how cultural differences impact international business? essayhow cultural differences impact international business? essay

In this era due to globalization the culture seems to vary from each other's nation. Sirmon and Lanes (2004) research findings suggests 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. StudyCorgi. 2. The British will have their own competition laws that Irish companies carrying on business in the UK will need to comply with (independent of EU competition law). This help includes: Transportation system in UK are very good and efficient which will make easy to transport inventory from one state to another. Parkhe, A. (1991) Interfirm diversity, organizational learning, and longevity, Journal of International Business Studies 22(4): 579-601. Literacy rate and culture are closely related. Impact of Cultural Factors on International Business - YouTube As discussed above, cultures are different from countries to countries. Disclaimer: Services provided by StudyCorgi are to be used for research purposes only. (Toncar, Alon & McKee, (n.d)). 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. Our academic experts are ready and waiting to assist with any writing project you may have. Also, a theoretical background of Hofstede's Model of Cultural diff. 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. Among them, the cultural factor or culture has a significant influence on international business. These are the some basic differences in the culture. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. This can have a detrimental impact on many factors including a sense of well-being and confidence. "Impact of Culture on International Business." 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. Language is the basic means of communication between people. First, individuals from separate professional cultures lack a shared set of basic knowledge because their occupational socialization involved different content material, which is reinforced by different professional experiences. Shake hands again when leaving. Wade, Jared. StudyCorgi. 1. Therefore, Sirmon and Lane, (2004) said that organizational culture is very important for the success of mergers and acquisitions. 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! How Cultural Differences Impact International Business Negotiations Culture is complex, multiple and hard to understand. The authors unpack their recent research. Knowing and understanding the partners language culture well is also very important for international business. Consequently, the above factors have increased competition among domestic players; thus, firms are the seeking opportunities in emerging foreign markets. Englands major import partners are: Germany, US, China, Netherlands, France, Norway, Belgium, Italy. How Do Cultural Differences Affect International Business? The culture of one country might be different from the culture of another country. do a lot more company in other countries across Europe. It was really easy to contact her and respond very fast as well. From (Morrison, 2006, p.172), nations are distinguishable from each other by a shared cultural history, for example, religion, language, or racial identity. If a business organization does not take enough care in communicating with people of different cultures, it may result in a heavy loss of money and reputation. In conclusion, cultural differences also have beneficial impact on the performance of international business. Tung (1982) has also observed this long-term perspective, claiming that the Chinese have a different concept of time, as compared to that of the Western world, they are interested in building the basis for long-term relationships. Moreover, Harrison et al. In order to share, combine and leverage complementary resources, the partners employees must interact effectively. These differences have an impact on trade. This Chapter explores the impact of technology for business and the associated issues for society and consumers, focussing on developments STRATEGIC BUSINESS MANAGEMENT AND PLANNING OF NESTLE. The example of the company Dominos Pizza Inc. is taken here. For example, the long-term orientation in China leads to a helpful long-term relationship between international businesses. (Wade, 2004, 38-43). 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. Moreover, in a low-context culture, communication is clear and direct, such as America. Sirmon and Lane, (2004) also said that the influence of national culture is strong and long lasting. Morrison (2006, p.191-192) mentioned that differences in national values and attitudes have been the subject of considerable research. But to specifically in doing business the three core main thing we need to consider is communication, workplace etiquette, and organizational hierarchy. And in undertaking company this internet technology makes it simpler to know other cultures just before undertaking any organization. Business people cannot do business with the people who speak different languages. Members of the society learn to conform with the cultural norms as they grow up. They thought that when the partners have the same organizational culture, satisfaction, learning and effectiveness of interactions will be increased. Barrett, D. (1997) Annual statistical table on global mission:1997, International Bulletin of Missionary Research, 1 (1):24-5. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. 2023 gradesfixer.com. All work is written to order. so lets get started. Albert, M. (1991) Capitalisme contre Capitalisme, Paris: Seuil. 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. Masculinity: the degree to which people prefer values of success/competition over modesty/concern for others (as opposed to femininity, which denotes sensitivity, caring and an emphasis on quality of life). PDF The Influence of Cultural Values on International Business Study for free with our range of university lectures! "Impact of Culture on International Business." The main objective of the paper is to discuss the role of culture in international business and to present main dimensions and typologies of cultural behaviours while doing business. But Bangladeshi dont follow any rule. 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. England is a highly industrialized economy with a well-established trade infrastructure. (2001) Resource complementary in business combinations: extending the logic to organizational alliances, Journal of Management 27: 679-690. Pothukuchi et al.s (2002) findings suggest that cultural differences stemming from national, organizational and professional cultures have influence on international alliance performance. (2021, December 3). IMPACT OF CULTURE ON INTERNATIONAL BUSINESS Impact of Culture on International Business Common Cultural Mistakes The Pitfalls of Cross-Cultural Business, written by Jared Wade identifies some common cultural mistakes which executives may commit while interacting with people from different cultures. From (Morrison, 2006, p.169), we can know that culture has many aspects, for example, value, behavior, beliefs, communication, sport, music and customs. Essay Services; Essay Writing Service; Essay / Assignment Editing Service; December 3, 2021. https://studycorgi.com/impact-of-culture-on-international-business/. While the future shape of the UKs trading relationship with the EU is unclear, contingency. Moreover, this lack of common understanding may undermine the partners interpretation of each others strategic intent, which is crucial in global markets and partnerships. This means that differences in national and organizational culture have a significant impact on the performance of international business. How cultural differences impact international business Cultural Differences in International Business Communication But in the concept of international business, what is common and accepted norm in one country may be different for another country.AS we are trying to expand the business to England we need to consider few issues for an example -like demographic, culture, economy, social status, peoples income, religion. and Ungson, G.R. Available from: https://gradesfixer.com/free-essay-examples/how-cultural-differences-impact-international-business/, She followed all my directions. If you use an assignment from StudyCorgi website, it should be referenced accordingly. And also the companies should try to improve the way of business communication. Then in section 3, we discuss the adverse and beneficial impact on International Business respectively in detail. Whats more, they also thought that if the partners have different organizational cultures, satisfaction, learning and effectiveness of interactions will be decreased. (1990) Cross-cultural cooperative behavior in joint ventures in LDCs, Management International Review 30(special issue): 87-102. Research: How Cultural Differences Can Impact Global Teams Differences in culture between partners have a significant impact on the international business. Moreover, Trice and Beyer (1993) said that professional cultures form as people, who span individual organizations, share a set of norms, values and beliefs related to their occupation. (1999) Do they do what they believe they can? Please review our, Special offer for our client! (n.d). Risk management: The pitfalls of cross-cultural business. These relationships proved very helpful during later negotiations in China. 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). 1607 words | 4 Pages. Englands imports are dominated by the following commodities: Manufactured goods, Machinery, Fuels, Foodstuffs. Lyles, M.A. (2004). Cultural differences stems from national, organizational and professional cultures. 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). This should also be considered for any future tender or evaluation process for new arrangements. Looking for a flexible role? After all, notions about cultural differences are often the basis for international marketing communications as well as global brand management strategies. Therefore, it is very important and necessary for the international business people to study and understand how culture impact on the international business. Dedicated to your worth and value as a human being! Common language, shared religious, shared moral values, shared history, relationship between the individual and group, and attitudes to education are all the elements of national culture. Cultural differences in business can have a significant impact on how businesses operate and communicate with each other. 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. Although the definition of culture is numerous and vague, it is commonly Recognized that culture is a shared system of symbols, beliefs, values, attitudes and expectations. Moreover, this essay will discuss 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). Common language is an element of national culture. Language is tools that express ideas and exchange thoughts; it is a special and universal social phenomenon. (n.d). Summary. 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). 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. Basic cultural differences and ways of thinking can affect how business is conducted. and Shenkar, O. This essay will also discuss how the national culture impact on the international business by discussing and analyzing how language and religions impact on the international business. The education system of a country plays a vital role in the culture of a country. 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. Now, we know that differences in national culture and differences in organizational culture both have a significant impact on the performance of the 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. Together, these distinguishing characteristics blend into a national culture, which influences family life, education, organizational culture and economic and political structures (Morrison, 2006, p.172). , "You must agree to out terms of services and privacy policy". Language facilitates social interaction and fosters a system of shared values and norms (Morrison, 2006, p.174). 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. Etiquette & Customs in Thailand Meeting In business . Thus communication between individuals from separate professional cultures is impaired. According to Hofstedes dimensions of national culture Li, Lam and Qian (2001) stated that, long-term orientation means focusing on the future. Hofstede (1994) has developed a theory to categorize and quantify cultural differences between nations, which allowing us to compare national cultures. International business ventures are slowly gaining momentum, owing to the numerous opportunities presented bythe globalization. Fig 1. Cultural diversity is an integral part of the business environment, playing a key role in shaping business practices and strategies. They used the data from a survey of executives from joint ventures between Indian partners and partners from other counties to do the research. Hofstede et al. Now, we know that differences in national culture have a significant impact on the international business. In this era due to globalization the culture seems to vary from every other's nation. Therefore, we can know that it is particularly important and necessary for the international business to know the business partners local religious beliefs well. If there is an established religion in a location, a business must take account of its wide ramifications. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. We use cookies to personalyze your web-site experience. Carefully! How Cultural Differences in Business Impact International Affairs As well as religious power, religion may exercise considerable political power. In this era due to globalization the culture seems to vary from each other's nation. Each of them touches a different part of the an. Blending the culture of different locations into a distinctive corporate culture can strengthen the sense of corporate identity, but poses considerable challenges for international managers. This article mainly analyzes the cross-cultural issues, expounds thecultural factors ininternational business management, enumerates the cultural differences in international. 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. Web. 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. Sirmon and Lane (2004) found that organizational culture is important to the success of mergers and acquisitions. Special offer for our client! There is another example exhibit the beneficial effect on the International Business. Both of these factors impede the finding of common ground from which the relationship can develop and produce value (Lane and Lubatkin, 1998). (2002) National and organizational culture differences and international joint venture performance, Journal of International Business Studies 33: 243-265. How Does Culture Affect International Business - 885 Words | Cram International companies locate to the UK because they want: Companies based in UK can reach more than 500 million customers across Europe. In England there was a Department of international trade which was run by the government to provide free essential service to foreign investor to establish business in England. Economic growth has been sustained up to now, therefore unemployment has sunk to 4.3%.Much uncertainty remains with the official exit from the EU scheduled for March 2019. The world trade cultural differences have affected the international business activities. By culture, we mean language, education system, literacy rate, food habit, lifestyle, social systems, different ways of communication prevailing in the countryetc. All work is written to order. However, culture is always present in international business negotiations and can include a variety of cultural . Wuhan City, which is known as Chicago in China contacted New World, a major Hong Kong developer, to negotiate a loan to complete an airport-linking expressway project. No payments have to make while transferring any inventory through UK because its free. Therefore, culture differences can directly impact the success or failure of a project. An international alliances performance is driven by the alliances effectiveness in achieving its primary value-creating activities. 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. (2001) said that resource complementarity between partners of international alliance is often a necessary condition to optimize this value creation. The British like a certain amount of personal space. Organizational culture is very important for the international business. These problems, in turn, have been found to lead to lower alliance performance (Lane et al., 2001). However, while . Thus, in some cases, increased national culture differences can lead to higher international alliance performance (Morosini et al., 1998). 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). Do not know the business partners religious beliefs well may lead to the failure of your business. 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. During a business meeting, these differences are likely to come to the fore. Further, attempts to compromise in the approach taken in problem-solving is likely to lead to less desirable outcomes. I Will Use It Later, How cultural differences impact international business. (2006), The International Business Environment, palgrave macmillan. (1984) Occupational communities: culture and control in organizations, Research in Organizational Behavior 6: 287-365. Impact of Culture on International Business. FIRST5, Leave us your e-mail address andyou will get it in a few seconds, Use the Discount Now Therefore, knowing and understanding the partners language culture well is also very important for international business. For example, if a compromise is reached, and members from both professional cultures abandon their preferred problem-solving approach, both effectively eliminate a significant amount of their valuable tacit knowledge. But Bangladeshi people are hard working. National culture relates primarily to deep-seated values (Hofstede et al., 1990). 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. Gradesfixer , How Cultural Differences Impact International Business., How Cultural Differences Impact International Business [Internet]. Systems of rules that specify dos and donts of employee behavior. On exit, EU competition laws (which incorporate three main areas: merger control, anti-competitive agreements and state aid) will cease to be applicable in the UK. We know that different countries have different cultures. July 29, 2022 A country's culture directly impacts how it conducts international business. Retrieved from https://studycorgi.com/impact-of-culture-on-international-business/, StudyCorgi. The first barrier for communication is language, so the manager or employee from Bangladesh needs to well train in English language and speaking skills. The other example is in joint ventures, the need for cooperation and trust between partners is the key to long-term success. and Beamish, P.W. Sorry, we could not paraphrase this essay. Resource complementarity between alliance partners is often a necessary condition to optimize this value creation (Harrison et al., 2001). Therefore, from the study of (Pothukuchi, Damanpour, Choi, Chen, Park, 2002), we can know that differences in national culture have a negative impact on the performance of international joint venture. The main objective of this textbook is to show cultural aspects and their influence of conducting business internationally. By clicking Send, you agree to our Terms of service and Privacy statement. 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). Knowing the business partners religious beliefs well will help to achieve good outcomes. As the rapid growth of globalization, more and more international business such as Joint Venture have emerged and developed fast. (1993) The Culture of Work Organizations, Englewood Cliffs, NJ: Prentice-Hall. Business Applications: Revelation HelpDesk by Yellow Fish Software, Three Key Moments of Organizational Change. Toncar, Mark., Alon, Ilan., & McKee, David. This material is not unique, Our experts help you to write plagiarism-free paper. Cultural determinations of international franchising: An empirical examination of Hofstedes cultural dimension. Whats more, Chui et al. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. When the company went into Italy, many Italians found its pizza too American the sauce being too bold, the toppings too heavy, a company spokesman recalls. Whats more, from the study of (Sirmon and Lane, 2004), we know 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. On the adverse aspect of culture, Sirmon and Lane (2004) indicated that national culture differences between alliance partners can challenge the development of successful relationships. (2001) Social identify in an international joint venture: an exploratory case study, Organization Science 12: 161-178. Terpstra, V. and David, K. (1991) The Cultural Environment of International Business (Cincinnati: South-Western Publishing Co.). Achieving a successful outcome will depend on sensitivity to differences in cultures between partners. This essay was donated by a student and is likely to have been used and submitted before, Free samples may contain mistakes and not unique parts. Finally, Pothukuchi, Damanpour, Chen, Park (2002) found that there is a negative effect from culture distance on the performance of international joint venture originates from differences in national culture and differences in organizational culture. Multinational and cross-cultural teams are likewise becoming ever more common, meaning businesses can benefit from an increasingly diverse knowledge base and new, insightful approaches to business problems. England already has the 2nd largest port in Europe, largest air transport system in Europe, most improved rail network in Europe. This paper analyzes how culture impact on the International Business. (2004), A model of cultural differences and international alliance performance, Journal of international Business Studies (2004) 35, 306-319. Differences in national culture lead to the lack of shared norms and value.