Business across Cultures - Research Paper Example

Introduction When moving into new markets, it is always a challenge for the organizations to actually understand and perform in the market. It is always critical for global organizations to actually locate the opportunity, understand the risks of entering into the market and define market entering strategies in order to perform according to the expectations. The spread of globalization has allowed international businesses to grow and expand into different markets. The forces of globalization has overcome political, regulatory as well as cultural barriers allowing organizations to tap into new opportunities and also achieve greater market access. However, expansion into global markets also brings with it certain risks which organizations have to manage in order to successfully build their presence into new markets. (Dlabay and Scott, 2011) International organizations, in order to successfully enter into any foreign market, has to actually understand the social and cultural context of the market, its political and economic systems along with further understanding the regulatory environment of the market. What is also critical to understand that global organizations have design and develop their strategies in a manner which can help them to manage a trade-off between the risks and returns and ensure that all the risks are identified and assessed strategically in order to allow the organization desired results? This paper will therefore discuss and compare Republic of Congo with that of UK in terms of its political, economic, regulatory environment etc. This paper also aims to use different theories which can be used to analyze entry of City College Norwich into the Democratic Republic of Congo. Democratic Republic of Congo- a general introduction Democratic Republic of Congo or DRC is located in Central Africa in the northeast of Angola. The total area of the country is over 2 million kilometers, less than one-third of US, with both and sea and water covering the whole area and as such country is accessible from land as well as seas. The overall population of the country is over 77 million with majority of the population belong to Congolese origin. 50% of the population is Roman Catholic followed by Protestants. Muslims and other religions also exist in the country however, overall the country is a Christian majority country. It is also important to note that over 43% of the population falls in the age group of 0-14 years old whereas significant portion of the population is between the age of 15 to 54 years. (Cia.gov, 2015) The overall rate of urbanization in DRC is 3.96% suggesting that the country is heading towards urbanization with approximately 43% of the population resides in urban areas. DRC has remained a volatile country since its independence in 1960. Established as a Belgian colony country gained its freedom in 1960 however, it remained under the dictatorial power when Col. Joseph MOBUTU. He remained as President for more than 30 years however, he was overthrown and was country subsequently faced more trouble and conflict. As such, the modern history of the country indicates that it has faced lot of political conflict and law and order situation. PESTLE Analysis Political Forces As discussed above, country faced significant political risk due to conflict with the neighboring countries along with facing the internal conflict within the country. Since its independence, it has been facing serious political trouble and remained under the military rule. Considering the overall political risks, it may not be possible for international organizations to actually enter into the market without significant political support from the government. Due to the overall conflicting situation in the region and the influence of other countries, DRC has not been able to develop economic policies through its existing political set up. (Van Reybrouck and Garrett, 2004) Economic Forces DRC is a country which is full of mineral and natural resources despite the fact that it is thinly dispersed area. With natural deposits estimated to be worth over $24 trillion, the overall state of the economy of the country is relatively poor. Considered as one of the poorest countries in the world, Congo has not been able to tap into its natural resources and resultantly country has not been able to develop itself. Major sectors in the economy are agriculture, fishing, mining and forestry. Due to overall poor conditions, the entry into the market may not be economically suitable considering the poverty and lack of purchasing power. Even if City College decides to enter into the market, it may not be able to gain many students to be enrolled into its tourism department considering the overall prevailing economic situation in the country.  (Doingbusiness.org, 2015 Social Factors Though the overall literacy rate in DRC is high i.e. over 66% however, due to poverty and other economic hardships, country has not been able to catch with the modern trends in the society. Though more than 12% of budget of DRC is spent on education however, the overall market for the higher education is relatively low. It is however, critical to note that due to rich presence of natural resources in the country there is a gradual increase of international migrants in the country. Especially there is small influx of Chinese immigrants in Kinshasa and they are setting up small family businesses in the country. This trend may indicate that the country may be hosting international immigrants and therefore international education may be more important for them. Technological factors Due to overall poverty and lack of economic development technological factors may not pose a significant risk as deployment of basic technology may suffice the purpose of any international organization. Legal factors The DRC is considered as a civil law country and its similar to the Belgian legal system. What is also important to understand that tribal law also exists within the country making it a country with relatively two different legal systems. However, the overall legal system may not pose a greater risk as compared to the political risks. Environmental Factors Since DRC is full of natural resources therefore environmental exploitation is one of the key concerns of the international organizations operating in the region specially those working in tourism, mining and forestry. Socio-cultural differences between UK and DRC Congo Considering the above discussion and overall history of the region, it is clear that the country is facing particularism wherein the overall collective response of Congolese society changed with the change in the political order of the country. It is also because of this reason that the power distance is relatively large in DRC as people believe in hierarchy and follow the strict chain of commands while at the same time strongly believing that certain individuals are above the law or accountability. However, in UK it is not the case as no one is considered above the law.  (Mitchell, 2009) The overall sentiments of communitarianism are relatively high as DRC is still a tribe based country as against UK which is a democratic country. It is because of this reason that the overall individualism is relatively low within the country and people prefer to associate themselves with the communities. It is also because of this reason there is very little separation of peoples’ personal lives from their professional lives and live under the influence of diffuse with low level of individualism.  (Trompenaars and Woolliams, 2003) Overall expression of emotions is emotional wherein employees actually express themselves. The overall masculinity level is low too because employees give more preference to helping others while performing their duties. The overall dominating values in the society are based upon caring for others and show their emotions for others with relative ease. This could be due to the more focus on communitarianism. The overall emotions for ascription also exist wherein value of employees is driven by the power position one holds within the organization at different power positions. Entry Mode Considering the overall discussion above, it is clear that to successfully operate and enter into the DRC market, the right mode of entry would be forming a joint venture. Joint venture is a temporary arrangement through which two parties enter into a new market and when the purpose is served joint venture is dissolved and any of the entities takes over the business.  (Wall, Minocha and Rees, 2010) City College Norwich therefore can open into capital city by joining hands with any local partner and establish the college. This is due to the fact that through joint venture, college will be able to understand the market in effective manner than it can enter into the market on its own. Conclusion The above discussion indicates that Democratic Republic of Congo is one of the resource rich country with significant potential for tourism. However, over the period of time, country remained politically volatile and it has not been able to sustain itself economically. Despite the fact that there is natural resources of the country worth trillions however, the economy of the country could not be put on right feet. Though there is a consistent increase of international immigrants setting up small businesses in the country, entering into volatile market may not be economically good decision. However, City College Norwich can enter into this market through forming a joint venture. References Cia.gov, (2015). The World Factbook. [Online] Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/cg.html [Accessed 10 May 2015]. Dlabay, L. and Scott, J. (2011). International business. Mason, OH: South-Western Cengage Learning. Doingbusiness.org, (2015). Doing Business in Congo, Dem. Rep. - World Bank Group. [online] Available at: http://www.doingbusiness.org/data/exploreeconomies/congo,-dem~-rep~/ [Accessed 10 May 2015]. Mitchell, C. (2009). A short course in international business culture. Petaluma, CA: World Trade Press. Trompenaars, A. and Woolliams, P. (2003). Business across cultures. Chichester: Capstone. Van Reybrouck, D. and Garrett, S. (n.d.). Congo. Wall, S., Minocha, S. and Rees, B. (2010). International business. Harlow, England: Pearson/ Financial Times Prentice Hall. Read More