International entrepreneurship is defined as the innovation, presentation, evaluation and utilization of opportunities internationally to build a business for customer services. (Oviatt, B.M. and McDougall, P.P. 2005)
Establishment of business internationally is very difficult task and knowledge about various cultures is very important where you want to start your business. Some successful business tricks in own country might not be effective in another country. So as per the definition, market research is very essential while establishment of new business internationally.
Culture is mainly described, where people are distinguished from one category to another by collective thinking of mind.
(Hofstede, pp, l-14, 1994). When we talk about understanding the culture it includes understanding local background, history, development and future of the people. Individualism and collectivism societies are observed during market analysis or market research. These are two opposite sides of societies where Individualism describes the self-independence. In which they believe in self without any help of family and society. On the other hand individualism society believes in strong group which will take care of them. From the birth they love to live in strong group and with their own family.
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The words "particularism" and "universalism" are two common sociological identified categories which describe the way of thinking of the different groups. (Parsons and Shils, 1951, 1977). Particularism described the thinking in which living standard of a person should be similar as like there group or society to which they belongs. In contrast Universalism describes the way of thinking in which standards should be same for everyone.
Masculinity and femininity are also two different groups which describe the different culture. It mainly differentiates with the roles between sexes. Value of men and women are different in various countries as per their culture. Masculinity culture is modern and do not believes in difference between men and women .Where on the other hand women has some importance and value but not as much as men. As a result they show some gap between value of men and women. Individualism mostly found in Western countries and collectivism generally found in developing and Eastern countries. Japan act as a blend of both Individualism and Collectivism. We can found Masculinity is more in Japan and less in some European countries like Switzerland, Germany and Austria.
(Hofstede, pp. l-14, 1994)
International Business Entrepreneurship is nothing but the understanding of different culture to improve business across the borders.
The importance of culture understanding give us the way how to develop business in different countries and how national culture impacts on business building process. International Business may form in different ways but it depends upon social norms and peoples beliefs and behaviour (Hofstede,1980).
Google, the fastest growing company was found with the clear goal i.e. Organise all information and make it useful and universally accessible. Google's mission and goal raised hope among human rights and social activities. When Google started Chinese language service in 2000 they was operating channel from United States. After two years Chinese authorities block the site. Immediately founder of Google decided to make market research and study cultural history of China. After understanding the culture and mentality of local people and government Google implicate it into the service and in short time of period there service restored in China. Google censored all the governmental sensitive sites due to the security reasons. China was strategically important market for the Google so they decided to start Chinese home page and established own computer server in China other than United States. It was first decision taken by Google which was not in their basic mission. So they changed their business strategy as per the Chinese culture and market. In 2006 Google rolled out Chinese home page and server based in Beijing and Shanghai operated by local employers. (Charles W.L. Hills -7th ed., page no. 148-149)
Understanding the culture while establishment of new business leads to deep study of Anthropology. This includes study of geography and history of the country. The study of language, study of ancient and historic society, biological entities of human and comparison of people with the world is the pivotal part in study of anthropology. (Garry P. Ferrero, 4 th ed , 2002, page no.4)
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Cultural anthropology allows understanding, why customers behave in different manners in different countries. For example, in the United States shaking head from side to side is the sign of negation. However, in India people shake head from side to side to show the affirmation. (Garry P. Ferrero 2002). Cultural understanding gives a look to the different variations in thinking found in the different countries. Different solutions can generate for the same problems in various nations due to the study of cultural anthropology. It also evaluates similarities in different countries which help to apply same basics and foundation in business.
According to recent studies of corporate cultures (Denison 1990, Kotter 1992, Frost et al. 1991, Rhinesmith 1996) business organizations prefer those societies which are studied by traditional anthropologists. It gives them chance to deal with groups like as unions, environmental groups, customers and government. While dealing with international business issues like marketing, negotiation, management are depends upon how your organisation use local cultural benefits and how employees can use their skills in new market. This is totally depends upon individuals interest, receptiveness and compassion of the new cultural environment. International business Entrepreneurship may be botched by wrong assumption like; if a business is successful in home country then the same business will be successful in different country without accepting the cultural difference.
Different Research has proven that disappointments in the overseas business mainly results due to incapability to recognize foreign habits of thinking and adaptation with the host cultural behaviours. (Tung 1988, Black, Gregersen, and Mendenhall 1992). One of the most important needs of society is to fulfil basic physiological requirements like shelter, food and water. Every society fulfil there need by developing and producing basic essential resources. In the overseas business organisation must have to understand the basic needs of the customer through their culture.
(Garry P. Ferrero 2002) Described the term Ethnocentrism which is one of the biggest obstacle to understand the different culture. Ethnocentrism means the tendency of people to compare an others behaviour with their own culture. They believe other culture is not much as good as their own culture. So generally they take their culture very granted supposing their behaviour is correct and others are incorrect. Every society follows own culture with the tendency to mention themselves as us and others as them. (2002, 35-36)
International business organizations need active communication medium while working overseas. The firm should have to communicate with workers, dealers, clients and ruling government administrators. Effective communication between the people from the different culture is quite difficult. For better communication with the local people organisation must have to match up with local people's ideas, expectations, attitude, and sensitivities. Communication occurs in different ways like, through language which is easily understandable for all the people and another is through nonverbal communication "silent language." Edward Hall (1959).
While considering the language difference in United States and Japan it reflects individualism and collectivism respectively. Japanese try to be more polite and endorse harmony. On the other hand United States people communicate to show their own importance. Americans are comparatively bad listener than Japanese because most of the time they engaged in building personal values rather than concentrating on what is described. Japanese communication style makes impression of politeness whereas United States communication style is very specific and competitive. Thus, all communication variance or linguistic dissimilarities between United States and Japan show there cultural difference and values and there different thinking. (Garry P. Ferrero, 2002, page no.56)
Language is important for communication. However, nonverbal communication is similarly important. It helps people to understand the physical gesture of the customer. Non-verbal language generally used when verbal messages are very hard to understand, serious, aggressive or funny. It observed during study that only 30 per cent of communication within the similar community people is verbal. In international business situation people from different speech community people are more depend on nonverbal language. (Garry P. Ferrero, 2002, chapter 4, page no.73) Learning the host language also plays pivotal part in building relationship for development of business internationally. It also helps to minimize misinterpretation and frustration. (2002, 70-73)
We generally called our own culture as national culture to differentiate our society from other society.
It is very important to address that national boundary or cultural boundaries in between different countries are becoming dramatically "fuzzy" (Fukuyama, 1995). According to Fukuyama, geographical boundaries are not considered equally in different nation's culture. Rules and values are different in different countries as per there population. National culture never demonstrate the individual characteristic, it describe the large no of group come from same background, moral ethics and education.
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International Business Entrepreneurship leads to better culture understanding by analysing local market and people mentality. Business culture is very different in United States and Japan. In United States business are more focused on profits. They shaped there business through rules and regulation. They believe in new technology and less efforts. They concentrate on accuracy and quickness. In United States business organisations are quantity oriented because of large product demand. In contrast, Japanese businesses are more focused on relationship with the people rather than direct profit. Their business is largely depends upon human force and awareness of employees. In Japan business established with the motive of quality of the product rather than quantity. Japanese evaluate the employees on long term performance and they provide job security. On the other hand United States people evaluate employees on short term performance. Americans business culture is very easy and maintain friendly environment while work but without job security. (Norihiko Shimizu ,1995)
IKEA after establishing itself in its own country went out in the foreign market for higher growth. Ikea used its standardized product strategy in each and every country. Company's main concept was to provide good design with high functionality but at low cost so that maximum people in the world can use what IKEA offers. (Kampard ,1940). When IKEA was succeeded in Europe market, they thought to go in North America. They did study first about new market, cultural behaviour, and political issues. After studying about US market IKEA opened its store in various states of US with its standardized product strategy but people of US were not able to adopt European design and models so IKEA was not able to make an impact on US market. After getting low response IKEA decided to adapt American culture and trends. They changed the designs of their products for e.g. size of drawers were decreased from its actual size as demanded by US customers, colour matching of bedding is done and IKEA opened big malls as US customer like to roam around while shopping. Americans like to relax in their free time so in addition restaurants and other leisure activities options were provided in malls. In addition to that US customer don't like to wait for the product so IKEA its own production unit which result in huge growth of IKEA market as compare to previous results. IKEA used generous and quick service as US people like they gave them next day delivery options. So, we can say that IKEA adapted itself new strategies, culture, traditions to grow in the foreign market. (Hills -7th ed., page no. 36)
For becoming successful business entrepreneur internationally cultural awareness is very importance. Satisfaction of employees is crucial factor which change according to culture to culture, like in United States incentives or bonus to individual is used for motivation but the same method is not useful in collectivistic society like China and Japan, Where individual award is embarrassment for the group member because they believe in team effort. If Individualistic business entrepreneur want to established business in collectivistic culture he must have to concentrate on long term relationship. Development of long term relationship is take place by patient and spending time and efforts. For development of repo with client and customers contact with third parties helps lot. Americans have impression over the collectivistic culture oriented people as they think about themselves other than business group for they are working, so for successful business development in collectivistic countries employers must have to mix them with host culture. (Garry P. Ferrero, 2002, chapter 5, page no.103)