how cultural differences impact international business? essay

In such cases, differences in national culture can lead to high-level communication and a more sustained collaboration (Shenkar and Zeira, 1992; Park and Ungson, 1997). England was the 7th country in the world in terms of import volumes. Park, S.H. No plagiarism, guaranteed! Click to order with. Sorry, we could not paraphrase this essay. National culture relates primarily to deep-seated values (Hofstede et al., 1990). So the company should deeply analyze the education system of the particular country and based on that business communication should be done. You are free to use it to write your own assignment, however you must reference it properly. (2001) said that resource complementarity between partners of international alliance is often a necessary condition to optimize this value creation. Therefore, it is very important to study and understand how the national culture impact on the international business. Lyles, M.A. Regardless, certain areas of business are likely to be impacted to varying degrees, particularly by changes to/ divergence from existing trading rules. Cultural differences stems from national, organizational and professional cultures. From Sirmon and Lane (2004), we can know that when cultural differences between the partners are very relevant to the value-creating activities of an alliance, cultural differences will significantly affect the performance of the international business. Resource complementarity between alliance partners is often a necessary condition to optimize this value creation (Harrison et al., 2001). After all, notions about cultural differences are often the basis for international marketing communications as well as global brand management strategies. Both of these factors impede the finding of common ground from which the relationship can develop and produce value (Lane and Lubatkin, 1998). From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Language is the basic means of communication between people. The paper will also discuss ethnocentrism and ways to avoid it. Well occasionally send you promo and account related email, Browse our vast selection of original essay samples, each expertly formatted and styled, Gold Mining Industry A global business is gold mining except for Antarctica it has its operations on every continent, and from mines, gold is extracted of different types and scales. The culture of one country might be different from the culture of another country. Moreover, in a low-context culture, communication is clear and direct, such as America. Sirmon and Lane (2004) explained that the influence of national culture is strong and long lasting. England is a highly industrialized economy with a well-established trade infrastructure. December 3, 2021. https://studycorgi.com/impact-of-culture-on-international-business/. Morrison (2006, p.191-192) mentioned that differences in national values and attitudes have been the subject of considerable research. How cultural differences impact international business Culture refers to the discovered norms based on values, attitudes and beliefs of a group of individuals and cultural distinction is the variation of the belief, valued, and behavior. Many big companies are investing on their country to make a hub in Europe. With over 20 years of experience operating outside the United States, our team is very skilled at adjusting our products and systems for local tastes and preferences. (International franchising with Dominos pizza, (n.d)). This article mainly analyzes the cross-cultural issues, expounds thecultural factors ininternational business management, enumerates the cultural differences in international. Second, these individuals often lack experience communicating with an auditing audience outside their professional culture. Status can be determined by clothing and general appearance, age, job, education, family name, and social connections. Section 2 is definition of culture and international business. Culture refers to the discovered norms based on values, attitudes and beliefs of a group of individuals and cultural distinction is the variation of the belief, valued, and behavior. English helps the business people overcome the problems of intercultural communication in their international business activities. In this era due to globalization the culture seems to vary from each others nation. Click to order with 5% discount: Executive summary Under the economic globalization, different levels intensifies, various types of cross-cultural negotiations, the trade has become increasingly frequent, different cultural factors become more important business communication. Furthermore, they also found that professional culture is the most relevant to the value-creating activities of an alliance. It is the culture of the society that will support an organization that continuously participates in social development activities. In short, decreased learning, satisfaction and effectiveness of interactions impede the business processes used to share combine and leverage resources such as knowledge, relationships and physical assets. Moreover, Harrison et al. On the beneficial aspect of culture, managers may be more willing to spend effort on avoiding misunderstandings in international alliances than they would in domestic alliances. English as a global language and common language helps people who speak different languages to communicate. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. From (Morrison, 2006, p.169), we can know that culture has many aspects, for example, value, behavior, beliefs, communication, sport, music and customs. (1996) Knowledge acquisitions from forging parents in international joint ventures: an empirical examination in the Hungarian context, Journal of International Business Studies 27(5): 877-903. Reviewing strategic contracts in place where there is a dependence on UK trade and where pricing mechanisms are in place that assume no tariffs, quotas or other barriers, Reviewing contractual terms that could be triggered (against you) because of the circumstances of a UK exit from the EU (including market volatility). If partners of international alliance cannot have common language to communicate, they cannot cooperate and interact because they cannot communicate. Franchising is a good option to make an international business successful because the franchisees can easily understand the culture of the people as it is run by people from the same country. A coworker relation between male and female needs to maintain a certain distance in Bangladesh but have to talk in a very formal way, whereas English are very fond of this relation. Dominos Pizza International recognizes the need for some adaptation in order to address the cultural and societal differences encountered in each individual market. Generally, similarity of partners organizational culture increases partner learning, satisfaction and effectiveness of interactions, whereas differences in organizational culture decrease these positive outcomes. (1990) said that whereas national culture relates primarily to deep-seated values, organizational culture relates primarily to shared beliefs in organizational practices and processes. Differences in culture between partners have a significant impact on the international business. do more business in other countries across Europe. Conclusion References Introduction Culture is the acceptable way of doing things in a given society. We will occasionally send you account related emails. Students who find writing to be a difficult task. By culture, we mean language, education system, literacy rate, food habit, lifestyle, social systems, different ways of communication prevailing in the countryetc. 1. For example, when the managers work with the foreign partners, they will spend more effort on avoiding misunderstandings in international alliances than they would in domestic alliances. Usually English people are very reserve which makes people to think them as a moody but in reality they are very friendly with foreigner and helpful. 51, 38-43. Lave, j. and Wenger, E. (1991) Situated Learning: Legitimate Peripheral Participation, Cambridge: Cambridge University Press. They stated that professional culture differences are often the most relevant and salient cultural differences that the interacting employees face, and thus professional culture differences are the most disruptive to the alliances effectiveness in achieving its primary value-creating activities. Doing business on the international plane presents many challenges because of a variety of factors which differ from one market to the other. Dedicated to your worth and value as a human being! The world trade cultural differences have affected the international business activities. From (Morrison, 2006, p.5), we know that an international business forms when business activities of a company straddle two or more countries. (Provided by the student). International business refers to business activities that straddle two or more countries (Morrison, 2006, p.5). The food habit of the people in a particular place has a great impact on the business, especially in the business of accompanying which is dealing with the food items. Essentially, this means that once a foreign firm has gained their trust and has demonstrated its goodwill and willingness to lend assistance to the country, the Chinese will try to reciprocate in kind, whenever possible. (p. 30). Morrison (2006, p.195) indicated that the characteristics of organizational culture include: Norms of behavior, such as relations between management and employees; Preferences for formal or informal means of communication within the company and with associated companies; Dominant values of the organization, such as high product quality and customer orientation; Degree of empowerment of employees throughout the organization; and. "Impact of Culture on International Business." Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. StudyCorgi. Common language is an element of national culture. Sirmon and Lane (2004) found that organizational culture is important to the success of mergers and acquisitions. so lets get started. Share Impact of Cultural Differences in International Trade Essay Exclusively available on IvyPanda Updated: Feb 20th, 2021 Towards the direction of increasing profitability and attaining competitive advantage over their rivals, many firms have been exploring expansion opportunities in different areas of the globe (Adler 48). Today, the global business is filled with cut-throat competition and most of the companies are trying to expand their business internationally. And also the companies should try to improve the way of business communication. This paper is going to discuss how it is important for international companies to relate and adapt to the cultures of the countries that they seek to set up a business. and Ungson, G.R. If you need assistance with writing your essay, our professional essay writing service is here to help! Hofstede, G. (1991) Cultures, Organizations: Software of the Mind, London: McGraw-Hill. The challenges for expatriates in cross-cultural adjustments (CCA) are personal, work, and non-work demands. In each case, achieving a successful outcome, in both the initial agreement and the long-term business relationship, will depend on sensitivity to differences in languages, value systems and norms of behavior between themselves and their hosts. Do not stand too close to another person or put your arm around someones shoulder. International companies locate to the UK because they want: Companies based in UK can reach more than 500 million customers across Europe. Chinese Culture: The Importance Of Doing Business In China. When the domain of a social group is closer to the value-creating activities of an alliance, organizational culture differences between the partners members of that social group will be more disruptive than national culture differences. Common language is an element of national culture. The education system of a country plays a vital role in the culture of a country. The reason is because these employees lack a common basis from which to interact effectively due to their distinct occupational socialization and resulting professional cultures. From (Van Maanen and Barley, 1984; Jordan, 1990Brown and Duguid, 1991; Lave and Wenger, 1991), we know that professional cultures develop through the socialization. Therefore, understanding cultural differences and overcoming them is crucial in international business negotiations. All rights reserved. Business people now can do business with the people who speak different languages by using English. Research has identified over 15,000 distinct religions and religious movements among the worlds population (Barrett, 1997). Keep in mind: This sample was shared by another student. But Bangladeshi dont follow any rule. Barrett, D. (1997) Annual statistical table on global mission:1997, International Bulletin of Missionary Research, 1 (1):24-5. December 3, 2021. https://studycorgi.com/impact-of-culture-on-international-business/. If a company does not properly understand and make adjustments in its strategy, the survival of the company will be a question. For example, many individualistic cultures, such as US, may have an advantage in technological assets, whilst many collectivistic cultures, such as Japan, may benefit from the ways in which they organize their workforce and establish relations between contractors, suppliers and joint venture partners (Dunning and Bansal, 1997). We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.io. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. and Duguid, P. (1991) Organizational learning and communities of practice: toward a unified view of working, learning, and innovation, Organization Science 2(1): 40-57. It was really easy to contact her and respond very fast as well. (1). This essay discussed and analyzed that how the culture impact on the international business. Moreover, this essay discussed how the culture differences impact the international business based on three main readings: (Morrison, 2006, p.168), the study of (Pothukuchi, Damanpour, Choi, Chen, Park, 2002) and the study of (Sirmon and Lane, 2004). This paper analyzes how culture impact on the International Business. Englands imports are dominated by the following commodities: Manufactured goods, Machinery, Fuels, Foodstuffs. We know that different countries have different cultures. Further, a lack of shared norms and values may reduce effective communication (Rao and Schmidt, 1998), trust (Aulakh et al., 1996; Doney et al., 1998) and knowledge sharing in joint ventures (Parkhe, 1991; Mohr and Spekman, 1994; Lyles and Salk, 1996). 2. The British like a certain amount of personal space. FIRST5, Leave us your e-mail address andyou will get it in a few seconds, Use the Discount Now These relationships proved very helpful during later negotiations in China. Whats more, Hennart and Zengs (2002) research findings also suggests that differences in national culture can disrupt collaboration and learning between partners of the international alliance. Achieving a successful outcome will depend on sensitivity to differences in cultures between partners. In countries where religion is a major element of the cultural environment, sensitivity to local religious beliefs and practices is particularly important in building business relations. (Provided by the student). English language is an intercultural means of communicating. Park and Ungson (1997) supplemented that these challenges result partially from the lack of shared norms or values and this lack of common understanding may undermine the partners interpretation of each others strategic intent, which is crucial in global markets and partnerships (Hitt et al., 1995). Therefore, same organizational culture between the partners has positive impact on the success of mergers and acquisitions. How Cultural Differences Impact International Businesses Cultural differences tend to be considered only in terms of consumer bases and target audiences, but less so when it comes to international teams operating within a company. Each of them touches a different part of the an. (2001) Social identify in an international joint venture: an exploratory case study, Organization Science 12: 161-178. Therefore, culture differences can directly impact the success or failure of a project. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! With this long-term orientation, people in East Asia such as China are more likely to emphasize education and training, and practice persistence, thriftiness and the delay of immediate gratification. [cited 2023 Jun 28]. (1996) found that different organizational cultures between acquirer and target could decrease top managers positive attitudes toward the merger and decrease their cooperation. Presentation should be detailed and perfect. How Cultural Differences Impact International Business Negotiations Culture is complex, multiple and hard to understand. Looking for a flexible role? If manager of these firms adopt appropriate strategies by making use of the competitive advantages derived from cultural values, these firms may achieve great success. This can have a detrimental impact on many factors including a sense of well-being and confidence. INTRODUCTION: Therefore, from the study of (Pothukuchi, Damanpour, Choi, Chen, Park, 2002) and the study of (Sirmon and Lane, 2004), we can know that organization culture has more impact on the international business. The U.K. ranks first for the first time in Forbes 12th annual survey of the Best Countries for Business. In this era due to globalization the culture seems to vary from each other's nation. As discussed above, cultures are different from countries to countries. These differences are basically informed by the environmen. Whats more, Sirmon and Lane (2004) found that when the domain of a social group is closer to the value-creating activities of an alliance, organizational culture differences between the partners members of that social group will be more disruptive than national culture differences. Pothukuchi et al. Dominos Pizza Inc. is a more socially committed organization and it, directly and indirectly, participates in different charitable activities which help the company in achieving high growth. The UK has: England government has made a flexible labor law which means companies can employee staffs in a way that suits the need of the business. Harrison, J.S., Hitt, M.A., Hoskisson, R.E. In British culture the Board of Directors is the source of power and the principal decision-making unit in a company. Moreover, resource complementarity between partners of international alliance is often a necessary condition to optimize this value creation. (2002) found that partners cultural differences may have more influence on the performance of international alliance as those differences become more directly related to the alliances primary value-creating activities. (1996) found that dissimilar organizational cultures between acquirer and target decreased top managers cooperation and increased negative attitudes toward the merger. Differences in national culture lead to the lack of shared norms and value. This is the 2nd largest in the EU. Sirmon and Lane (2004) stated that it is disappointing when international alliance partners require employees from different professional cultures to interface in the primary value-creating activity of the alliance. As the rapid growth of globalization, more and more international business such as Joint Venture have emerged and developed fast. The way of communication of the literate people will be different from the way of communication of the illiterate people. While the future shape of the UKs trading relationship with the EU is unclear, contingency. Morrison, (2006, p.202) said that in the international environment, a polycentric approach will make it easier for the international organization to adapt to the different cultural environments of foreign operations. International franchising with Dominos pizza. Web. Thus, national culture differences between alliance partners can challenge the development of successful relationships. Small business (A special report); Foreign flavors: When going abroad, you should think of franchising as a cookie-cutter business; Unless, of course, you want to succeed. The authors aimed at providing information which can be useful in the. Therefore, in order to share, combine and leverage complementary resources, the partners employees must interact effectively. (1996) found that dissimilar organizational cultures between acquirer and target decreased top managers cooperation and increased negative attitudes toward the merger. Cultural differences affect international business exchanges. We're here to answer any questions you have about our services. In this case, differences in national culture can lead to high-level communication and a more sustained collaboration. The paper will assess various [], In the Indian economy, small-scale industries occupy an important place, because of their employment potential and their contribution to total industrial output and exports. Therefore, differences in national culture can also be beneficial for the international business. Whats more, Weber et al. According to Hofstedes dimensions of national culture Li, Lam and Qian (2001) stated that, long-term orientation means focusing on the future. According to him, the culture of the people, who are only cautious of themselves (I-conscious) will be different from the culture of people who care for others too (We-conscious). Sirmon and Lane, (2004) said that it will be more difficult for partners who have different organizational cultures to effectively achieve the primary value-creating activities. And in order to analysis it well, firstly we will talk about the definition, levels and Hofstede's theory of culture in the section 2. Moreover, Hofstede (1991) found that national culture explains 50% of the differences in managers attitudes, beliefs, and values. The UK has a workforce of over 30 million people. So when a person works in a foreign country or a company does business internationally maximum care should be taken to reduce cultural mistakes. 1999). If there are multiple religions in locations, a business as a good corporate citizen should not discriminate (Morrison, 2006, p.181-182). Communication Effective communication is essential to the success of any business venture, but it is particularly critical when there is a real risk of your message getting "lost in translation." In many international companies, English is the de facto language of business. It is very important and necessary for the international business people to study and understand different national cultures and organizational cultures. In others, people are typically soft-spoken, use flowery or indirect language and wait patiently for others to finish their sentence. Therefore, partners cultural differences may have more influence on the performance of international alliance as those differences become more directly related to the alliances primary value-creating activities. Because communication plays an important role in the success of a business and language is the core element of any kind of communication. In such cases, differences in national culture can lead to high-level communication and a more sustained collaboration (Shenkar and Zeira, 1992; Park and Ungson, 1997). Pothukuchi, V., Damanpour, F., Choi, J., Chen, C.C. December 3, 2021. https://studycorgi.com/impact-of-culture-on-international-business/. This means sensitivity to differences in norms of behavior, value systems and languages between the partners will impact the success or failure of a project. Imports in 2009 were recorded at $473.6 billion, in contrast to $639.3 billion in 2008. Language facilitates social interaction and fosters a system of shared values and norms (Morrison, 2006, p.174). The main objective of this textbook is to show cultural aspects and their influence of conducting business internationally. 1607 words | 4 Pages. Sirmon and Lane (2004) explained this opinion in detail as following: an international alliances performance is driven by the alliances effectiveness in achieving its primary value-creating activities. *You can also browse our support articles here >. Try. Whereas traditional International Business research has been concerned with economic/legal issues and organizational forms and structures, the importance of culture has become increasingly important in the last two decades, largely as a result of the classic work of Hofstede (1980). The lack of shared values and norms may reduce effective communication, trust and knowledge sharing in the international business. (1997) The effect of national culture, organizational complementarity, and economic motivation on joint venture dissolution, Academy of Management Journal 40(2): 279-307. Hofstede et al. Gradesfixer , How Cultural Differences Impact International Business., How Cultural Differences Impact International Business [Internet]. 1. These differences may be difficult to overcome, as the employees may reflect the not-invented-here syndrome, which is the resistance to the utilization of knowledge created elsewhere (Michailova and Husted, 2003). The 'wai' is the traditional form of greeting, given by the person of lower status to the person of higher status. Individualism: the extent to which individuals perceive themselves as independent and autonomous beings (as opposed to collectivism, in which people see themselves as integrated into ingroups). Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Chui, A.C.W., Lloyd, A.E. This digital revolution is expected to generate new [], It has been more than 60 years of independence, a large section of Indian population still remains not under Indian Financial System. Moreover, many social associations and political parties in many countries are commonly based on religious affiliations. Solving the Problems Noticed With the Nevada Gold Dome, GE Energy and GE Healthcare: Strategic Customer Relationships, Organizational Culture in Google Corporation, Business, Ethics, Responsibility and Sustainability, * Hyperlink the URL after pasting it to your document. There are at least three levels of culture: Nations are distinguishable from each other by a shared cultural history, such as language, religion, ethnic or racial identity. In Great Britain, punctuality is important for business meetings and they always try to be on time but the corporate culture of Bangladesh is something very opposite scenario. In countries where religion is a major element of the cultural environment, sensitivity to local religious beliefs and practices is particularly important in building business relations (Morrison, 2006, p.180). Among them, the cultural factor or culture has a significant influence on international business. In addition, Porter (1991) pointed out that the competitive advantage of firms could be derived from the greater commitment based on cultural values observed in some countries, and not in others. In order to discuss how the culture differences impact the international business, we should also understand what international business is. And also the differential consideration by the society to men and women, the approach of people in the lower strata of the society towards the social difference, and the attitude of people to avoid uncertainty depict the culture of the people.

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