Global Business Environment: Cultural Risks & Success in Korea

This essay explores the global business environment with a focus on the cultural risks and success factors that General Motors might encounter while venturing into international business in Korea and China. It identifies major cultural risks such as failing to adapt business models to local markets, missing opportunities due to cultural barriers, and failing to adapt management practices across cultures. The essay also discusses ways to deal with these risks, including knowledge sharing, diversity training, and cultural learning. Furthermore, it highlights the roles of comparative and competitive advantages in ensuring success, as well as the contributions of a country's industrial policy, factor conditions, related and supporting industries, and industry rivalry. The analysis emphasizes the importance of adapting to local preferences, leveraging industrial policies like Made in China 2025, and understanding competitive dynamics to achieve sustainable growth and profitability in the global market.

Global Business
Environment

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Major cultural risks which might be encountered by the company and ways for attempting to
deal with them..............................................................................................................................1
Roles of comparative addition to competitive advantages in American company ensure
success..........................................................................................................................................3
In what manner, country’s industrial policy, factor conditions, related and supporting
industries along with industry rivalry contribute in success of enterprise...................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Global business environment entails key elements that are unique cultural, economic, legal,
technological addition to political attributes which define activities of a business concern within
a country. It is defined as an environment within distinct soverign nations, with dimensions
exogenous to home environment of company, impacting and influencing decision making in
usage of capabilities addition to resources (Hamilton and Webster, 2018). It advocates expansion
of establishment, ensure sustainable growth and provide wider access to international customers.
For people at managerial positions, it is mandatory to work on factors which comprise global
business environment. General Motors is American enterprise popular for producing automobile
in U.S.A. In the year 1908, the business was established by William C. Durant as a holding
company (General Motors, 2021). It is among world’s largest manufacturer of automobile. The
managers of company are planning to venture into international business which manufacture and
market in Korea and China.
The essay highlights major cultural risks which might be encounter by the company and
how managers attempt to deal with it. It further explains how roles of comparative and
competitive advantages ensure success and how organisational policies and other factors
contribute in organisational success.
MAIN BODY
Major cultural risks which might be encountered by the company and ways for attempting to
deal with them
Cultural risks are said to potential for operations of enterprise to struggle due to
differences in customs, customer preferences, norms and language. Globalisation has outpaced
capabilities of various establishments to manage accompanying cultural shifts. In aspect to
General Motors, ignoring cultural risks while venturing in international market can lead to weak
market share, missed opportunities, negative of low investment returns, reputational damage,
expatriate failure, legal challenges addition to premature termination of contracts. While
venturing with international business that performs manufacturing and marketing in Korea and
China, major cultural risk that might be encountered is failing to adapt business models to local
market. In international business environment, consumer attitudes as well as behaviours are
highly influenced through culture (Radović-Marković, Salamzadeh and Vujičić, 2019). In
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context to General Motors, when managers plan venture with business in Korea and China,
major cultural change that it might encounter is unable to adapt global business model to local
market. It is because the organisational managers needs to modify business models that reflects
local preferences, habits and customs. For example, changes needs to be made to car model
offerings, pricing and marketing. Till local cultures drive business models, international
companies have high failure risk. In Korea and China, costs related with failure can be
significantly on avergae, General Motors needs to absorb years of losses prior shuting down or
sell operations to some local rival.
An international business might encounter cultural barrier that might lead to missed
opportunities. General Motors being well established automobile manufacturer which is looking
for venture with businesses perfroming manufacturing and marketing in China and Korea, has
wide chances to face failure in establishing an early market presence as well as leaving them
unable to catch. It might damage relationships together with leaves a legacy of weak
commitment in process. Furthermore, Failure in identification of regional addition to
subculture differences is also a cultural risk which is as relevant intranationally as
internationally. Within Korea and China, there are certain regional variations in preferences in
consumers along with market conditions that might be encounter by General Motors while
venturing. Subcultures are not restricted to regional or ethnic variations (Katiyar, Barua and
Meena, 2018). For instance, managers considering variant consumer profiles of female and male
in China and Korea. Although, males account around 60 per cent of automobile purchases,
marketing campaigns overlook differences in differences for thinking and behaviour in male and
female. It is reported by around four-fifth multinationals that their offshore decision making arise
in a country despite of city level. When the entity will fail to recognise cultural diversity of
market risk missing significant segments of consumer. Barriers in culture might be amplified
within national context as they are preducted to be non relevant. Most of management theories,
practices and models are laden with specific assumption about culture. There are no
organisational theory that are universal, yet cultural assumptions underlying practices of
management might be unacknowledged while going internationally. In context to General
Motors, managers while planning venture with international organisation in Korea and China
might encounter cultural risk of failing to adapt management prcatices across cultures. In the
venturing process, ideas are transferred to other cultural environments without giving
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consideration to variations in culture. However, when transmission of practice across culture
without any adjustments then it can result in failure, even leading to losses.
There are various ways in which an organisation can deal with major cultural risks that
they might encounter while going internationally. In aspect to General Motors, managers can
deal with cultural risks with the help of knowledge sharing. It has been analysed that ability of
managers for diverse recruitment to generate creative results has limits in capability of
employees to share knowledge about culture (Khan and Ebner, 2019). Through recruiting and
selection higher creative level of people in venturing business carrying out marketing and
manufacturing in Korea and China which are more interconnected can help in dealing with
cultural risks. Knwoldge sharing addition to collective contribution results in creative results.
When managers of General Motors will have employee base having different cultural
backgrounds as well as experince to work internattionally, it can stimute cultural inclusion
together with outcomes in innovation.
Another way to deal with cultural risks is employ diversity training. Managers of General
Motors through employing diversity training can deal with the situation as it ensure that there is
inclusion of people in company of distinct cultural backgrounds. With this, the entity can foster
inclusive work culture that encourage teamwork, create new opportunities addition to leadership,
therebt builds positive work culture (Guercini and Milanesi, 2020). Diversity training can help
employees to understand and embrace cultural differences of coworkers and perform effectively
in Korea and China. Learning abour distinct culture is also a way to deal with cultural risks that
might be encounter by managers of General Motors while venturing in the country. At the time
of performing practices with businesses perfroming manufacturing and marketing in Korea and
China, asking polite questions related to cultures of each other addition to expressing
willingness to learn about cultural background that can foster relationships in venturing. For the
entity, it is essential to create a culture of inquiry in which asking questions is encouraged.
Through carrying out working patiently and understanding for norms along with beliefs of
various culture, ongoing learning for dynamic culture are all effective ways to deal with any type
of cultural risks.
Roles of comparative addition to competitive advantages in American company ensure success
Comparative advantages are potentials to produce specific product or service at lower
opportunity cost than trading partners. Within General Motors, role of comparative advantage is
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to set potentials of entity for producing goods and services at lower cost than others in market.
For instance, General Motors planning a venture with organisation manufacturing and marketing
in Korea and China as it will be much convenient than venturing in own country that is America.
It can be possible that employees in these countries may not speak English clearly, the savings
will be enough to make trade-off worth the loss of quality resulting in attaining profitability
which will ensure success (Hakanen, Helander and Valkokari, 2017). With roles of comparative
advantage, the American Company, General Motors will sell its products and services in lower
prices than competitors that will ensure gaining stronger sales together with profitability.
Lowering costs is not only role of comparative advantage, entering into trade with other nations
is also an effective role wherein the company will increase its number of potential customers and
clients. While venturing in Korea and China, this role of comparative advantage will add to its
list that would open up new pathway to entity growth and enhancing revenue generation system.
Competitive advantage is said to an attribute which enable the establish to outperform
competitors. With this, company accomplishes success through making superior margins in
comparison to rivals and building values for establishment and its shareholders. One of role of
competitive advantage is routing long term success. In context to General Motors, the role of will
help the company to reach them quickly and optimise routing. It will lead to improving produciy
and meeting customer needs that makes them happy and loyal towards the brand (Rialp-Criado
and Komochkova, 2017). Moreover, the role of comparative advantage will reduce consumption
of resources and overtime costs to establish factories for manufacturing and marketing the
business in Korea and China through venturing with international company with efficicnt routes
addition to balanced schedule to achieve desired objectives.
In what manner, country’s industrial policy, factor conditions, related and supporting industries
along with industry rivalry contribute in success of enterprise
Industrial policy of country: Industry policy is termed to a strategic effort by state for
encouraging economic transformation. For General Motors, industrial policy of Korea and China
can guide in creating favourable investment climate along with mobilising resources to
accomplish business objectives. For example, Made in China 2025 is one of industrial policy
adopted in China to boost manufacturing quality, labour productivity, reduce energy along with
resource consumption and many more (Singhania and Saini, 2018). Through this industrial
policy, managers of General Motors will set practices to venture into international business,
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manufacturing and marketing in Korea. It will promote various forms of ownership along with
allow the firm to work with flexibility to access markets and obtain advanced technological level
that can result in business success.
Factor conditions: These are elements which are created by a country for itself. With
adaptation to factor conditions, an organisation can ensure success in new country. In context to
China and Korea, key factor conditions comprise of superior demand conditions along with
business strategy, competition conditions and technological innovation. When managers of
General Motors adopt all factor conditions while carrying out venture with business
establishment to manufacture and market in China and Korea, it can achieve success. Within
these countries, productioon factors are easily available that will help the enterprise to make
economic profits (Roy and Singh, 2017).
Related and supporting industries: These are defined to upstream as well as downstream
industries which facilitate innovation with the help of exchanging ideas. For General Motors,
related and supporting industries in Korea and China includes Iron and Steel Industry. It
contributes in ensuring success of the enterprise through providing materials to manufacture car
or other automobile, high education level, component suppliers together with IT infrastructure.
Presence of such industries provides foundation to an organisation that create additional values
for customers as well as becoming more competitive.
Industry rivalry: Within automotive industry, there are various automobile manufacturers
such as Hyundai, Alpheon, Ford, BMW Group and many more (Nisula and Pekkola, 2018). Low
intensity of competitive rivarly makes the industry less competitive resultinh to enhancing profit
potential for existing organisation. In aspect to General Motors, intense rivalry in Korea and
China will contribute in building loyaty with consumers addition to workforce. Moreover,
intense rivalry is one of effective way to achieve success as it helps the enterprise to get target
audience to take sides as well as prevent them from using products or offerings of other brands.
It contributes in ensuring success through motivating business to implement positive changes
along with improving profitability.
CONCLUSION
From the above information, it has been concluded that global business environment
contributes in infrastructure development, providing better services, new technology, creating
jobs along with bringing in investment capital from other nations. Key cultural risks that could
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be encountered by a company in international business environment are failing to adapt business
models to local market, missed opportunities, failure in identification of regional addition to
subculture differences and failing to adapt management prcatices across cultures. To deal with
cultural risks, some mechanisms or ways are knowledge sharing and employ diversity training.
Roles of comparative and competitive benefits that ensure success are lowering costs, entering
into trade and routing long term success.
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REFERENCES
Books and Journals:
Guercini, S. and Milanesi, M., 2020. Heuristics in international business: a systematic literature
review and directions for future research. Journal of International Management, 26(4),
p.100782.
Hakanen, T., Helander, N. and Valkokari, K., 2017. Servitization in global business-to-business
distribution: The central activities of manufacturers. Industrial Marketing
Management. 63. pp.167-178.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Katiyar, R., Barua, M. K. and Meena, P. L., 2018. Analysing the interactions among the barriers
of supply chain performance measurement: an ISM with fuzzy MICMAC
approach. Global Business Review. 19(1). pp.48-68.
Khan, M. A. and Ebner, N. eds., 2019. The Palgrave handbook of cross-cultural business
negotiation. Springer International Publishing.
Nisula, K. and Pekkola, S., 2018. How to move away from the silos of business management
education?. Journal of Education for Business. 93(3). pp.97-111.
Radović-Marković, M., Salamzadeh, A. and Vujičić, S., 2019. Selection of organization models
and creation of competences of the employed people for the sake of competitiveness
growth in global business environment. International Review, (1-2), pp.64-71.
Rialp-Criado, A. and Komochkova, K., 2017. Innovation strategy and export intensity of Chinese
SMEs: The moderating role of the home-country business environment. Asian Business
& Management. 16(3). pp.158-186.
Roy, V. and Singh, S., 2017. Mapping the business focus in sustainable production and
consumption literature: Review and research framework. Journal of Cleaner
Production. 150. pp.224-236.
Singhania, M. and Saini, N., 2018. Determinants of FPI in developed and developing
countries. Global Business Review. 19(1). pp.187-213.
Online:
General Motors. 2021. [Online]. Available through: <https://www.gm.com/>
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