Steve Kafka, an American of Czech origin and a franchisor for Chicago Style Pizza, has decided to expand his business into the Czech Republic. He knows it is a risky decision; when he became a franchisor, he had to overcome a lot of difficulties. Steve anticipates he will face some of these difficulties again at the new location in Prague, Czech Republic. Although he was born in the United States, he has family and friends in the Czech Republic, speaks Czech fluently, and has visited the country of his origin several times. He knows the people and the culture. In this paper, I will analyze the cross-cultural differences between the United States and Czech Republic, determine comparative advantages in this country, and recommend ways to minimize the risks of establishing a franchise overseas.
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.
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.
Although Steve is of Czech origin and speaks the language, he should still take into consideration language barriers as well as different attitudes and expectations from local partners. His friends living in Czech can help him, but Steve cannot expect them to be around for all his business transactions. For example, to show respect to others in the Czech Republic, one addresses both men and women by their professional titles and last names. People do not use first names until they are well acquainted. This culture is very different from the U.S. and Steve needs to be aware of it in order for him to avoid offending local business partners and customers.
The affect the four dimensions by Hofstede, power distance, uncertainty avoidance, masculine/femininity and individual and collectivism have on organizational show in all cultures and cross culture.
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.
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.
Since we are living in the global age, people from different cultures meet in the work place. For this reason, Hofstede developed an understanding of the workplace values globally. There are several dimensions of cultural diversity among them; building connection between people, structuring projects, motivating people, and developing strategy among others. These diversities arise due to the fact that what works in one location may or may not work somewhere else. The dimensions developed by Dr. Geert Hefstede are a globally recognized standard. He developed the standard from research from employees from different countries but working for the same organization (St. James press, 2004).
International Business is an important aspect for the world’s economy. Interacting with other countries connects the world in ways for both the government and for the citizens. Each country the United States connects with influences our country in both positive and negative ways. But one of the most prominent countries that the US does business with is Switzerland. A country comfortably settled in the middle of France, Germany, and Italy, it has made a positive effect on America’s economy and culture. Understanding Switzerland’s culture is an essential piece of knowledge to successfully do business with them.
The purpose of this research is to provide a substantial assessment/explanation/analysis of the degree to which the McDonald’s operates based on a universal cultural or whether it is most strongly influenced by the national culture of that country. The researcher will explain how McDonald’s uses diversity and organizational initiatives to contribute to the corporate bottom line. Finally, the researcher will evaluate the company’s bottom-line rationale for diversity initiatives.
Diversity has made the United States what we look at today as a great nation with greater opportunities. In that same mentality, a business only becomes greater by including diversification, not only within the United States, but diversifying throughout the world. As our organization ventures out to the United Arab Emirates (UAE), we have to make the move as smooth and educated as possible. Whenever a company enters the international market, they have to make sure that they understand and examine the different parts of the culture and practices that differentiate them from the United States. By understanding the geography and background, cultural dimensions, differences in daily activities, etiquette and leadership styles, and the different laws, our company can successfully transport into the UAE.
The differences in cultures between Sweden and Italy had already become apparent in 1993, when Pharmacia merged with an Italian pharmaceutical company, however the inclusion of the American company into a corporate culture which had only so recently been developed and accepted by employees of the companies involved in the original merger created further cultural confusion. “Communication problems, beyond the obvious language differences, became a real barrier to honest dialogue”. This quote, coming from one of the American representatives of Upjohn goes to prove that there was an obvious problem with the interaction between managers of the three countries involved in the deal.
Cultural Differences in Hofstede’s Six Dimensions According to Professor Geert Hofstede, dimensionalizing a culture requires a complex analysis of a multitude of categories including differing nations, regions, ethnic groups, religions, organizations, and genders. Hofstede defines culture as "the collective programming of the mind distinguishing the members of one group or category of people from another". Throughout his many years of contribution as a social scientist, he has conducted arguably the most comprehensive study of how values in the workplace are influenced by culture, leading to the establishment of the Six Dimensions of National Culture. From this research model, the dimensions of Power Distance, Individualism, Masculinity, Uncertainty Avoidance, Long Term Orientation, and Indulgence are defined according to their implication on individual countries, which when comparatively examined provide a broad understanding of cultural diversity as it relates to the workplace. Identification and Definition of the Six Dimensions In initially defining each of Hofstede's dimensions, a foundational understanding of the six categories is established, from which a greater understanding of different cultures can be built off of.
In 21st century, the internationalisation and globalisation of businesses is becoming increasingly important to business prosperity and goal achievement. According to Geert Hofstede, “Culture” is the mindset for categorization of people from one group to another. In this report, differences in culture between the U.S. and France is analysed based on the case "European Negotiations - Southern Candle 's Tour De France".
Businesses tend to secure themselves financially and overlook certain characteristics, prior to expanding into international markets. For the purpose of this critical analysis case study, international markets are foreign other than the United States and the various consumers that inhabit them. Culture is a broad and vague concept. We will define culture as the values, beliefs and practices that a group of individuals hold. Culture is a major factor and businesses need to be conscious when expanding into foreign markets. The following paper will examine cultural issues that U.S. businesses must address before attempting to sell their products internationally, six problems Mattel faced expanding Barbie into foreign Chinese markets, and then
There is no doubt that the business world is changing rapidly and that many factors are also simultaneously interacting. Perhaps these factors are created by cultural diversity.
The components of culture discussed in the textbook, ‘International Business: The Challenges of Globalization,’ include aesthetics, manners and customs, education, physical and material environments, personal communication, religion, social structure, values and attitudes (Wild, Wild, Valladres Montemayor, 2015). When moving businesses’ to international markets like Birkenshire Corporations did, being a British organization having operations in China (Huang, T.Y., 2017), these elements of culture are extremely important to consider. Whether being in marketing and having to change the packaging of the product such as language, colors, and picture used; in social structure of the company and how staff arr expected to communicate, or the manners and customs a company has. In the case of Birkenshire Corporation, the main element of culture that was ignored and not considered was the manners and customs. Ignorance of culture was done by both the administrative department, made up of Chinese and non-Chinese staff, and the employees who received the gifts, made up of people from other cultures such as Latin-America, Australia, Europe, North America, Asia, and Africa (Huang, T.Y., 2017). If these employees had been made aware of the manners and customs of all the various cultures present in the Birkenshire organization, this issue could have been resolved in a way that didn’t offend
a company can familiarize itself with cultural nuances which may impact the design, packaging or advertising of the product. Moreover, traveling abroad allows one to locate and cultivate new customers, as well as improve relationships and communication with current foreign representatives and associates
15. Hill, Charles W.L. International Business: Competing in the Global Marketplace. New York : McGraw-Hill, 2007.
Daniels, J. D., Radebaugh, L. H., and Sullivan, D. P., (2011). International Business: Environments and Operations. Prentice Hall, Upper Saddle River, New Jersey.