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Business Failure Due to Cultural Differences “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. The differences in other cultures vary from beliefs to ways of life, or norms, of the different societies. The importance of understanding and sensitivity to other countries’ differences is crucial to a business’ success. “Lack of familiarity with the business practices, social customs, and etiquette of a country can weaken a co... ... middle of paper ... ... 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. Works Cited Chung, Mona (2009, January 16). Bi-cultural consultant is your key to the red gate. China Success Stories, Retrieved March 20, 2009, from http://www.chinasuccessstories.com/2009/01/06/between-two-cultures. Schaefer, R.T. (2009) Sociology: A brief introduction (8th ed.) New York, NY: McGraw Hill. Understand and heed cultural differences - cultural variables in transacting international business. (1991, January 28). Business America. FindArticles.com., Retrieved March 20, 2009, from http://findarticles.com/p/articles/mi_m1052/is_n2_v112/ai_10412261/pg_4?tag=content;col1
This international business study will define the negative cultural effects of American Exceptionalism and the Anti-American sentiment that is creating competitive barriers in the global business community. America is the predominant superpower in the world, which has created the impression that America is economically superior to less powerful nations. More so, some countries have become the victims of American business superiority, and it has made them resentful of American business interests entering their local economics. The main barrier to business dealings with these countries is the global conflict of
Each country has its own culture, with subcultures inside the dominant culture (Schaefer, 2009, p.69). “Culture is the totality of learned, socially transmitted custom, knowledge, material objects, and behavior” (Schaefer, 2009, p.57). Values, artifacts, and ideas are also part of culture (p57). With globalization there is the integration of these cultural aspects, as well as language, social movements, and ideas throughout the world (Schaefer, 2009, p.20). Internationalization helps with this integration. Internationalization is the process of planning and implementing products and services so that they can easily be adapted to specific local languages and cultures (Linfo, 2006). Numerous American retail firms have expanded to other countries. Many have been quite successful due to their internationalization. However, failure to study the culture, retail practices, and consumer market of the country they intend to expand to can be quite costly. Although Home Depot is one of the world’s largest home improvement stores, their expansion to Chile cost them enormous financial loss, resulting in their divestment (Bianchi & Ostale, 2006, section 1, para3). This paper will look at successful international expansion of Home Depot stores, analyze what mistakes were made in Chile, and make suggestions of what could have been done differently.
The authors identify that there are three main factors that effect how people act, think, and make decisions. The first is religion, in some countries faith plays an important role in all areas of life in the culture of the country and can influence many of their customs and behavior. The second factor is that of fact. In many countries their greatest desire is to find the best deal and the best product or services. The final factor is feeling, if a culture is based on feelings the people will conduct business accordingly. For example it would be essential to make a personal connection with this type of individual.
Socio- cultural factors consists of language, ethics, religion, values and customer perceptions. It deeply affects t...
A major challenge of doing business internationally is to adapt effectively to different culture. Such adaptation requires an understanding of cultural diversity, perceptions, stereotypes, and values (Hodgett &Luthans, 2005). Doing business overseas has its challenges as well as it rewards.
Steve Kafka, a franchise owner for Chicago Style Pizza, is contemplating the options of opening a new franchise into the country of the Czech Republic, the country of his family's origin. Though Steve has made several trips into the Czech Republic, speaks the language and knows many people, he must seriously consider all of the opportunities and potential barriers to this new venture. I will explore the cultural differences between the United States and the Czech Republic. Next, potential competitive advantages are examined along with Hofsteade's Primary Cultural Dimensions to reveal clues to the culture pertaining to the new business. Finally, trade barriers and price income and elasticities are discussed.
jeswald w. salacuse (2) 005 ‘The Top Ten ways that Culture can Affect International Negotiations ‘. Available from < http://iveybusinessjournal.com/topics/global-business/the-top-ten-ways-that-culture-can-affect-international-negotiations#.Uzwdh6iSySp > [ 3 April 2014]
...enture into overseas market comes with expectations as well as uncertainties due to unfamiliarity. Charles and Keith, the fashion retailer, has to understand clearly that what appeals in one market might not be accepted in the others and this is almost the same for all industries. Thus, a thorough research on cultural background has to be done before entering an unfamiliar ground.
As companies grow and put heavier weight on the importance of globalization, the need for companies to partake in cultural learning becomes more and more vital. With the various cultures worldwide, companies will find it highly beneficial to not only learn what makes the people within these cultures tick, but more importantly, apply it to their business strategies. In order to successfully manage, merge, or trade with other countries, one must understand how cultures differ from each other and what steps they need to take to be successful when conducting business with these cultures. The use of cultural anthropologists has proven beneficial for companies like Google, Intel, and Microsoft in implementing their business
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.
The article talks about a female executive who had visited a conservative Muslim country. She had trouble interacting with male business partners as they come from cultures where women do not often engage in high-level trades. The men refused to shake her hand, which made her, feel disrespected and confused. The author suggests that female businesspeople from liberal countries such as those in the West need to learn that every country has its norm pertaining the roles of men and women. Age is also important in cross-cultural businesses where older people are considered wise. Body language and communication style are also different depending on the culture where in some place direct speaking may be regarded as disrespectful or even rude while in others steady eye contact is considered as a means to build trust. The female business person also has to recognize the signals that she is sending to her corporate partners. She should be wary of offending her business partners of all sexes as the female may judge their fellow women more harshly than how a man would. The woman also has to determine if the signals that she is receiving are cultural norms or sexism. Therefore, the important factors in intercultural businesses are learning the culture of the other person in advance to know how to
Sonderberg, A-M & N Holden. (2002), Rethinking cross cultural management in a globalizing business world' International Journal of Cross Culture Management 2(1): 103-121
Edward T. Hall thoroughly examines the many situations and their influences that we face every day in our lives in “The Silent Language”. He clearly explains how these influences have strong impact on our development, our relationships in todays’ global economy. Hall mentions how the American business people were inexperienced and unfamiliar with the rest of people of other countries. The author strongly feels that one should cross the cultural gap between two participating countries in order to achieve the success in a global economy. The author tries to describe five aspects that are responsible for disastrous results that lead to any country to fail in international business if a firm is not aware about it. They are:
With the rapid growth in globalization there are a number of firms who have taken their businesses abroad. Their challenge, cross cultural management and communication. An effective communication strategy begins first with understanding who the sender of the message is and who the receiver of the message is. Many companies have realized this and offer training in the different cultures to help better facilitate communication between leaders (Cross-Cultural Communication, mindtools.com). Without this basic understand between sender and receiver it can be very difficult for companies of multicultural to even begin to communicate. The second important understanding is that leaders must demand a cultural tolerance of acceptable behavior between cultures to facilitate effective communication (Cross-Cultural Communication, mindtools.com).
Within the case analysis students will develop a sense of managerial and cultural hindsight that is extremely pertinent in the business field. For instance, Four Seasons demonstrates the ability and need for cultural awareness. While the company entered international jurisdictions their President of Europe, Middle East, and Africa, Antoine Corinthios, stated that “if you are going to go global you cannot be one way.” In addition, throughout this case, Corinthios taught lessons on being a cultural chameleon; being able to effectively expand into a new market with ease. In addition, Four Seasons taught individuals that agreeableness is a weakness at times, especially concerning excuses since those are not to be tolerated. Individuals must maintain responsibility for their actions and not design excuses as results. As the students continued to absorb the information they learned that just because someone is in higher management does not mean they cannot lend a helping hand. Businesses should be maintained as all for one and one for all; if the one individual makes the business look bad then everyone looks bad. Additionally, students could learn that values and standards are the embodiment of the business. Four Seasons had a motto of: talk to me about my standards and you talk to me about my religion. The individuals that work for the company should constantly represent the values and standards of the company. Finally, the most important note for business students is that this case study allows them to effectively use the three lenses: culture, strategic, and political; to analyze an