Impact of Culture on Global Business

“Impact of Culture on Global Business”

Project Brief:

As the world grows with the increase in population and ever growing business opportunities, the companies are compelled to expand their operations across the borders to harness new business prospects. The companies need to compete in global markets has accelerated the emergence of multinational companies (MNCs). While developing their strategies and designing their product lines, the most important consideration is given to the National Culture of the target market or the host country.

Understanding cultural differences is a critical aspect of the business. An internationally operating company is not expected to master the cultures of the world; however, understanding the ways culture affects business is necessary. When selecting markets for entry or as a source of supply, such companies must become familiar with the specific cultural factors, business etiquette and issues involved in conducting business abroad.

In our research, we aspire to develop an understanding of the term Culture, its different variables and its strategic importance for the companies operating internationally or going to be part of the global corporations.

Literature Review

Cultures: An Overview

Whenever the word Culture comes to our mind, initially we describe it into the two most significant variables; Religion and Language. Although these both factors are quite important and posses sufficient importance but the term Culture is not limited to these two.

Culture is everything we are made up of and is everything that we are. Our daily life from eating to religious habits is confined within the wall of culture. Our views of what is right and what is wrong reflect who we are. Without culture we would not know who we are. Without culture we wouldn't be able to contain our uniqueness and diversity. Cultures may be called a sum of the beliefs, rules, techniques, institutions and artifacts that characterize different societies and populations. In other terms culture is a very big deal to every country or group and cultural awareness is critical in the business relationship in every level.

There have been a lot of theories and definitions about the culture, so here the purpose is not to redefine the culture rather to build a basic but clear understanding of it. Mentioned below are some of the defining quotes about Culture, after going through these quotes, we would be able to draw more precise picture about “What Culture is or What constitutes a Culture”.

* O Mankind, We created you from a single (pair) of a male and a female and made you into nations and tribes, that you may know each other.

The Quran, 49:13

* Culture is a thin but very important veneer that you must be careful not to scratch. People from different cultures are basically the same and respond in the same way. However, make sure that you understand their basic customs and show an interest and willingness to learn the differences between your cultures.
Mike Wills

* Culture is the way in which a group of people solves problems and reconciles dilemmas.
E. Schein

* Culture is the fabric of meaning in terms of which human beings interpret their experience and guide their action.
Clifford Geertz

* Culture is a little like dropping an Alka-Seltzer into a glass-you don't see it, but somehow it does something.

Hans Magnus Enzensberger

* I do not want my house to be walled in on all sides and my windows to be stuffed. I want the cultures of all the lands to be blown about my house as freely as possible. But I refuse to be blown off my feet by any.

Mahatma Gandhi

* If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear.
Gene Roddenberry

* On a group of theories one can found a school; but on a group of values one can found a culture, a civilization, a new way of living together among men.
Ignazio Silone

* A culture may be conceived as a network of beliefs and purposes in which any string in the net pulls and is pulled by the others, thus perpetually changing the configuration of the whole.
Jacques Barzun

* Culture is the name for what people are interested in, their thoughts, their models, the books they read and the speeches they hear, their table-talk, gossip, controversies, historical sense and scientific training, the values they appreciate, the quality of life they admire. All communities have a culture. It is the climate of their civilization.
Walter Lippmann

* Culture means control over nature.
Johan Huizinga

* Culture is roughly anything we do and the monkeys don't.
Lord Raglan

Elements of Culture

Czinkota and Ronkainen (1998) describe culture as a set of common yet interdependent elements. These elements are manifestations of the total way of life of any group of people. Some of salient elements identified in a culture are;

* Language

* Religion

* Values & Attitudes

* Manners & Customs

* Aesthetics

* Education

* Social Institutions

(Czinkota and Ronkainen -1998)

Research Aims & Objectives

As stated earlier, the aims and objectives of our research are to develop an understanding and importance of the cultures for the companies operating internationally and also look into different cultural aspects and variables which influence operating strategies of global organizations and which should be given due focus while devising strategies, policies and product lines.

Research Methodology

Search of Data for Literature Review

Since the topic of our research is quite vast and of very significant and focused nature, we will explore all possible resources to gather data for literature review so that a deep understanding of the topic could be developed which shall make our further task more precise and relevant. For this purpose, we intend to use University library, Newspapers, Research Journals and World Wide Web but due reference shall also be mentioned to make our research more authentic.

Purpose of the Research

As stated above, core objective of this study is to describe Impacts of Culture on International Business. Eriksson and Wiedersheim-Paul (1997) and Yin (1994) claim that the purpose of a thesis is usually Exploratory, Descriptive or Explanatory.

Exploratory Studies define, describe and explain new problems, an area of work which has not been identified or discussed earlier in previous research studies.

Descriptive Studies mainly focus on the characteristics of the research object and its relevant surroundings. Descriptive studies are useful when the problem is relatively clear and structured, but the intentions are not to investigate causal relations.

Research Method / Approach

Holme and Solvang (1991) identified two main approaches to research in social sciences;

(a) Quantitative Method (b) Qualitative Method

Quantitative approach makes generalized opinions based on the results generated through research. Such methods are controlled and structured and they study few specific variables on a large scheme. Quantitative research methods are usually used for statistical researches which are supported by facts, figures and mathematical analysis.

Qualitative research approach is supported by case studies and interviews instead of structured questionnaires which have controlled questions. Such method tries to investigate and describe the study area as whole.

The prime objective of this thesis is to gain a better understanding of Impact of Culture on Global Business. We have chosen to investigate this by using a qualitative research approach. A qualitative approach is considered to be most suitable since our goal is to make a detailed investigation looking at a number of complex cultural variables (Language, Religion, and Education, Beliefs, Values & Attitude and Social organization) in order to gain a deeper understanding of the studied area. The fact that the issues investigated in this thesis are intangible is another reason for choosing a qualitative research approach. Our results cannot be measured in how much or how many, instead they are best presented in words and therefore a qualitative approach was appropriate.

Data Collection

There are two broad methods for data collection for the research purpose. First the primary and the other one is Secondary data collection method.

Primary Data Collection is done when the researcher is working on such topic which has not been explored or worked earlier. Primary data can be collected through various ways including questionnaires and interviews. But such method may be very expensive and data collected may be outdated sooner.

Secondary Data Collection is based on the data/material already available for the subject under study. Secondary data can be collected from the research thesis, articles or journals previously published on the subject matter.

(Eriksson & Wiedersheim-Paul, 1997)

We believe that the topic under research has not been addressed previously, so we'll be using primary data collection method to complete our task.

Data Analysis

When data for the research has been collected and organized, a researcher has two options to analyze the available information; Cross Case Analysis and Within Case Analysis. Miles and Huberman (1994)

Cross case analysis is done when a researcher is making comparisons and analysis on two or more than two case studies while Within case analysis method is used when the researcher has to focus only on one single case study but compare it with some previous research done.

In our study, we aim to use within case analysis method.

Results & Conclusion

At the end of our research, the analysis, results and concluding remarks regarding this study shall be shared.



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