How culture affects business?

Culture affects management of business around the world in the following manner: Small vs. large power distance (PD) This refers to how a society handles inequalities and the extent to which the less powerful members of organizations and institutions (like family) accept and expect that power is distributed unequally. Individualism vs. collectivism (IDV) Behaviour towards community. The degree to which individuals are integrated into groups or are expected to look after themselves and self-actualize. Masculinity vs. femininity (MAS) Behaviour and roles distributed according to gender. In one of the notable findings in the IBM studies revealed that in masculine cultures, people (whether male or female) value competitiveness, assertiveness, ambition, and the accumulation of wealth and material possessions whereas in feminine cultures, people (again whether male or female) value relationships and quality of life. Weak vs. strong uncertainty avoidance (UA) This refers to the level of need for structure. Cultures with low uncertainty avoidance tend to accept risk and change and prefer implicit or flexible rules and guidelines. Long vs. short term orientation (LTO) How much society values long-standing, as opposed to short term, traditions and values. Cultures with high long-term orientation place strong importance on family, discipline and social obligations. (Note: This fifth dimension was added in a study that took place in 23 countries around the world, using a questionnaire designed by Chinese employees and managers.)

Following are the other factors which culture affect in business: Customs When doing business with an affiliate from another country, consider the cultural differences that may be presented. This includes basic customs, mannerisms and gestures. For example, If a salesperson approaches a meeting with knowledge of a customers cultural background, then his words, body language and actions can all be adapted to better suit those of the customers. This in turn may lead to being better liked by the customer, ultimately increasing the salesperson's opportunity to close the deal.

 Language Barriers In some countries, like the United States and Germany, it is common for people to speak loudly and be more assertive or aggressive when sharing ideas or giving direction. In countries like Japan, people typically speak softly and are more passive about sharing ideas or making suggestions. When interacting with people from different cultures, speaking in a neutral tone and making a conscious effort to be considerate of others' input, even if it is given in a manner to which you are not accustomed, can help foster effective business communication. Target Audience When launching a marketing campaign or advertising to members of a different culture, always research the target market prior to beginning the campaign. Levels of conservatism, gender views and ideologies can vary greatly between cultures. Presenting a campaign that is not in line with specific cultural norms can insult the target audience and greatly hinder the campaign. Being aware of cultural norms can also help your company narrow down the target audience. For instance, in Japan and Austria, men usually are in control of decision making, but women make the majority of purchasing decisions in Sweden. Technology Due to globalization, people from various cultures and countries increasing conduct business with each other. Technology enables people to easily connect with people around the world in a moment's notice, but there are a few rules to remember before doing so. If making an international phone or video conferencing call, be conscious of the time zone differences and make sure to set a reasonable time for all involved parties to interact. It is important to remember that cultural differences can also affect availability. For instance, just because you schedule a conference call for the middle of the business day does not mean that the time will be favourable for the people you are conducting business with. Many Spanish cultures have longer lunch breaks than Americans are accustomed to, which means there may be a two- to three-hour time period during the day in which the person you would like to meet with is unavailable. Asking for availability prior to making the call is the best way to avoid any confusion. Once you are able to connect, speak clearly and slowly. Politics Political influences, both past and present, can potentially affect the way a person or company does business. Some cultures have a very strong sense of nationalism and government pride, and therefore, are more comfortable and willing to purchase from companies with some sort of government backing. Conducting business with those of differing cultures can also impact negotiations if there are on-going political disputes

between the involved parties' countries of origin. To avoid conflict, it is best to avoid discussing any political matter that does not directly pertain to the business at hand. This is also true for inter-office interactions. Communication Styles Adapt As American workplaces grow more diverse, employers and coworkers must also learn to communicate differently than in the past. This principle goes beyond race and sex to religions like Islam, which is America's fastest-growing faith, "Diversity Inc." reported in August 2009. For example, employers may wish to rethink the scheduling of office parties and other food-related celebrations during Ramadan, one of the Islamic calendar's holiest months. Failure to consider these issues may put employees in counterproductive or embarrassing situations. Corporate Culture Changes Foreign-born workers who speak poor English pose major challenges. This inability to communicate has lethal implications where a grasp of safety standards is vital, the Charlotte-Mecklenburg Workforce Development noted in a position paper. As an example, the board cited the growing number of Hispanics working in local construction. On-site training remained available to improve language barriers and safety conditions, yet many employers were unwilling to participate. The board questioned how such attitudes persisted, given the high costs associated with work-related deaths and injuries. Employers Revise Policies As corporate America grows more diverse, employers have reacted by revising their internal policies. For example, the many Christmas and team-building celebrations that mark the year's end are now labelled holiday parties, according to University of Phoenix business professor Reginald B. Gardner. Other notable trends have seen a shift from cultural and religious-based vacation days. Instead, these occasions are increasingly called personal days that employees can use as they wish. Such gestures show a company's respect for its workers' various lifestyles and cultures. Fallout Is Costly Ignoring employers' cultural needs often yields costly legal consequences. In 2000, CocaCola paid $192 million to settle its African-American employees' pay and promotion discrimination claims. The amount represented the largest payout in a corporate racial discrimination case, according to the Business and Human Rights Resource Centre. As part of the settlement, a task force was named to monitor the soft drink maker's willingness to address the problems. By December 2006, the task force ended, stating that the company had made significant progress. Workplace Communication According to lecturer and author Stephen Dahl, languages are highly influenced by the unique world views of their indigenous cultures. This means words and expressions

themselves can have vastly different meanings and implications for people from different backgrounds. Employees in today's workplaces must be careful to ensure that their intended messages are understood clearly as they communicate with culturally diverse coworkers. Taboo topics of conversation, biases in spiritual, political or social issues and the nuances of life experience differ between cultures, making it a challenge for co-workers to find a common ground when communicating. Conflict management styles vary dramatically by culture as well, creating possible tensions. Imagine an employee from the Netherlands, where people see arguments as a constructive and necessary part of communication, trying to solve a problem with an employee from Japan, where public disagreement is deeply offensive, and you'll begin to grasp the types of problems that can arise due to cultural differences. International Business Communication In the past, it may have been commonplace for entrepreneurs and corporate managers to develop their own unique communication style for dealing with customers, business partners and suppliers. Today, however, managers must take the time to study the cultural eccentricities of their business counterparts before attempting to make contact with people in other countries or from other subcultures. The Texas oil tycoon, for example, has to understand that grabbing his Chinese partner's hand in a firm handshake is not a good idea but that a slight bow and smile are the appropriate form of greeting. Verbal communication and body language are more important than ever in international business dealings because innocent hand gestures, mannerisms or even posture can cause a rift between culturally diverse business partners. The diversity of culturally distinct managers has been melding slowly as globalization and Westernization give managers extensive experience in different cultures. Written Communication A fundamental shift in the form of written business communications is taking place to accommodate foreign speakers. University business-communication courses now stress simplicity and readability of correspondence over wordiness and technical prowess in writing. Being able to get your message across to all readers has become more important than showcasing a mastery of legalese or the complex language of business research. Define and Establish Cultural Diversity A typical organization has an extensive range of people who have cultural and personal differences. A small business interested in fostering cultural diversity among its employees endeavours to create mutual respect for the different cultures, along with enabling personnel to reach their full potential. Acknowledging diverse cultures enables the organization to positively influence the organizational behaviour that, in turn, enhances the performance and image of the organization. The business should portray the cultural diversity aspect of the organization in the mission statement.

 Transforming Organizational Behaviour The patterns of behaviour in the organization are influenced by the nature of interactions and degree of diversity within the organization. The business, therefore, should seek to create an organizational culture that not only enhances the diversity of its workforce composition but also boosts individual performance. The positive influences of cultural diversity not only enable the organization to increase the scope of its reach --- the business also receives favourable exposure from every sector of the population due to its multicultural approach. Influencing Cultural Diversity Cultural diversity is geared toward having a deep respect and understanding of the various people in the organization. This aspect of the organization is strengthened by having feedback, teamwork, team-building activities and interpersonal communication. During such engagements, individuals are able to interact and appreciate each other's culture; consequently, an accommodating culture and organizational behaviour is established within the organization. Sustaining Positive Influence Programs Programs for positive influence should always be adjusted to suit the dynamic nature of interactions among people. Establish regular forums and educational programs in which participants are trained to be sensitive to and appreciate cultural diversity, as well as in maintaining desirable organizational behaviour. Regularly post motivational quotes and messages of cultural diversity on public bulletin boards. Concentrate on creating programs that internalize cultural diversity into the organization's behaviour.

Submitted by: AKANSHA SINGH PGDM IB FIB1102 JIMS,ROHINI,SEC-5