When a company is conducting business internationally, understanding the culture of the country or region, it is doing business with, as well as making sure the business fits the culture where it is doing business, is extremely important. Not understanding the culture could mean that the product or service affects the competitiveness, marketing, and could even have some political ramifications. An understanding of the country’s language, attitudes and beliefs, religion, material culture, social education, legal characteristics, and political structures can have a positive impact on the success of an overseas business venture. In order to run a successful international business, a business manager must also become a student of culture and diversity. Before choosing a global market to sell a product or service, a company needs to make sure that the product or service is a good fit for the culture. It is important to know if the product or service is something that the culture of the country would need or want. As an example, if a company sells cowboy hats, they are not likely to be very successful in a country where the culture and religion requires the people to wear turbans. Knowing the culture and its religions is important when choosing a country for as a global market. To be successful, a company will want to know that its product or service will sell, and being successful in the United States does not necessarily mean that a product or service will do well in other
International marketing or business is uniquely different from the local market because the product price, place and promotion is vastly different from what is been offered to local customers (Johansson, 2000) With the emergence of the information technology, cross border marketing has never been a distant dream. However, it has never been easier even for giant multinational companies to face challenges that come in international business. The biggest challenge comes from the culture which varies from country to country.
So far as international business is concerned, the four dimensions of culture form an important facet. Knowledge of the manner in which different features of a business are viewed in different cultures, can help a manager in understanding and sailing successfully across the international business market.
Every country differs in culture which has been there for centuries. The international market is growing rapidly, with more and more multinational organisations entering new markets each day. In this assignment I will evaluate how the difference in cultures affects the performance of international businesses.
Doing business in such different countries ask you to be flexible and need to be able to adapt quickly to the local demand and cultural differences. Your strategy has to be adapted to the ethical standards, cultural norms, but also the way the business is going locally. In others world, the company has to localize its distribution and marketing strategy to the requirements of the local market.
A third way to build a positive and successful intercultural relationship is to become educated on common business practices and cultural norms of the country of the prospective business partner. “Business people should learn how the other side approaches business and what the principles of hospitality are” (MacEwan, 2015, p. 156).” This quote demonstrates the importance of education in regards to other cultures business norms, because without a prior education a person could be doing something that the other country or culture finds offensive without realizing it. It could be the smallest of issues that ruins the business relationship and makes it unsuccessful.
Globalization has made it paramount for businesses and individuals that want to venture into a different country to have cultural intelligence of that country. Cultural intelligence is defined as capability to successfully adapt to new cultural environments and unfamiliar settings attributable to cultural context (Earley, Ang, and Tan 2006). Obtaining cultural knowledge allows business relationships to flourish, provides feasibility and sustainability for the business. It also shows cultural sensitivity, which is important when trying to win over locals of a specific area.
There are many cultural and ethical differences between countries and it is important for mutual trust and respect that no organization try to strong-arm another into their way of thinking or take a position that their culture is more valuable than the other. According to Pitta, Fung, and Isberg (1999), it is vital for success to have a basic understanding of the culture and the expectations within cultures as they affect all business transactions. Failing to understand and consider the cultural differences will likely result in failure.
Making business abroad can be risky, but it can also be profitable for a company as well; thus the necessity to study in deep the country where the company will bring the business to. International companies are faced with many cultural challenges, when doing business across and inside of different borders. Identifying the significant cultural issues involved when evaluating the attractiveness of a particular location as a place for doing business can be crucial for a business. Aspects to consider when studying culture in a new place
Cultures are varying among different parts of the globe. People with different cultures have different characteristics and viewpoints on the subjects due to diverse understanding and method of learning. During the past few decades, the international trade grows in a very rapid rate due to the advantages that it provides; “increased sales, operational efficiencies, exposure to new technologies and broader consumer choices” (Heslin). Therefore, when considering the culture aspect to current business world, it is crucial for business to understand the culture aspect because of the tremendous growth of international business as well as utilize the international market to its maximum
Cultural differences between countries have strong effects on individual personality and behavior, as well as on organizational culture (Hofstede 2001). These differences can be a significant barrier for an international business leader. Failure to understand and adapt to these differences may
Using appropriate theories critically analyse the role of culture in International Business. Support your answer by quoting relevant examples from the case study.
Today corporations have turned global. So it is very important that employees and top management both understand the cultural intelligence so they can execute the effective leadership and management tactics. Cultural intelligence provides an opportunity to understand and effectively function across the different cultures (Dyne, Ang & Livermore, 2009). For any leader to work efficiently and effectively in different culture environment it is very important to have cultural knowledge and adaptability. To work in different culture it is necessary to have knowledge of norms, habits , and behaviors in the underlying culture so leaders can use it in favor of business. A leader should also understand the difference between his home country
According to the works of Chaney & Martin (2011) and Harris & Moran (2000), they agree that international management skills are in need for the increasing scope of international trades and investments. A large number of multinational companies have expanded their businesses through both developed and developing countries. Some of the business invest directly and others are partnership arrangements and strategic alliances with domestic operations. Their studies show that independent entrepreneurs and small businesses have started investing and competing in the world marketplace. Thus, to acquire corporations’ objectives, there is exceedingly a necessity for the development of strategic framework for cross-cultural management and communication in the current competitive global market. Chaney & Martin (2011) also noted that, cultural awareness and cultural differences are strongly important to the multinational corporations’ success. A good understanding of the culture where business is implemented can make international managers productive and effective.
Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.
When dealing with intercultural business a person should be well aware of the characteristics of the culture he is to be in contact with. He should be well prepared to face attitudes not common in his home country.