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1 Introduction

Terrorism, ethnic conflict innovations, gender inequalities, deprivation and diseases etc., have
made society more ambiguous and uncertain about its future. The cultural issue has been at
the forefront of political concerns since 11 September 2001. The 2002 World Summit on
Sustainable Development in Johannesburg recognized the importance of culture and
describes culture as the fourth pillar. In addition, the increased globalization puts strong
pressure on national corporate cultures to adapt local thought to their management policies.

Internationalization companies can face a number of legal and cultural barriers when
preparing their market entry strategies. The differences in culture result from numerous
different variations of culture such as material culture, social organisation, religion, language,
aesthetics and popular culture. They are fairly ambiguous. The local company culture needs
to have these factors successfully included. Culture has an influence on many business
practices, including contracts, leadership, recruiting, interaction and quality reviews, through
everyday organizational processes. The understanding and benefit of cultural differences are
one of the greatest challenges in business operations globally and it is interesting and useful
towards to the information in international business. There are many researchers go for this
topic to study on how the companies could react to the culture in order to expand their
companies to the foreign countries.

2.1 Understanding culture

Culture is a collection of learned core values, principles, norms, traditions, ethics, rules and
actions shared by individuals and communities that define how an individual act, feels and
views himself and others. The culture of a community is passed from generation to generation
and factors such as language, religion, customs and laws interrelated which is the view of a
society of authority, morals and ethics will ultimately manifest how a person conducts business,
negotiates a contract or deals with a potential foreign business partner or competitor may help
develop a sound strategy for neglect. Culture can also describe as the pattern of basic
assumptions that a given group has invented, found, or formed in learning to cope with its
external adaptation and internal integration problems, and that have evolved well enough to be
considered legitimate, and thus to be taught to new members as the right way to interpret, think,
and feel in relation to these issues. It is less clear that when these differences are articulated,
someone varies culturally. It will most likely express itself through communication, especially

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in an international business setting. Culture also produces, receives, stores and processes
messages. Therefore, culture is conveyed by communication, and communication represents
the culture of somebody.

2.2 Significant components of culture

The following are some significant elements of culture that have an impact on

international business.

2.2.1 Language

Language is more than just words that are spoken and written. A meaning is transmitted
through non-verbal communication, expressions, body languages, facial expression. When two
people don't speak a common language and are forced to use an interpreter, this non-verbal
form of communication is the only direct contact and tool which individuals can use to
communicate each other directly. In failing to understand the cultural context in which such
non-verbal communication takes place, you run the risk that you will not only fail to interpret
your college across the table, but that you will actually send the wrong signal. Many would say
that English is now the main international language used in cross-cultural communication, but
not everyone speaks English, or, to the point, not everyone wants to speak English, while
English has become the first language after Mandarin, and by far the most popular second
language in the world. Naturally, this language is far more widely used than any other European
one and is a major language diplomacy, air traffic control, a lot of pop culture. It is not easy
for businesses to follow a global language strategy and always fail along the way. It's
revolutionary, and the staunch opposition from workers is almost certain. Some people may be
disadvantaged because their English is not as great as other people, so team dynamics and
success can be hindered, and national pride can be avoided. But companies have to break down
language barriers, so that they can survive and thrive in the global economy, and English is
now almost the common ground.

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2.2.1.1 Competitive pressure

When businesses wish to purchase or sell, they must be able to communicate with a variety of
buyers, distributors and other business partners. If companies are lucky, the parties involved in
the transaction will share a mother tongue, but it cannot be counted. In essence, companies that
fail to formulate a language strategy limit their opportunities for growth to markets where their
language is spoken, which clearly put competitors with English at disadvantage.

2.2.1.2 Globalization of tasks and resources

Language differences can cause a bottleneck. Communication will be affected without

common ground. Better understanding of language provides employees with more first-hand
information that is important to making good decisions.

2.2.1.3 M&A integration across national boundaries

The negotiation of a merger or acquisition is sufficiently complicated when everyone speaks

the same language. But, when they don't, details are lost easily, even in basic e — mail
conversations.

2.2.2 Religion

The dominant religious philosophy in a culture may have a far greater impact than many people
expect on their approach to business, even if the individual isn't a devotee of a particular
religion. Employees want religious beliefs and practices to be accommodated, including time
during the workday for rituals, and time off from work for observances. Failing to recognize
different religious and respecting the needs of individuals’ employees, can lead to team
conflict, scheduling problems and costly employee turnover. Measured by percentage of world
population in 2010 (Pew Research Center, 2015), Christianity (31.41%) is the biggest religion,
followed by Islam (23.2%). By 2050, however, the Islamic population will be approximately
equivalent to the number of Christians.

There is not always a connection between a country's faith and the ethical framework. Until
1949 China's official ethical system was the Confucianism, which, unlike Christian and Islamic

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ethics, was not based on religion. Eastern Asia also affects the Code of Confucian Learning.
They mainly focus on three ethical principles: honesty, loyalty, and reciprocal obligation.
These are critical for "guanxi" networks which allow but must be reimbursed for assistance and
information. Guanxi could be stricter than the law. Honesty fosters trustworthy ties between
business partners and superior loyalty results in command obedience. These findings indicate
that the dominant religion and ethical system in a country influence international business as it
shapes the conduct of society. This should be taken with caution, though, because a common
faith and morality does not necessarily lead to the same actions at work. For example, because
of other factors such as culture two countries with the same religion can vary in their attitudes
towards companies. The next section addresses the cultural influence.

2.2.3 Conflicting attitudes

The way business is conducted has enormous impact on cultural values. Some of the most
important quality distinctions to consider are whether a culture values individualism, like the
U.S. or collectivism, like China, and whether society is motivated by tasks, like the U.S. The
cultural values expressed in daily life are often distorted and not only reflected in industry.
Unless you understand the cultural foundations, even before negotiations start, you can turn
into a deal killer. Visitors are often left scratching their heads as to why something has fallen.
Successful businesses today embrace the eminent fact that conflict remains unavoidable and
choose to handle the issue in a constructive manner that pushes the business in a positive
direction. Organizations cannot continue to handle conflict in shame and yet compete
effectively in a growing global economy. The efforts of an organization to establish a reference
structure in order to form a common cultural forum within an international business
environment, however, were theorized as the basis for successful interactions between different
cultures. Ultimately, all the elements involved in the process benefit from the experience.

2.2.4 Institutional and legal systems

Differences in legal systems, contractual formality and lawsuits reflect differences in the
structure of communities as far as laws and decision-making processes are concerned. The level
of formality in dealing with public and private issues must be taken into account in any sort of

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contractual relationship, including negotiation of joint venture arrangements, registration of
subsidiaries and resolving sensitive issues with the host country's public authorities.

2.2.5 Value systems

The ideals that are dominant in a certain society and the way they are valued in people's daily
actions are significant because they influence their willingness to take risks, leadership styles
and superior-subordinate relationships. This refers to the ties between negotiators within a
specific team, antagonistic negotiating teams and the negotiators.

2.2.6 Time orientations

The way people organize their acts has an intangible and ubiquitous effect on time and how it
forms. The most obvious implications may be timeliness differences expressed in daily
negotiating behaviour, but differences in time guidance are more important, particularly in the
future, as they influence long-term issues such as the strategic context of decisions made during
negotiations.

2.2.7 Mind-sets

Thinks affect the ways in which issues are addressed, information gathered, the information
chosen and its' truthfulness' assessed, so that it finally affects the process of negotiations and
the decisions resulting.

2.2.8 Relationship patterns

These relate to the manner in which the person is related to the group; what are the
predominating patterns of the family and kindergarten; how relations are framed. Through the
interaction between individuals, decision-making process and the mixture of human and
business relationships, these behaviours affect international business negotiations.

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3.0 Levels of culture

This includes grades and sublevels, a basic tenet of community. Community is useful in five
basic levels, namely global, local, organizational, group and individual. Tangible and
intangible sub-levels of culture are within each of these scales.

3.1 National culture

The cultural influences of a country that result in its national characteristics are the regional
differences. While there may be geographical or political disparities between nations, national
culture can be seen as the values held by a majority of the nation's population. Such principles
are essentially subconscious and established in one's infancy. The values in contrast to the
cultural values of another nation are brought to a level of consciousness.

Values are usually viewed as constant over time within national cultures. National values are
going to slightly change from generation to generation as they represent the customs of the
nation-state over time but the basic values remain the same. For instance, a German from a
culture of timeliness and business travel in Italy will realize the difference between Italians
viewing time (more leisurely and relaxed) in terms of their national culture.

3.2 Regional culture

A cultural area or cultural domain refers, in anthropology and geography, to cultural aspects
associated with an ethnolinguistic entity and the territory in which it resides. Different cultures
often do not restrict their territorial coverage to national borders or to smaller State
subdivisions. Cultural "influence spheres" also may overlap or form concentrated structures of
macro cultures that include smaller local cultures. Various bounds, such as religion, folklore
versus dress and architecture versus language, may also be drawn depending on the particular
aspect of interest. All the national cultures are local subcultures that affect one group's
characteristics in a nation state. For example, the word "pop" means soft drink in the Midwest,
but if you go to the East Coast, you are called “soda”. Soft drink is known in other parts of the
United States as “coke”'

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3.3 Organizational culture

Organizational culture speaks to an organisation's own culture–the culture that distinguishes it

from competitors and non-competitors. Corporate cultures are often called corporate cultures
and reflect an organization's beliefs, values and assumptions. For example, in a school district,
one culture can be different from the culture of another school in the same district simply
because of what people relate to and respond to in one school culture.

3.4 Team culture

Throughout team environments the values, principles and norms of culture are present, which
determine the activities and performance of the group. Cultural standards guide team members
in dress and appearance, culture, the way they communicate and get along with each other.
Many teams use humour throughout their work lives. Other teams are extreme. Departments,
teams and work groups, even if they are based in the same building and organization, could
and will act differently from each other. Although you may not think as cultural elements of
personality or disposition, they can and can shape the culture of a group.

3.5 Individual culture

Individual different cultural variations contribute to personal experiences, including family's

impact, friends, education, the press, colleagues, etc. Those individual can share with another
person a national culture, such as an American, and live in the same regional culture, the
Midwest. Even with the same organisation, you will work together with the same group and
thus have a culture of organization and team and even if you share similar values, you would
probably have a different culture based on who you are and your social education.

These five levels of culture are important to consider and recognize, but each of these cultures
can be expressed as subcultures or micro cultures. Not everyone in a national culture does or
does the same thing. Religious differences exist as well as gender cultures, culture of capability
and disability, cultures that centre around sexual orientation and even cultures based on
concepts or conditions such as the culture of poverty or the culture of juvenile criminality.

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4.0 The impacts of culture on International business

Culture mainly affects the outcome of negotiations indirectly. When negotiating internationally
one needs cultural knowledge and skills in intercultural communication. Many agreements
have to be negotiated, drafted, signed and finally implemented such as sales contracts, licensing
agreements, joint ventures and various kinds of partnerships, agency and distribution
agreements, turnkey contracts, etc. Negotiation is not only based on legal and business matters,
hard facts which are often emphasized as being the sole important facts, but also on the quality
of human and social relations.

4.2 Communication

Effective communication is essential to the success of any company, but it is particularly

important when there is a real risk that a "lost" message is translated. English is the common
trade language in many international companies. But it's how businesses communicate their
message that is not just the language to say. For example, while Finns value directness and
brevity, Indian professionals can communicate more indirectly and nuanced. In addition, while
fluent English can give an overall professional boost, it may also be important for international
business to understand the importance of a sensitive nonverbal communication between
cultures. It might be odd or even disrespectful to our culture while it is normal in foreign
colleague or client culture – be a firm handshake, direct eye contact or kiss on the cheek. The
companies must do their work in advance of professional encounters with people of a different
community as far as possible. Recall being sensitive to the language of body, and ask if any
doubt. Cross-cultural communication can be challenging, but it can help to make cultural
differences easier to approach everyone through sensitivity, openness and curiosity. Companies
that want to work globally must be mindful of language, sound and body language barriers.
Inter-cultural interaction may be a challenge, but it can help businesses thrive internationally
to address cultural differences with tolerance, transparency and curiosity.

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4.3 Workplace etiquette

Different approaches to professional interaction are only one of the numerous variations in
working conditions worldwide. Address formality is another key aspect of interaction with
colleagues and consumers from diverse cultures in global enterprises. Are they comfortable
with first name approaches or do they prefer titles and surnames? The latter seem to be favoured
by Asian nations like China, while Americans usually take first names. Issues like address
formality may not seem so significant, but if it gets on the wrong foot with a potential
international client, that may ruin the chances of working with them ever in future. In certain
cultures, the etiquette of work also means that they have a different approach to working hours,
rules and regulations. Although some may see long work hours as a sign of commitment and
accomplishment, others can view such additional hours as a show of lack of effectiveness or
lack of consideration for family or personal time.

In an international business environment, the concept of punctuality may also differ between
cultures. Various ideas about what is "on time" can often lead to misunderstanding or a negative
perception of culture. For example, if an American could arrive a few minutes early at a
meeting, an Italian or Mexican counterpart can arrive after a scheduled start (and still be
considered "on-time") several minutes. Differences in attitudes, particularly to workplace
conflict, rules and regulations and expected working hours, come with different etiquettes.
While some might regard working long hours as a sign of commitment and success, some might
view this additional hour as proof of inefficiency or of the prioritization of important family or
personal time.

4.4 Organizational hierarchy

There can be widespread differences in organizational hierarchy and management attitudes

between cultures. It can be dictated by cultural standards whether or not people who are in
junior or middle managements feel well at conferences, have questions or express a differing
opinion. This can often represent the societal values or the level of social justice of a nation.
For example, this approach is brought to the job of a country such as Japan which historically
appreciates social hierarchy, relative rank and respect for seniority. This hierarchy helps to
define organizational roles and responsibilities. It suggests as well that senior managers
appreciate and anticipate a certain degree of formality from the young team leaders.

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Scandinavian countries like Norway, however, which illustrate social justice, continue to have
a relatively flat hierarchy. This can mean, in turn, relatively informal communication and
emphasis on cooperation throughout the company. It is easy to understand why these cultural
differences can be a challenge when you define role in multinational teams with diverse
attitudes and expectations of organizational hierarchy. Therefore, these various cultural
management attitudes can make it difficult for multinational teams to determine roles.
Consequently, the cultural approach towards the organizational structure of companies is
important to be aware of their target market.

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5.0 Conclusion

The 20th century marketing is marked by a short product life cycle and severe competition for
the very same market customers. Before entering the market, the exploration of country culture
is seen as an essential means by companies to compete effectively and efficiently in the market
and to attain a long-term competitive advantage on the market. Today, many countries are
trying to force their ideologies on the world market. But if the countries don't want to face a
cultural clash, they have to change their business in politics. On the basis of our analysis of the
results, the international development of businesses relies not only on the companies, but also
on the countries. This topic gives a new answer to the companies that desire to expand their
markets to the foreign countries and also towards to every people who interest in international
business. More than 80% of the articles deal with the role of culture in internationalization
decisions (Lopez, Vidal and Gonzalez, 2015).

Countries should promote and be more open-minded in relations with other countries. They
will open their borders to their neighbours ' culture. To order to develop international business,
all these challenges must be solved by countries. In addition, cultural understanding is essential
to business decision-making. You have to understand their behaviour and lifestyles if you want
to select a target group. More empirical research is therefore needed to improve the
understanding of culture.

Companies must adapt culturally sensitive products and advertising services to sell
successfully for foreign customers. Through the chart, we can assess the socio-cultural
variables in all countries. The success of the company is dependent on the determination of the
company to recognize the country's culture. It needs to understand the internal culture, but must
also learn to link its abilities to a local culture in which these values never alter. For
international business, culture is very important.

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Apetrei, A., Kureshi, N. I., & Horodnic, I. A. (2015). When culture shapes international

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