Cultural Factors Affecting International Business
There are numerous cultural factors affecting international business. Culture can be defined as a way of the life of a group of individuals. This encompasses the beliefs, behaviors, knowledge, skills, motives, values and attitudes. The meanings of cultural symbols are usually learned and perpetuated by the society deliberately through the established institutions. Cultural factors are simply factors that come from various components that relate to a cultural environment or culture where a business operates or consumers belong. On the other hand, international business refers to an entity like an international company or a multinational corporation that has business operations in multiple countries. International business also means the exchange of services and goods among businesses and individuals in multiple nations.
What are the major cultural factors affecting international businesses?
- Language and communication
In any business, communication is a vital element that determines how successful it becomes. However, communication of an international business can be affected by language barriers. Communication both orally and use of body language plays a vital role of enabling a business to know what the basic needs of consumers are. An international business that knows how to communicate in different international languages enjoys the benefit of being able to convey the right messages to consumers or prospects. On the other hand, language barrier can be off-putting and a serious challenge in conducting international business even when there is a translator. There are times when language barrier leads to ridicules and anger because physical gestures may vary among countries.
- Negotiations
Business people in different countries tackle negotiations differently. Chief executive officers and managers of international businesses should adapt to how negotiations are tackled in different countries. Due to cultural differences and personality in most countries, business persons seem to approach the process of making a deal with the attitude that both parties can win, or one side can win while the other loses. While entering a negotiation session, it is crucial that international businessmen know the negotiation attitude of the other party.
- Religion
Religious beliefs in different countries vary. International businesses should know the religious beliefs of different countries where they operate and respect them fully. Religion affects the attitude or values of customers on the products or services that are offered by international businesses.
- Etiquette
How people show business etiquette in different countries vary. In some countries, business professionals shake hands as a way of showing business etiquette. There are countries where culture requires business people to bow, hug or even kiss on the cheek. This affects international businesses because international business professionals should know how to show respect for other parties. Being aware of the culture’s etiquette of the other party enables international business professionals to avoid making mistakes because some people can be offended by even small gestures.
- Tastes
Culture plays a role in shaping the preferences of tastes and color of different people. It is important that international business appreciates the local taste sense and customs. Taste affects international businesses because they are forced to modify their products so that they can satisfy the specific needs of the target consumers.
Why it is important to know cultural factors affecting international business
Variation in cultural factors should be considered by the management of an international business in order to succeed. This is because culture has a lot of power in the world of business. This power creates insensible ideas and pictures’ matrix whose impacts are exceptional for international businesses. When an international business fails to consider culture, it loses credibility from its target customers. It also gets a negative response from the public. Eventually, it loses revenue. To avoid this, it is important that an international business knows the cultural factors that are likely to affect its operations.
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Sources
https://www.tamu.edu/faculty/choudhury/culture.html
http://theconsumerfactor.com/en/4-factors-influencing-consumer-behavior/
http://www.businessdictionary.com/definition/international-business.html
http://businessculture.org/business-culture/cultural-differences-in-business/
http://iveybusinessjournal.com/publication/the-top-ten-ways-that-culture-can-affect-international-negotiations/
http://www.coloradotech.edu/resources/blogs/march-2013/cultural-sensitivity
http://www.virgin.com/entrepreneur/how-does-culture-affect-international-business