Assignment Outline the reasons why the various elements of culture (social struc

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Assignment

Outline the reasons why the various elements of culture (social structures and control systems, language and aesthetics, religion and other belief systems, educational systems, etc.) might increase the cost of doing business in a country. Be sure that you illustrate their ideas with concrete examples of both cultural elements and specific countries. *The purpose of this assignment is to come up with examples like the ones below*.

(1) For example, in Saudi Arabia, labor laws prevent gender mixing in the workplace, therefore business costs increase accordingly, as MNEs need to have separate offices for men and women. (2) Or for countries like Saudi Arabia that are majority Muslim, MNEs could lose hours of sales and potentially pay hourly wages along with utility costs during the multiple times the business shuts down in a day for prayer.

Explanation / Answer

Social and cultural aspects of a society form its very nature. The multinational companies operating internationally is growing constantly. The world is opening up for foreign firms and new destinations in the company’s business are increasing. High competition from the competitors, companies operating abroad are faced with a much difficult task then before. Also, going international the challenges the company must handle are new and unfamiliar, hurdles the firm never faced before are becoming crucial in the everyday work. Culture is one of these obstacles and can affect the entire operation of the organization. Culture can influence the business in different ways. Language problems, pricing difficulties and culture collisions are common in the beginning. The company must be able to handle these difficulties in a way that is satisfying for all the stakeholders of the organization. Disrespect for the foreign culture can destroy the entire operation of the company. Culture can be both a positive and negative influence and many companies struggle in the new foreign environment. Respecting and understanding the new culture without forcing their own beliefs on people, are things that can be extremely helpful to consider for the organization. Understanding how culture affects international business in core areas like communication, etiquette, and organizational hierarchy can help the companies avoid misunderstandings with business partners and clients from abroad and excel in a globalized business environment.

Effective communication is essential to the success of any business venture, but it is particularly critical when there is a real risk of the message getting lost in translation. In many international companies, English is the standard language of business. But more than just the language ones speak, it’s how they convey their message that’s important. For example, while the Finns may value directness and brevity, professionals from India can be more indirect and nuanced in their communication. So, if the communication is not done in the proper way, there will be delay in the overall operation of the organization, raising the cost to company for various elements of the company. Although, fluent English gives a professional boost globally, understanding the importance of subtle non-verbal communication between cultures can be equally crucial in international business. The company has to remember that what might be common in their own culture be it a firm handshake, making direct eye contact, or kiss on the cheek, these very things could be unusual and offensive to a foreign colleague or client.

Workplace etiquette and various approaches to professional communication are just one of the innumerable differences in workplace norms from around the world and in the multinational organizations. Hence, the formality to address is a big consideration when dealing with colleagues and business partners or clients from different nations. Some prefer titles and surnames and some responds on the first-name basis. While it can vary across organizations, for example, Asian countries such as South Korea, China, and Singapore tend to use formal Mr./Ms. Surname, while Americans and Canadians tend to use first names. Thus, one has to thoroughly research about all these nitty gritty before venturing to new countries for expansion. Along with differences in etiquette, come differences in attitude, particularly towards things like workplace confrontation, rules and regulations, and assumed working hours. For instance, while some nations may consider working long hours a sign of commitment and achievement, others may consider these extra hours a demonstration of a lack of efficiency or the de-prioritization of essential family and personal time. Organizational hierarchy and attitudes towards management roles also varies widely among different cultures. Whether or not those in junior positions feel comfortable speaking up in meetings, questioning senior decisions, or expressing a difference in opinion, can be dictated by cultural norms. Often these attitudes can be a reflection of a country’s societal values and level of social equality. For example, a country such as Japan, which traditionally values social hierarchy, relative status, and respect for seniority, brings this approach into the workplace. This hierarchy define roles and responsibilities across the organization and also means that those in senior management positions command respect and expect a certain level of formality from junior team members. On the other hand, Scandinavian countries, such as Norway, which emphasize societal equality, tend to have a comparatively flat organizational hierarchy. This means relatively informal communication and an emphasis on cooperation across the organization. When defining roles in multinational teams with diverse attitudes and expectations of organizational hierarchy it can be quite a cumbersome task for the management of the company, as these cultural differences can present great challenges within the company as well as with the outside environment.

The various elements of culture namely social structures and control systems, language and aesthetics, religion and other belief systems, educational systems, etc. surely effects the international organization and often increase the cost of doing business in a country. Easily available information, rapid growth in technology, labor cost factor, trade agreements, standardization, sophisticated distribution methods and channels along with other managerial and operational innovations have gave way to a wave of globalization in the past decade and many organizations have gone global through organic and inorganic expansion. Every organization has its distinct culture thus management should have good understanding of the foreign culture to develop meaningful strategies for the company to easily mingle with the new environment. A business cannot simply rely on its current method of conducting business when it decides to take its business at international level. Every country has a set of different variables which can be new for an offshore company like rules and regulation, taxation, different currency, different holiday periods etc. Most important consideration in this regards is the difference in culture among the nations. If appropriate research is not done prior to setting up shop in foreign countries, then the cultural aspects of that foreign country can greatly impact the working of the organization and mostly in negative ways.

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