How Does Culture Affect International Business Marketing Essay

how culture affects business

1. Introduction

With the recent increase in the pace of globalization, culture has gained further introspection than before, especially the role player by culture in the performance of a new business unit in a foreign region or mergers and acquisitions in businesses. Some of the key factors giving rise to an increased networking amongst various cultures would be due to advancement in telecommunications and IT industry. Due to this high formation of global alliances there is more cross cultural activity which makes it important to understand the critical nature of culture in international business. Culture has been cited as one of the main reasons which could either help the new company settle well in the region or result in losses like internal conflicts etc.

In this essay we would be demonstrating the effect if culture through a case study of international business and analyse existing literature which focuses on culture and international businesses. According to Geert Hofstede, Culture is the collective programming of the human mind that distinguishes the members of one human group from those of another, hence it can be termed as a result of set of values within a community. Edgar Schein defines it as a deep level of basic assumptions and beliefs that are shared by members of an organisation that operate unconsciously and define in a basic 'taken for granted' fashion an organization's view of its self and its environment.

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Culture is a collective behaviour which is accepted as a common standard within groups and its basic need to communicate within themselves at various levels (Brown, 1995). This would mean the various modes of communication not limited to language but actions and social communication techniques through specific set of actions which may be identified by that group itself. Some example of it would be:

A community based local language, for example specific description of foreigners.

Religious or Community Rituals like joining of hands in Asia tofor greetings.

Paintings depicting historical information of the region.

Dynamics of power and authority within organisation like the parental management seen in Japan compared to US culture which is more focused on performance than age of employees.

According to research done by Ember and Ember, 1973 on culture, they state that it is a part of various social structures and it helps in providing a common direction to a group of people thereby leading to formation of social dynamics, power structures and overall roles in the community. Therefore it implies that if the nature of culture has a major impact on social dynamics of that region, leading us to conclude that even though there may be similar businesses running in two different parts of the globe, due to a different culture there may be a different operational structure of

the same company in form of flat or bureaucratic management or power control of an organisation. This also means a separate set of expectations from the employee perspective in different regions.

Given such an important role of culture, it becomes important for business operating or planning to operate in a different culture to utilize the impact of culture at macro and micro level to their advantage through an understanding of various places where culture plays a role in the new business.

Understanding the micro level culture of all regions globally may seem a hard task due to the amount of data involved and hence culture cannot be measured region specific but there can be certain assumptions taken at a broader level to group certain regions or cultures in a similar set of characteristics (Ember & Ember, 1973). Such a type of comparison would be feasible for understanding the link between workplace culture along with social culture and the overall perception of employees at a generic level (Pearlin & Kohn, 1966).

For a business operating globally, culture may have impact at various levels and departments. Some of the direct impacts which culture may have on an international business would be understanding the consumer behaviour of the new region which in turn may lead to higher sales. Since there may be a different management style in the new country of operation for the company, adhering to local culture within reasonable limits to set up employee management strategy would play a key role in the overall performance of the business.

Further, companies need to understand that the overall process of culture is continuous and may vary according to different regions according to their development. While some regions would have a stable culture due to either lack of development or self development without foreign intervention, there may be other regions with a gradual shift in culture or fast paced change in culture due to a new group formation or high influence of foreign culture due to modernization and development experienced in the new region.

Some of the key elements of culture could be classified as

1. Social structure - The historical influence or existing social structure forms a key aspect of whether a culture is masculine or feminine etc. For example. In the case of capitalistic countries the social structure is based more on self achievement while it may be contrary for socialist countries like the UK and hence a difference in culture.

2. Religion - Regions which have specific policies on following religion may have a deep impact on culture. Countries in Middle East which strictly follow Islam as a religion would have a cultural which follows the religious teaching of it. This may mean a culture with less influence of alcohol etc.

3. Language - Common language like in UK would mean the culture has some level of standardization compared to a country like India where culture varies due to different language in every region.

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