Does Business Culture in Europe Influence the Culture in Asia - Research Paper Example

Does Business culture in Europe influence the culture in Asia? INTRODUCTION Culture plays a pivotal role in influencing the systems of control and coordination of economic ties. Despite the fact that the topic concerning culture is a taboo in many social sciences today, enough researchers have downplayed this notion by giving considerable reason that makes people believe that culture shapes the nature of multiple business systems around the world. The control that culture has, nevertheless, is complex and subtle. It is therefore important to understand culture before taking a position on the impact of diversity in culture in the various global markets, in this case European and Asian markets. Culture is a societal component that defines the similarity or agreement between a people living within the confines of that society. Moreover, culture entails a shared understanding concerning specific issues, maintains similar significance on how the society handles certain matters and similarity in behaviours or understanding on how to make life worthy and comfortable (Fain & Wagner, 2014). Socialization, as envisaged in cultural beliefs, interprets and redefines the essence of social behaviour, in the process attaching critical value judgement. Over time, religions have taken a bulk of the societal order that keeps evolving, with its incorporation being more rampant in legitimate authorities and political systems. Therefore, cultural diversity influences the nature of doing business across borders. LITERATURE REVIEW This paper aims to explain the understanding of business practises in Asia in comparison to the cultural nature of the European markets. It is important to take a dynamic view of business, hence explore it in several ways including setting up the business and highlighting the success achieved upon founding the business entity (Chen, 2010). In addition to that, cultural diversity has been and will always be one challenge of contemporary management. The diversity in entrepreneurial behaviours between the Asian and European cultures highlights the difference between the social beliefs of these two cultures in relation to the success of a business. The religious, linguistic and social diversity obviously affect the success of entrepreneurial activities. Through this criterion, the paper will enlist the environmental constraints that make entrepreneurship and business different in the two regions, and how small scale firms in the two regions manage to survive despite the constraints relating to resources in these environments. In essence, the paper aims at explaining how the European business culture influences the culture of business in the Asian markets. In previous readings, the involvement of the Europeans into the Asian markets has provided positive results in the Asian markets. According to Xina Yuan (2011), the productivity and innovation experienced in these markets is partly due to the involvement of economic ties between the Europeans and the Asians. Therefore, the European business culture influences the Asian business culture in both positive and negative ways. However, researchers in this field have not taken into consideration the impact that global business has on the growth of the Asian economy. Despite having the common notion that the Asian value their cultural beliefs strongly, many past researchers have failed to address the issue of globalisation in Asia. As the continent that houses the world’s strongest economy, many foreign investors have to conform to the Asian cultural tendencies before experiencing guaranteed success. Nonetheless, the cultural diversity at the international business workplace occurs due to the obligation for businesses to embrace diversity as a means of survival in the global business arena (Nikolova & Simroth, 2013). Therefore, the paper highlights the impact that globalization has on the cultural diversity of both the Asian and European markets. RESEARCH QUESTIONS AND AIMS The main questions that define this paper are based on the cultural diversity between the European and Asian business cultures. It entails how to understand the differences that exist between the European and Asian markets. The paper also unravels what it takes to break or make a business deal in either markets, and how to rate individual cultural intelligence. The meeting etiquettes of the Asian and European businesses are discussed, with inclusion of the social etiquette, rapport building and signing of contracts and agreements. METHODOLOGY Consequently, the paper draws its arguments from books and journals that have a clear in depth analysis of the different cultural behaviours in the Asian and European markets. The collection of data is from the books, while the journals provide an analysis of the data provided from these books. The discussion and conclusions are based on the weight of each argument. DISCUSSION The success of developing economies all around the world is relatively linked to entrepreneurship. The activities involving entrepreneurship are a recipe for growth of small businesses that are the pinnacle of most developing countries. The Asian region constitutes a large variety of cultural backgrounds. The ethnicity and language act to illustrate the movement of people across the continent, leading to the establishment of the world’s axial presentations of religions. The religious aspects of the Asian continent affect the societal behaviours with some religions being more constraining than others are. The most constraining religion in the Asian culture is the Islam which characterises itself with prescribed lifestyles and extensive domains in public life. In Europe, however, religion does not play a critical role in business. The society believes in practical rewards for the individual input in the business. In certain businesses however, religion is a concern as per the requirements of the founders. Nonetheless, Christianity is the largest religious affiliation in Europe, with most businesses putting less focus on the religious beliefs for the prosperity of their entities. Due to globalisation, the Asian cultures have learnt how to do business with people from other religious backgrounds (Chen, 2010). For instance, in certain Islamic states that have rich oil reserves, foreign investments are necessary in extraction and refining of the oil. Learning and understanding the cultural values of the Asian and Europeans requires acquisition of new concepts about such factors as values, attitudes, time and space. The etiquettes employed by the Asians and the Europeans are different, and are drawn from the cultural and historical development. In Europe, the heritage is common and receives general acknowledgement for its existence despite a few differences in individual nations. On the other hand, the Asian cultures are dissimilar, with several religious and linguistic differences spread all over the region (Hofstede, 1980). This guarantees a difference in tastes and preferences, especially based on the social view of the consumption of foreign products against locally produces products. It is however similar in both the cultures to embrace successful working relationships amongst business partners to guarantee growth. The general code of conduct obligates businesses to create a positive and lasting impression of the business to its associates, more so on the first meeting. In the European culture, time keeping is an essential tool that defines success. In contrast, most Asian cultures believe that it is better to arrive at the meeting late than failing to turn up. However, as globalization takes its course on the business scene, many Asian cultures now view poor time keeping as insulting. The Chinese, for instance, view late arrival as a message of loss of interest in business deals. This trend shows how the European culture has influence the Asian business culture in line with time keeping. The body language in the European business culture plays a critical role in the judgement of the participants. In doing business, it is the culture of the Europeans to shake hands formally and firmly. The titles, first and last names are mentioned in such occasions. This is the norm in most European cultures that employ the use of courtesy titles in introduction. However, the Asian culture is more inclined to the titles than to the individual names. The mode of introduction in most Asian cultures includes the title and the name of the company in which the holder of the title works in. With the current investment of European companies into most Asian countries, the Asians have adopted the formal design of introduction that defines the European style. The Asian firms, for example in Japan, have enormous investments in the training and development of employees. The new recruits in certain posts in these firms often receive between six and twelve months of training in each of the major departments of the company. The main aim of this activity is to make the employee a multipurpose asset that operates in all facets of the company’s functions (Hofstede, 2001). This culture characterises the industrious nature of the Japanese employees, with the company’s rarely registering employee deficits in specific offices. Contrary to that, many European firms believe that specialization is the key to efficiency in production and supply of products. These companies save the costs of employee training on all the departments of the company, instead focus on training the employee on the department of specialization. The European labour market has a wide pool of talent, and these companies invest heavily in talent management and retention. This creates the readily available succession that a company needs to guarantee competition and survival in the markets. Due to the trends in globalisation, many Asian educational syllabi have taken into concern the concept of specialization. Currently, many Asian companies take similar amount of time as the European companies for the orientation of new recruits into the working system. Indeed, this creates efficiency within the company. In addition to that, the Asian culture creates a democratic relationship between the employees and the supervisors. Under this relationship, both parties have role to play on the decision-making processes of the company. The top authorities in most Asian companies are not viewed as a source or figure of authority, instead as a catalyst and consensus builder. The management in the Asian companies are tasked with maintaining harmony to foster a good working relationship amongst the work force. The top management often takes cues from the middle management, whose operation depends on information form subordinates (Nikolova & Simroth, 2013). On the other hand, the European culture roots for hierarchy in the management process. The European business culture believes that supervision is the key to effective participation of all employees in their specific duties. Despite being taunted as a recipe for bureaucracy in management, the hierarchy in management ensures discipline and fulfilment of orders as per the requirements of the company. In this manner, many European companies have built a reasonable design that enables them to qualify their employees based on the loyalty. This method is also critical in proving guidelines for the employee rewards, including being a suitable criterion for promotion of ranks within the company. Due to previous cases of employee misconduct and failure to adhere to the stipulated code of conduct, many Asian economies and companies have adopted the European hierarchical system of business management. In this system, the top managers interact formally and occasionally with the employees, creating the discipline ambience that is needed for completion of duties. The Asian business culture ranks low in individualism. This culture has a preserve for collective mentality that ensures every person takes the responsibility of others. This group mentality is the reason behind many successes of small and micro businesses within the Asian markets (Whitefield & Loveless, 2013). This society believes that to overcome obstacles, individual brilliance is no match compared to group work. Despite the fact that group work has positive impacts on the ethical concerns of employees globally, many Asian companies have experienced these groups as instigators of employee reluctance and continuous go slows that are harmful to the well being of the company. Group work is a shared concept between the Asian and European business cultures. In Europe however, taking responsibility for failure is an individual obligation. In the Toyota Company, for instance, the group mentality was abolished in place of the requirement by the founder that each employee fulfils his or her duties to establish the departments that had possible inefficiencies in their operations. In the year 2009, the car manufacturer had massive reputational crisis after the consumers complained about the acceleration systems. The company was unable to pin point the perpetrators of this operational inefficiency that forced the company to commission a recall program that cut into the company’s revenues (Xina Yuan, 2011). Other companies in Asia have begun taking into concern the need for individual responsibility in handling crisis. This trend explains the extent upon which the European business culture has influenced the Asian culture of doing business. Signing of contracts represents a start of relationship for the Asian business culture. Most European cultures have a universal preference for sumptuous dining in which significant amounts of foods are served in the process of signing deals. In contrast, the Asian social life does not envisage several courses of meals in signing deals. During such informal meetings, the Europeans value table manners. These manners are strict and any violation classifies the violator as impolite. In the Asian culture, however, the table manners are not as strict and the society does not judge individuals based on the table manners (Whitefield & Loveless, 2013). The universal motion of the world towards globalization requires that the cultures embrace in order to foster possible mutual understanding. This has obligated many Asian cultures to observe table manners when dining with the European business partners. The flexibility of the Asian people to adapt to the requirements of the diverse cultural backgrounds enables many investors to invest in these economies. CONCLUSION The prosperity of most Asian economies is distinct, hence allowing these societies to be institutions of leadership in global business. The Asian culture is different in every detail, and the power of the government in the economy differs from that of the European set up. There exist several philosophical and practical differences between the two business cultures. Despite this, the growth of the Asian economies is attributed to the Asian society embracing the external diversities that come with global businesses. In addition to that, many Asian cultures have absorbed foreign cultures into their traditional cultures, making it easier for their economies to cope with foreign investors. The diversity in religion in the Asian markets is relevant for foreign entrepreneurial trials, as many Asian economies are unwilling to forego their religious beliefs for the sake of business prosperity. On the other hand, linguistic diversity is a core component of entrepreneurial success in the Asian markets. Due to the need for many Asian companies to sell their products in Europe, the language barrier offers an opportunity for the investors to interact with foreigners in the formation of mergers that will markets products in each foreign country (Xina Yuan, 2011). In Europe, for instance, the historic international trade boosted the formation of diversity-friendly and persistent institutions that made commercial exchange easier. Therefore, the entrance of the Europeans into the Asian market has created cultural shocks on the Asian culture. Finally, the Asian markets derive their prosperity partly from the involvement of the European investors in these markets. Despite the fact that cultural and linguistic barriers make business difficult to thrive overseas, the Asian culture has embraced the basic components if the European culture, hence enabling their manufacturers to understand the scope of multiple cultures that define diverse consumer tastes and preferences. Globalization, therefore, is a game changer that defines the extent to which the European business culture has influenced the Asian culture. REFERENCES Chen, M. 2010. Culture and Business in Asia. Asian Bus Manage, 9(2), pp.281-284. Fain, N. and Wagner, B. 2014. R&D-marketing integration in innovation – does culture matter?.European Business Review, 26(2), pp.169-187. Hofstede, G. 1980. Culture's consequences. Beverly Hills, Calif.: Sage Publications. Hofstede, G. 2001. Culture's consequences. Thousand Oaks, Calif.: Sage Publications. Nikolova, E. and Simroth, D. 2013. Does Cultural Diversity Help or Hinder Entrepreneurs? Evidence from Eastern Europe and Central Asia. SSRN Journal. Whitefield, S. and Loveless, M. 2013. Social Inequality and Assessments of Democracy and the Market: Evidence from Central and Eastern Europe. Europe-Asia Studies, 65(1), pp.26-44. Xina Yuan, 2011. Cultural influences on consumer values, needs and consumer loyalty behavior: East Asian culture versus Eastern European culture. AFRICAN JOURNAL OF BUSINESS MANAGEMENT, 5(30). Read More