Effects of cultural differences on international

business

INDEX

1.INTRODUCTION2. Attitudes towards culture3. National culture4. Cultural Differences5. Making business in foreign culture6. Conclusion.

INTRODUCTION

• The number of companies operating internationally is growing constantly.• he world is opening up for foreign firms and new destinations in the

company´ business are increasing.• Because of high competition the companies operating abroad are faced with

a much larger task then before.• Obstacles the firm never faced before are becoming crucial in the everyday

work. • Culture is one of these obstacles and can affect the entire co-operation.• Culture can influence the business in different ways such as: (Language

problems, pricing difficulties and cultural collisions)• The company must be able to handle these difficulties in a way that is

satisfying also for the other part.• It is important, even before entering the foreign country, to inform the

personal about the manners and customs in that new culture.

INTRODUCTION

• Culture can be both a positive and negative influence and many companies are struggling in the new and foreign environment.

• The important thing to always have in mind is that the foreign culture is not as we are used to at home and to be prepared before starting the new foreign operation.

• Respecting and understanding the new culture without forcing our own beliefs on people, are things that can be extremely helpful to consider.

• By learning the host country’s language, can respect and trust more easily be won, and competitive advantages can arise.

INDEX

1. INTRODUCTION

2.Attitudes towards culture3. National culture4. Cultural Differences5. Making business in foreign culture6. Conclusion.

Attitudes towards culture

1-Parochialism – “our way is the only way”

2-Cultural Blindness - People do not recognize cultural differences in order to be just and to treat everybody equally.

3-Ethocentrism – “our way is the best way”

4-Synergy – Cultural diversity is recognized and can lead to both advantages and disadvantages.

Attitudes towards culture

And when we have Synergy attitude toward the culture we can solve any problem by:1.Recognition of the problem2.Analysis from different perspectives3.Solution appropriate for all cultures

Advantages: Achieving the results at possibly higher potency, more flexible, creative and open to new ideas

Disadvantages: Control, side-affects on products, fear of unknown

INDEX

1. INTRODUCTION2. Attitudes towards culture

3.National culture4. Cultural Differences5. Making business in foreign culture6. Conclusion.

National culture

The set of norms, behaviors, beliefs and customs that exist within the population of a sovereign nation.

International companies develop management and other practices in accordance with the national culture they are operating in.

The dimensions of national culture are:1. Power Distance2. Uncertainty Avoidance3. Individualism4. Relation to nature

INDEX

1. INTRODUCTION2. Attitudes towards culture3. National culture

4.Cultural Differences5. Making business in foreign culture6. Conclusion.

Cultural Differences

• In order to do business with differing cultures, much market research is needed to help companies understand various similarities and differences even when dealing with everyday cultural norms dealing with people such as:

1. Punctuality2. Greetings3. Nonverbal communication signals4. Good Manners5. Decision making

INDEX

1. INTRODUCTION2. Attitudes towards culture3. National culture4. Cultural Differences

5.Making business in foreign culture6. Conclusion.

Making business in foreign culture

You have to make sure that what you’re selling is what the people expect and what they want.

And we have 4 Steps to Understand Customers in a Foreign:

1- Study the Region:• It's critical to analyze everything about the region where their customers

reside.

2-Consider the Cultural DifferencesTo get the full picture, a company must also familiarize itself with the local

culture of its target customer base.

3-Understand the Local Languageit's also important for business owners to understand the local language spoken

by their customer base to avoid linguistic snafus.

Making business in foreign culture

4- Follow Local Trends and Modify as Needed A company may consider surveying target customer groups or offering samples of its products to determine if its customer base wants a product as is, or if they would prefer an altered version to fit local tastes.Such as the Japanese people.

Product-design for Japan•Prefer quality and are willing to pay premium prices•Different taste: less sugar and salt•Smaller servings•Different body shape

Japanese television advertising•Length: 15 seconds or less•Mood advertising: - non-verbally or with few words

INDEX

1. INTRODUCTION2. Attitudes towards culture3. National culture4. Cultural Differences5. Making business in foreign culture

6.Conclusion.

Conclusion

Culture has a very important impact on business, but not everything can be explained

by it Other influences: individual character, situation, legal system etc. Culture in each country have many factors , The foreign company must analyze this

factors to know how to deal with culture of each community The foreign company must analyze and deal with these cultural differences and

remove the tension to bring about reconciliation between these countries. Learning about and accepting diversity can improve your interpersonal effectiveness

and increase your personal and professional opportunities.

The end