How could Culture Affect International Business - Essay Example

How culture affects international business Introduction According to Hofstede theory, a key to success in most business internationally is first and foremost to understand the role of culture in the global business. Whatever a sector one operates in, cultural diversities will have a significant impact on the profitability (Hofstede, 2000). Improving one's level of knowledge of global cultural diversity in business can help in building international competencies and enabling one to gain a competitive advantage. Nevertheless, on one hand where it is imperative to be aware of cultural diversities of diverse countries, and on the other, it is also hard to understand every single feature of each country’s organizational culture. Thus, one should understand the key aspects that have a direct influence on business. In such an elaborately complex and diverse country as India, it is very difficult to convey generic conclusions that may be used by those transacting business there. Religion, regionalism, language, as well as the caste system, are all the factors that should be taken into consideration when doing business in such a country like India. Etiquette, behavior, and approach are modified depending on the occasion and context in which they are being addressed as well as whom you are addressing (David C. Thomas, 2014). Communication Hofstede's cultural dimensions theory is a framework that relates to cross-cultural communication (Hofstede, 2000). Methods of communication may vary among from one culture to the other. Some put emphasis on simple and direct methods of communication; others may rely most on complex and indirect methods (Marie-Joëlle Browaeys, 2011). The latter may use figurative forms of speech, circumlocutions, facial expressions, gestures as well as other forms of body language. In some cultures that value openness and directness, like the German, one expects to receive a vibrant and definite response to his proposals and questions. However, in other cultures that depend on indirect communication, like the Indians and the Japanese, reaction to your questions and proposals may be interpreted seemingly vague. What you may not receive at the first meeting is a definite rejection or commitment (Hofstede, 2000). The confrontation of these communication styles in the same negotiation may lead to abrasion and friction. For instance, the indirect ways the Indian negotiators express disapproval have always resulted to overseas business executives believe that their proposals will still be considered when in the real sense the Indian side have rejected them. This therefore confirms the application of Hofstede's cultural dimensions theory. Transacting business When transacting business in India, meeting etiquette involves a handshaking. Nonetheless, Indians themselves make use of the Namaste (David C. Thomas, 2014). This is the situation where the palms are brought together at the level of the chest with a slight bow of the head. Indians use the Namaste as a sign of their understanding of Indian etiquette. Similarly, names speak a lot about an Indian's background. For instance, a Singh will often be a Sikh. The suffix "-jee" is a sign of a very high caste. Therefore, when addressing an Indian especially whom you know personally, it is good to use proper formal title, whether Doctor, Professor, Mr., Mrs., or when you are not sure of their real names then Sir or Madam will be better. When transacting business in India, business cards must be exchanged during the first meeting. It is the best idea to have it interpreted on one side into Hindi, more so, as a sign of dignity and respect as opposed to the linguistic requirement. One has to be sure to receive and give with his/her right hand. A business partner wishing to seal a quick deal has to win this culture so as to meet his business obligations. Furthermore, transacting business in India mainly involves building strong relationships. In most cases, Indians only strike deals with those they know and trust - even at the cost of well-paid deals. It is very important that a strong working relationship is established with any potential partner (David C. Thomas, 2014). This take place on the business level, i.e. showing strong business expertise. Meetings and Negotiations According to David C. Thomas, (2014), he argued that there is no doubt that all business meetings should be planned in advance. This has to be done in paper and confirmed by phone. This is a business culture that Germans and Indians strongly believe in. Punctuality is valued in business meetings and negotiations. When attending a meeting with an Indian, for instance, enter the meeting and greet the most senior figure first. Meetings must always commence with some discussion. This is part and parcel of the 'getting to know you' process. Some of the auspicious topics of conversation are the fortunes of the Stock Exchange, latest business news or cricket. In such meetings, avoid talking about personal issues. Germans also value time most, and any wastage in meetings is regarded as a failure. If a meeting in scheduled to start at a certain time, they only give you up to five minutes late, before they leave for other businesses. If your business transactions in India include negotiations, it is advisable to bear in mind that they are slow. When trust has not been fully established, then it is good to concentrate efforts on establishing rapport. Usually, decisions are made at the highest level. If the Director or the owner of the company is absent, the chances are that these may be early stage negotiations. The Indians do not base their business decisions only on empirical data, statistics or exciting PowerPoint presentations. They mainly use their intuition, faith and feeling to guide them. Therefore, always be patient when striking business deals with them and show good character and never exhibit anger or frustration (Marie-Joëlle Browaeys, 2011). Business etiquette According to Hofstede's theory, Values and attitudes are the basis of every country’s culture and are the building blocks for mounting business culture. Cultural influences, attitudes, and behavior differ within and across countries and within and across customs, and are strongly rooted within communities. In several respects, Germans are considered to be the masters of planning. This culture prizes forward thinking and knowing what should be done at a specific time on a particular day (Hofstede, 2000). German thought procedure is very thorough, with each facet of a project examined in detail. Careful planning is a sense of security in one’s personal and business life. Most facets of German living and working are well defined and planned by structure. Rules and regulations help people to understand what is expected of them so that they can plan their daily routine accordingly. They believe that maintaining definite lines of demarcation between places, people, and things is the best way to lead ordered and structured life. In their business culture, this is reflected in the observance to set business rules and regulations resulting in, a low level of flexibility and impulse in values and attitudes. Therefore, when transacting business in Germany, it is important to appreciate the fact that business etiquette is very importance to your fellow German. Germany is a country that is toughly individualistic and requires the utmost respect always (David C. Thomas, 2014). Conclusion Having all said and done, it is worth understanding cultural diversities of different countries so as to work effectively in business. Apart from the native culture, a business person should be aware of the culture of his/her business partners and accord the required respect. Success of the business in mainly involves building strong relationships. In most cases, business partners only strike deals with those they know and trust, and this comes with respect to the culture. Whatever a sector one operates in, cultural diversities have significant a direct impact on the profitability. Therefore, improving one's level of knowledge of international cultural diversity in business helps build international competencies and enable one to gain a competitive advantage. Bibliography David C. Thomas, M. F. (2014). Cross-Cultural Management: Essential Concepts. NY: SAGE Publications. Hofstede, G. (2000). Culture’s consequences: comparing values, behaviors, institutions, and organizations across nations. Thousand Oaks: Sage Publications. Marie-Joëlle Browaeys, R. P. (2011). Understanding Cross-cultural Management. Prentice Hall: Financial Times. Read More