Business Abroad

Doing Business Abroad

There are several ways culture differences can affect how we do business internationally. We will discuss three specific ways cultural differences can affect doing business internationally, what managers need to address these differences and finally are expatriates or foreign mangers better equipped to deal with these challenges. Before we cover the challenges culture differences can bring to a business let's define culture. According to Hofstede culture is "the collective programming of mind which distinguishes the members of one human group from another" (Hofstede, 1984). Culture is "the customary beliefs, social forms, and material traits of a racial, religious, or social group" (Webster, 2007).

International companies should learn to recognize and respect culture differences. Understanding that cultural differences do exist and finding out what those are is a very important step to being successful internationally. For example in the Asian market when they do business they rely on social trust, personal relationships, agreement by trust and have slow ritualistic negotiations. In the United States on the other hand we are business first, we rely on expertise and performance, we make agreements by contract, and we like efficient negotiations. You can see why if the US and China had business dealings together someone would have to adapt for the others culture.

Cultural differences can affect the failure or success of an international company. One specific way cultural difference would affect doing business internationally is the different preferences and tastes. Customers and consumers in foreign countries may not have the same taste or prefer the same products as compared to that of the United States. What sells in the US may not sell as well overseas. Knowing the culture of the overseas market may help the company adapt the product or service or even the advertising to best fit the culture it is trying to sell to. A second way culture affects business is the management of motivation. When dealing with different attitudes and values managers need to use for different management styles and practices. Cross-cultural management is essential to be effective and successful in international business. Learning not to over generalize and expect culture is the same across an entire country or the world is a good rule to live by. Learn to be sensitive to cultural aspects of the country but do not stereotype. Understanding gestures, body language, and expressions are just a few things one should research when doing business internationally. Some things will only be learned through trial and error, but researching the cultural differences will cut down on the mistakes that can cause loss of business in the foreign market. Finally, the concept of what is morally right and wrong in different cultures can affect doing business (Tung, 1995). Concepts that guide business decisions can differ. What is acceptable in the US may not be acceptable overseas. Take for instance the concept of being competitive. Americans are more often seen as confrontative individuals where the Japanese seek to preserve harmony.

What specific skills would a global manager need to address these differences? Cultural differences can

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