The International Business Culture Business Essay
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Published: Mon, 5 Dec 2016
What is meant by the culture of a society, and why it is important for international managers to understand it. Do you notice cultural differences among your classmates. How do those differences affect the class environment or your group projects?
Society mean by culture is a set of shared values, assumptions and beliefs that are learnt through membership in a group, and that influence the attitudes and behaviours of group members.
Culture is not innate it can be learned, and it may varies tremendously from society to society. We begin learning our culture from the moment we’re born, as the people who raise us encourage certain behaviours and teach their version of right and wrong.
It is important for the international managers to understand it, to know how to respect towards one country’s culture. Once culture may not work well for the other country and can be interpreted as an insult. That’s why, it is really important to raise the awareness of cultural issues to the international managers to ensure efficiency and effectiveness. Some cultures are difficult to observe and measure; basically managers should be keen and knowledgeable about it.
Managers must develop cultural sensitivity to anticipate and accommodate behavioural differences in various societies. As part of that sensitivity, they must avoid parochialism-an attitude that assumes one’s own management techniques are best in any situation or location and that other people should follow one’s patterns of behaviour. The managers should know how to adjust and able to cope up with in a diverse cultural differences.
Managers can use research results and personal observations to develop a character sketch, or cultural profile, of a country. This profile can help managers anticipate how to motivate people and coordinate work processes in a particular international context.
And some cultures may put more emphasis on universal commitments while others put more weight on loyalty to particular people or relationships. Dealing with national culture differences requires not only knowledge adequate behaviours but also more importantly, an understanding of deeper level assumptions and values that explain why certain behaviours are more appropriate than others.
Time effort, reputation and even contracts can be lost to an international manager because of cultural ignorance.
Yes I notice cultural differences among my classmates. It can affect group projects and as well class environments. It can affect the group projects in a positive and negative way.
Negative: In any group activities we were not being able to express and communicate well. There’s a language barrier that hinders once idea or we cannot easily express what we feel. Different accents, different words having different meanings and connotation that somehow misinterpret.
Some of us feel there is a Social Groups and Social Alienation inside the classroom, as each of us has a different culture towards beliefs values and common interests. We don’t share similarities; some of my classmates feel isolated from the others. That somehow these dissimilarities create tension in the classroom discouraging them to be more aware and be tolerant to others.
Positive: We allow ourselves to accept and adopt a culture. We gain different ideas and nurture these differences that each one of us has. These things can help us in the near future in dealing with various people who have a different culture.
We became knowledgeable in diverse language and culture. We students faced in a diverse classroom and we learn different cultures constantly. We became curious and may ask questions to classmates and we are encouraged to learn another language and culture.
Critically assess the types of operational conflicts that could occur in an international context because of differences in attitudes towards time, change, material factors, and individualism. Give examples to specific countries.
Owners of a company and managing foreign stakeholders who has cultural differences may create managerial challenges. Company’s employing/recruiting people from other culture may arise in operational conflicts because of their differences.
Below are the examples to specific countries where operational conflicts occur in an international context:
Timeliness in Appointments
In US and most of the first world countries really value the time. Scheduled appointments are often treated like a general guideline and to some countries it should be strictly abide by. Failure to come on time may lead to conflict and misunderstanding. Some cultures are more time conscious than others. Punctuality really matters for European countries, as time for them is wealth.
In addition, whether you are in France or in China, your business partners will appreciate your efforts to make good impression if you arrived on time. But failure to do so may feel unlikely not interested or unwell prepared to attend the occasion and business meeting.
In New Zealand, they are strict in the number of hours you can work, as they don’t want to stress and let the employee feel that they are overworked. They provide certain amount of working time.
Filipinos has the “manana” habit or attitude, instead doing a project/task as early before the deadline comes, they prefer to do it the day before the deadline or in a rush. The habit of saying/doing there will still tomorrow to finish a task.
Western Culture considers change as a positive business opportunity. Innovation comes to different type of business in Westernise countries. Business landscape for them is rapidly evolving, changing and transforming which used as a strategy to survive in a never ending changing business trends. Change for them is a good thing as this start of a new business opportunity, start of wealth and new product to market.
Meanwhile, Muslim culture is passive to change due to effect on the gender role and religious practice. They see that a man reflects a dominance of tough, values such as achievement, assertiveness, competition and material success. Religion is something to do with faith that changes are not applicable. That it was written in a book a long time ago and should be abided. In the Philippines or any countries, which Muslim resides, men provide food and work for the family. Muslim wives have nothing to do with it, men are over powered and overwhelmed that results to a conflict. As well failing to acknowledge the status of Muslim within a business/work or to greet them without respect can leave a bad impression.
US are considered as materialistic culture. They tend to spend lots of money and invest on material products that sometimes affects to a certain business opportunities. They are overwhelmed with the money that they have earned and spend it. Lifestyle is very different.
On the other hand, Asian culture valued their natural resources (air, sea, land) sometimes it was misused that result to a conflict. They give value on natural environment and make new services or products with the natural sources they possess.
Western Culture is highly individualistic like US, Sweden, UK and Germany. They are very confident, independent, have recognition of personal initiative and achievement. Conflicts that UK experience, that they maintain loose social structure, they can’t control a person, they more likely to be aggressive and tend to have their own way.
While Asian culture promotes cooperation and teamwork that sometimes they are very dependent to one another. Relying to each other to finish a certain task or project. In the Philippines, conflicts arise when people tend to pass their work and rely to the help of their subordinates or co-workers that results to delayed of a certain task.
Without knowing the operational conflicts in an international context may result in some costly blunders in business marketing and management, it also can affect seriously the success of international business negotiations.
A.) Jo Barnes and Monsieur Hulot are both managers of Port Philip Pharmaceuticals are based in two different countries. Jo Barnes is an Australian International manager who oversees the operation in France under the management if Monsieur Hulot, a French national. Describe and Compare how each of these managers deals separately with the management issue that is affecting the operation of Port Philip Pharmaceuticals?
Jo Barnes is an Austrailan International manager, she’s educated, confident, independent woman. Jo Barnes belongs to a country of an individualistic culture, culture that shows a relative preference for the individual in a contrast to the group. This social structure are characterised by independence, the importance of individual’s rights and recognition of personal initiative and achievement. The first approach of Jo was very self-centred that it became obvious that any idea of her running the training programs in testing techniques and quality control was not likely to be well received.
Meanwhile, Monsieur Hulot is a French Manager, which has an element of specialisation, unity of command, and unity of direction, with a hierarchical line of authority, initiative, and esprit de corps. All of the characteristics describes a Collectivist culture, these culture clearly distinguish between in-groups and out groups and expected to subordinate their individual interests for the benefit of their in- groups.
Two countries with different culture, one has been overpowered by being independent and educated (Jo) and the other focused on the benefit of all his subordinates (M. Hulot). They were not able to deal immediately the issues but Jo Barnes was able to adjust to the French culture that makes M. Hulot be proud of her.
B.) One of the challenges of international business in different countries is the different forces of International environment that impacts the role of management of multinational organisations. Evaluate any of the international forces that have affected Port Philip Pharmaceuticals in their operation and its management in France?
International force that affects Port Philip Pharmaceuticals in their operation and its management in France are the following:
P3 in France are members of a collectivist, in whom they clearly distinguish between in groups and out groups and are expected to subordinate their individual interests for the benefit of their in-groups like family and organisation. And value the overall good of loyalty to the group. They became dependent on each other, and trust everyone in their respective work that sometimes not well, as they rely on each other.
With a relatively high power distance (uneven distribution of power). Hand in hand with a focus on individual rights and personal achievement. They are concern about their status differences and show proper respect to their superiors. This status difference exist within P3 may be based on age, social class or family role. P3 employees had high opinion for themselves and have professional knowledge. Power distance exists based on education and wealth too.
P3 also possess high uncertainty avoidance, they prefer structure and predictability that results in explicit rules of behaviours and strict laws. They do not want changes. Not risk takers. They limit themselves into new ideas or innovation.
Language barrier was also became an international force to P3’s management and operation. One of the hindrances that they encounter dealing that not most of them cannot speak English. Translations as well can have different meanings or connotations.
C.) A multinational company like Port Philip Pharmaceuticals deals with many constituents. Evaluate the management approach of Jo Barnes in dealing her constituents in Philippines and France.
Jo’s management approach in the Philippines just worked very well. Filipinos were known to be hospitable. She doesn’t find any hard time in dealing with them. As Filipinos knows how to respect and deal with different kinds of people. Filipinos with a high degree of Power Distance tends to accept and give importance of a culture’s position (Australia) along a certain cultural dimension. They know how to accept and adopt once culture. Jo was taken out for a dinner in a wonderful restaurant, every day and night she was entertained, wined and dined. While during working hours Filipinos had listened respectfully to Jo’s suggestions for improvements.
On the other hand, when she’s in France her situation was different from the Philippines. Her first approach just failed as she tends to be an individualistic (independent, self-centred, personal initiative and achievement) person, she was informed that her qualifications to be inadequate. As a result of this approach, the French chemists had high opinions of themselves and their professional knowledge was not prepared. It became obvious that any idea of her running training programs in testing techniques and quality control was not likely to be well received.
On the next day, Jo remembered how Filipinos treated her. Jo adopted a new strategy. She made a little speech thanking M. Hulot for his courtesy in inviting her to visit the company and congratulated everybody on its fine reputation, back home on Brisbane, for the high quality of its products and the creative innovations it had made to the pharmaceutical industry. And compliment how proud she is to have French Connection.
Jo Barnes, knew already to adjust and adapt to the French Culture (new sense of respect and able to know French commitment to their areas of specialization) She was able to cope up with them. She was able to put smiles on their faces and was able to start her training with everyone’s listening. She set aside first her educational background, her status in Australia and her personal achievement. Instead she extends her hand to help French P3. She was able to impress everyone. She showed that she was part of the group (Collectivist) person. They have one objective and goal as a group. That’s the time brainstorm arose, with everybody contributing ideas. Everything just went well. A solution to the problem had been found and she was confident it would be implemented without a delay.
Today, international business people must think globally about production and sales opportunities. Many global managers will eventually find themselves living and working in cultures altogether different from their own. Many entrepreneurs will find themselves booking flights to places they had never heard of. What do you think companies can do now to prepare their managers for these new markets? What can entrepreneurs and small business with limited resource do?
In order for the companies prepare their manager for the upcoming new markets. They should act global and should practice globalism. Creating a closer ties or bond to other countries by way of exchange of goods and services.
Through globalisation managers may increase their interdependency and may bridge between two countries. It can also innovate ideas and can easily be implemented.
The company must start to train their managers by involving themselves in the movements of ideas, information images and people. Company should provide remuneration and rewards. Provides health and safety insurance. Treating employees as assets of the company.
International managers should pay attention to trends in the global industry. Able to predict globally hot topics, products and services that the new market will be interested. Managers should develop niche expertise; their skills, knowledge and abilities should be nurtured and embraced through training.
The international business environment influences how firms conduct their operations in both indirect and direct ways. Managers of globalization are causing the flows of trade, investment, and capital to grow and become more entwined-often causing firms to search simultaneously for production bases and new markets.
Companies today must keep their finger on the pulse of the international business environment to see how it may affect their business activities
Each national business environment is composed of unique cultural, political, legal, and economic characteristics that define business activity within that nation’s borders. This set of national characteristics can differ greatly from country to country. But, as nations open up and embrace globalization, their business environments are being transformed. Globalization can cause powerful synergies and enormous tensions to arise within and across various elements of a society. Company managers must be attentive to such degrees, adapting their products and practices as needed.
International firm management is vastly different from managing a purely domestic business. Companies must abide by the rules in every market in which they choose to operate. Therefore, the context of international business management is defined by the characteristics of national business environments. Because of widely dispersed production and marketing activities today, firms commonly interact with people in distant locations within the international business environment. Finally, managers and their firms are compelled to be knowledgeable about the nations in which they operate because of the integrating power of globalization. Businesses should try to anticipate events and forces that can affect their operations by closely monitoring globalization, national business environments, and the international business environment
Know how to market. The concept of personal branding that suggests individuals should think of them as a brand and market their skills. For the entrepreneurs and small business with limited resources can do is to expand their business with new target market and customers that are not too costly. They would be able to identify their local and global potential markets. Able to determine their needs and desires. Not only discover the prospects want, but why and how they want it. It is crucial, but they should meet their wants and needs.
International trade specialists can help small businesses locate and use federal, state, local, and private-sector programs. They are also an excellent source of market research, trade leads, financing, and trade events. The Trade and Development Agency also helps small and medium-sized firms obtain financing for international projects.
Even if you have small business yet you think BIG that would be their competitive advantage. Making sure that their business takes the maximum advantage of those areas represent their strengths of small companies.
Create a constant improvement and listen to the customers. Market driven. Listen. Act. Respond to customer’s needs. Maximise employee productivity.
What are the claims of those who say globalisation eliminates jobs, lower wages, and exploits workers?
Some societies find globalisation as a dominating concept. That it may affect their lifestyle. A country has a complex cultural conditions such as they see exploiting people on the ground of race, gender or class, people will really try to get rid such society or country.
People in a certain country feel they are being over powered with foreign workers. Just like in the views of developing countries, globalisation increase phobia of inequality. It eliminates jobs from local nationality; they somehow prioritise foreign workers because they were paid at a lower wages or labour fee. Or they have lots of job opportunities but then the wages were too low, claims are they see the potential of the foreign worker or a country that offers a cheap labour. Conflicts arise and instability.
A country can outsource cheap labour and sell it on their country in a higher price. Local manufacturers feel that they are dominated by imported products. Lots of subcontracting that reduces job opportunities.
Competition became higher and risky for local workers and labourers as international dominate their working environment.
They criticize the practice of sending good-paying manufacturing jobs abroad to developing countries where wages are a fraction of the cost for international firms. It is argued that a label reading “Made in China” translates to “Not Made Here.” Although critics admit that importing products from China (or another low-wage nation) lowers consumer prices for televisions, sporting goods, and so on, they say this is little consolation for workers who lose their jobs.
When a manufacturing job is lost in a wealthy nation, the new job (assuming new work is found) pays less than the previous one. Some evidence does suggest that a displaced manufacturing worker, especially an older one, receives lower pay in a subsequent job. Those opposed to globalization say this decreases employee loyalty, employee morale, and job security. They say this causes people to fear globalization and any additional lowering of trade barriers.
Because of these claims above mentioned, it may cause issues like chauvinism, fundamentalism, and religion, ethnic and racial hatred in controversy.
A.) One strategy Yahoo! Could use to deal with the Chinese government is to allow its local joint venture partner, Beijing Founder Electronics, to deal with the government. What are the benefits and risks of doing so?
The benefits of Beijing Founder Electronics (joint venture partner of Yahoo!) in dealing with Chinese government, it can produce mutual gains and clear distinction of operational freedom. It is legalise and recognised by the authority. The process of hiring and remuneration will be authenticated. There will be a secure patent and copyright protection supported by the government.
The risks/influences that the government implies to Beijing Founder Electronics: There will be levels of taxation and restrictions on profit repatriation. Have controls on risks limits and observance of professional standards. Some rules to be followed and should abide. There will be labour union rules to obey. Foreign firms should regulate it.
In such way there will be benefits and risks to consider in a local joint venture of two organizations. There might be an effect and impact but still its necessarily to address it in a legal way.
B.) How does a strategic alliance differ from a joint venture? Explain the pluses and minuses of such alliances?
Strategic alliance (called in a government perspective) is a form of collaboration between two or more companies that can take on many forms such as: Technology transfer, Purchasing and distribution agreements, Marketing and promotional collaboration and Joint product development
While Joint Venture (called in a business man perspective) involves a potentially long term of investment of funds, facilities and resources by two or more companies to a combined venture which benefits all companies. All involved will have an equity stake in the new venture. It may be formed to: Run production facilities in another country, establish a marketing distribution presence, use complementary technologies held by each participant and Joint venture can also be used to get around country trade barriers.
Advantages or Pluses of these alliances:
Forming a business relationship with a partner, or partners, may provide you with a number of advantages. You may be able to access technologies or patented processes owned by the other partner. You may be able to access their distribution network.
Enable firms to share costs and risks of the research and development of new products and process.
International alliances serve to avoid import barriers (Free flow of goods). Licensing requirements and other protection legislation.
Disadvantage or Minuses of these alliances:
Global alliances are usually slow in the making, but in a highly competitive they present a faster and less risky route of globalisation. It is not easy to negotiate and finalise an argument, but if both parties have approved the agreement everything will be fast.
Problems and challenges that alliance may encounter:
Shared ownership (risks of shared assets), differences in national cultures (cultural differences; national and organisational culture), difficulties with integration of different structure and systems, distribution of power (may dominate one partner when it comes to process/ideas/outcome), competition within partners, conflicts between relative centres of decision and control. Disclose confidentiality of information, usage of patented technology or intellectual property rights, difficulty on collaborative efforts that lead to mistrust and secrecy.
All the advantages and disadvantages mentioned above are inevitable in having alliances. Alliances may work and may not work well. So alliances, should consider their strengths and weaknesses. Ideal partnership takes advantage in their both core competencies that will strengthen weaker areas of a company business.
A.) Evaluate the management strategy used by Brandon in order to finalise the deal of the Yokohama parts with Mr. Kumatsu and how it led to success or failure of the deal?
The management strategy used by Brandon to finalise the deal of the Yokohama parts with newly appointed Japanese executive, Mr. Kumatsu was based on direct coordination which decision making is based on the merits of the individual situation. It should not treated that way as Japanese have a high uncertainty avoidance which pertains to dislike of any changes (resistance to change) and want the process in a prefer structure and predictable as Japanese company always look for a long-term goal.
It also give least common approach that gives more pressure to Yokohama parts and able not to coordinate well. From the above mentioned strategy Brandon used, it led him to be unsuccessful with the deal. The complexity and interdependence of both parties decrease the needs to think parallel and drawn up to a contract.
B.) Design an effective management strategy for Brandon to successfully achieve a good international dealing with their company’s suppliers in Japan.
For Brandon to successfully achieve a good intetrnational dealing with their company suppliers in Japan, the effective management strategy should be managing resistance to change. This strategy will change raises anxiety over fear of the following: Economic loss, basically Japanese company look after their economic status if the deal/opportunity is worthy to grab and if it will be beneficial to the company as well to the country. Inconvenience, they want to reduce the cause of trouble or problem. They more likely want to have an easy access. They want to be more convenient and efficiency. Uncertainty, basically Brandon must prove that there’s no doubt in their business negotiations and be certain enough. Break in status-quo, Brandon must prove that it will be a breaking through deal, that he will have no fear in making it through a good negotiation and provide a quality service for Mr. Kumatsu.
In using the above management strategy, it would be a successful deal as it leverages distinctive mix of orientations and strategies. It is global technological competence with unique product development. It also focuses on quality and leveraging of foreign distributor competencies. Brandon should also adapt to the demands of its new environment and culture as it remains the most effective way of maintaining a lasting competitive advantage.
International Strategic Management (Strategic Formulation and Implementation) Hodgetts, Luthans and Doh, International Management: Culture, Strategy and Behaviour, 6th Edition (New York: McGraw-Hill Irwin, 2006)
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