The Role Of Culture In International Business
As globalization continues to thrive trade liberalization has led to the emergence of many businesses across the globe. There are many cultures in the world and the international businesses ought to have a good understanding of them if they are to be successful in the global market place. (Kotter J. and Heskett J, 1992).
Culture refers to the patterns of behavior or ways of life of people. It gives meaning and importance to activities done by a large group of people. Culture may include science and technology.
It includes people’s language, mode of dressing, religion, beliefs and arts. Culture determines values; altitudes and customs. Major elements that define culture include language and communication, religion, personal achievements, social behavior and socialization among cultures. Culture affects people’s notion of time, roles and concepts of the universe.
Culture ethnocentrism is the tendency of some people considering their culture superior to others. It also entails the belief that one’s culture will suffice in other areas.
Companies ought to be very careful to avoid this as it can result to loss of their effectiveness. It can make them ignore the most important aspects of people in areas they have established themselves. It creates conflicts to people around and those inside the organization. It can affect the leadership of the company resulting to confusion and strikes all of which are not beneficial to the company.
To overcome ethnocentrism; companies should appreciate the fact that there are diverse cultures and acknowledge that they are all distinct.
This way they will be able to interact with he locals without conflicts. The management should be very careful in avoiding assumptions and judgments. They should monitor the situation on the ground without making assumptions based on prejudices. Prior understanding of the locals will be crucial in reducing ethnocentrism. Empathy and group cohesiveness would also help overcome ethnocentrism in companies.
Altitudes, values, customs and beliefs shape peoples culture. Through communication from the family settings and other socialization agents people internalize ways of doing things. Their perception towards life is modified to match their culture. Values, customs and beliefs of a specific culture are taught to all generations. People of same culture believe in what they are taught without question. Institutions set up in society ensure that culture is perpetuated.
Global companies should put in place effective strategies that will enable them adapt well to the local culture. First, they should conduct a research to acquire some awareness with the local culture. All their undertakings should not provoke or work against the local’s culture. They should not interfere negatively with the local people’s lifestyles or political ideologies. (Butler N, 2000)
Involving the local people in advertising the products could work to attract more customers. Regional branches can advertise the products to attract more people. Regional branches ensure that the locals do not feel neglected. Respecting what the locals perceive as important for instance, historical sites would not discredit the company. (Anderson K. and Blackhurst R, 1993)
Prejudices should be handled effectively. The locals may perceive the foreign companies as out to introduce exploitative measures against them. In such cases it’s upon the company’s management to incorporate the locals in their activities. They can help in community based activities and create employment for them. Respecting the locals’ religion will also be a vital aspect. Religious issues should not be interfered with by such companies. Again in their choice of products religion plays an important role. For instance establishing a pork industry among a Muslim dominated region will create conflicts.
To operate efficiently in the global market place, international companies must understand the intercultural socializations. Communication is very important in business. Companies must be conversant with the local languages and apply interpreters where they do not understand. (Metcalf H, 1991) They must understand that symbolic communication varies across cultures and consequently be cautious when dealing with locals. People are cautious with aesthetics as per their culture affect them. Companies can incorporate those aspects in their packaging processes. Some local communities may not be as time conscious as the companies would expect. They should be patient enough when such issues arise so as not to compromise their business. (www.bawtc.com)
The company also needs to understand the social institutions and their impact on the local’s culture. Family institutions may affect how business is carried out in some cultures as opposed to others. Personal space is interpreted differently by different cultures and caution should be taken not to irritate the locals. It is also important to understand how interpersonal communication is carried out among various cultures. Some emphasize on formal relationships where titles must be used while others do not mind the informal communication.
Culture affects people’s attitude towards work. Some work to acquire the basic needs while others work to rise up the social ladder through promotions. Social mobility varies across varying cultures. To some communities a shift status is associated with one’s position in society. People who strongly value family may favor their family members in organization a more and can be condemned for nepotism.
Physical environment affects culture; people from specific geographical locations tend to behave in distinct ways. The western ways of thinking or perception vary from the eastern points of view. Different environment affects people’s cognition and perceptions some may be more analytical and keen to detail while others use the holistic approach. People have different perceptions to the physical environments surrounding them.
Some cultures do not use a straightforward way of communicating negative responses while others use a no or yes approach. Some cultures do not smile or maintain direct eye contact when communicating something that can create communication barriers. It is important to understand people’s culture so as to achieve effective communication. (Barna M, 1997)
Education ensures the stability of people’s culture. People are taught in details what their culture entails. Again, in some education systems the nation’s language is used. Culture is also understood as the process where goods are produced and given meaning. It therefore incorporates science and technology. Culture must be learned or studied indirectly or directly. Through education people are able to learn of how to produce certain products as pertains their culture. Education and technology therefore have an inter-relationship with culture. Education and technology ensures that culture is sustained while culture affects what technology to use through education. With advancement of technology, culture is changing and education provides the communication channel.
The mass media plays an important role in communicating information to the public. Through its advertisement international companies can increase their sales and consequently their profitability. The media affects the public opinion towards an item, good or service. Marketing practices used by the media shapes the people’s perception. It can also reinforce stereotypes based on race or gender. Advertisements should not ridicule the locals’ culture as the business could be at stake. Powerful images and positive aspects should be used effectively. Mass media influences people’s tastes to goods or services advertised.
International companies are in most cases negatively affected by the local government’s politics. They face political risks especially when wars prevail. Discriminative taxes from the foreign countries affect their profitability levels to a large extent. An effective and just legal system would ensure that their security is guaranteed. Democratic countries offer good environment for international companies. (Butler N. 2000) Corruption and red tape bureaucracies tend to hinder effective functioning of companies in foreign countries. Total totalitarianism creates room for corruption and it is not favorable for the locals. Effective legal system will ensure that laws are enforced and patents, copyrights, or trademarks are protected. (Kotter J. and Heskett J, 1992).
National security is vital for business to thrive. Countries can create restriction on international companies hindering their efficiencies. Standards can also be set where goods or products to be sold by the international companies have to comply with. (findarticles.com)
Cultural awareness is a vital factor for the international companies to consider before they venture in today’s global market place. Cultural awareness ensures that these companies have a better understanding of the country they are to deal with. It helps the company apply important aspects in its undertaking thus improving its profitability levels. It will ensure there is effective communication as communication barriers will have been established and solutions sought. There will be better understanding of the people’s social behavior and this will reduce communication barriers. (Byram M, 1997)
Corruption results to increased operational costs and is not good for business. Weak legal system creates room for abuse of office and fails to ensure that the rule of law is followed. Strict rule of law results to reduced corruption. (Goudie W. and Stasange D, 1997)
Understanding cultures enables one to enhance on the positive while avoiding the negative aspects negotiations are easier to make when one knows and understands people’s culture. Cultural awareness reduces the chances of one establishing business based on goods that the locals will not consume. It is also important that international companies study the political culture of a country they have interest investing in.
International companies identify and utilize cultural differences for their gain. They should consider people’s values beliefs and norms in their planning and decision making processes. Policies that are cultural sensitive are likely to bear better results.
The global market is very competitive and factors like product quality, customer service, discipline, product quality and the company image play an important role in determining which company keeps operating and which one closes down., companies need to integrate culture sensitivity in their undertakings to ensure their sustainability in the market. (Messner D, 1997)
References:
Byram M. 1997. Cultural awareness. In Chambers G. ed. Language Learning Journal 16. Rugby: Association for Language Learning, pp. 51-57Kim Huggett. 2003. In International Business, Cultural Awareness is Power.http://www.bawtc.com/tradenews_details.asp?PartnerID=&ArticleID=52Metcalf H. 1991. Foreign Language Needs of Business. IMS Report. Falmer: University of Sussex; Institute of Manpower StudiesBarna M. 1997: Stumbling Blocks in Intercultural Communication. In Samovar, Larry A. and Porter, Richard E.: Intercultural Communication. Wadsworth, CA, USA.Goudie W. and Stasange D. 1997. Corruption: The Issues. OECD Development Centre Technical Papers No.122, Paris: OECD.Savage T, Nix W, Whitehead J, and Blair D. 1991.Strategies for Assessing and Managing Organizational Stakeholders. Academy of Management Executive. pp. 61-75.Ronald Clement. 1994. Culture, leadership, and power: the keys to organizational change. Business Horizons. Retrieved on 27th January 2008 from http://findarticles.com/p/articles/mi_m1038/is_n1_v37/ai_14922916Kotter J. and Heskett J. 1992. Corporate Culture and Performance. New York: Free Press.Anderson K. and Blackhurst R. 1993. Regional Integration and the Global Trading System, London and New York, Harvester Wheat sheafs.Messner D. 1997. The network society: economic development and international competitiveness as problems of social governance. Frank Cass, London, UK.Butler N. 2000. Companies in international relations. Survival, 42.
