Cultural Differences Impact on Business - Term Paper Example

Running head: CULTURAL DIFFERENCES’ IMPACT ON BUSINESS Abstract This paper looks at culture and how it affects businesses all over the world. In business people from different cultures come together to make money and through this conflict may arise. Using Unilever Company, a reputed company in the manufacture of food and body products, that has a branch in a good number of companies, this paper has looked at the challenges Unilever faces in regard to cultural differences and how they are coping with them. Using several cultural theories and terminologies, this paper has given possible scenarios that may arise due to possible cultural differences and how they may be dealt with. Although this paper is written in detail, the topic is extensive and requires more research in order to be covered exhaustively. Keywords: culture, monochromic, polychromic, high and low context, culture fluency Business has been growing tremendously over the last few decades through the internationalization of operations. Over time, the economies of countries around the world become increasingly integrated as technological advances speed up the progress of migration of people across international borders, the flow of capital, and the trade of goods and services. Sophisticated communications and transportation technologies is probably the biggest factor that has led to internationalization as it is now easier to make business deals across borders. Internalization offers increased profits to companies and nations, it also has its pitfalls including differing expectations, cultures and values, legal systems and standards of living as well as unexpected global cause-and-effect linkages (Harrison 2002). This paper shall look at the need for international companies to understand and adapt to local cultures and the challenges they may face while operating in a diverse cultural environment. Vedina (2001) states that the way of life of a people, their beliefs, their values, and their generally accepted behaviors passed on from generation to generation through communication and imitation is unique to every community. Diversity of culture has to be dealt with squarely for any international business to prosper and develop. Although the internet has managed to break down communication barriers, cultural differences remain the biggest hurdle for international business to overcome there is no specific way to deal with people from ant specific culture. When international businesses open new branches in new countries, they are expected to recruit members from the respective companies, manufacture brands that suit the needs of that community and set prices that match their living standard. These are just some of the issues that international companies have to deal with when it comes to cultural diversity. Tackling them may be hard but definitely not an impossible task because with time the employees of the particular company will adjust to the new community and learn to relate with them. Unilever is an international company that was started in 1930 although the companies that merged to form it were established well before the start of the 20th century. The earliest can be traced to 1890s when William Hesketh Lever, founder of Lever Bros manufactured his revolutionary new product, the Sunlight Soap that continues to be in existence up to date. The beginnings for Unilever, back in the ‘3os were particularly stormy especially because of the Great depression and the second world war. Although this may have curtailed business operations, Unilever still managed to diversify its market. In the 1960s, the world’s economy began to pick up and with it Unilever developed new products an opened up new braches the world over. The 70s also witnessed a decline in the growth of business especially in the fast-moving consumer goods (FMCG) sector due to inflation. During the 1990s, Unilever is named one of the biggest companies but they decide to focus their energies on particular products, in the process withdrawing from manufacture of approximately two thirds of their brands. To date Unilever has four hundred brands in over 70 countries and thousands of employees thus it is the perfect example for a multi national company that can be used in this assignment. In business, time remains one of the biggest determinants of its success and development. ’Time is money’ as the old age goes has been proved right as years have progressed. Business people all over the world have mentioned time and how it is handled to be the key aspect that has determined their operations in the different countries they have visited. According to Harrison (2002) time can be classified into two broad categories depending on how particular people handle it; clock and event time. If people in a certain culture behave according to clock time then they are more cautious abut scheduled appointments and easily become irritated if the specific time demands are not met. Unilever managers in America a re provably tougher on the employees who get to work to work late as compared to their counterparts in Africa. If a meeting is planned at 9.00pm in America, the meeting will take place at exactly that time and the attending members should be settled and ready to work by 9.00pm whereas in Africa people will start walking in through the door approximately ten minutes after 9.00 pm and this is generally acceptable. It would therefore be hard may be impossible, for an American business man visiting Africa for business related purposes not to get annoyed when the Africans pay attention to event time as opposed to clock time. In some countries social relationships take a back seat after work whereas others spend equal amounts of energies on each and still in others social relationships are better placed than work. Unilever workers in Germany may spend a lot more of their time doing serious business, those in Kenya an almost equal amount of time socializing and getting to know each other better. Hurley (2010) argues that social interaction may help especially in case of delegating duties but work may take a lot longer to complete. The African culture emphasizes on the need for social togetherness and helping one another in times of need. In the same light, when one arrives in the office in the morning, Africans may take a lot longer greeting each other, asking about their respective families and other such pleasantries while in Germany a mere hallo without as much as a handshake is appropriate. A German working in Africa could easily be regarded as anti social, impolite and rigid while an African working in Germany is termed lazy and time wasting. The business world is deadline oriented and it puts a lot of emphasis on speed as well as accuracy. Americans have taken a polychromic approach to time as opposed to traditional Asians who took a monochromic approach to time (Robert Harris & Moran, 2007). The typical American worker takes their lunch as they check e mails, make important phone calls and maybe even drive to business meetings. In contrast, the traditional Asian worker performs one task at a time, taking an almost ceremonial approach to each task. They will eat their lunch at some fancy restaurant while enjoying small talk without taking into account the amount of work awaiting them back at the office. A manager from Unilever may have a hard time adjusting to the way things in America are done especially as pertains tasks. Americans will categorize his mono chromic behavior as lazy and incompetent while to him, polychromic behavior will seem disorganized and probably too tasking. Dressing is a large proponent of the physical manifestation of culture. According to Ditzel (2007) through dressing, one can easily determine a person’s social status, their age, gender and economic status. In the more developed industries, a good example being United States of America, dressing is more relaxed creating a friendlier environment. The IT department of Unilever offices in Washington DC, most of their employees is young people fresh in the new market. For this reason then, jeans and casual wear are a common scenario within the offices except on days when clients are coming in or during meetings. According to them it is the output that matters, and they are more fruitful in a relaxed environment than in a serious one. In comparison, the young people at the offices in a third world country, take their dressing vey seriously because they dress to impress as this has been instilled in them. They are more likely to be dressed up in complete suits and ties in order to match up to their employers. The development and wide spread use of technology in the developed countries has freed people from the burden of manual labor. This has brought about more concern for a better quality of life and subsequently the need for holidays and breaks from work. In Britain for example, Unilever gives longer holidays to their employees than their counterparts in America. People desire a better standard of living and this has compelled them to work harder and for longer hours in the States in order to earn enough income to buy luxuries. People are also developing the culture of working harder and earning more while still young in order to retire early and more comfortably. Unilever is more likely to have a better retirement plan in Britain than America because Americans spend most of their time working intensely and hardly ever take early retirement. Working across borders does have its disadvantages especially when it comes to mingling people from different cultures. Differences among people may more often than not cause conflict among them if the differences are not handled properly. In some cases, members of a particular culture, it may lead to the false assumption that all other cultures are inferior to others without realizing that they are using the practices of a their culture as a universal yard stick. An ethnocentric individual will always judge others on the basis of their culture relative to his in regard to their religion, language, behavior and customs (Vedina, 2001). An employee from Europe if transferred to Asia may criticize Africa for their lack of time consciousness as well as their friendly behavior and social cohesion while the Africans may in return call him unfriendly and anti social. The European may then accuse the Africans of under development citing their lack of time consciousness as the biggest contributor and proceed to copy their way of life if the Africans intend to develop. Business men are also human beings and they too experience feelings of anxiety, disorientation and confusion when they are forced to operate within a culture they are not familiar with. Culture shock is a common scenario especially when one has trouble assimilating into the new culture since one can not differentiate what one is supposed to do and what not to do (Harrison 2007). If for example a Unilever employee from Asia is taken to America, they may find it hard to cope with their liberalism especially as concerns their mode of dressing and religious affiliations. In America, they may dress less decently an a bit informally as compared to their rigid way of doing things. The Asian will be incompetent and much slower in performing his duties as compared to when he was back in familiar grounds at home. Adjusting to the ways of his new neighbors may take a while resulting in the general slowing down of business. According to trends in the contemporary world, although culture will remain a major part of the business world, people will eventually learn to accommodate all kinds of culture. However, as of now differences in culture are taken a bit seriously in some countries thus conflict is bound to arise. The best way to deal with cultural differences and in the process avoid cultural conflict is through getting Cultural fluency (Hurley 2010). Understanding other cultures, how they work their identities in society and how they are intertwined with our relationships during conflict and peace. Before relocating to a new country with a different culture, one should learn all that they can regarding their new culture through the internet, orally and any other literature in existence concerning the culture they are about to get integrated into. This way, it is much easier to adapt to the new changes and one is ready for any extreme changes hence avoiding culture shock. Ultimately, cultural fluency ensures the smooth running of a business, more efficiency as well as closer interaction with the customers. Cultural conflict and misunderstanding is majorly brought about by communication or lack there of. Harrison (2007) classifies communication into two broad categories; high- and low-context communications. In high-context communications, most of the message is not relayed directly in words, instead it is conveyed through the context surrounding it. In this context, non verbal cues and signals take a front seat whereby the speakers avoid directly spelling out the message as it ought to be. The physical settings, the environment, the tone of voice used as well as shared understanding are relied upon to convey the meaning. In high-context communication, interaction is formalized and some what rigid with the speakers following some rituals of saying what they should. The Japanese are well known for this as they avoid confrontations and would rather be polite in order to save face. A manager of the Japanese branch of Unilever would not directly fire one of their employees regardless of how incompetent they are. Instead he would keep hinting that they should leave their job using such phrases as ‘why don’t you look for greener pastures?’ In contrast, low-context communication lays emphasis on directness as opposed to politeness. In low-context communication, verbal communication is specific and the meaning is taken literally with little or even no signals used (Harrison 2007). Low context communication increases the chances of misunderstanding but it also intensities conflict in the office because it is more confrontational and gives way for arguments. Low-context communication is mostly observed in the United States of America where people are in the habit of saying exactly what is on their minds without batting an eye lid. An employee in USA is more likely to face their colleague when their space is invaded and this will may often than not result in a fight. General understanding of these two types of communication will ease one’s burden of interacting in a new environment hence adaptation will be easier and quicker. Culture will remain an integral part of business as long as business is conducted by human beings because they are different and have different perceptions on every aspect of life. Today, globalization has taken the front line in business especially with the rise in internet connections hence people from different parts of the world who have been socialized differently come together with the aim of making money. Conflict and misunderstandings can therefore not be avoided but if handled properly they can easily be solved. All business people need to find similarities in their differences and through the one thing they have in common then their differences are overshadowed. The too need to realize that everybody is unique and special and stereotyping anyone according to culture is not only immoral but also unjust. Culture is multi faceted and no one person is a staunch follower of one particular culture and ignorant of the rest. Respecting everyone’s cultural beliefs and practices, understanding that people behave as they do because of their social backgrounds and accepting the differences will go a long way in ensuring peace and economic development References Ditzel, U. (2007). Cultural differences in business life - Understanding German and American business culture.GRIN Verlag Publisher. Harrison, L.E. (2002). Culture matters: How values shape human progress. 4th edn, Basic Books Publisher. Hurley, L. The importance of understanding cultural differences in business. Retrieved August 23, 2010, from http://www.helium.com/items/657179-the-importance-of-understanding cultural-differences-in-business. Robert,T. M., Harris R.P., & Moran R. (2007). (7th Ed) V.S.Managing cultural differences: Global leadership strategies for the 21st century. Butterworth- Heinemann Publisher Vedina, R. (2001). Cultural differences in business: Russian managerial values. R. Vedina Publisher. Read More