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Challenges faced in international business due to culture differences
Difficulties of adapting to a new culture
Challenges faced in international business due to culture differences
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The Cultural Challenges of Doing Business Overseas
Many young American entrepreneurs are seeking to do businesses internationally. Some entrepreneurs want to expand their businesses and the others want to challenge their skills. When young American entrepreneurs launched their businesses overseas, they assumed that money would help them to overcome any obstacle because the value of U.S. Dollars is higher than most of the countries' currencies. Due to this faulty assumption, many American businesses owners have closed their oversea businesses within three years. Steve Kafka is one of the American business owners who want to expand his business into the Czech Republic. Although Steve Kafka's origin was from Czech, knowingly only the Czech language would not help Steve Kafka's business to succeed in the Czech Republic. The tips below might help Steve Kafka to overcome the cross-cultural challenges.
Major differences and incompatibilities between the U.S. and Czech cultures
A major challenge for Steve Kafka to do business internationally is to adapt effectively to difference cultures.
Business in US and The Czech Republic The purpose of this document is to present solutions and recommendations for Steve Kafka, an American of Czech origin and a franchisor for Chicago Style Pizza, who has decided to expand his business into the Czech Republic. This document focuses on the major differences and incompatibilities between the U.S. and Czech cultures. The script also shed lights on the business risks and mitigation on Czech culture. The paper also talks about the comparative advantages that exist in the Czech Republic and Hofstedes four primary dimensions for Steve to evaluate the Czech business environment.
The numbers presented about trade outside of the united states is impressive. What is even more impressive is that there are less than 1% of companies in the U.S. that export, which is the lowest level of active exporters in the industrialized world and 70% of the world’s purchasing power exists outside of the U.S. This means that export in America is virtually an untapped market and many businesses are overlooking the opportunity to service a majority of their consumers. There is no reason to let fear, uncertainty, and doubt prevent a business from growth. Knowledge is the most useful resource to any individual and business, therefore if knowledge is obtained regarding the matters that bring about fear, uncertainty, and doubt it can easily be determined whether these thought are substantiated or not. Prior to watching this video, I too believed that in order to be successful in the global markets a company had to reach the level of becoming a large, reputable corporation, however, now that I have been equipped with this knowledge I have a new perspective on the growth of a business’s finances and organization. As Scott Szwast stated “In
Daniels, J. D., Radebaugh, L. H., and Sullivan, D. P., (2011). International Business: Environments and Operations. Prentice Hall, Upper Saddle River, New Jersey.
Written communication is expressing oneself clearly, using language with precision, constructing a logical argument, note taking, editing and summarizing, and writing reports.(Spears, R. A. (2001). When doing business with a foreign country such as Brazil, one needs to also factor in the countries political history, religion, and culture of your audience.
Some of the major differences and incompatibilities between the United States and Czech cultures are norms, values, beliefs and behavior. These differences will create a business risk for Steve because even though he is of the Czech origin, has friends and family living there, visits several times and speaks the language fluently he does not the full knowledge of how businesses are conducted in Czech. Though he is a franchisor for Chicago Style Pizza, he cannot operate internationally as he does locally because of the differences in value, as it will affect his management functions.
The global marketplace is an area that is very difficult to be successful in. It is for this reason that businesses must compete with each other in an attempt to pip their opposition and gain a competitive edge amongst the constantly changing global environment. At the heart of this are managers and leaders to ensure that the company is able to stay on track whilst maximising revenue and limiting production costs.
Foley, J. F. (2004). The global entrepreneur: Taking your business international. United States?: Jamric Press International.
Our economic development will forever be defined as our ability to succeed internationally. PwC forecasts India’s real annual GDP growth until 2050 at 8.9 percent, Vietnam’s at 8.8 percent, and China’s at 5.9 percent. The list of fast-growing emerging markets goes on and on. The U.S. forecast is a meager 2.4 percent, comparable with most Western economies. The domestic companies that are likely to see incremental growth in the coming decades are those that are not only doing business internationally, but that are developing the strategic skill set to master doing business across cultures. Cross-cultural core competence is at the crux of today’s sustainable competitive advantage. For example, political environment will tell us, as to how and why political leaders control, whether and how of international business. Legal environment, both national and international will tell us about many kinds of laws by which business firms must work. The cultural environment will tell us about attitudes, beliefs and opinions important to business people. Economic environment will tell us about the economic system being followed by the host country, which may or may not be different from home country. It will also explain the variables such as level of development, human resources, Gross Domestic Per Capita and consumption patterns that determine a firm’s ability to do business. Geography will tell us about location, quantity, and quality of the world’s resources.
As a result, culture plays a vital role in expanding international business with its impacts from general strategic direction to details like logo.
With places people also differ and hence the culture. In Japan people are very polite while in Australia they are blunt. Even if one consider Red colour, it means stop or danger in United Kingdom, good fortune in China and symbol of death in Turkey. This shows vast difference in culture and thinking of people in different countries. Behaviour and thinking pattern of people differ in different cultures that have been studied by lots of political scientists and sociologists from perspective of Patterns of global diversity and their implications.
“Red is a positive color in Denmark, but represents witchcraft and death in many African countries,” (Understand and heed, 1991, p.1). Simple understandings, such as this one, can make the difference in a business’ success or failure in a foreign country. Various countries have different customs and beliefs that need to be accustomed to when business are to be successful. American businesses especially have difficulties with this concept. “At times in the past, Americans have not had a good track record of being sensitive to cultural distinctions,” (Understand and heed, 1991, p.3). Perhaps this is because America is made up of so many different cultures that American people have become so used to easily adjusting to each other’s differences that they forget that other cultures are not as flexible. Today, more American’s are becoming more sensitive to the differences of other cultures. This sensitivity and understanding has come with a price, after a long string of business failures. It is not until a business fails miserably in another country that they see the adjustments that should have been made in order for their success to be a possibility. With an understanding and sensitivity to the customs and beliefs of other cultures, it is possible for successful businesses that have originated in western cultures to also be successful in foreign countries as well.
Our world is becoming increasingly connected and global and the role of international business is increasing. Each country has its own set of unique customs and traditions. Each citizen's beliefs define the cultures by which each citizen abides by in normal everyday life, thus serving as the very foundation of the country. For example, in Saudi Arabia a citizen convicted of stealing will have his hand cutoff. In the United States, a citizen convicted of stealing would possibly receive only short term probation. The American Heritage Dictionary defines culture as, "The totality of socially transmitted behavior patterns, arts, beliefs, institutions, and all other products of human work and thought characteristic of a community or population." Seemingly minuet gestures or situations which carry different meanings in particular cultures can make or break business deals. Global managers from the United States or from any other nation have to be aware of the various cultural differences. Injecting certain specific skills, such as diversity training for expatriate managers, will bridge the gap between cultural differences such as language, religion, and values.
Many everyday citizens may wonder why anyone would ever want to learn about international management. Many business professionals are steadily increasing servicing the needs of customers
The international business have lots of challenge in foreign countries, especially the culture impact. If the company want to success that have to know the different culture well. Culture is a combine of a series of custom, norms and guidelines of specific social groups. It plays an important part as norm, guidance and impetus in the development of different nations and countries. Since the companys of the International business negotiations represent the interests of different countries and regions, with different social and cultural backgrounds and political and economic background, people 's values, and ways of thinking, behavior, language and customs differing, the negotiations are more difficult than in domestic. Different performance reflects different companys arising different values and different ways of thinking from different cultures.In today 's global business environment, developing successful business strategies and
Since the end of World War II, international operations have become a reality for an increasing number of corporations. Many of these initial efforts began as simple export schemes to sell goods overseas to supplement domestic sales. Over time, however, international operations have become increasingly more complex: from joint-ventures to purchasing existing foreign firms to ‘green-field’ start-ups. While export operations usually require no more than extended business trips overseas, more complex international operations demand long-term assignments of key personnel outside their home-country. What would normally be considered routine business transactions in the home country can become very complicated when they are conducted between individuals and organizations from different cultures. In this essay we will examine how this cultural gap can affect international business and joint ventures.