How Cultural Differences Between Parent and Host Country Can Affect Business Communication Process of an Organization - Essay Example

How cultural differences between parent and host country can affect business communication process of an organization? Introduction Internationalization and globalization has become increasingly important in the contemporary era. In the modern world most of the companies look forward to expand their business in foreign countries as the world has become more interconnected. Managing business functions across international boundaries have several positive and negative effects on the management process of the companies. The global economy has developed business environments that entail companies to expand their business in different cultures and ethnicities. In order to maintain sustainability and increase sales, most of the companies prefer to expand their business operations abroad. The Western companies have shown tremendous interest regarding expansion of business in the Middle East and the Eastern countries because of the emerging market. The international business that the companies have emphasized in the modern world can have strong effects. A bad choice of a country can increase the risks associated with the financial losses and it can also reduce the opportunities for success. There are many reasons due to which the risks associated with businesses arise in host countries. Issues related to the political factor, economic factor, social factor, technological factor and legal factor have severe impact on business. The differences in the culture with respect to business between a parent country and the host country are essential reason behind the risks and lack of opportunities. The market entry decisions made by the companies play very crucial role against the risks associated with cultural differences. This essay illustrates the effects of cultural differences between parent and host country on business communication. Discussion Cultural aspects of different countries have significant impact on the sustainability as well as the profitability of business corporations. The business culture in the western countries is significantly different from that of the eastern world. The major growing business markets such as India and China have several different approaches with respect to business culture. China The business practices and culture of China differ greatly from other countries, such as Canada, USA, Australia and UK. In order to initiate a business in China, the most essential factor is to understand the business etiquette. Understand the business etiquette and the socio-economic culture can lead organizations to success. There are several challenges that the managers of the Australian companies had to face based on managing employees. The most essential factor to continue business in China is to understand the basis of conducting business and managing the Chinese staffs (Thyer, 2010, p.12). The cross-cultural competency directly affects the performances of many MNC’s continuing their business in China. Cultural studies have become steadily important because of the growing awareness of cultural values. Cultural values of a country signify their human behaviour (Naylor, 2001, p.19). Several researches on leadership signify that cultural differences between Chinese and Western practices. Most of the modern theories on leadership consider western countries as industrialized culture. In order to understand the cultural differences of China and its impact on business communication, an example of Foster’s Group has been considered. Foster’s Group is a brand of Australia, currently operating and extending its business operations in China. There are several factors that affected the business of Foster’s group in China. First of all, the cross-cultural management, which explains that Foster’s Company, experienced huge loss due to high production in the Chinese emerging market. The Australian management of the brand emphasized majorly on the emerging consumer market and they increased the production. The products under the brand were diversified in order to gain maximum attention and interest from consumers. The management of the Australian Company regarded Chinese as technically backward and they believed that their products JV, TFBL and GFBL would help the company to acquire maximum profit (Tierney, 2013, p.61). This kind of belief led the company to lose two of the major products and finally the company ended up making huge loss. This explains that lack of analysis on the cultural perspectives can result to lack of profitability and affect business communication process. Secondly, frequent change of the organizational structure can also result in the occurrence of profitability and sustainability in a business. Lack of consistency is also a cultural aspect of business communication. In order to enhance the production and generate sales organizations must learn the adequate manner to sell products in the emerging consumer market. The Chinese society did not open its economy and consumer market to the rest part of the world. They isolated themselves from the rest part of the world in the past. After China opened its economy for the world and allowed foreign investments to be made in the country, several companies started to make investments in the country. Consistency of business and products is highly valued by the Chinese people. In order to develop trust and understanding with the Chinese, it is essential that consistency of business operation is maintained. The Chinese business culture has valued consistent businesses (Luppicini, 2012, p.25). Consistency with respect to employee management is also an essential factor; therefore it must be given importance. In order to maintain sustainability in the Chinese market, it is essential that there is a clear and transparent contract developed between the business partners. The Chinese market has been too vulnerable for the international business interventions. Most of the customers’ experiences variation in their opinion towards the foreign companies because they do not prefer to be controlled by the economy of other countries. One of the most important factors due to which the Chinese do not prefer to work with them is the psychological barriers towards international adjustments (Leininger, 2006, p.62). Most of the people avoid foreign products in China because they believe that the MNC companies would not be able to adjust according to the culture of the country. Chinese market is too complex because people develop self-opinions against new brands or product arrivals. Language barrier is also an important problem due to which the inter-cultural debates have not been conducted with much positive outcomes. Cultural values of countries, such as China can have several impacts on business communication, especially during the conduction of inter-cultural meetings (Kelley, 1988, p. 145). Since, China is a country with diverse cultures, careful market research is an essential area that foreign companies need to consider. China has been regarded as multiple countries within one country because of the demographics. The western companies have been able to gain the interest of the customers in China by conducting careful research about the Chinese market. In order to enter the market of China and maintain sustainability, most of the companies had to send representatives. The representatives would provide consultation to the companies and help them to gather initial support from the country (Parris and Peachey, 2012, p.380). Since, Chinese market was at a developing stage when the foreign businesses entered the market; therefore circumstances were very challenging for the companies. Germany The population of Germany mostly comprises of 91.5 percent German, 2.4 percent Turkish and 6.1 percent of people belonging from other ethnicities. Doing business in Germany has been found to be very difficult in the contemporary era due to several inter-cultural factors. In order to establish a sustainable business in Germany, it is essential for organizations to understand the culture of the country as well as their socio-economic conditions (lamson, 2010, p.87). Germany has been experiencing several severe circumstances in the past. Business etiquette in Germany is of a high quality, which includes privacy, value order and punctuality. The German government has open policies for foreign investments; however the statistics of a company’s performance is valued prior to the approval given to business organizations. Language remains in Germany as an important barrier, similar to other countries. Inter-cultural business meetings conducted in Germany have been found to be rare due to their civil policies (Lacy, 2004, p.98). Germany is a developed country and it has limited resources for people, therefore the federal policies do-not allow people to waste excessive water or food under any circumstances. Business meetings in Germany have been difficult experience for foreign business organizations. The political and social factors have been affecting the foreign companies greatly. Most of the companies in Germany have implemented joint venture strategies during their business expansions in order to limit the resistance experienced by political factions as well as local population (Kocka, 2009, p.18). Employments are majorly generated in Germany for local people because it reduces the chances of disputes with stakeholders. India Doing business in host countries such as India has been found to be very complex for UK and USA companies. India has several different region and religion that are widely different from each other (Hugman, 2013, p.39). The economic, social and political influences in India have great impact on the business organizations of UK as well as USA. In the United States of America, business culture is regarded as the bonding between to two companies as well as their consumers (Haung, 2013, p.89). In India ethical values, etiquette and behaviour are highly valued, even more than the bonding between the business relationships. The cultural values in India are not similar throughout the states. In every state there are different types of regulations that are required to be abided by the companies. Indian business market opened for the world during the 1990s (House and Aditya, 2009, p.412). There were several resistances that the foreign companies had to experience while expanding their business in emerging market such as India. The socio-economic classes of the major cities, such as Delhi, Bangalore, Hyderabad and Mumbai have been targeted by the foreign business firms. The primary objectives of the foreign business organizations have been limited to development of business chain and endorsement of brands (Hogan, 2012, p.32). The major problems that the business firms faced in India were language barriers. In the United States of America, language problem has not been the major factor behind loss of business because most of the states have similar language and accent. With respect to the Indian culture, language barrier has been one of the most pivotal factors that affected the rise of business organizations. Hindi has been regarded as the national language of India; however few people only speak Hindi or English language properly (Hirschhorn and Gilmore, 1992, p.108). The difference in the language has been found among the people of every state. The MNC’s doing business in India had to face terrible problems regarding language barrier because most of the suppliers and customers could not adopt the foreign language, practices and culture. Therefore, the companies incorporated policies that would help them to maintain their sustainability in the emerging market. One of such important policy was mass recruitment of local employees, who could deal with the customers as well as other stakeholders (Hallinan and Jackson, 2008, p.78). Among all the cultural influences that impact business culture in India, hierarchy plays an important role. Indian culture is obsessed with its roots in Hinduism and caste system. Roles of people, social order and status are strictly defined by the cultural hierarchy. The work environment gets impacted greatly by the hierarchical system followed by the Indian culture. PepsiCo has faced several challenges in its work culture due to the ethnic differences that existed between UK and India (Hall, Evans and Nixon, 2013, p.72). For example, the peons of the PepsiCo Company were made to move around different tables of the employee associates, in order to transfer information, which could have been carried out by the employees themselves easily. This shows that there is a great influence of cultural values in the work environment of business organizations. The meetings and seminars conducted by the companies of UK and USA have experienced some significant differences in the behaviour of the Indian business professionals as well as the consultants (Gay, Hall, Janes and Madsen, 2013, p.28). Most of the business organizations of the hospitality sector, such as Marriot have conducted intercultural meetings in the past to enhance trade relations among the parent country and the host country. Despite several attempts made by Marriot, the cultural differences still exists in the business operations. Meeting and greeting are some important aspects that are valued by the government officials as well as the Indian business professionals. In order to extend business, most of the companies have to implement joint venture strategies in the business operational procedures. The socio-economic and the political pressures in India are very high. Joint venture business strategies reduce the challenges associated with profitability and sustainability of business firms. The joint venture strategies also have some difficulties with respect to maintenance of business relations with the Indian business firms. The Indian companies are generally obsessed with the holidays. There are several Indian companies, who do not prefer to work on national holidays as well as the cultural festivals (Edberg, 2012, p.99). This factor degrades the values of the companies and they end-up suffering for survival in the competitive business market. The meetings organized by the business organizations of foreign companies in India, have to check the holidays and festivals before they plan for an important event or meeting. This is one of the most pivotal challenges because it affects the companies of UK and USA to continue their work prosperously. The political factors have also played significant role to demoralize the business organizations such as Wal-Mart (Dubey, 2008, p.88). The Indian government have stated that introduction of Wal-Mart in Indian market can lead to the rise of unemployment for the farmers. Strikes and social-chaos have also affected many companies because it leads to discontinuation of work even at peak periods. Therefore, the cultural differences between the Western countries and India have affected business communication process of organizations. Recommendations Business communication processes can be enhanced appropriately by limiting the cultural differences that exist in the contemporary era. Every country has their own cultural values that are significantly different from each other. Language barriers, psychological barrier, differences in etiquette, socio-economic factors and political factors have great influence in business communication processes (Diller, 2010, p.91). The companies of the Western region have experienced drastic effects due to the cultural differences. In order to reduce the inter-cultural differences some implementations are required to be incorporated in the work culture. Language barrier can be avoided by recruiting local staffs in the organizations. Countries, such as China and India have great differences in the languages practiced from one state to other. Therefore, generating employment opportunities for the citizens of the respective countries would help the organizations to overcome the issues related to the language barrier. Psychological barriers in some countries also have great impact over the business communication practices. It has been observed that several companies experience resistance from the political factions and customers due to difference in the cultural perspectives. The lack of acceptance of the people has affected the business communication process severely (D’almedia, 2007, p.12). It is essential for the business organizations to adopt local cultural values in their business environment in order to overcome the issues that occur due to psychological barriers. Difference in etiquette is also an essential factor that affects the growth of business organizations in economically developing countries, such as India and China. Business organizations should emphasize on practicing etiquettes that are valued by the business professionals, stakeholders and consultants. The socio-economic factors have also played major roles in the development of business organizations. Socio-economic factors are difficult to measure in China and India because of difference in the occupations of people. Companies, while doing business in China and India can emphasize on the economic stability of the region and implement strategies to develop products that could be in the purchasing power of consumers (Cox, 2004, p.48). Political factors have played vital role in the business communication processes, especially in India. Since India is a democratic country with its cultural base as Hinduism, there are many occasions wherein chaoses have occurred in the society. Business corporations of UK and USA should engage business continuity programs for employees during the occurrence of political disturbances in the society (Berger and Huntington, 2002, p.18). This would resist the companies from experiencing loss during vital working periods. Conclusion Based on the discussion, it is possible to state that cultural differences between parent and host country has several impacts on business communication process of an organization. Since globalization and internationalization have emerged greatly in the contemporary era, most of the business organizations have the tendency to expand their business operation and communication processes. China and India are the two major emerging markets due to immense population and consumer demand. The buying power and potential of the Chinese and Indian customers are very high and Western Business firms have shown tremendous interest to invest capital for business in these countries. Indian and Chinese cultures are widely different from the Western countries, such as UK and USA. The language difference, political influence, cultural values, etiquettes etc, have affected the business communication process of several companies. The primary objective of the Western based business organizations are to understand the inter-cultural differences and implement strategies to overcome the issues that have occurred to the cultural differences. Inter-cultural meetings on business programs can help to reduce the challenges associated with the progression of business communication. Therefore, it can be stated that the cultural differences between countries have tremendous impact on business operations and business communication processes and organizations can overcome the issues by implementing cultural values of host countries in their work environment. References Berger, P., and Huntington, S., 2002. Many Globalizations. London: Oxford University Press. Cox, T., 2004. 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