...The Cultural Challenges of Doing Business Overseas EC0/561 8/2/2014 Dr. Sharghi The Cultural Challenges of Doing Business Overseas This paper will provide an analysis of Steve Kafka’s decision to open and operate a Chicago-style pizza business in the Czech Republic (University of Phoenix, 2011). This analysis will include information on the cultural differences between the United States and the Czech Republic and how these differences may affect the business climate. This paper will also review potential risks in doing business overseas and what Kafka may be able to do to mitigate these risks. In addition, trade barriers and price structures will also be discussed. Background Kafka is an American of Czech heritage, speaks fluent Czech, and has traveled to the Czech Republic on many occasions, thus giving him confidence in his understanding of the business environment and economy opportunities (University of Phoenix, 2011). Kafka also has many friends and family members living in the Czech Republic which also give him the ability to better learn about cultural differences and standard customs. The Czech Republic is a member of the European Union, NATO, the World Trade Organization, the European Bank for Reconstruction, and the International Monetary Fund, and the International Bank for Reconstruction (Doing Business, 2011). The monetary unit used is the Czech crown rather than the Euro and credit cards are commonly accepted, including the...
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...The Cultural Challenges of Doing Business Overseas Karinna Kruse MMPBL501 November 22, 2010 David Francom Steve Kafka is an American citizen from Chicago, Illinois, who is looking to expand his business overseas. Steve is a franchisor for Chicago Style Pizza and sees the opportunity of introducing the famous food in Czech Republic, a country his family came from. Because he is familiar with the language, customs and culture, Steve is confident that he will make his business successful in Czech Republic. Therefore, before starting his franchise overseas, Steve needs to conduct a cultural and economic study to determining the cost of business, the risks of investment, and the any trade barriers for his pizza business. “Culture is the acquired knowledge that people use to interpret experience and generate social behavior. This knowledge forms values, creates attitudes, and influences behavior” (Hodgetts, Luthans, & Doh, 2005, p. 93-94). United States and Czech Republic are two countries situated on two different continents, and with significant cultural differences between their cultures. Czech Republic was part of Czechoslovakia, a former Easter communist country. Czech Republic gained its independence in 1989, after the Velvet Revolution, when the Eastern communist bloc ceded to exist The economic, political and cultural relationship between United States and Czech Republic are strong, furthermore, the United States encourages the economic transformation in Czech...
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...Cultural Challenges Globalization and overseas business expansion has brought about the need for in-depth understanding of cultural differences. When researching and considering cross cultural business ventures, it is important to understand that culture before vocally communicating that wish. Take time to research and understand the audience you are making your sell too. 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 investigate this venture thoroughly and become familiar with the Czech culture to realize opportunities and mitigate risks to meet his end state goal of expanding his Pizzeria business into the Prague. Czech Culture and Comparative Advantages Czech cultures focuses on non confrontational and indirect communication. Czechs are non-confrontational and prefer to do business over through a series of meetings during different times. American’s can be confrontation and usually like to get to the point of their business negotiations, without getting to understand the other people within the meeting. When conducting business in the Czech Republic it is important to understand that Czechs are not as expressive as Americans can come off. A direct approach could be viewed as confrontational and rude, which goes along with the misconceptions of foreign understanding of the American culture. The best...
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...Running head: THE CULTURAL CHALLENGES OF DOING BUSINESS OVERSEAS Week 6 Paper The Cultural Challenges of Doing Business Overseas University of Phoenix Online ECO/561 July, 26 2010 Dr. George Sharghi Abstract Mr. Kafka is an American of Czech origin. He’s a franchisor for Chicago Style Pizza and decided to expand his business into the Czech Republic and anticipates he will face some difficulties at the new location in Prague, Czech Republic. 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 (University of Phoenix, 2010). This paper will identify major differences, incompatibilities, risks, mitigation factor, comparative advantages that exist and how best Steve can benefit, Hofstede's four primary dimensions, trade barriers, assessment of demand, cost, and what Mr. Steve Kafka should know about price and income elasticites. U.S./Czech Cultures & Comparative Advantages Some of the major differences and incompatibilities between the United States and Czech cultures are; norms, values, beliefs and behavior. The citizens of the Czech Republic believe in the firm hand shakes upon introduction and again when departing. They address each other by their first name takes time and occur when the consent is mutual. They raise a hand in order to get their attention. Czech citizens are well informed about politics and religion. The general attitude of Americans...
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...role in businesses. More and more companies are conducting businesses overseas because of many factors such as competition between companies, low cost, demand, faster services and they also represent the main factors that had contributed in the success of Globalization. It has a positive side when all rules and regulations are being observed and a negative side when there is exploitation, contraband, low labor, maltreatment, political and cultural differences etc. That said I have been chosen to hire a new manager for the Scandinavian division and also to explain the process. It could be a long process for Management to find that person and know how to retain them at the same. In the following few lines I will demonstrate the most important skills and qualifications that a candidate must possess to be approved for an overseas assignments, the danger of doing business abroad and how to transmit the message to HR manager as well as the senior leadership team. Application of HR in the Global Environment What is Globalization and why is it being done by many companies globally? As describe from Wikipedia “The term Globalization (or globalization) refers to processed of international integration arising from the interchange of world view, product, idea, and other aspect of culture” (Wikipedia, 2006). Consumers are becoming very demanding and competition is not helping either, therefore, a business to quickly to provide her service or product at anytime, anywhere and anything...
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...Global Operations Management Abstract The world offers significant business opportunities for every company, however, opportunities are accompanied by significant challenges for managers. Managing global operations across diverse cultures and markets represents a big challenge and opportunity for companies. To compete in the global market and be successful, companies must learn the strategies, policies, norms and technology necessary to conduct international business. The opportunities for global expansion are numerous, and attaining success is a matter of developing the right strategy to win local markets and its consumers. Global Operations Management In today’s global economy many companies have been feeling the necessity or the pressure to compete overseas with other companies not only to expand their market share but to obtain higher profits. While there are substantial opportunities in expanding globally, privately owned companies also face significant challenges in selling, purchasing, and setting up operations in foreign countries. PPQ Parts is one of the companies that have decided to expand globally over the next several years, but in order to do it managers must be properly trained in multiculturalism and diversity management. The company executives need to be aware of the many challenges and obstacles that going globally represents for the organization to be prepared when a situation arises. Global marketplace...
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...ASSIGNMENT ON TOYATA’S GOBAL PRODUCTION STRATEGY Submitted to: Mr. Md. Zillur Rahman Course Coordinator Course Code: MGT-601 Course Title: Strategic Management & Case Analysis Department of Business Administration Sylhet International University, Sylhet Submitted by: Shakhor Ranjan Dash Roll No. 11382 MBA 2-2 Submitting Date : 30.11.2012 Dell Case: Question 1 :: What are the advantages to Dell of having manufacturing sites located where they are? What are the potential disadvantages? Answer: Dell’s manufacturing sites are in Brazil, China, Malaysia, Ireland, and the U.S. Advantages of these locations are that some of them are low cost (Brazil, China, Malaysia and, relatively, Ireland), they have educated work forces that are highly productive, and they are near large regional markets. Dell Case: Question 2 :: Why does Dell purchase most of the components that go into its PC from independent suppliers, as opposed to making more itself? (Does does little more than final assembly of components into PC) Answer: Dell outsources because it enables Dell’s business model to be successful. Dell’s comparative advantage is in pricing, customization and rapid order fulfillment, all advantages gained through supply chain management and logistics. By outsourcing, Dell does not carry risks connected to inventory such as obsolescence, Dell can maintain flexibility in its manufacturing, and Dell has lower coordination...
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...The Cultural Challenges of Doing Business Overseas The Cultural Challenges of Doing Business Overseas Steve Kafka, an American born citizen and a franchisor of Chicago Style Pizza, has decided to expand his business overseas. Steve wants to set-up business in the Czech Republic, a place where he has friends and family. Steve can speak the language fluently and knows the people and culture. Steve must ensure he is aware of the cultural differences between operating a business in another country, determine the comparative advantages, and evaluate the mitigating risks. Economically, Steve needs to research trade barriers, investigate demand, prices, and income elasticity. The United States and the Czech Republic have some major differences in their cultures: values, beliefs, and behaviors. The Czech culture is not as faced paced as the United States and they tend not to eat out as much as Americans. Lunch is the biggest meal of the day whereas in the United States dinner is. This is a potential risk for Steve because pizza is considered a snack in the Czech Republic, whereas in the United States pizza is considered a meal. Czechs do not usually converse during meals. Czechs are very private people and tend not to speak to strangers, smile, or make eye contact. The Czech citizens have become standoffish because they do not easily trust people not of their culture because of the history of their country experiencing invasions. The Czech culture...
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...HRM issues UK companies need to take into consideration when relocating their operations overseas. In answering this question you need to show an awareness of both the problems and the advantages HRM ISSUES WHICH UK COMPNAIES FACE WHEN RELOCATING TO OVERSEAS Introduction * With the growth of traditional business, the scope of HRM has also grown in recent years. * Every country is different in terms of political, ethnicity, monetary, multilingual and legal state. The companies has to face problems in global ventures, due to the lack of managing workforce among different ethnicity. * Most of the industries stake their growth plans on expanding globally, so for that they have to increase consistency for approaching the capabilities of talent management, leadership development and HR policies. At the same time the companies have to face issues when they are relocating to overseas. HRM ISSUES HR covers many various activities related to organizations employees; * Firstly HR will focus on staffing, as it is the basic need of the company. When relocating the business, HR has to consider whether staff members are the company employees or external contractors. * Training and recruiting employees, HR has to train employees to work in an international projects, they need to train technical skills to the employees such as cultural values, social customs, languages and reward system in the host country. * HR management also face the issues in managing the...
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...Assignment Doing Business Abroad Doctor Ken Myers April 11, 2005 INTRODUCTION: PURPOSE: The purpose of this paper is to answer the assigned questions within this module. By answering these questions, I will gain a better understanding of the important aspects surrounding conducting business abroad. BACKGROUND: This is the first case assignment for MGT501, Management and Organizational Behavior during the spring semester at Touro University International. COVERAGE: I will use background information, combined with outside research to strengthen this paper. I will begin by identifying at least three specific ways that cultural differences would affect doing business internationally. Next, I will discuss some specific skills that global managers need to address the cultural differences. I will then discuss my views regarding expatriate and foreign-national managers by stating the reasons why a combination of managers is the most effective way to deal with these challenges. Finally, I will conclude with a brief summary that highlights the key points made throughout the paper. DISCUSSION: Many foreign markets are considered an untapped resource. The potential for growth in these markets is very high; however the potential can not be fulfilled without strong human resource applications, effective organizational structure, and efficient cultural understanding. The company’s corporate culture has to be modified to take cultural differences...
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...operating the park. Involvement of the government in terms of providing assistance through subsidies. Research and identify the target market to better tailor efforts to them. Provision of alcoholic beverages as an enticement to the French population. Global Management Challenges Risk Cultural Obstacles Different languages made it hard to reach out to larger customer base. Cultural difference as a result of the diversity made it harder to stay within politically correct bounds. Food and Music variety made it challenging to decide on what the best option for the country was. Global Issues Differences in the economy of both countries had an influence on pricing and cost. Relationship between the countries over the years had a positive impact. ZUCAMOR S.A: GLOBAL COMPETITION IN ARGENTINA Lessons Learnt: Both countries hold themselves in high regard in that they value their countries very much. Marketing Strategies: Provision of protection for local products and companies Also, provision of a tax break for local stores to enhance their profits. Global Management Challenges Cultural Obstacles Differences in the perception of time and how it should be used. Again, there was a difference in the perception of space between both countries. Nonverbal communication also played a major role in the relationship between the two countries....
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...obvious, why waste all that time in a university learning trivial facts which don’t apply to the real world when you can bypass it and still learn an important skill.... [tags: Argumentative Persuasive Educating Essays] 1329 words (3.8 pages) $29.95 [preview] America: Culturally Constipated? - ... Cultural pluralism or cultural diversity replaces the melting pot image with what is frequently described as a “mosaic” or almost a “tossed salad.” As Christine Bennett stated “each part retains some of its uniqueness while contributing to the beauty and strength of the whole composition.” The United States still has failed to become part of the tossed salad idea we don’t diversify with other cultures, why. Prejudice and racism is a root problem for cultural barriers within the borders of the United States.... [tags: American Culture] 763 words (2.2 pages) $19.95 [preview] Cultural Challenges Of Doing Business Overseas - The Cultural Challenges of Doing Business Overseas Steve Kafka, an American of Czech origin and a franchiser of Chicago Style Pizza, has decided to expand his business and open a franchise in Prague, Czech Republic. Before venturing into the global business sector, Steve needs to conduct an in-depth analysis in order to become familiar with the Czech culture. This analysis will present opportunities and risks that Steve will need to achieve and overcome so his end-state goal of expanding...
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...previous generations. One of the most important advantages of internet to the world is that the implementation of internet reduces the time for people to acquire information they need, previously, the learning of different culture only can be done via limited forms such as living in a foreign country, reading books and so on, they are both effective ways to learn different cultures but they are also not available for most of people, the implementation of internet provides an time saving method for spreading and learning different culture without going to the foreign country physically, most of the people can obtain and learn different culture even without leaving their home. The internet becomes an important force to push globalization and cultural harmonization; it provides the speed and convenience for people who are willing to learn and experiment foreign cultures which never exist before, and for instance, people can watch major events like Olympic game online and also learn knowledge about the host country. 2. Discuss the types of operational conflicts that could occur in an international context because of differences in attitudes towards time and individualism, give examples relative to specific countries. With the development of globalization, more and more multinational companies established their physical appearance in foreign markets, for that reason, the group work which involves people from different...
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...previous generations. One of the most important advantages of internet to the world is that the implementation of internet reduces the time for people to acquire information they need, previously, the learning of different culture only can be done via limited forms such as living in a foreign country, reading books and so on, they are both effective ways to learn different cultures but they are also not available for most of people, the implementation of internet provides an time saving method for spreading and learning different culture without going to the foreign country physically, most of the people can obtain and learn different culture even without leaving their home. The internet becomes an important force to push globalization and cultural harmonization; it provides the speed and convenience for people who are willing to learn and experiment foreign cultures which never exist before, and for instance, people can watch major events like Olympic game online and also learn knowledge about the host country. 2. Discuss the types of operational conflicts that could occur in an international context because of differences in attitudes towards time and individualism, give examples relative to specific countries. With the development of globalization, more and more multinational companies established their physical appearance in foreign markets, for that reason, the group work which involves people from different...
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...Global Organization and Cultural Perspective (Nike) Once an organization, like Nike, becomes a global organization, and the business goes to other countries to gain more profits, it will encounter challenges and ethical issues. Some of the challenges for a global organization are child labor laws, wages, and outsourcing. An example is a Nike sweatshop labor case that stirred up a big controversy over ethical business practices. Because of this issue the organization has to deal with the negative perception, and the organization needed to solve this ethical issue to remain profitable and ethical in the eyes of the consumers and stakeholders. The Nike Corporation is one of those global organizations which brought their business to other countries to provide economic opportunity to the host country, and in turn obtain more profits due to cheap labor cost. The organization outsourced its manufacturing plants to several countries in order to lessen costs and become more efficient in productivity. The outrage and protests that followed were far from what Nike expected; the company was labeled as forcing “children to slave away in hazardous conditions for below-subsistence wages” (Hill, 2009). Because of this issue, a wide protest of globalization and human rights activists accused the Nike organization for taking advantage of the workers overseas and exposing their workers in unsafe working environment. Although Nike was making billions of dollars in profit, however, it has...
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