Culture and Business - Literature review Example

Culture and Business Table of Contents Table of Contents 2 Introduction 3 Culture and Business 3 Culture and MNCs 5 Culture and Communication 6 Conclusion 8 Reference List 10 Introduction The world is profound with a huge number of companies which have been growing constantly and have therefore been expanding into the international markets. The world has now become an open place and businesses are increasing globally owing to high competition and hence the companies are faced with a large task. The challenges that come forth for companies while expanding into the international markets are unfamiliar and quite new. These obstacles are the ones that can make life difficult with everyday work in the international context. The critical thing here to bear in mind is that foreign culture is quite different from what one has been used to in the home grounds. Respect and understanding of the new culture Is critical for building the first impression. One cannot force one’s own beliefs in a foreign nation. Culture and Business The culture of a business can determine the success or failure of a merger or acquisition process. Such can be defining in numerous ways. Work that is in conformity with the organizational culture is the work that determines the different aspects of the company. Such beliefs and traditions develop expectations with reference to the individual behavior and accomplishment fop tasks that are related to the organization. Each organization has its own organizational culture but such cultures have to be altered and aligned in the international context whenever one tries to enter into a new country for their international expansion activity (Deal and Kennedy, 2000). The globalization of the economy has been viewed to be the best hope for bringing in world stability. Yet, it can also be taken to be one of the greatest threats for civilization. The concept of successful mergers and acquisitions can bring the world together to become a better place but the unsuccessful mergers and acquisition processes bring about differences in the corporate culture which again deters company views along with corporate identity. The secret behind the success of a merger deal is in the corporate culture built within the acquisition process which has to be a good blend of the two cultures and be accepted by the employees of both the organizations. In the context of business culture, one can look at the Bradley’s model (2002) where the influence of culture of each country can be classified clearly. The culture of a country is said to mediate through three critical factors namely, Cultural challenges, process of consumer decision making and cultural forces. The challenges in culture come forth in the form of ethics, behaviors, morality, designs and roles that have an impact on the cultural exchanges of messages (Bradley, 2002). The culture of a country also has an impact on the needs of the consumers in general and also manifests the wants of the society as well as consumer trends. Education, National identity and one’s family reflects the cultural forces. Such differences in culture can be said to be represented within Country A and Country B. In this context, the foreign company has to make an analysis of the reconciliation format between the two nations. In combining and synthesis of the differences in cultures of foreign companies with the host nation can integrate the cultural perspectives to seek some dynamic solution to the diverse problems that arise. According to Hofstede (2001), the factors concerning the masculinity and the felinity reflects the culture inherent within the society where it provides preference to male employees over females and such emotional roles among different countries. The dynamism aspect within Confucian is a model that looks into the cross cultural framework for determining if a culture if particularistic or universalistic. Universalistic cultures are of the opinion that good is applicable everywhere while the particularistic culture followers believe that application of good shall be preceded by maintenance of relationships (Hofstede, 2001). One can cite the example of China in this case where the particularistic nature of the culture of the country stresses on building strong relationships before establishing any business ties or business relationships with the foreign parties. Culture and MNCs The globalization of world has made it important for the marketing managers to realize that the ability to communicate across different cultures is critical for the success of international business. In the later part of the 19080s, the Japanese makes of television sets were dominating the imported TV segment in Chinese markets. The European marketers also wanted to venture into the Chinese market of televisions but decided against it owing to the low per capita GDP of the Chinese population in general. However, the Japanese TV makers went forth with the Chinese market based on the research that Chinese believe in saving and they have been saving up for 3-4 years in order to gain their dream television sets. As a result, the Japanese Television makers profited highly. Hence, it can be seen that the criticality of cultures is also inherent within business researches and propositions (Porter, 2002). Cross cultural relationship or the interactions that are between the different cultures can either be internal or external. These include the relationships maintained between the subordinate and the superior, the method of transferring knowledge, the basis for training and the business trips that are carried out by the organization. This impacts the manner in which people within companies interact with each other and how they perceive each other. Such cultures have an impact on the process of communication and have been perceived as a complex set of behaviors (Schein, 1990). In most of the multinational companies, there is an existence of subcultures wherein the national and the organizational cultures have an impact on the interpersonal relations. Such multinational companies have conflicting or complimentary set of behaviors. Based on the different identified determinants of the human behavior, three basic behaviors can be identified. 1. The national culture is bounded by cross cultural communications: The mental programming among the people is majorly done by their individual national cultures. Here, cultural chock, auto stereotypes, cultural stereotypes, prejudices and ethnocentrism have been identified and boundaries to management across cultures. 2. The barriers can also be organizations when it comes to cross cultural interactions. Here, the barriers pertaining to the organizational context can be identified as identified to be the strategic mindset, institutional ethnocentrism practices of managing the human resources, staffing practices, patterns of communication and the structure of the organization. The degree of international experience also speaks loud about the patterns of international exposure gained by the company in terms of knowledge that can be used to minimize the barriers associated with the cross cultural relationships. 3. Behavior of the people within a multicultural setting can also be a significant factor that is responsible for misinterpretation and misrepresentation among the different individuals. The perceptual filters that have been developed in a process of national culture help in gaining inappropriate meanings and wrong interpretation of things and actions. Lack on intelligence pertaining to the culture of a nation is also considered to be a barrier across cultures. Culture and Communication Cross cultural communication or the difference in communication between different cultures exist among the customers and the marketers in at least one single aspect of the language, social norm, religion style of living, values and education. The communication in business across cultures demands that companies are aware and also sensitive about the differences across cultures. With a view to provide respect to the consumer’s cultural rights, the marketers try to seek success in the cross cultural values through appropriate marketing initiatives. Western marketers shall communicate within the settings of a business but it is critical for them to understand that Chinese cultures consider special occasions as a character within the country and shall hence treat the meeting in a different manner altogether. Communication in businesses is not an independent components altogether. Such a behavior is combined with purchasing power abilities, use patterns of products, consumer tastes and preferences and benefits accrued to the consumer in general. Marketers have to focus on the cultural differences in order to make appropriate adjustments from the anthropological perspectives and all such behaviors in the market are bound by cultures (Davies, 2006). Hence, with a view to make the buying and selling activity fruitful, business forms have to make adjustments for their communication programs along with the adjustments pertaining to differences in cultures. Cultural overtones that have been driving the marketing operations have an impact on the target market where these overtones might sometimes also decide the consumer preferences. It has been suggested by Johann, (2008) that cultural characteristics within a specified target market shall have an impact on culturally bound segments which include the local stores. Western MNCs shall find it difficult to understand the system of marketing within such culturally bound nations or the developing nations. For instance, the marketers from the United States were pressurized to understand and comprehend that decision of the French government to restrict the size of French stores with a view to protect the local stores. Here, the decision to forgo the economies in distribution by the size of departmental stores was a part of the culture of the local government. Hence, unless one understands that differences in each country that reflect in attitudes, messages, expectations and unworded information, firms shall find it frustrating to do business in an emerging region like Asia and specially the largest one of China. As per the cultural influences experienced in business communication, the firms can be agents of culture. Interactions between the businesses can be examined based on three different perspectives. The first perspective shall assess the impact of culture on consumer behavior with the definition of acceptable levels of consumer behavior that can be defined by purchasing and product use behavior. In the second position, culture of a business in the international context also has a significant role to play within its advertising messages and the advertisement pattern and content. The budget of advertisements along with its structure is to be decided based on the habits of the people within the international market and their patters on consumption. Such is also reflected within the norms and the values held by the people. The state of the culture in material terms and the medium of communication being used also have significant impacts on the advertising communication in the international context. Theorists like Clegg, Kornberger and Pitsis, (2008) have claimed that such roles have theme that are decided within the advertisement communication are a depiction of the cultural influences shared by the organization in international context. The level of business communication is responsible for the determination of cultural change and borrowings. With the growing maturity among the markets, the marketing mix begins to get more and more standardized. The cultural changes in China can be helpful in emphasizing this point. In China, it is believed that differences in gender have a significant affect in the consumption behavior. However, this is a traditional view of the Chinese cultures and a recent report by Emery and Tian (2003), there was no significant difference obtained between the consumption cultures based on gender in the case of USA and China. Alternatively, one can say that masculinity factor was not significant in both the nations. Thus culturwes undergo a process of change and this happens very slowly. Here, the important task of all businesses is to locate the points of similarities and try to eliminate the differences as smoothly as possible. Conclusion The cultural advantage in the international context has a completely separate set of values that determine the way things work in international businesses. The competitive advantage finds it necessary to identify and appreciate these differences (Radovic-Markovic, 2012). To lower the cultural variations, there are four basic strategies that can be adopted. 1. Development of a strong corporate culture that has an international outlook 2. Creation of a common professional and technical culture that is acceptable at the global level 3. Reliance on the strong system of planning and financial management. 4. Understanding of each culture and letting them be independent of forced personal influences The purpose of negotiations has to be complete in ways that can have a great influence on the norms of the participants and the cultural values of the international setting. These differences that arise within the negotiating styles bear a significant difference between the Eastern and the Western nations. Businesses have to work towards bringing in a common international culture through the gradual globalization process. Reference List Bradley, F. 2002. A synthesis of cultural influence on buyer behaviour, International Marketing Strategy. 4th edition, United Kingdom: Pearson Education. Clegg, S., Kornberger, M. and Pitsis, T., 2008, Managing and Organizations. London: Sage. Davies, A., 2006. Best practice in corporate governance: building reputation and sustainable success. London: Gower Publishing Limited. Deal, T. E. and Kennedy, A. A., 2000. Corporate Cultures: The Rites and Rituals of Corporate Life. New York: Perseus Books Emery, C. R. and Tian, R. G., 2002. Cross-cultural issues in Internet marketing. Journal of Academic Business, 12(2): 217-225. Hofstede, G., 2001. Cultures Consequences: Comparing Values, Behaviors, Institutions and Organizations Across Nations. California: SAGE. Johann, R., 2008. Cross-Cultural Management. Norderstedt: GRIN Verlag. Porter, M., 2002. The national competitive advantage of nations. London: The Macmillan press LTD. Radovic-Markovic, M., 2012. Impact of Globalization on Organizational Culture, Behaviour and Gender Role. Charlotte: Information Age Publishing. Schein, E., 1990. Organisational Culture. American Psychological Association, 45(2), pp. 109-119. Read More