An understanding of cultural relativism can lead to an advantage in international business, it can enable people to gain a better insight into their own moral reasoning and it can help to avoid the pitfalls of ethnocentrism in a decision-making process. Global marketing, for example, requires an understanding of how a target country's culture plays a role in product-purchase decisions, and it can be a critical factor in success. On the personal level, an individual can gain a better understanding of their own situational stimulus-response patterns by comparing their reactions to those of an individual experiencing a similar situation in a different culture.
Ethnocentrism can significantly impair a decision-making process when that process involves the people, politics or institutions of another culture. A potentially costly misjudgment can result from imposing, for example, a distinctly North American point-of-view upon the expected responses of individuals or groups in an Asian, African or Middle-Eastern culture. An effective awareness of cultural relativism proceeds from the perspective that an individual's judgment and response patterns are a product of their experience, and they should be viewed neutrally and within the context of an individual's culture.
Cultural relativism and ethnocentrism reflect divergent ways of examining beliefs and actions. Ethnocentrism is the more limiting viewpoint because it assumes that certain moral and social parameters are self-evident, without taking into account that those same parameters may not be self-evident, or may be quite different, within the context of another culture. In this respect, an understanding of cultural relativism carries the advantage of an increased awareness of the totality of human experience and of the dynamics behind the interactions taking place between cultures and counties on a global scale.