Culture and its Impact on International Business

Introduction As businesses have grown and expanded to the international level; certain aspects of business have become abundantly clear. One thing that has become the norm when doing business on the international level is dealing with different cultures. Culture, as defined by Geert Hofstede is “the collective programming of the human mind that distinguishes the members of one human group from those of another. Culture in this sense is a system of collectively held values.” The concept of a culture has been around for a very long time; in-fact, when people exist in the same place together they end up following a set of rules. These rules can be called a “social norm” or culture and can be made up of simple things like how to act in certain situations all the way to a very devout set of beliefs or values. This paper will focus on the role that culture plays on multinational businesses around the globe and the differences that culture plays from one area of the globe to the next. An in-depth look will be taken on the obstacles that may arise due to culture, adjustments that need to be made, and any ethical conundrums that may arise due to different cultures.

Literature Review D. Elenkov and d. Kirova, state that “MNCs should not underestimate the importance of the cultural specificity of the host countries because different staffing, selecting, training, motivating and compensating practices should be applied in accordance with the characteristics of the local cultural context,” (2008, p. 71). A unique perspective on culture is taken by Hill, Hynes, and Johnson by analyzing the international student in the American business culture. “A relatively unrecognized challenge is knowledge of contemporary American business customs and culture. International students enrolled in two business schools formed focus