Role of Culture in Shaping International Business

INTERNATIONAL
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 2............................................................................................................................................1
2.1. Role of Culture in shaping international business................................................................1
2.2. Implications to management, organisational strategy and operations ...............................5
2.3. Strategies to overcome the cultural differences...................................................................5
2.4. Importance of self awareness and sensitivity to diversity in culture...................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Organisational culture refers to rules, regulations, customs and values that are followed in
the system. Hence, it represents diverse type of culture which is followed throughout business
life. As organisation have to operate in environment which is dynamic in nature and keeps on
changing with time. Thus, they have to modify their operations considering all these concepts.
They have to apply definite strategies into their system to carry out the process effectively and
efficiently. This report highlights the case of Air pie which is a well-established fast food
restaurant in UK, but due to market saturation they wish to expand their business to Japan and
USA. They have to face cultural differences because of entrance into new market segment,
therefore management have to understand the cultural implications. This assignment also
highlights the importance of self-awareness and sensitivity that arises as a result of cultural
diversity.
TASK 2
2.1. Role of Culture in shaping international business
Organisational culture refers to process that is followed in the system and aims to
accomplish final objectives in definite time period. Managers plays very important role in
establishing healthy working condition. As they have to operate in different markets that consist
of diverse cultures that directly impact the vision of the company. As Air Pie have to shift their
operations from UK to USA and Japan due to market saturation. Thus, their management have to
adopt culture of these two countries. They have to frame new strategies according to business
environment that have to be implemented properly and correctly in proper time frame. Business
have to function in continuous changing environment and thus have to be flexible in their policy.
Hofstede's cultural dimension aids in understanding the cultural difference concept that
get arise in organisational structure. He coined six dimensions that is discussed below:
 Power Distance Index(PDI): It refers to differences that is there in company and is
solved in proper time. It can be high or low.
High PDI  It is applied in centralised organisation
system.
 It is also characterized by several
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hierarchy system.
 There is distance between number of
authorities and levels.
Low PDI  Low PDI signifies that there is flatter
business firm.
 In organisation employees and
employer are equal before system.
Thus Air Pie also consider the different methods of Power distance index which help
them to collect information of Japan and USA in better manner which help company tom
identify the market situation, although firm will wok according to this criteria as well.
 Individualism Versus Collectivism: It indicates the relationship that individual shares
with each other in their community.
High IDV  High IDV indicates that person are
ready to take challenges and receive
their outcomes in return of work done
by them.
 More focus is made on freedom of
workers that are working in company
institution.
Low IDV  Low IDV refers to attention made on
developing skills and become expert in
some area.
 It also signifies that there is overlapping
of several issues and aspects that may
arise in team structure.
Air Pie have to make strong bond between people of different nature so that there is no
problems that can arise while performing the work. Through this, approach there is
encouragement of employees thoughts so that proper involvement can be made.
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