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This report is prepared to identify, how the home country local company can expand their business operation to host country. In this essay we will know about how to expand our local company on host country, what are the difference of two country cultures, difference of social group behavior patterns of the home country and host country. In addition what are the positive and negative influences of home country and host country cultures on business decision making.
One of the main differentiating factors between markets is the socio-cultural environment of each market. In every business when they are starting business the main aim is to expand their business and get more profit. When they are getting more profits they have to expand their business in different countries. Expanding business in different countries, one of the main difficulties they face is cultural differences. In this essay I will explain what are those cultural differences are and how we can expand business on host country.
Culture, in a country refers to a set of values, beliefs and norms shared between groups of individuals living there. It influences their buying habits and attitudes towards foreign businesses. Every society has different culture, because every society people use a specific language, traditions, and behaviors beliefs. From culture we can identify the people from different society. Like that when a business is also expand to different country, first they have to understand what their cultures .So then only they can expand their business on that country.
Therefore in this assignment I will take the home country local company Villa Shipping and Trading Company Pvt.Ltd. Whereas Villa shipping and Trading company is the single largest and operator of resorts in the Maldives, with 5 island resorts.1002 rooms(including 6 presidential suits) and 2,008 beds. The average combined bed capacity utilization of Villa Hotels' Resort in the last five years has been at 81.1%, which is much higher than Maldives industry average of 72%.Villa Shipping and Trading Company Pvt Ltd is one of the largest private companies in the Maldives. First I will give the introduction of the Villa company in Maldives.
Today, The Villa Shipping and trading Company is one of the most progressive and well-diversified business entities in Maldives, covering major sectors like, Tourism, Fishing, and Energy. This company hundred percent Maldives company, however the company all the business services are given to the Maldives. I think, in Maldives Villa Shipping and Trading company is a one of the biggest income of the country, Therefore in this essay I will explain how Villa Shipping and Trading company can expand the business in USA and what are the positive and negative effects that company face and what are the two country social behaviors and what are the difference of the doing business in two countries.
Republic of Maldives is an island country, formed in an Indian Ocean which has chain of twenty-six atolls extending in a north-south direction off India's Lakshadweep Island. Maldives 1200 island are inhabited and there are 100 private resorts in a country. Maldives is a hundred percent Muslim country, and the country language is Dhivehi. In all part of the Maldives people are spoken in Dhivehi. Tourism is the main industry in Maldives and Maldives 20% of the GDP is getting from tourism. Economy is regarded as standard in the region and welcomes foreign investment in addition the currency is the Rufiyaa and laree. The exchange rate for the US Dollar is 15.24 and commonly people used credit cards and American Express, Visa, Master Cards, Diners Club, JCB and Euro Cards. Whereas Villa company groups have many business they will operate, however there most famous business is Tourism, therefor company get income from dollars, because Maldives the biggest industry is Tourism and more tourists are visiting to the country, company get more dollars.
Villa Group of company doing business in Maldives it is very easy for them, because Villa group of company is hundred percent Maldives Company and the culture of the country is easy for them to doing business in the country. Then I will look about what is the cultural ways of doing business in Maldives, therefor business meeting appointments should be made well in advance. Meeting etiquette requires a handshake and normally men's wear a short -sleeved or long-sleeve shirts and tie with formal trousers and women's normally wear a lightweight suit or official dress. In meeting when addressing and Maldivian whom you know personally, always use the appropriate formal title or their full name. Business cards should be exchange the first meeting.
Maldives business culture is differing from USA culture. People in Maldives think that doing business in Maldives involves building relationship with other countries. Meeting should be confirmed by phone and meeting should be arranged well in advance. When the meeting is started on a time, they will wait for others will come. They conduct meeting only on public working days. The working days of Maldives are Sunday to Thursday morning 8.00am to 3.00 pm. and also they avoid meeting public holidays like two Eids, Independence days, National Days and all public holidays. In business meeting they only invite office high management people and they will not get the ideas from the sub-ordinates or employees. The power distance is very high in Maldives, the company CEO, Managing Director or Manager Will said to do something, and then all the management people will agree that and finish the meeting. They think they are the persons who have to finish take a decision in a company. They will not get ideas from others. Meetings are very formal but when they arrange a meeting and the company CEO, MD or manager call and said cancel the meeting he or she can't come.so then they will cancel the meeting.
Maldives Society is a dependence and collectivism society. the children's, who finished the school and some students want get higher studies and others go for job and other will not do anything and they stay at home. But in Maldives parents will spend so many money in children educations. When the student is studying in their island and finished o'level then they go for Capital City male' and get higher studies or some student who get good marks then they will go abroad and studied. After they finish studies then they will come back their home country or their island and do a job. When they are doing their job for three or four years then they will start an own life. Many other examples can be seen in our culture which suggests that Maldives are a very masculine culture which values material success over quality of life. Maldives have collective society and they will care for each other very much.
Maldives have short term oriented culture because when the Villa Company or Maldivians plane their business, they did not plan for long terms. They plane for 5 or 10 years. A lot of values associated with short term oriented cultures can be seen in our culture. Because of Villa Company also have short term oriented goals in Maldives.
Consequently, Then I will go for how Villa company can expand business in USA what are the difficulties and what are the positive and negative effects that we will face in the company.
United State is the large country the world and the world most of the people are migrating USA and they are the most diverts country in the world. The population of the United State is 300 million people of a mixed races and heritage. They are spoken in English and the main language of the country is also English. And the majority of the USA is Christian and when doing business in the United State should know the meet requirements instructions by the laws and the legal resources and specialist are available and we can find in any transections. And so the culture and the environment of an area will influence how business is doing in USA.
In USA business conversation are takes place in a meals. Mostly they arranged business meeting in a breakfast meeting, Lunch meeting or dinner meeting it depends on time. Doing business in USA they are very direct people. When they have business meeting they will be very punctual. In most Northeast and Midwest, they more punctual when the person is late for the meeting they disrespect that person. Actually Southern and Western states people are very relax but they give important on time. Whereas meeting is start they went that place, before the meeting is begins. Meeting is serious and they give important to controlling the time. First meeting they orally do these agreements and build a relationship. In business meeting men's wears a business suits and women's wears a business suits or dress with jacket. But in general in America East people they are more formally and east are informal. When you're meeting different people at once, their cultural way is to maintain eye contact during handshake until you move on another person. Because they think during business meeting and social conversation good eye conduct shows interest and sincerity and confidence. In business meeting when the introduction they use the Mr. Mrs and the full name. Business cards are exchange during introduce. And also the business cards should be exchanged in a meeting. Business meeting you should have to be good listener. When the person is talking you have be listening very carefully until you get chance, then only you have to talk. If something is not understood you have to ask for the classification. If you understood then said "YES" or if you did not understand said "NO". Nodding your head in up and down or side by side is very confused for them. At the conclusion of the meeting they will summarize what they will decided on a meeting what action they take first and second.
I think when Villa Shipping and Trading Company when they are expanding their business in USA they can face a difficulties to run their business while the culture of two culture is different.
American society is different from Maldives society, it will be very easy to adjust in American society but it is not good to so friendly or personal them soon, because their values are privacy a lot. If they want to give a dinner or bring you to their home they will call and tell time. They're not so friendly like Asian countries because they are individual society and we are like Maldives is a collective society. In USA society they will call a person and give smile to that person. If they got a time they want enjoy their free times, many of them are engaged in a some sports or doing activities. They think that time is money. Most of the American is very impatient in discipline. For example when they are waiting in the line to get services, they will wait did not push people and wait for their turn. But in Maldives when people are waiting in a line people will get irritation and did not wait for line. But Maldivians are very friendly, when a new person come they will be very friendly and bring them their home and give dinner or lunch or coffee. And they will introduce everyone in their family. Maldivians think that person is a part of their family.
USA people are highly individualist people. They will think about their self, and will not care about others to finish. They spend more money on fast foods. In USA most of the jobs are based on the week five days (Monday to Friday), eight hours per day and 40 hours a week. Many employees in USA get minimum wages and wages are differing from state to state. Some states have higher wages minimum wages. Most of the employees have good qualification and they have more experience than Maldives.so they work very well and their salary also will be too high.
According to the Greet Hofsted cultural dimension theory American businesses measure their performance on a short-term basis, with profit and loss statements being issued on a quarterly basis. When Villa Company goes to USA they can plane for the future.
In American society power distance is very low, both the managers and employees except to be consultant and information is shared equally.so the communication is informal, but direct and participative. But in Maldives power distance is very high. When manager or CEO said something then they will follow him. So the Villa Shipping Company when they going to USA they will follow USA cultural ways and also USA they can get high qualified people, so they can run their business easily and get high profit. So then I will look about what are the advantages and disadvantages that Villa Group of Company can get when there are expanding their business in USA and Maldives.
Villa Group of Company is a Maldives company.so the best advantages is when company expand their different services in a different island in the Maldives, so they can get new customers and they can get more familiar in the country, whereas the owner of the Villa company is the Maldives most richest man.so more people will want join that company to get better salary. Because of that when they are get more profit so it is easy for them to start a business in different part of a country.
Villa Shipping and Trade, there one of the most business is Tourism. When the company goes to the USA the big advantages is Maldives will be advertised and also the culture of of Maldives will be advertised in USA and more tourists will come to the country. The second advantage is when the company goes to the USA they can get more customers another than the Maldives, because Maldives is small country and USA is big country so will get more customers and business will be advertise in there. Therefor more foreign currency will be get in to the country and get more resources other than the Maldives. Beside that there are disadvantages also.
But when Villa Shipping Company goes to the USA. Our culture will be mixed people do not know what is their real cultural ways of doing things. However most company in the country when they are not enough services to the customer's people will not get services from the company, because of the Maldives culture there are some types of business that Villa Shipping Company cannot introduce. Maldives people when first time when they get services or buy product on the company, that services or goods are not bad so they will not buy or get services from that company. This is also one of the disadvantages of Villa Shipping and Trade.
However the big disadvantage is behavior of the two countries is different and Villa Shipping Trade Company has Maldives culture and when the company goes to the USA it is difficult to change culture. Because Maldives is has a collective society and they will do business differently from the USA. And another big disadvantage is currency rate. When they are going USA, USA people use Dollars and Maldives people use Ruffiyya.so the Maldives country was devaluated and 1 dollar is equal to 15.42 US dollar. When the company has to get change their money to dollars and invest that country. This is also one of the big disadvantages.
In conclusion I would say that the Maldives culture is differ from the USA culture. When we are expanding Maldives business to USA it is a big challenge to face that country. We can challenge the cultural difficulties like business negotiation of USA is differing from Maldives and Social behavior and many more. But when we look about every angles to expand our business to USA and settle down their so we can get more profits other than the Maldives. So the USA culture and Maldives culture all the cultural dimensions like power distance, individualism, collectivism, and many more all these are different from this two country.so Villa Shipping limited company when goes to USA it will be a big challenge and overall I would say that the expanding business in USA is a good.