An Overview On Foreign Direct Investment

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Foreign Direct Investment is the direct investment in new facilities or companies to expand a business in a new country. In evaluating and analyzing East Asia, it is important to focus on cultural issues as they are major indicators of the business environment and implementation in a given local. East Asia, including China, only began opening up for foreign investment in the 1970s. Japan is considered a developing market, where the rest of Eastern Asia is an emerging market, the majority of FDI around the world is targeted to developing nations due to increased stability, consumer culture, and large markets. The risk of emerging markets is greater than in developed, thus yielding a greater return on investment when the endeavor succeeds.…show more content…
Cultural managerial implications including long-term planning and results based rewards will likely be a shock to the traditionally, faced-paced, and instantaneous American companies operating currently in the American Culture. Communication and interaction also differs once operating in a given country, with the cultural norm being close and multiple relations occurring simultaneously. Transitioning the American corporate culture to a more collectivism culture where employees are focused on the team instead of individual success will be a major factor that affects the overall company culture. Implementation of service in a country where traditional culture and outlook is significantly different than the company’s home culture poses a barrier to success. Identifying and shifting managerial implications so they address the local expectations are essential to success. Both Anthropology and Hofsteder’s cultural dimensions are imperative to analyzing cross-cultural differences especially when evaluating the expansion possibilities of a company to a different country. The following are the top 5 dimensions as they relate to multi-national enterprise management: 1) Masculine/Feminine Dimensions 2) Individualism – Collectivism Dimensions 3) Activity Orientation Dimension 4) Uncertainty Avoidance Dimension 5) Power Distance Dimension I find that the basic interaction dimensions are most
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