally competent, and
strategically aligned with international best practices. By fostering a mindset
of cooperation, openness, and continuous improvement, SMEs in both
developed and developing countries can unlock new opportunities, access
wider markets, and contribute meaningfully to sustainable global
development. Further research and collaborative initiatives will be essential
to continue this journey and create a more inclusive, equitable global
business ecosystem.

References:

A. Levitt, S. R. (2022). Intercultural competence in international teamwork:

Understanding high-and low-context communication styles. Communication
and Media in Asia Pacific, 5(1), 1-13.
B. Sáenz-Royo, C., Salas-Fumás, V., & Lozano-Rojo, Á. (2022). Authority and
consensus in group decision making with fallible individuals. Decision
Support Systems, 153, 113670.
C. Omrane, A., & Khan, M. A. (2024). A comparative analysis of six national
cultures under the umbrella of Hofstede's model. Environment and Social
Psychology, 9(3).
D.Bharadwaj, A. (2024). Communication Skills for Global Leadership:
Strategies for Effective Intercultural Management. Taylor & Francis.
E.Kiaer, J., & Kim, L. (2024). The Language of Asian Gestures: Embodied
Words Through the Lens of Film. Taylor & Francis.
F.Ermasova, N. (2021). Cross-cultural issues in business ethics: A review and
research agenda. International Journal of Cross Cultural Management, 21(1),
95-121.
G.Kilag, O. K., Diano Jr, F., Bulilan, R., Allego, L., & Cañizares, M. C. (2024).
Leadership Strategies for Building Inclusive School Communities: The
Challenges of Managing Diversity in Schools. International Multidisciplinary
Journal of Research for Innovation, Sustainability, and Excellence (IMJ RISE),
1(1), 92-100.
H.Cruz, A. D., Hamilton, E., Campopiano, G., & Jack, S. L. (2022). Women’s
entrepreneurial stewardship: The contribution of women to family business
continuity in rural areas of Honduras. Journal of Family Business Strategy,
100505.
I.Hall, E. T. (1976). Beyond culture. Anchor Books.
J.Hofstede, G. (1980). Culture’s consequences: International differences in
work-related values. Sage.
K.Shore, L. M., Chung-Herrera, B. G., Dean, M. A., Ehrhart, K. H., Jung, D. I.,
Randel, A. E., & Singh, G. (2009). Diversity in organizations: Where are we
now and where are we going?. Human Resource Management Review, 19(2),
117-133.
L.Venaik, S., & Brewer, P. (2010). Avoiding uncertainty in Hofstede and
GLOBE. Journal of International Business Studies, 41(8), 1294-1315.