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How does culture affect international business
How does culture affect international business
How does culture affect international business
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As the globalization of world markets continues unabated, American businesses seek to explore and develop capabilities to internationally source or distribute goods, services or intellectual property. The recent economic downturn has only made taking advantage of strategic opportunities through international alliances more appealing. All but the largest companies lack the infrastructure, resources, experience and management strength to enter international markets de novo. Business alliances of various forms allow companies to access the global marketplace more economically and effectively. Legal and regulatory, cultural, language and currency differences make partnering in the form of an international joint venture (IJV) an attractive option. Ted Dorman's task on taking the assignment of managing a factory to aid in globalizing the business of his company to Mexico turns out to be a lot more work than expected. This analysis strives to explore the ways in which American and Mexican business practices differ and how those business cultures can be integrated to ultimately achieving a profitable, long survived organization. Ted Dorman is viewed as a family man with …show more content…
Confronted with requests to enhance effectiveness at the new plant, Ted steers Manuel to roll out improvements, which incorporate terminating the base percentile of ineffective laborers. (Angrianwan & Rarick, 2011, pg. 6) Operations were foreseen under a dictatorship style managed. Other ideas and opinion were neither inquired on or accepted leading to a downward spiral in the plants business operations. Ted operated off the only teachings and values in which he was most knowledgeable of, the American cultures. You can't expect to have a flourishing globalized franchise if you do no have basic knowledge about the country in which you are undertaking a partnership
North America has a monochromic culture, where time is treated as a valuable resource and business tasks are needed to be completed as quickly as possible. Mexicans follow a polychronic culture, which emphasizes relationship. Thus, Alan, US sales representative in Mexico, experiences difficulties with doing business because people with whom he works get used to be late on the meetings. Moreover, his hosts want to talk about sightseeing and his family in order to establish a relationship. Mexico is also characterized by high-context culture, where communication is conveyed implicitly and considered as a means to establish relationships. Alan’s low-context culture leads to employees’ miscommunication because he counts long not job-related conversations irrelevant. In addition, family is the first priority for Mexicans, so Alan’s meetings are frequently interrupted by customers’ children who come into the office.
A businessperson needs to understand that the Mexican government plays a large part in establishing a business in Mexico. The government in Mexico influences and controls the Mexican business world, as most business transactions require a permit. Because of the strong government influence, many business practices in Mexico are corrupt. Not understanding or taking the time to learn Mexican business etiquette along with rules and regulations, one can find themselves in a compromising position. This paper intends to provide the necessary details such as customs, etiquette, mannerism, and culture of doing business in Mexico.
Firms exist with the purpose of create and deliver economic value (Bensaco et al 2010, p. 365); therefore, business that create better economic value than its competitors will attain an advantage position in market place. Companies might try to improve its sales (profit) through domestic expansion, product diversification or by internationalisation; this report will focus on the reasons of espressamente Illy to expand internationally; additionally, its sources of competitive advantage and, the analysis of three markets in which company want to participate.
He had a keen interest in working in the Pacific Rim for which he was eventually rewarded a position of Chairman on Board (COB) at the Factory in China. What we noticed is that due to Control's relative inexperience and lack of understanding of joint venture, James was recalled only after completing one third of his contract length, to be replaced by a relatively inexperienced employee from Singapore (Jimmy Chao). Controls Asia Pacific, in doing so, ignored the fact that they might threaten the success of the joint venture. This case shall try and analyze what factors may have caused this pull out to occur, what may be its consequences, and what we feel should be done, in order to reinstate trust and confidence to make the joint venture a success. Adaptation, Acceptance and Experience.
The importance of culture in International business today cannot be underestimated and it is imperative that attention is paid at strategic, organizational and the individual levels. The “Blue Ridge Spain” case elucidates these at all three levels. My analysis of this case is from the perspective of the Spanish corporation, Terralumen S.A. National culture is the shared implicit beliefs and tacit values that truly differentiate one cultural group from another. I will be using Geert Hofstede’s frame work to deconstruct this case into its separate dimensions.
In the article, Cultural constraints in management theories, Geert Hofstede examines business management around the globe from a cultural perspective. He explains how he believes there are no universal practices when it comes to management and offers examples from the US, Germany, France, Japan, Holland, China and Russia. He demonstrates how business management theories and practices are very much subject to cultural norms and values and by understanding these differences, it can give managers an advantage in global business practices.
15. Hill, Charles W.L. International Business: Competing in the Global Marketplace. New York : McGraw-Hill, 2007.
Gringo Management, South of the Border. As companies grow and put heavier weight on the importance of globalization, the need for companies to partake in cultural learning becomes more and more vital. With the various cultures worldwide, companies will find it highly beneficial to not only learn what makes the people within these cultures tick, but more importantly, apply it to their business strategies. In order to successfully manage, merge, or trade with other countries, one must understand how cultures differ from each other and what steps they need to take to be successful when conducting business with these cultures.
Daniels, J. D., Radebaugh, L. H., and Sullivan, D. P., (2011). International Business: Environments and Operations. Prentice Hall, Upper Saddle River, New Jersey.
“Red is a positive color in Denmark, but represents witchcraft and death in many African countries,” (Understand and heed, 1991, p.1). Simple understandings, such as this one, can make the difference in a business’ success or failure in a foreign country. Various countries have different customs and beliefs that need to be accustomed to when business are to be successful. American businesses especially have difficulties with this concept. “At times in the past, Americans have not had a good track record of being sensitive to cultural distinctions,” (Understand and heed, 1991, p.3). Perhaps this is because America is made up of so many different cultures that American people have become so used to easily adjusting to each other’s differences that they forget that other cultures are not as flexible. Today, more American’s are becoming more sensitive to the differences of other cultures. This sensitivity and understanding has come with a price, after a long string of business failures. It is not until a business fails miserably in another country that they see the adjustments that should have been made in order for their success to be a possibility. With an understanding and sensitivity to the customs and beliefs of other cultures, it is possible for successful businesses that have originated in western cultures to also be successful in foreign countries as well.
Miroshnik, V. (2002). Culture and international management: a review' The Journal of Management Development 21(7): 521-544
Corporate culture is the shared values and meanings that members hold in common and that are practiced by an organization’s leaders. Corporate culture is a powerful force that affects individuals in very real ways. In this paper I will explain the concept of corporate culture, apply the concept towards my employer, and analyze the validity of this concept. Research As Sackmann's Iceberg model demonstrates, culture is a series of visible and invisible characteristics that influence the behavior of members of organizations. Organizational and corporate cultures are formal and informal. They can be studied by observation, by listening and interacting with people in the culture, by reading what the company says about its own culture, by understanding career path progressions, and by observing stories about the company. As R. Solomon stated, “Corporate culture is related to ethics through the values and leadership styles that the leaders practice; the company model, the rituals and symbols that organizations value, and the way organizational executives and members communicate among themselves and with stakeholders. As a culture, the corporation defines not only jobs and roles; it also sets goals and establishes what counts as success” (Solomon, 1997, p.138). Corporate values are used to define corporate culture and drive operations found in “strong” corporate cultures. Boeing, Johnson & Johnson, and Bonar Group, the engineering firm I work for, all exemplify “strong” cultures. They all have a shared philosophy, they value the importance of people, they all have heroes that symbolize the success of the company, and they celebrate rituals, which provide opportunities for caring and sharing, for developing a spiri...
Oesterie, M. J., Richta, H. N., & Fisch, J. H. (2012). The influence of ownership structure on internationalization. International Business Review, 22(1), 187-201.
International Marketing, at its simplest level, involves the firm making one or more marketing mix decisions across national boundaries (Jobber, 2010). At its most complex level, it involves the firm establishing manufacturing facilities overseas and coordinating marketing strategies across the globe (Jobber, 2010). There are various reasons for going global, some of which are: to find opportunities beyond saturated domestic markets; to seek expansion beyond small, low growth domestic markets; to meet customers’ expectations; to respond to the competitive forces for example the desire to attack an overseas competitor; to act on cost factor for example to gain economies of scale in order to achieve a balanced growth portfolio. The methods of market entry that could be used are indirect exporting (for example, using domestic –based export agents), direct exporting (for example, foreign –based distributors), licensing, joint venture and direct investment. I found this par...
Hofstede, G . (1983). The cultural relativity of organizational practices & theories. Journal of International Business Studies ,14 (2), 75-89.