Cross Cultural Peculiarities Of Doing Business Management Essay

The cultural aspect of doing business has recently become the object of attention in many countries around the world. Experts in the field of economy and entrepreneurs are closely studying the sphere of influence of national cultures on business, as well as national characteristics and peculiarities of doing business in different countries. And indeed, the experience of many companies stresses the importance of cultural and national dimensions when leading the company to foreign markets, in the processes of mergers and acquisitions, as well as the opening of representative offices and affiliates in other countries.

The aim of the paper is to outline the reasons why the various elements of culture might increase the cost of doing business in a country.

Also in the paper it is necessary to provide examples of countries, compare the cultures of those countries and discuss the ways in which cultural differences will affect the cost of doing business in each. In conclusion of the discussion it will be examined the way in which business practices and ethics vary across the cultures.

Cross-cultural peculiarities of doing business

“Our own way of living is just a common, it is other people have ethnic, individual-specific and cultural peculiarities.” 

Terry Eagleton

In the late 1990’s in the business culture area dominated two concepts: “culture as the essence” and “Culture as a difference” that allow analyzing cross-cultural challenges that managers and organizations face only in terms of differences in values, linguistic and mental differences. Context of interaction was not taken into account, and all the cultural factors were considered as a set of external phenomena, not related to the activities of the organization.

According to research by Professor of Comparative and International Management of Business School and University of Nottingham, Nigel G. Holden conducted at the beginning of the XXI century, the culture should be viewed as an organizational resource, and cultural differences – as a form of organizational knowledge, calling for solving inter-ethnic cultural problems.

As the basic components of modern international management could be considered interactive global information network, team forms of work and organizational education. In this regard, today’s managers out of practitioners have turned into “sophisticated analysts, capable of managing complex of projects, people, resources and problems” (Drucker, 1996). 

In the development of thought, Peter Drucker pointed out that for managers in different countries the main challenge is to increase the productivity of knowledge and training of professionals working with him. With respect to the global economy, Drucker outlined the of trend productivity increase of knowledge factor and working people, united in a multicultural team, with the global information network communicating with the external environment of the company (customers, shareholders, society, authority).

Management and marketing have become international, and multicultural teams are key elements of cross-cultural management and marketing, which Nigel Holden proposes to consider as the management of different cultures. The concept of culture is interpreted not as a set of national or ethnic characteristics, but as the “area of general knowledge and a unified system of values that influence the organization, without sufficient awareness of the bright, clear, defined boundaries” (Holden, 2005).

 Thus, in the new economy culture indeed has become one of the resources of the organization. The main requirement in the world market is formulated as “obtaining the maximum benefit from alliances “across borders” and promoting organizational learning”.

Consequently, culture can be regarded as one of the factors affecting the organization. As for the interaction of organizations with lots of different cultures can be noted that the firms involved in international economic relations depend on a variety of external experts: tax services, lawyers, bankers, advertising and marketing agencies. And in a situation of economic globalization transnational, multinational companies need new forms of expertise: the experience of successful ways of working, successful solutions (applied to the local business culture).

 “With increasing global competition it is a cross-cultural knowledge that becomes the source of the additional benefits of the firm” (Fink and Meyerhof, 2001).

It is important that the culture was realized and used by the management of the organization as a resource, and all the values of it were transformed into knowledge.  Such a transformation makes the culture a possibility of organizing and competence, which is a “set of skills and technologies that enable the company to give the buyer something special” (Holden, 2005).

Examples of doing business in different countries

It is necessary to choose two countries that are culturally diverse, compare the cultures of those countries and discuss the ways in which cultural differences affect business sphere in each, how business practices and ethics vary across the cultures.

1. United States of America

The history of the American nation, that has created its own business world in a historically short time, proves that Americans are enterprising, courageous and hardworking people. If to remember the times of the conquest of the Wild West, the struggle for independence, as well as the fact that the ancestors of the Americans were immigrants who went to a foreign country for happiness, these facts show that the entrepreneurial and business culture of Americans are “in their blood”, as they say.

American style of business interaction is characterized by pragmatism and results orientation. In addition, American businesses are often trying to reduce the possible costs, carefully study the organizational aspect of any business, carefully check the possible results of decisions and pay attention to details. The basic principles of the Americans include the analysis, separation of functions and control. Specialization – is one of the strongest peculiarities of Americans, as it is hard to find encyclopedic educated people, but there are a lot of good specialists and experts in narrow spheres.

Americans cherish the time and appreciate punctuality, they use diaries and live according to the schedules.  Therefore, conducting joint business with them, people and business partners must come to an appointment in time.

Communicating with Americans it is necessary to know that they are characterized by self-confidence and even snobbery towards international partners, as they believe that they are perfectly versed in the business of any country, any nationality, and they want other nations take example of them and their way of doing business. 

 It is important that America is the weirdo, as individuality and individual rights are the most important for the Americans. From early childhood, Americans are accustomed to rely only on themselves, so they are independent, energetic and ambitious, they know what they want, and relentlessly strive to achieve their goals. Americans like to compete, to appreciate the achievements and records, and on this ground are constantly competing with each other. As a rule, Americans are straight people, they appreciate in people honesty and candor, quickly go to the essence of the talk and not waste time on formalities. 

During business meetings (unless it is a diplomatic reception) Americans avoid unnecessary formality and stiffness, preferring a comfortable, casual clothes. Americans appreciate the jokes and respond well to them, trying to emphasize the friendliness and openness. However, their humor can sometimes seem a bit rough and primitive. Also the work with Americans requires efficiency and accuracy of language.

2. Japan

Ethics and rules of business, marketing and management in particular, in Japan differ substantially from the rules and regulations of the business world of the West.

In the Japanese national character stand hard work, solidarity with the group norms, adherence to traditions and to develop the aesthetic sense, discipline, duty, courtesy and poise. Japanese from childhood are brought up in the spirit of “group solidarity” and learn to suppress their emotional impulses, trying to “save face” in the most unpleasant situations. Japan’s moral believes about the bonds of mutual dependence and moral duty lie in the basis of relations between people. 

Japanese society is homogeneous and pervaded the spirit of collectivism. Japanese are always thinking on behalf of groups, and person is aware of himself primarily as a member of the group, and individuality is a part of the whole community.

Management in Japan, as in any other country, reflects its historical features, culture and social psychology, it is

directly related to the socio-economic structures of the country. Analysis of the Japanese management is of particular interest for the following reasons: this is a kind of management that has the most striking differences with the widespread in the developed capitalist countries Western (American) style. Presuppositions of management and marketing approaches, as well as specific methods for their implementation in Japanese companies are significantly different from American.

The Japanese are receptive to new ideas, they prefer to learn from mistakes and benefit from others’ experiences. They are closely watching what is happening in the world and systematically supplement the information from abroad. They borrow and quickly assimilate new technological methods and processes. 

It is also very important to point out that Japanese workers have no resistance to the introduction of new products and technological progress, as innovation – is the basis for economic growth and the Japanese are genuinely committed to it.

Conclusion

In today’s world business and entrepreneurship go far beyond the national markets, involving a growing number of people from different cultural areas. As a result, cultural differences begin to play an increasing role in organizations and have stronger influence on the marginal efficiency of business activities. That is why there are cross-cultural issues in international business that are defined by differences in: language, religion, politics and law, geography, art, education, technology and other life values.

It is necessary to stress the importance of the problem of cross-cultural approach to international business development, the successful solution of which requires a new approach to language and cultural differences to achieve growth in material wealth and monetary and effective operation of the multinational teams of managers.

Underestimation of cross-cultural gaps in the work of companies from different countries often leads to a crisis of business relations, lower business activity. Meanwhile, the connection of different business cultures in the management involves not only openness and mutual trust, but a serious effort to develop plans for common strategic development and marketing programs.