To what extent can we explain patterns of business internationalization by cultural factors?

Culture is termed as the way individuals, group or a community lives. This includes their behaviors, belief

To what extent can we explain patterns of business internationalization by cultural factors?

Culture is termed as the way individuals, group or a community lives. This includes their behaviors, beliefs, skills, knowledge, values, motives and attitudes. The meanings of cultural symbols are usually learned and distributed by the society through the established institutions. Cultural factors are simply several components relating to cultural surrounding’s where business operates or consumers belong. Whereas an entity for instance an international company or a multinational corporation that runs businesses in multiple countries is referred to as international business. It is also the exchange of goods and services among businesses and individuals in multiple countries.

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There are numerous factors affecting international business: Language and communication just like any other business communication is an essential element since it determines how successful a business becomes. More so, when it comes to international business it is affected by language barriers. This is because people are from different nations and speak different languages. Communication both use of body language or orally is vital since it enables a business to know the basic needs of a consumer. An international business that understands and able to communicate different international languages benefits a lot since it conveys the right messages to potential buyers and consumers.(Mattsson and Johnston Et al 2002) On the other hand language barrier leads to serious challenges like ridicules and anger since physical gestures vary among nations.

Negotiations are another cultural factor that affects international businesses. This is because individuals from different countries handle negotiations differently. Hence chief executive officers and managers of international businesses should adapt on how negotiations are done in different countries so as to have a successful business. Most of the business people approach the process of making a deal with an attitude that one side can win or the both parties win this is due to cultural differences and personalities in most countries. It is advisable that international business persons to know the attitude of the other party.

Etiquette being a cultural factor affecting international businesses, this is how people behave towards their businesses in different countries which vary from nation to nation. Due to culture in some countries it requires business professionals to shake hands as a way of showing business etiquette. (Deresky H 2017) Elsewhere business people bow, hug or even kiss on the cheek showing etiquette. This affects international businesses because some of the business professionals see the practices as being disrespectful to other parties for example in Arab countries it is bad to attempt to shake hands with a person of higher authority while in US it is the contrary. However being aware of other party’s cultural etiquette is vital to business professionals to avoid making mistakes which can be offensive to the party.

Religion and tastes of people are other factors affecting international businesses. To begin with, religious beliefs vary in different countries. Hence international businesses should know and understand religious beliefs of different countries where they operate and respect them fully. Religion affects the values and attitude of customers on the products or services offered by international businesses. When it comes to taste culture shapes the preferences and color of different individuals. It is crucial that international business appreciates the local taste sense and customs. Taste affects international businesses since they are forced to modify their products so as to satisfy specific needs of the target consumers.

Education takes a significant role in cultural factors affecting international businesses since it transmits skills, attitudes and principles in people’s lives. Education gives the knowledge of the surrounding; it is the basis of culture and civilization. It is the instrumental in the development of values and virtues; education cultivates people and makes them capable of planning of their futures and taking the right decisions. Through education business persons are able to plan the future of their businesses and make right decisions when dealing with different parties.

The values and attitudes are cultural factors affecting international businesses. This are convictions that people have regarding what is right or wrong, good or bad, important or unimportant. (Sapienza P and Zingales 2006)Values influence culture for instance US customers believe France Champagne products are of high quality similarly Russians believe that McDonald’s cuisine is superior to their own. Also technology is cultural factor that affects international businesses; through internet people are able to transmit information by exchange of ideas and data.

There is a theory that expansively talks about cultural factors affecting international businesses. The Hofstede’s theory where Hosted conducted a study in IBM subsidiaries based on 13,000 questionnaires in 1974.(Erez and Gibson Et al 2005) From one country to another respondent are similar in all respects except nationality. Hofstede divided into four segments which national cultures differ: power distance reflecting the range of responses from various countries based on the question on how a society tolerates unequal distribution of power in institutions and organizations. The results showed that countries where power distance is short there is limited dependence between the subordinates and their superiors the emotional distance between them is relatively small subordinates easily approach and contradict their superiors.

The second dimension Hofstede examined is uncertainly avoidance which indicates the extent to which a society feels threatened by ambiguous and uncertain situations and tries to avoid by providing greater career stability in establishing more formal rules. (Sivakumar and Nakata 2001) The third division is individualism where each is supposed to take care of him or herself and the immediate family Finally the fourth dimension is the masculinity where masculine is the dominant value in society compared to feminism which is the hard temperament and the taste of money and the material goods without the concern of others or the quality of life.

In conclusion in order to succeed in international business the management should consider the variation of cultural factors for a business to succeed. This is because culture has a lot of power in the world of business which creates insensible pictures and ideas whose impacts are exceptional for international businesses. To end with when an international business fails to consider culture it loses credibility from its target customers and gets a negative response from the public.

References

Deresky, H. (2017). International management: Managing across borders and cultures. Pearson Education India.

Friman, M., Gärling, T., Millett, B., Mattsson, J., & Johnston, R. (2002). An analysis of international business-to-business relationships based on the Commitment–Trust theory. Industrial marketing management31(5), 403-409.

Guiso, L., Sapienza, P., & Zingales, L. (2006). Does culture affect economic outcomes? Journal of Economic perspectives20(2), 23-48.

Leung, K., Bhagat, R. S., Buchan, N. R., Erez, M., & Gibson, C. B. (2005). Culture and international business: Recent advances and their implications for future research. Journal of international business studies36(4), 357-378.

Sivakumar, K., & Nakata, C. (2001). The stampede toward Hofstede’s framework: Avoiding the sample design pit in cross-cultural research. Journal of international business studies32(3), 555-574.

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