Firms increasingly have to compete globally in order to survive. An understanding of the host country’s local culture arguably being one of the most important aspects of this survival. The greater the cultural difference, the higher the risk of miscommunication and of mismanagement. Given that cross-cultural management is acknowledged as an intrinsic part of firm establishment in foreign markets today, we set out to explore the linkages between the competence of international firms in managing cultural differences and the effectiveness of their business operations. How this ‘cross-cultural competence’ is acquired is of particular interest to this study. Swedish firms operating in Kenya, Lithuania, Poland and Russia are examined. The findings show that international firms tend not to formulate any preparatory measures to become ‘culturally competent’ prior to entering foreign markets. Learning takes place by doing. A Process Model of Acquiring Cross-Cultural Competence in Foreign Markets is constructed.