Implications of Differences in National Culture for International Business - Assignment Example

?Implications of Differences in National Culture for International Business Introduction When business are involved in international activities, a range of significant matters takes place that do not have similar uncomplicated answers as are made available by carrying out business in a single location of legal influence and jurisdiction. Due to the tight spot that is progressively afflicting the large global companies, international business ethics has ascended to facilitate in attending to these oppressive subject issues. International business ethics makes an effort to contend with inquiries of what to accomplish in circumstances where ethical morals are scrapped and become at odds in consequence of different and, oftentimes, opposing cultural practices. Negotiations in the international business platform can be deliberated from a wide or a restricted sense: negotiations in a wide sense comprise nearly all, if not all, forms of "consultation, communication, discussion, exchanging of views, reaching a consensus, and formal negotiations" (Chang, 2006). Those which are in a restricted sense comprise the undertakings that are accomplished in locations that are openly or officially arranged for negotiations (Chang, 2006). The academic sphere of discussions gained differing stance towards the relationship between cultures and the manners of negotiations. A few people are certain about the fact that negotiations have turned out to be a collective and shared behaviour, and notwithstanding the cultural upbringings of those involved in the negotiations, and in the international business in general, the manner of negotiations is achieved inside the pre-set structure. Nevertheless, there are still those who are positive about the fact that negotiations in different nations are divergent from each other in that they manifest manifold and, more often, conflicting forms, and are basically diverse. To a wide-ranging expanse, varying cultural backgrounds result in varying kinds of organizations. This relationship is not complete and conclusive, nonetheless, and labelling, categorizing should be evaded (Liu, 1996). To appreciate the influence of national cultural difference on multinational business and negotiations, as well as in terms of the decision making process, a multi-cultural study and the varying national cultural strengths and weaknesses can be employed in order to project a differing countries’ potential behaviours in negotiation process, and to recognize the cultural factors that may impact the decision making process (Chang, 2006). It is normally considered that multicultural investigations are concentrated on particular occurrences and deliberate the parallels and differences among countries. While this type of investigation may have limited potential in terms of the selected nations or particular behaviours on international business negotiations, it remains to hold a considerable importance in terms of facilitating individuals to understand business negotiations in a global perspective considering that it touches on different values, behaviours, and decision making models of individuals coming from different nations (Ghemawat & Reiche, 2011). For instance, China and the United States have absolutely varying styles in carrying out a negotiation owing to: (1) Americans have diverse personalities in so far as the geographical divisions of Americans are concerned: “southern, eastern, and western regions are like different worlds” (Chang, 2006), as compared to (2) China’s extremely analogous, communism-inspired personality traits. National Cultural Differences and International Business Negotiations Regardless of the nature of the discussion of the personality traits as influenced by one's national culture, it is quite thought-provoking and challenging to profoundly comprehend and figure out international business negotiations considering that it involves manifold complex factors. Aside from the cultural factors, there are also other important things that need to be taken into consideration such as "politics, international economy, governmental and administrative system, the society, and individual ideas" (Chang, 2006; Salacuse, 1988), which makes international business negotiations more complicated and perplexing as compared t national business negotiations. In dealing with national cultural differences, it is not enough to simply recognize the differences among people coming from different countries, but it necessitates an understanding of "deeper-level assumptions and values that explain why certain behaviours are more appropriate than others" (Ghemawat & Reiche, 2011). Hofstede’s Cultural Dimensions Theory The most extensively referred structure for classifying national cultures is a theory developed by Geert Hofstede: the Cultural Dimensions Theory (Hofstede, 1980). The information used in order to Hofstede to develop such a strong and persuasive theory pertaining to the pertinent cultural value dimensions hailed from the employees of IBM company, an multinational company, after assessment has been carried out between the from the year 1967 to 1973, which involves approximately fifty cultures (Ghemawat & Reiche, 2011). Among the various dimensions of the theory: power distance, individualism or collectivism, uncertainty avoidance, and masculinity or femininity, the most significant dimension that really applies to relationship between national cultural differences and international business is power distance. This particular dimension contends with the level to which cultures adopt and uphold the reality that power and authority is dispersed unequally and haphazardly within any known society (Hofstede, 1984). For example, constituents of a highly power distance country such as Malaysia adopt differences in rank, position or status and are required to display reverence and respect to those belonging to higher status. Differences in the perspective of status among countries in so far as international business is concerned would most likely take a negative effect on the part of the highly power distance nation in that it would create a sense of inappropriateness of cultural upbringings. The Importance of Ethics in International Business There have been various international business ethics dialogues that are taking place, which believe the query of how to act or perform in the national or international platform. The contention supporting the idea of behaving according to the accepted social customs and cultural practices of the host country displays reverence and respect to people living within the host country, in which the enterprise is carrying out its multinational undertakings. Generally, business behaviour is obviously connected to the “general standards of the society” (Webley, 2001). In the advancement and globalization of marketplaces, it is very important for corporations, especially multinational companies, to recognize and become aware of the cultural differences and to preclude the lapse of “adopting ethnocentric attitude” (Enderle, 1999). Bibliographic References Chang, L 2006, 'Differences in business negotiations between different cultures', The Journal of Human Resource and Adult Learning, November, pp. 135-140. Enderle, G 2001, 'International business ethics: challenges and approaches', International BUsiness Ethics Review, vol. 4, no. 1, pp. 5. Ghemawat, P & Reiche, S, National Culture Differences and Multinational Business, IESE Business School, Barcelona, viewed 4 April 2013, Hofstede, G 1980, Culture's consequences: International differences in work-related values, SAGE Publications, Beverly Hills. Hofstede, G 1984, Culture's consequences: International differences in work-related values, 2nd edn, SAGE Publications, Beverly Hills. Liu, B 1996, 'Negotiating Bible', Business Weekly Cultural Publishing. Salacuse, JW 1988, 'Making deals in strange places: A beginner's discovery to international business negotiations', Negotiation Journal, vol. 4, pp. 5-13. Webley, S 2001, 'The status of business ethics: A UK perspective', International Business Ethics Review, vol. 4, no. 1, pp. 1, 6. Read More