Impact of Culture on International Business Operations - Desklib

This report discusses the impact of culture on international business operations and highlights the cultural challenges faced by a company headquartered in New York while expanding its operations to South Africa, France, and Tokyo. It covers topics like communication, attitude, nationalism, and more. The report also provides insights on the cultural challenges in South Africa, France, and Tokyo.

BUS6003
International Management
Part 1 – Group presentation
and individual written report

Contents
INTRODUCTION..............................................................................................................................3
MAIN BODY......................................................................................................................................4
Task 1 A...........................................................................................................................................4
Task 1B..........................................................................................................................................10
CONCLUSION.................................................................................................................................12
REFERENCES.................................................................................................................................13

Slide 1
INTRODUCTION
Slide 2

There are various companies around the world who establish their businesses in different
nations but face the issue related to the different culture that persists there. Due to these differences
they might fail to adapt in these countries as they won't be able to connect to the customers of these
countries. Some global companies might be unable to connect to the local people of the markets as
they must have different choices and preferences which company fail to fulfil which often results in
operational failure (Cicchelli, 2018). They may face the problem of realizing the opportunities too
late in major markets of various nations. To solve these culture related issues they need to first start
by developing an understanding of these issues. This report will discuss about these problems which
is faced by a company headquartered in New York and wants to establish its business in South
Africa, Tokyo and France and it will also include the impact that international culture has on an
organization’s operations.
MAIN BODY
Task 1 A
Slide 3
Role of culture in international business
International culture is a major driver of global businesses as it has a major impact on the
way business in conducted differently in varied locations of the world. Historically trade has always
been tied up with local cultures and prevailing customs and that still holds true today as whenever a
business strays away from their home culture to other locations, it has to overcome the problem of

culture shock and culture clash as the culture and people’s habits that they encounter in these
locations differ vastly from their homeland (Hino, 2018). This next section of the report will
highlight the problems faced by a business headquartered in New York when it’s trying to expand
its operations to South Africa, France and Tokyo.
South African Culture
Slide 4
The economy of the South Africa is controlled by big companies which have small and less
developed sectors. But in recent years, the responsibilities of the companies have been decentralized
and more opportunities has been offered to the lower management of these firms. The country's
culture is more concerned about families and different groups or communities rather than making
money which is a stark contrast to New York and the American culture.
Cultural challenges in South Africa
Slide 5

Foreign companies can plan to establish their business in the country for a short as well as
medium period of time by taking the advice of local legal adviser as the people are sceptical about
foreigners. Business meetings in South Africa is usually casual but being on time will be important
as lack of punctuality can leave a bad impression. It will be a long process for the company to start
and establish the business in the South African region because the paperwork involved is extensive
despite permits being cheap in the country and company can face the problems related to electricity
as long time is taken for the connection to get established which is around 8 days and the process of
registering a property and conducting cross trade also involves rigorous documentation which can
prove tiresome (Hou, and et.al., 2018). The language culture of the country is diverse which makes
it necessary for any company to hire a good translator if they want to settle the organisation there.
France culture
Slide 6

If company wants to start its business in France then their main focus should be on the
French culture and its deep seated understanding. In most of the countries English is accepted as an
official business language but French people are very emotionally attached to their language, so
company must respect this quality of the French people and make sure no sentiments are hurt.
Cultural challenges in France
Slide 7

The final decision making power for the business mostly lies in the hand of top level
management and company needs to focus on being more formal and professional for establishing
business in France as the people there appreciate luxury and sophisticated demeanour which can be
a tricky challenge. It will be easy for the company to establish business in France as it takes only
four to five days for completion of procedure however it will also be difficult for the company to
open the bank accounts in the country as it is a time taking process with lots of paperwork involved.
There are also other cultural challenges in France which the company needs to keep in mind, one of
them being the people’s obsession and pride over their clothing, lifestyle and cuisine which the firm
must not disrespect or malign in any way.
Tokyo culture
Slide 8
There is extreme difficulty when initiating business in Japan in the Tokyo region as the
customers of Japan are very demanding at times and they also have different taste and preferences
as compared to other country's customers in terms of clothes, foods, technologies and basic needs
and wants etc. According to many countries, the Japanese culture is considered a bit different and
they have to redesign and improve their products and services in order to compete with the Japanese
companies and dealing with the Japanese customers too. Basically the Japanese have unique culture
which has been shaped by their different ethics and values. They have an effective educational
system when it comes to effective learning and adaptation of new skills. For the Australian business

companies that are seeking to join the Japanese industry hub, it is quite difficult to understand and
adapt to the culture of Japan because of their fundamental culture, different approaches and
perspective to look at things. Also they are very dynamic in terms of activities and technologies
which are quite difficult to understand and adapt gradually for some countries, in order to achieve
success in the business sector of japan.
Cultural problems of Tokyo
Slide 9
Following are some cultural differences between Tokyo and New York with respect to
starting a new business in Japan which can pose major challenges.
 Age and status - Age is a term which is very well respected in the Japanese culture, their
management hierarchy is affected by all the aspects of social and cultural interactions. The
Japanese are more comfortable in initiating an interaction with someone who belongs to
their own social status. For the people of japan, status is an importance term when it comes
to their contribution towards the company. According to US, age is not that major concern
relating to their work or operations performed in the organisation. Their structural hierarchy
treats all the people of same functional ability equal.
 Little daily rules - There are a lot of rules in day to day Japanese life, which should be
followed and respected by the employees working in the organisation, which basically does
not exists in Europe and USA. Such as, no drinking and eating, do not kiss and hug
anybody as a greeting, don't blow your nose in front of other people. The Japanese have a

strictly adapted culture which is quite disciplined and mannered with respect to other
countries, like USA which has an open culture and they do not have such rules and
regulations which has to be considered while entering into a business platform. They have a
friendlier and free culture in comparison to japan (Michaud, 2019).
 Japanese business etiquette - The etiquettes followed by the Japanese people are very
disciplined. They have a different culture followed in the business, such as they have to
exchange their business cards which is considered as shaking the hands. Their business card
should be offered by both of the hands and a bow. By presenting the documentation, the
employees have to impress the managers by showing their achievements and certifications
which is a necessary part in their business culture. The employees and the workers should
be well prepared and they should be there on the exact time too. These etiquettes are a bit
different in terms of USA culture as they hug and shake their hands in terms of expressing
their gratitude.
Slide 10
Task 1B
Culture plays a major role to start any international business it is important to understand
that different countries have different cultural values so companies can face some common
challenges such as language barriers if they want to start their expansion in international waters.
This makes it very tricky for businesses to adapt to the local culture of any given place as there are a

lot of regionally found variations which differ from one country to another which can actively
hamper the growth of the business and impacts their working in a major way (Murata, 2018). Some
of the major ways in which regional culture differences impact the organizational culture of
multinational companies have been listed herein.
 Communication - Both verbal and nonverbal communication are important for the
company as they can both effect the company in a positive and negative manner as lack of
proper communication can hamper a company’s growth prospects in any international
market of major significance and there are also issues related to the language barrier which
has been identified as one of the most major ways in which a culture of the company can get
affected in a negative manner. For example, for a company expanding in France, not
knowing that French people place great importance over their language can hurt their
aspirations and any employee who isn’t proficient in French will face working problems in
the country. On the other hand, if a businesses has great communication capability, they can
build a robust and diverse culture in which language barriers arte overcome using
organizational communication. The way in which a company communicates to its
international market is a key driver of its organizational culture (Muñoz-Leiva, Mayo-
Muñoz and De la Hoz-Correa, 2018).
 Attitude – Companies also need to be aware that different cultures have different attitudes
toward the company for example – in Japan traditional value is much more important and
these things reflect in their organisations and business ethics which is very nationalistic.
When Japanese people meet each other, they do not engage with other with the help of a hug
but they bow instead and when it comes to the habit of tipping, it is considered heresy in
Japan compared to America where it is a regular thing to do and is even consider as having
good manners. Attitude and societal customs also affect a company’s culture when they
expand into such territories as they must adapt to the local culture and make special
provisions in their culture to adhere to their style of living. In America, working late and
being late might be accepted but in japan, punctuality is considered as a key virtue to have
which is something firms must keep in their mind (Santoro, Ferraris and Winteler, 2019).
 Difficult to identify new opportunity – Companies often have to change the way they
operate including the way communication happens in their workplaces, the way workers are
treated in order to help solidify their presence in an international market. By catering to the
needs of the local and regional workplace, their culture must be respected and adapted to a
certain degree which is also why organisational culture is ever evolving in companies which
control a diverse and global workforce.
 Nationalism – This is also a major factor as the firm’s culture is directly impacted from the

local political thought which exists in regions worldwide. For example, Japanese people are
fiercely nationalistic and love their country and its culture very much and they don't like
when other countries come and harm their culture and Japanese people are much more
formal when compared to Americans which makes life difficult for companies unless they
adapt their culture within the organization accordingly. However firms must also be careful
in this regard as organizational culture must not fluctuate too much and they must
understand the difference between nationalism and politics as not everyone who loves their
country is a right wing political thinker (Hannibal and Knight, 2018).
 Multi domestic challenges- To set the company globally is not an easy task as it takes time
to conduct lots of research and knowledge collection is also an expensive procedure. The
companies have to do research and develop a strategy for each country and then they have to
focus on advertising and commercial tools to achieve their target and built their business
which is also where they must integrate their culture to be sensitive towards the regional
differences found in countries where it markets its products.
 Etiquettes- It is set of collection in which includes interconnected rules that imply a good
impression of our lifestyle and it is very important part for those companies who set their
business expansion goals internationally as even a slight bit of misunderstanding which
occurs due to their cultural etiquettes and way of working being different can set off a huge
domino chain as people are very sensitive when it comes to matters of culture and religion.
 Different country have different polices – Local politics also plays a huge role as it is a
major regional differentiator which governs the firm’s organizational culture in many ways
as in order to succeed in any given international market, firms must make sure that their
operations and cultural demeanours adhere and fully comply with the political authority in
charge.
CONCLUSION
The above report went into detail regarding the various impacts that culture has on a
company’s international businesses operations and in this report, there was a detailed comparison
between New York, South Africa, France and Tokyo in terms of their prevalent cultures. A culture is
a social environment in which people live and it is a blend of all things around them such as
language, traditions, law and polices, customs, moral etc. Different countries have different cultures
and it was concluded from this report that culture and regional differences have a major effect on a
firm’s international expansion capabilities and their organizational culture.

REFERENCES
Books and Journals
Cicchelli, V., 2018. Plural and shared: the sociology of a cosmopolitan world. In Plural and Shared:
The Sociology of a Cosmopolitan World. Brill.
Hino, N., 2018. EIL education for the expanding circle: A Japanese model. Routledge.
Hou, N., and et.al., 2018. Cross-cultural training effectiveness: Does when the training is delivered
matter?. International Journal of Intercultural Relations, 65, pp.17-29.
Michaud, J., 2019. CULTURAL VALUES AND MANAGEMENT IN AFRICAN COUNTRIES.
Current Politics and Economics of Africa, 12(2/3), pp.131-177.
Murata, A., 2018, July. Cognitive biases and distorted decision making that prevent rational and
efficient sports management-cross-cultural difference between MLB and NPB. In International
Conference on Applied Human Factors and Ergonomics (pp. 668-680). Springer, Cham.
Muñoz-Leiva, F., Mayo-Muñoz, X. and De la Hoz-Correa, A., 2018. Adoption of homesharing
platforms: a cross-cultural study. Journal of Hospitality and Tourism Insights.
Santoro, G., Ferraris, A. and Winteler, D.J., 2019. Open innovation practices and related internal
dynamics: case studies of Italian ICT SMEs. EuroMed Journal of Business.
Hannibal, M. and Knight, G., 2018. Additive manufacturing and the global factory: Disruptive
technologies and the location of international business. International Business Review, 27(6),
pp.1116-1127.