How Culture Influences Business

This essay examines the impact of culture on business, focusing on how cultural dimensions influence communication, ethical practices, and overall business success. It explores the role of language, religion, and social institutions in shaping business interactions and provides insights from Hofstede's cultural dimensions framework.

HOW CULTURE INFLUENCE THE
BUSINESS

HOW CULTURE INFLUENCE THE BUSINESS
In each and every business, communication is one of the primary concerns. This mainly
encompasses verbal as well as non-verbal communication. Because of the rising globalization,
businesses are creating more international workforce. Pertaining to this, it is becoming a
necessity of the businesses to study cultural development. Research in relation with the area of
inter-cultural dimension is becoming more needful (Martin, 2002). In every culture, the style of
communication is different because varied cultural values impact the behavior of individual.
Thus, it is quite obvious that there will be cross-cultural problems amid different groups of
culture. People within an organization interact with each other and interpret words as well as
action in their own understandings and assumed that these are shared when in reality they are
not. Accordingly, it can be attributed that every individual takes his own culture as the standard
which leads to various problems related to communication. It is important on the part of
managers of the companies to aware about the differences in culture as what is acceptable and
common in one culture may not be acceptable or offended in culture of another nation and
company. As a manager it is important to know the differences so that he can adapt to that.
Therefore, the present essay will have a closer look at how culture influence the business.
Further, it will analyze how cultural dimensions influence the communication in business. In
addition, the research essay will also analyze the relationship between organization culture and
business ethics so as to determine the key elements of successful businesses (Cameron and
Quinn, 2011).
Due to rise in globalization, the interaction amid the firm which is from different cultural
background is booming. Consequently, culture which is manifest in behavioral norms, human
nature and hidden assumptions has profound impact on the business of both domestic and
international market. In such a situation, in order to deal with the foreign partners more
effectively as well as to enter into the new market successfully, the exploration of the exotic
culture and there influence on the business is necessary. In a lay man language, culture involves
religion, education, symbol, economic systems, political system, social institutions and language.
So, when it is talked about the influence of culture on business, these aspects should be
considered, specifically the influence of language, religion, social institutions and history which
depicts habits, beliefs and attitude of the society. Analyzing these aspects will greatly help in
gaining understanding about the influence of culture on business (Martins, 2000).
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To initiate with, language is being regarded as the most vital factor that influences both
domestic as well as international business. This is because language is the critical medium for
partners in business in order to communicate with one another as well as to understand the ideas
and values (Adeniji, Osibanjo and Abiodun, 2013). Rising and frequent global trade has
increased the exchange of languages and is impacting the international trade. There are many
taboo words ad idioms in every language, which are likely to cause problems. For example, there
are some numbers which are treated differently in diverse areas like number ‘3’, which enjoys
praise as well as abuse alike. For example, in Monaco and Hong Kong, people like this number
because of the belief that it will bring prosperity (Ricardo and Wade, 2001). On the other hand, it
is considered as ominous in European nations. Thus, it can be said that, while carry out business
and interacting with the international partners, code-switching is very important. Let’s
understand this situation by taking the example of Microsoft Word. It is simply software at the
first glance. But the languages available in the Word are part of Microsoft marketing discourse.
It also makes statements in regards with the ways brands want to perceive. As a part of
localization strategy, word offers wide range of English from Australia to Zimbabwe. Further, it
also provides a comprehensive option of language in Irish-English. Here, Microsoft is considered
as a good model of code-mixing, which offers convenient to customers and expands the
customer base and attain global reputation (Hofstede, 2001).
Secondly, the role of religious factor in both domestic and international business can’t be
ignored, especially in the states which are being ruled by religious authorities. These religion
laws set down fundamental principle and beliefs which controls the life as well as behavior of its
adherents. The business can be impacted by religious belief mainly in two ways. Firstly, sharing
the beliefs which are common often implies sharing similar values. For example, a business
partner of same religion will help in enhancing the trust amid them and will increase the trade
volume more than the partners of different religion. Secondly, each and every religion has its
own ethical perspectives in relation with the activity of trading (Parker, 2000). The influence of
religion can be indicated on the material life of the people as well as on their attitude of
purchasing and utilizing the services and goods. Furthermore, religious traditions also prohibits
the consumption of specific products and services like in Islam, eating pork is prohibited.
Similarly, in Hindu tradition consumption of beef is banned (Ojo, 2003). Thus, when the
multinational companies like McDonald steps towards the Muslim nations, they alter their menu
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according to the religious practices of that particular nation. In such nations, the hamburgers
must be Halal. McDonald changed their name of the product and calls it as a beef burger rather
than hamburgers in order to make the public clear that there is no ham in them. Thus, before
entering in the international market or any other local region, it is vital for the organizations to
explore taboos and preferences of the societies of trade partners.
Finally, throwing light in relation with the social institutions, it is a complex of position,
norms, roles, values lodged in specific kind of social structures. According to Turner, it
organizes comparatively stable patterns of human resources concerning fundamental problems in
order to sustain viable societal structures within a provided environment (Schein, 2003). It is also
believed that the nature of social institutions helps in encouraging justifications of sanctioned
behavior. For illustration, China is a nation which is having powerful social institutions that
influence the business operations in number of ways. In China, family and its members are
mutually dependent and thus, the behavior of the people is impacted by these elements. In
Chinese societies, these relationships are controlled and overseen by guanxi, which is being
defined as a bond amid people, based on which friends are projected to take care of well brings
of each other. As a result, it can be said that a successful business relationship amidst the
Chinese organizations initiates with the establishment of a personal bond between them.
After gaining comprehension in relation with the key determinants of culture, it is
significant to highlight the famous study of Hofstede’s cultural dimension in order to have clear
picture of the impact of culture on communication of business both in international and domestic
market. Dimensions of cultural differences is quite vital for the companies particularly those
which are planning or operating in the global markets so as to apprehend the differences and get
manifest about the standards and values to be adopted in that particular nation (Hofstede,
Hofstede and Minkov, 2010). The Hofstede’s cultural dimension consists of uncertainty
avoidance, power distance, masculinity versus femininity, short and long term orientation,
indulgence versus restraint, individualism and collectivism.
Talking in relation with the power distance index, it is being defined as a degree of
inequality that exists within the people with or without power. If there is a high power distance
index than it means that the society accepts an unequal and hierarchal distribution of power and
the people understand their place in the firm (Hofstede, 2006). On the other hand, a low PDI
depicts that power is being shared and is widely dispersed. Additionally, the members of the
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society do not accept the situations where power is unequally distributed. For instance, in
Malaysia there is high power distance index, where team members do not initiate any kind of
actions by themselves and are most likely to be directed in order to complete the task. Further, if
the superior does not take charge they may think that the task is not important (Năstase, 2004).
Secondly, uncertainty avoidance index depicts how well people cope up with unknown
situations, stress and anxiety. High uncertainty avoidance index shows that people try to make
their life predictable and controllable. They try to minimize their anxiety of the unknown by
establishing rigid rules and laws. On contrary, nations with low UCI are more open to change
and have less rules, standards and regulations. Individual versus collectivism refers to the degree
to which the individual are integrated into groups. Those culture which places emphasis on
individualism focuses more towards achievement of personal goals. On the other hand, if the
culture is paying attention towards collectivism, the goals of the group and their values are taken
into account (Nicolescu, 2001). Furthermore, masculinity versus femininity means the
distribution of roles amid men and women within the organization. Those companies and
societies which scores high in this index have more differences between men and women in
comparison with those companies which scores quite low.
Focusing in regards with the long-term and short-term orientation, it is generally related
with the time horizon of the society. Those cultures which are short-term oriented values
traditional methods and employs time for building relationships and are of the belief that time is
circular and past and present is inter-connected. On the other hand, long term orientation views
time as linear and looks to the future rather than focusing on present and past. Lastly, indulgence
v/s restraint refers to the dimensions that measure the ability of the culture to satisfy the
immediate as well as personal needs of its members. Those culture that takes into consideration
restraint, have strict rules and regulations and regulates the satisfaction of drives.
Business organization all across the world is emphasizing more on the subject of business
ethics, as it is a new concept in the international business domain (Verbeeten, 2008). Human
resource plays a significant role in the organization and thus, modern management pays more
attention towards evaluating series of social factors like loyalty, ethics, morality or involvement.
The current economic context highlights these aspects at an international level in each and every
field. Under pressure conditions appearing from both external and internal business environment,
the main objective is to determine the resources which are used so as to grow the
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competitiveness and profitability of global firms; it has appeared a growing interest in
comprehending the relationship amid organizational culture as well as business ethics ().
Organizational values, business ethics and moral codes are considered as the main element that
needs to be considered at the time of studying the influence of business culture over economic
performance and image of the firm. It is quite obvious that there is a strong relationship between
ethics, business morality and culture. Each and every part influences each other in the
development process of company. The culture of the firm is stable and it indicates basic
principle, regulations, beliefs that cannot be replaced easily. Thus, development of the culture of
the firm based on the strong ethic principles can help in achieving a competitive advantage. The
economic performance of each and every firm is impacted by the ways business ethics is applied.
The changing external environment offers challenges to experienced business people also
(Istocescu, 2005). They also generate the tendency of practicing an immoral behavior in order to
survive in the market and to maintain the level of the firm. Thus, to maintain the image as well as
to achieve competitive advantage in long run, firms can develop a strategic way of thinking by
following the business ethics principles. Further, culture with its great power can create an
unconscious matrix of ideas as well as image influences the business in various aspects such as
religious, history, social institutions and languages.
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REFERENCES
Books and Journals
Adeniji, A.A., Osibanjo, A.O. and Abiodun, A.J., 2013. Organizational Change and Human
Resource Management Interventions: An Investigation of the Nigerian Banking Industry.
Serbian Journal of Management, 8(2), pp.139-154.
Cameron, K.S. and Quinn, R.E., 2011. Diagnosing and changing organizational culture: The
competing values framework. Reading, Ma: Addison-Wesley.
Hofstede, G., 2001. Culture’s Consequences. Thousand Oaks, CA: Sage Publications.
Hofstede, G., 2006. What did GLOBE really measure? Researchers’ minds versus respondents’
minds. Journal of International Business Studies, 37, pp.882-96.
Hofstede, G., Hofstede, G. J. and Minkov, M., 2010. Cultures and Organizations: Software of
the Mind. 3rded. New York: McGraw-Hill.
Istocescu, A., 2005. Comparative International Management, Bucharest: Academy of Economic
Studies Publishing House;
Martin, J., 2002. Organizational Culture: Mapping the Terrain. London: Sage.
Martins, E.C., 2000. The Influence or Organizational Culture on Creativity and Innovation in
University Library. MInf Dissertation, University of South Africa, Pretoria.
Năstase, M., 2004. Organizational and Managerial Culture, Bucharest: Academy of Economic
Studies Publishing House;
Nicolescu, O., 2001. Comparative Management, Bucharest, the Economic Publishing House.
Ojo, O., 2003. Fundamentals of Research Methods, Lagos: Standard Publications.
Parker, M., 2000. Organizational Culture and identity. London: Sage.
Ricardo, R. and Wade, D., 2001. Corporate Performance Management: How to Build a Better
Organization through Measurement Driven Strategies Alignment. Butterworth
Heinemann.
Schein, E.M., 2003. Organizational Culture and Leadership. San Fransisco, CA:Jossey-Bass.
Verbeeten, F.H.M., 2008. Performance Management Practices in Public Sector Organizations:
Impact on Performance. Accounting, Auditing and Accountability Journal, 21(3), pp.427-
454.
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