...Cultural Differences in Forming a Business Strategy 1. Introduction International business covers all transactions undertaken between enterprises from two or more countries. In order to finalise a transaction companies have to form international operational structures distinct from those applied in their domestic market. Besides knowledge of international strategies managers need to comprehend the interdependence between the strategies and their financial results. Differences between an international and a domestic business concern commercial practices, the scope of managerial decisions, disparities in legal systems, as well as restraints put in place by governments, limitations connected w ith different currencies, not to mention cultural differences. Different business cultures in different countries lead to distinct commercial practices. Therefore, executives operating internationally encounter difficulties that people managing enterprises on a local scale do not have to face. Cultural differences are of fundamental importance for running an international business . The aim of this essay is to indicate the impact of cultural differences on the business strategy formulated for various countries and to show the significance of knowledge about the culture, behaviours, customs and traditions of the partner country in international business. This article is composed of three parts. The two first parts comprise a theoretic essay, in which native cultures are described...
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...but also doing business with people around the world. Enterprises enter foreign markets in order to expand the market or look for resources or reduce cost etc. However, Multinational Enterprises (MNEs) not only need to know the political, legal and regulatory environment in host country but also the culture difference which is very important to lessen the cultural problems and know how to solve it wisely. Companies may be abandoned by customers or spend a lot of money to recover their reputation if MNEs’ managers do not understand the cultures of the countries they deal with. The influence of international trade liberalization has presented not only substantial opportunities but also some challenges for domestic and international companies (Watchravesringkan 2011). The aim of this essay is to discuss the importance of culture difference to MNEs. In this essay, culture and society will be discussed in the first part. The following part is about the importance of cultural difference to international managers. Finally, it will discuss the methods to understand cultural difference. Dowling & Liesch (2009) state that culture is a system of values and norms those is shared among a group of human beings and form a pattern for living when brought together. Culture is gained knowledge that human beings use to explain experience and develop social behaviour and this knowledge forms values, generates attitudes, and affects behaviour (Luthans and Doh 2012). Moreover, culture influences the...
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...African Journal of Business Management Vol.6 (22), pp. 6456-6464, 6 June, 2012 Available online at http://www.academicjournals.org/AJBM DOI: 10.5897/AJBM11.2673 ISSN 1993-8233 ©2012 Academic Journals Review Key issues in cross-cultural business communication: Anthropological approaches to international business Tian Guang* and Dan Trotter Shantou University, Shantou City, Guangdong Province, Southern China. Accepted 8 March, 2012 Cultural factors have long been known to influence the communication and success potential of competition. Cultural awareness shapes how business firms behave in cross-culturally reflected international markets. It is broadly recognized that cultural factors act as invisible barriers in international business communications. Understanding cultural differences is one of the most significant skills for firms to develop in order to have a competitive advantage in international business. This paper probes some key elements of cross-cultural issues in international business communication and provides a framework for creating competitive advantage for firms engaged in international business. Culture affects many aspects of international business communication. It impacts free trade policies, localization and standardization strategy decisions, advertising, brand effectiveness, business relationships, international business management, international marketing, international negotiation, and consumer behavior. Seven themes are suggested as guidelines...
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...Culture and its implication on the international business management. Introduction Today, problems associated with global business management have been identified as factors that negatively impact the performance and productivity of multinational corporations and in turn, adversely affect regional and national economic growth The goal of this paper is to analyze the influence of culture in international business. The globalization of the world economy has intensified international relationships, increasing the importance of cultural dimension. The world is being affected by the globalization of the economy. This phenomenon is bringing movement of companies, assets, services, capital and people. Analyzing globalization this process is taking the world to major changes in the economic, technologic and social areas, which are having consequences in all organizations and societies that participate in this globalized market. It is a process that does not bring equal benefits to all participants. The globalization concentrates more of its actions in some sectors of economic activity and some regions and countries, rather than acting everywhere. With the world getting flatter doing business anywhere in the world is easier today, because of major changes in technology, global politics and expanded educational opportunities. But it is not only businesses that are affected. Governments, NGOs and society itself is changing at a fast pace. Nevertheless going forward can only happen...
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...Nonverbal Behaviours Cultural Differences in International Business Negotiations Nonverbal Behaviours Cultural Differences in International Business Negotiations Globalization embraces the free-market system which is driven by policies to allow the integration of markets in the global economy. By reducing trade barriers, it has promoted free trade - encouraging competition to spread globally. As a consequence, the global environment of business has become exceedingly challenging as the number of corporations competing in the world marketplace rise. The unprecedented growth of international business has become increasingly dependent on effective face-to-face negotiations between business partners from different countries which often have unique cultural nuances. Culture influences how people think, communicate and behave, which ultimately affects the way they negotiate. For example, many countries which utilize northern European, German, English, and Scandinavian languages are categorized as low context cultures, and rely on spoken words in order to communicate. Conversely, high context cultures, often pertaining to Asian and Arabic languages, are heavily dependent on nonverbal and situational cues. These differences in culture can lead to misunderstandings during international business negotiations, so it is imperative that all members involved are familiar and sensitive to the culture of the other party. A key component of successful international negotiation is effective...
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...Cultural Issues and Ethics in International Business Introduction The expansive and unstoppable process of globalization has forced employers to form their ability to trade and negotiate with the outside world. However, it is important not only they are immersed in this subject, your staff, or one who is qualified to do so, you should also have access to the most significant aspects of foreign trade, logistics, and the impact. Companies are not limited to conduct private and government operations locally, but also with other countries. Precisely what we call international business is the relationship between an organization and its external world (Maddox, 1993). This type of activity also involves foreign trade and international, which includes transactions such as exports, imports, investments, or financing that are performed worldwide. Among the success factors that can be mentioned in the international business operations are competitiveness, financial support between the parties and logistics. This aspect is very important because when the actors involved are from different countries or regions, the business success is more complicated. In analyzing the economy, we must review the dimension that transcends the borders of a country, i.e. which addresses the problems international economic purposes (Maddox, 1993). The importance of international relations in trading, politics or culture has reached a global level, a deeper meaning that one cannot speak only about...
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...your opinion, what is the most relevant macro-environment factor (legal, political, cultural and economic differences) for an international business when choosing to internationalise into an emerging/developing market? Discuss any international business concepts or theories that could be used to help justify your answer. In the past few decades internationalisation has been a phenomenon in being a main subject in international business research. Globalisation has allowed countless commercial opportunities to occur over the border of their national country by maintaining competition and the continuing growth of international firms (Tikhonova, 2012). In foreign countries, legal and political systems as well as the economy are essential to have knowledge in as it explains how political systems, laws and regulations and economic differences affect international business opportunities. Although these factors are vital in understanding the foreign environment, it is not as broad as culture. Culture is a factor that includes several aspects that range from different dimensions which on a broad level includes linguistic, regional, religious and ethnic dimensions (Reference for Business’s website, 2014). Fundamentally for an international firm to endure success in emerging markets it is relevantly important to have full understanding of consumers and their cultural differences. In order for a firm to reach their full potential and succeed in an emergent market they need to have the...
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...Economic globalization brings increasing communication of economy and trading among countries, and the negotiation has been the important part of international business activity in this process. The international business negotiation is not only the communication and cooperation in the economic domain, but the communication of culture among various countries. In the process of negotiation, negotiants’ idea and behavior are controlled by their own national cultures. There are large differences in thinking pattern, value view, group consciousness, negotiation style, benefit consciousness and law consciousness between western and eastern cultures, and these differences largely influence the process and result of negotiation and they are important factors we should consider in the negotiation. Keywords: International business negotiation, Cultural difference Economic globalization brings increasing communication of economy and trading among countries, and the negotiation has been the important part of international business activity in this process. The international business negotiation is not only the communication and cooperation in the economic domain, but the communication of culture among various countries. In the process of negotiation, negotiants’ idea and behavior are controlled by their own national cultures. As a developing country, China urgently needs to abstract advanced scientific technology, management mode and trading rule of developed countries in the...
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...Employee Behavior in International Business Chapter Objectives After studying this chapter, students should be able to: Identify and discuss the basic perspectives on individual differences in different cultures. Evaluate basic views of employee motivation in international business. Identify basic views of managerial leadership in international business. Discuss the nature of managerial decision making in international business. Describe group dynamics and discuss how teams are managed across cultures. CHAPTER SUMMARY Chapter 15 examines the behavior of managers and employees in different cultures, and the impact of managerial behavior on international business. The chapter begins with a discussion of Hofstede’s work concerning individual behavioral differences, and then relates his ideas to motivation, leadership, and decision making. Finally, issues related to creating and managing cross-cultural teams are discussed. INDIVIDUAL BEHAVIOR IN INTERNATIONAL BUSINESS Individual differences are reflected in personality traits. Attitudes, perception, creativity, and stress also are factors in influencing individual behavior. Personality Differences across Cultures • Personality is the relatively stable set of psychological attributes that distinguish one person from another. Both biological factors and environmental factors are believed to be important influences on personality. It is important for international managers to recognize...
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...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...
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...process of international trade, investment among people, organisations and governments from different countries (Chen, 1999). This process has effects on the environment, culture, political systems, and economic development around the world (Deresky, 2008). Due to globalization, the international dimension of management has become a major challenge to countries, institutions and people. International management is becoming more important within the academic setting. International management is a process of developing strategies, designing and operating systems, and working with people around the world to ensure sustained competitive advantage (Sepehri, 2010, as cited in Lecture notes 1). This essay identifies the challenges of operating in different national cultures for international managers by using Hofstede’s theory. In addition, the essay explains international skills and knowledges required by managers to be successful in different countries. Cultural Value Dimensions Culture in a global economy is one of the most important factors in global economy. In international management research, Hofstede defined culture as "…the collective programming of the mind which distinguishes the members of one group or category of people from those of another" (Hofstede, 1991, as cited in Jones, 2007). Within the context of international management, culture involves different dimensions. Four major dimensions provide frameworks for identifying international differences in culture (Jones...
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...A) The name of the company is Apple. The reasons of choosing this company to explore its experience using the concepts of International Business are as follow: Global pattern of trade * Apple is the global company in the retail industry. 43,000 of Apple employees in the United States to work in the 30,000 Apple stores. Apple retail store employees to do more than the average wage of employees, and provides money for universities, as well as a gym membership, 401K plans, health care plans, product discounts and lower prices for the purchase of shares. * Apple has 453 retail stores (such as in March 2015) in 16 countries and 39 countries in the online store. Each store is designed to meet the requirements of the position and the regulatory authorities. Apple has received numerous architectural awards for its store design, especially its location on Fifth Avenue in midtown Manhattan on. Competitive advantage * Before the company advertised its products are being made, the late 90s of the last century the United States; however, as a result of the outsourcing plan in 2000, almost all of the manufacturing process is now abroad. According to a report the New York Times, Apple insiders "that huge overseas factories, as well as flexible, diligent and industrial skills of foreign workers have to make more than their American counterparts that" Made in USA "is no longer a viable Alternatively, for most Apple products. " * The company's production, procurement and logistics...
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...MG1054 INTERNATIONAL BUSINESS ENVIRONMENT Alexandra Donea Student number: 1019599 Assignment 1 International Business vs Domestic Business “International business is the study of transactions taking place across borders for the purpose of satisfying the needs of individuals and organizations. These economic transactions consist of trade, as in case of exporting and importing, and foreign direct investment, as the case of companies funding operations in other countries. It refers to all those business activities which involves cross border transaction of goods, services, resources between two or more nations. Transaction of economic resources include capital, skills, people, etc. for international production of physical goods and services such as finance, banking, insurance, construction, etc..” ( Rugman, Collinson, 2006, p.5) “Over half of all world trade and approximately 80 per cent of all foreign direct investment is made by the 500 largest firms in the world. These companies, called multinational enterprises (MNEs), are firms that are headquartered in one country but have operations in one or more other countries. Well known multinational corporations include fast food companies (McDonald’s, Pizza Hut), electronics companies ( Sony, Samsung) and vehicle manufactures ( General Motors)”. (Rugman, Colinson, 2006, p. 38). Areas of study within this topic include differences in legal and political systems, economic policy, accounting standards, labour standards...
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...------------------------------------------------- International Business Essay : Intro : Mohamed Branine (2011). Managing across cultures. London: Sage . p36-42. In today’s world of massive globalization, managers doing international business have to deal with cross-cultural management. Thus, with these interconnections, it seems important to adapt one way or another in order to stay on the market. Each country has its own culture, which differs from other countries in many ways. That’s why a manager has to be careful about the political, legal and economic challenges, but also technological challenges (Branine 2011). However, the main challenge is to deal in a good way with all the cultural differences concerned by the exchanges in the market. A. Ball, J. Geringer, S. Minor, M. McNett. (2009). Sociocultural Forces. In: McGraw-Hill International Business: The challenge of global competition. New York: Paul Ducham. p137-167. For this, many cultural elements affecting international trade have to be taken into account. It could be sociocultural components as aesthetics, attitudes and beliefs, religion, language, education, legal characteristics and political structures as well (A. Ball et al. 2009). In a first part, I’ll talk about these cultural elements affecting business across different cultures. Then, we’ll observe if that create some additional costs, depending on the way the company is practicing international business. Actually, cost Information will be completely different...
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...How International Business Affected HRM Terry Conry Human Resource Management 12 August 2014 How International Business Affected HRM Introduction Changing trends within globalization, technology, and e-business has caused for diversity to have an impactful effect on each & every aspect of business involving human resource management. Furthermore, there has been the enhancing demand for organizational flexibility. Human resource management has been very challenging within international regard. This has been the discipline, which trusts totally on the people, and its behavior has been decided through shared values. As values change from one generation to the next, from one country to another, and from one culture to the next, rules of human resource management have been regularly altered ("Going Global: Managing the HR Function across Countries and Cultures.," 2009). The effect of globalization combined with internationalization within increasingly competitive business arenas is required to be evaluated. This particular paper will give insight to how human resource management fits in along with contributes towards companies international business strategy, as well as discussing important factors that influence international human resource management with regards to globalization. • How has the growth in international business affected human resource management? A major outcome to internationalization...
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