Culture Affect International Business or Relationships - Essay Example

How Could Culture Affect International Business or Relationships in A Business Settings between Any Two Cultures Table of Contents Introduction 3 Critical Discussion 3 Cultural Aspects on International Business or Relationships in Business 3 Theoretical Concepts Associated With Cultural Studies 6 Conclusion 9 References 10 Introduction The term ‘culture’, defines the way of life that mainly comprises of knowledge, values, and other moral beliefs as well as habits acquired by the individual members residing in a society. Culture further comprises of different patterns likely to be either implied or unambiguous with respect to the behaviour acquired or gained from other individual groups. The essential core components of cultures are mainly associated with the traditional values and ideas (Moran & et. al., 2011; Browaeys & Price, 2010). Contextually, the paper analyses the concept of cultural differences with respect to Mexico and Germany through theoretical frameworks, which correspondingly reveals its influence on international business relations. In fact, the set of values, beliefs and behaviours of one individual can be observed as much different from the other, which in turn challenges the modern leadership notions to incorporate cultural diversity within workplace management thoughts, especially when functioning internationally. Therefore, it has become increasingly essential to understand the culture of different nations (Moran & et. al., 2011; Browaeys & Price, 2010; Ferraro, 2007). Critical Discussion Cultural Aspects on International Business or Relationships in Business The development of technology has resulted from the movement and migration of individuals from one nation to the other. Contextually, cultural differences among individuals are likely to affect the communication process largely. As a result of which, cross cultural study shall benefit in improving the communication process between nations (Olatundun, 2009; Pym, 2003). The cross-cultural difference also has the potential to influence international businesses, which mainly arise out of diverse cultural backgrounds. The difference in culture also may result into differences among the employees that in turn shall have the potential to develop misunderstandings among them and subsequently, affect the overall performance of the organisation in the long run. Therefore, it has evolved as a decisive objective from the perspective of corporate organisations to manage the differences in the cultural backgrounds of its employees (Kawar, 2012; Leung & Ang, 2008). Applying this concept in the context of Germany and Mexico, Germany can be asserted as one of the leading players in international foreign trade. In the context of business, Germany can be found associated with international business with different nations. The products manufactured in Germany are exported world-wide, presenting a largely internationalised dimension of business operations and thus, it is necessary for the business to understand cross-cultural aspects to maintain good trade relations with the other concerned nations. For instance, the electronic products, machineries as well as automobile manufactured in Germany are in huge demand, and thus, a number of reasons for international trade partners to engage in business with a German company. In the context of international business, entrepreneurs engaged in business with German companies are required to have proper knowledge with respect to the culture of the concerned nation. Its cultural aspects principally signify the pattern of negotiations maintained by the concerned German company. In addition to this, cultural factor also defines the values and beliefs associated with the German people that in turn enable the business partners to conduct businesses successfully (Holliday & et. al., 2010; Mitchell, 2009; Kavalchuk, n.d.). The cultural aspect of Germany can also be implied from the after effects of World War I. The commencement of the war resulted into drastic changes in the cultural aspects of the concerned nation. The abolition of different areas had further resulted in the formation of trade relations between different nations. The improved trade relations between different nations have in turn resulted into a better understanding of the cultural aspects related with the nation. In the context of cultural differences between the two nations, it is eminent that German are more punctual in time planning. This approach has a positive impact on their business relation with other international partners. On the other hand, the Mexicans are not particular about time that correspondingly has a negative impact on its business relations. The formation of international organisations in this context has thus enabled growth of business relation as well as fostered better understanding with respect to the culture of different nations (Bridgham, 2006; Liulevicius, 2000). In the context of international business, cultural aspect of Mexico is also different from other nations, thus for running a successful business, it is required to have proper understanding with respect to the cultural aspects. Mexico has a free market economy that has the potential to influence entrepreneurs from different nations to engage in trade relations. In this context, the cultural aspect of different nations is reflected through the business practices of the concerned nations. The business practices associated with Mexico mainly signifies avoidance of uncertainty, as well as individualism. For instance, the business culture associated with Mexico is more collective in nature. It also signifies increased power distance along with the tendency to avoid uncertainty risks. Mexican workers are therefore more interested to work together that in turn implies the work environment as highly group-oriented. In the context of cultural consideration, Mexican people are more emotionally repressive as compared to German that eventually creates cultural differences between the two nations. Therefore, the cultural differences between Germany and Mexico can be asserted as highlighted in its diverse business practices (Novinger, 2013; Samovar & et. al., 2011). Theoretical Concepts Associated With Cultural Studies The Hofstede’s model of cultural dimension is effective for the comparison of cultural aspects between different nations. The dimension of the model thus comprises of power distance, individualism, masculinity, uncertainty avoidance, long-term orientation and indulgence. In this context, the figure below depicts a comparison between cultural dimensions of Germany and Mexico. Figure 1: Cultural Dimension of Germany and Mexico Source: (itim International, 2014) The above graphical representation indicates the existence of significant differences of culture between the two nations. The power dimension of the model thus indicates the differences existing between the two nations in terms of individuals residing in the society. Additionally, power distance of Mexico is observed as high than that observed for Germany (ITIM International, 2014; Piepenburg, 2011). The difference of power culture is also likely to influence the attitude of employees towards the cultural aspects. Observably, the distribution of power is unequal between the two nations. Contextually, the individualism dimension signifies the independence of the members in the society. The figure here represents the fact that Germany is individualistic in its culture, whereas Mexico is collectivist that implies its residents as more interested to function as a part of a group, taking continuous assistance and feedback. On the other hand, masculinity indicates the impact of competition as well as success, implying whether the business culture follows an autocratic or a demographic form of leadership practices. In subsequence, uncertainty avoidance signifies the extent to which, the individual fear of the unknown circumstances and thus, become resistant to changes implying a more stringent organisational structure (ITIM International, 2014; Piepenburg, 2011). The figure indicates that both masculinity and uncertainly avoidance rates are high in the case of Mexico that in turn has the potentials to influence the performance of the individuals in the long run. The long-term orientation dimension of the model further indicates the fact that it is essential to have some relation with the past that in turn is effective in maintaining a proper cultural aspect with respect to different nations. The figure hence indicates that long-term orientation is high in case of Germany, which signifies the fact that the concerned nation has strong association with its history, which correspondingly attempts to influence the cultural aspects (ITIM International, 2014; Piepenburg, 2011). The model classifies culture as the linguistic factor involving Active, Multi-Active, and Reactive factors. The model is applicable to individuals as well as countries including Germany and Mexico in the current context as it is effective in enhancing the cultural values and beliefs. From the figure below, we can differentiate the cultures with the help of Lewis Model. Figure 2: Lewis model Source: (Times Internet Limited, 2015) The multi-active dimension of the Lewis model signifies that people belonging to Mexico are give more priority to work as well as has the tendency to shift to different task at one time. Additionally, multi- active also signifies more social as well as possess the skill to manage relation that is like to be beneficial at workplace. On the other hand, Germany is linear-active, which signifies skill to plan and manage to implement different actions respectively. Additionally, they prefer to complete a task according to the given schedule and therefore are more efficient at work as compared to others. Conclusion The above discussion concerning Germany and Mexico indicates the importance of understanding their cultural dimensions, as can be apparently noted the cultural dimensions of the nations are different from each other. Thus, it has become essential for organisations to have a proper understanding of cross culture when expanding to the international business context. The paper also analyses that history of the concerned nation might impose a potential impact on the cultural aspects. It is thus evident from the course of the essay that the nations, including Mexico and Germany, have witnessed significant cultural changes during World War I. The paper analyses the theoretical aspects of culture with the help of different frameworks including Hofstede’s model and Lewis’s Model. Despite the existence of similarities, the two nations differ in culture that can be analysed through the differences in their business patterns. From the above discussion, it can thus be examined that Mexico is a collectivist society that in turn signifies the existence of interdependence on individuals. On the other hand, Germany follows an individualistic culture that implies independence rather than depending upon group performances to complete a task. Therefore, it can be concluded from the discussion that for the success of international businesses in the long-run, it is crucial to enhance the communication skills of the employees and to raise cultural awareness of the foreign nations that would considerably support the growth of the companies in turn. References Browaeys, M. J. & Price, R., 2010. Understanding Cross-cultural Management. Pearson Education India. Bridgham, F. G. T., 2006. The First World War as a Clash of Cultures. Boydell & Brewer. Center for Creative Leadership, 2014. Leadership Effectiveness and Culture: In a Nutshell. [Online] Available at: http://www.ccl.org/leadership/pdf/assessments/GlobeStudy.pdf [Accessed May 23, 2015]. Ferraro, G. P., 2007. The Cultural Dimension of International Business. Pearson Education India. Holliday, A. & et. al., 2010. 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