Is understanding that transcends language and cultural barriers at all possible? How can we account for the different sorts of failure in achieving intercultural understanding and cooperation? What theory would describe how we can go beyond cross-cultural differences and reach some mutual agreement on business principles and practices? This article explores the relevance of Donald Davidson's philosophy of externalism and Thomas Kent's rhetorical theory of paralogic hermeneutics to these pressing issues in intercultural communication. Using a cultural perspective based on the Taoist yin/yang principle, it explains how an understanding of the externalist conception of truth and the world, and paralogic rhetoric as a theory of communicative interaction, can better enable us to deal with the radical changes taking place in the nature of intercultural relations and communication.