The Cultural Challenges Of Doing Business Overseas

1152 Words5 Pages
The Cultural Challenges of Doing Business Overseas Globalization and overseas business expansion has brought about the need for in-depth understanding of culture differentiation. When conducting or contemplating cross cultural business ventures, it is important to understand the culture before communicating one's desires. This paper will focus on the cross cultural challenges of doing business overseas, with special attention being placed on the Czech Republic. The Situation Steve Kafka, an American of Czech decent is contemplating expanding his franchise, Chicago Style Pizza, into Prague, Czech Republic. Steve currently franchises his business in the U.S. Steve must thoroughly investigate and become familiar with the Czech culture to realize opportunities and mitigate risks to meet his end-state goal of expanding his Chicago Style Pizza business into the Prague, Czech Republic Czech Culture and Comparative Advantages Czech culture focuses on indirect communication and politeness. Czechs are non-confrontational and prefer to do business over the course of several meetings. Americans are usually upfront and to the point in business negotiations. When conducting business in the Czech Republic it is important to realize that Czechs are not as direct as Americans. A direct approach may be seen as confrontational and rude. In order to avoid this type of conflict, Steve must carefully plan his approach to doing business to ensure that there are open lines of communication, with respect to Czech cultural norms. It will be necessary to accommodate cultural communication differences, to insure meeting end-state goals. Steve must contemplate alternatives to reduce potential conflict when introducing his business venture to Czech culture. It is important that he realizes that Czechs will not openly express their disdain for unstructured situations, due to their norms of humbleness and politeness. It would be helpful for him to consult with existing family members and friends to help create a non-conflicting environment, in which to operate his business. Hofstede's Four Primary Dimensions Hofstede's four primary dimensions are power distance, uncertainty, avoidance, individualism and masculinity (Hodgetts & Luthans, 2005, p. 102). Power distance in Czech culture is low. Low power distance will be an advantage for Steve. Low power distance cultures tend to have more qualified people for work; therefore Steve may have a competent pool of people to draw from to help run his business venture. Although, he must keep in mind that employment regulations are more rigid than in the U.
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