Discussion of International Business

Business environment is constantly in the process of change and its dynamic could be explained by the impacts of a great number of factors. Most of these factors are related to the process of globalization, impacting the decisions of the managers and the paths of the companies’ development all over the world. Most of the modern companies strive to have access to international markets, because they could open numerous new opportunities for their business development. This is the reason, why most of the businesses prefer to operate not only within the borders of their native countries, but expand internationally. “International trade refers primarily to trade in goods and services across the border of a country. Multinational companies play an important role in the development of international trade, among other factors such as globalization and outsourcing.” (Vanhoegaerden, 2017). Thanks to such rapid development of international trade, consumers from various countries received the opportunities to purchase goods and services from different countries, businesses in their turn are forced to provide such opportunities for their customers and be ready to manage all the challenges, related to social, economic, legislative and cultural barriers, existing between the countries.

All companies, which consider the possibility of their international operating and success, are to consider local culture and local language in order to work out the correct strategies for working in their markets. The challenges for the companies are not related purely to marketing approaches for the products or services. “They must have an effective planning program, and develop effective strategies for sourcing, transportation, marketing activity, with demands and results that differ from one country to another, subject to different regimes related to trade policies, legislation, infrastructure, culture, etc. Also, companies need to be socially and environmentally responsible, requiring to engage in these actions for the good of society, but also to build a successful business.” (Vanhoegaerden, 2017).

More and more companies focus upon multinational or cross-cultural teams, which have the potential for benefiting businesses from diverse knowledge base and application of new approaches towards solving of business problems. At the same time all these advantages of global organizations and multinational teams should not be considered alone without the limits and challenges, brought by culture in international business. There are a lot of ways to define the concept of culture, but considering it in its broad meaning, it could be defined as a set of common and accepted norms, which are supported within a society. This definition of culture allows realizing that in international business context the norms, accepted and exercised within one society, could not always be applied for a different society or country. Culture is an integral part of human lives, all humans are dependant upon the environment, they were raised and live in. Individuals perceive their culture as a part of their self-identity.  That’s why understanding and recognizing of at least three basic culture affects, namely communication, organizational hierarchy and etiquette, could contribute to avoiding of miscommunication and misunderstandings with colleagues from different countries, customers and business partners.

Effective communication is the integral part of success in any business sphere; it occupies special position in the situation of cooperation between individuals or companies, belonging to different cultural backgrounds. Most of the modern companies have the specialists for translating and interpreting services, some of the managers and workers know English, as it is generally considered to be the language of business communication. However, not only the fact of sending a message is important, but also the way, how it was done. This could be proved with simple example. The Finns prefer to express their ideas directly, whereas people from India are much more nuanced in their communication. Thus being fluent in English is not the key towards being successful in international business communication, instead profound attention towards subtle non-verbal communication between representatives of different cultures could grant success in international business scene. An individual, working with specialists from different countries, should not rely purely upon his own cultural peculiarities; rather he should do primary research in the sphere of culture of professional interactions in the target country. Even if it turns out to be really challenging to manage the cross-cultural differences, there is a need to be open and sensitive towards cultural differences.

Workplace etiquette is an integral part of business culture. For example the fact of addressing a business partner or a colleague matters. Some professionals prefer to be addressed by their names, others use only surnames, etc. “While it can vary across organizations, Asian countries such as South Korea, China, and Singapore tend to use formal “Mr./Ms. Surname,” while Americans and Canadians tend to use first names. When in doubt, erring on the side of formality is generally safest.” (Vanhoegaerden, 2017). One more example could be related to the concept of punctuality. Although the notion “to be on time” seems to be universally clear for all cultures, still there are differences. In some countries arriving to a meeting several minutes before the agreed time or several minutes later is considered to be “on time”, whereas in other cultures only arriving exactly a couple of minutes before is perceived suiting the frames of mutual respect.

Organizational hierarchy and perception of the management roles could be also different in different cultures. Junior or middle-management positions are allowed or not allowed to speak up during official meetings, participate in taking decisions or express various opinions. This is defined by cultural norms of the concrete country. In Japan for example social hierarchy is traditionally highly valued and correspondingly the same attitude is brought to the work places. In many organizations in Norway, where generally societal equality is supported, flat organizational hierarchy is usually applied.

The world economy is seriously dependant upon the process of globalization nowadays. Most of the countries are ready to welcome international and foreign companies and organization for establishment of business relations with them. Along with this most countries are already aware of the fact that their home organizations and business are to look for the ways to contact other countries. It was already mentioned that the major condition for building successful international business relations, it is important to develop the position of cultural sensitivity, otherwise all promotional strategies and approaches might fail or even work in the opposite direction. One of the brightest examples of such failure is the disaster, faced by Proctor and Gamble, when they made their first attempts in 1973. “The Japanese consumers bombarded the American products, American way of selling, American way of managing and American strategies by the P&G with scant regard to local needs, local culture, local social norms, and local living habits. This resulted that, Proctor and Gamble faced huge losses till 1987, until it eventually understood the local culture and started playing the marketing game the same way as the Japanese do.” (Filippouli, 2014).

Information technologies have penetrated into all life spheres and they contribute to uniting countries of the world and separate individuals from different cultural backgrounds. Cultures and economies come closer, people learn more about traditions and lifestyles of other nations and learn how to perceive differences with tolerance and respect. Actually, in order to develop and support this tolerance, it is necessary to realize that all actions, even if they are individual ones, are related in the whole world. In other words even incidents in remote areas are able to impact other countries of the world. Business competition and international relations should be built on the basis of the principle of this connection. This reality forces the need of international social responsibility, which should not be affected by individualism or any kind of borders. All multinational companies, which plan or have already started their operating in international context, are to adhere to the idea of global thinking, to consider the cultural variability of different countries and even regions of these countries and contribute their maximal effort into development of cultural understanding. “Major cultural constraints encountered by businesses include local attitudes, taste preferences, language, religion, management style, gender discrimination, skills, personalities, education, etc. To be successful, they need to mold their business actions in accordance with the local cultural models, they need to establish a global mindset.” (Filippouli, 2014). In order to have better understanding of this theoretical position, the example of such food giant as McDonalds could be considered. This company is definitely one of the leaders regarding its global presence, as it operated in more than 100 companies and around 70 million consumers purchase their products on a daily basis. The head management and head quarters of the company are situated in America, however all the local operations are trusted to local managers of the concrete companies. In addition, all the menus of the company are also customized in accordance to cultural habits and local taste preferences. This is a good example of successful global thinking.

Overall, the process of globalization has offered a number of advantages and challenges to all countries in various spheres; first of all it is meaningful for the business sphere. All companies and individuals, who attempt to operate in international environment, should be ready to manage all cultural differences as this is the only path towards international success.

References:

Filippouli Elizabeth. (2014). Cultural Understanding and Global Thinking in Business. HuffPost

Vanhoegaerden, Jean. (2017). How cultural differences impact international business in 2017. Hult News 

The terms offer and acceptance. (2016, May 17). Retrieved from

[Accessed: March 28, 2024]

"The terms offer and acceptance." freeessays.club, 17 May 2016.

[Accessed: March 28, 2024]

freeessays.club (2016) The terms offer and acceptance [Online].
Available at:

[Accessed: March 28, 2024]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: March 28, 2024]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: March 28, 2024]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: March 28, 2024]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: March 28, 2024]
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