Culture does not matter

Submitted by: Pawan Arya (030/1) According to Edward Tylor Culture is that complex whole which includes knowledge, belief, art, law, morals, custom, and any other capabilities and habits acquired by man as a member of society. (Source: Book The culture of culture by Herve Verenne)

Culture and Business

Ethnocentrism is one of the greatest allurements of the managers. Ethnocentrism is defined as the tendency of forming a perception about a group from the view point of your own culture. It can also be a great mistake at the same time because people who belong to different culture have different prospect about anything. And doing so managers thought that their culture, values, norms, views and religious thinking are greater than any other group or community. In the sense of business ethnocentrism can cause serious problems like inefficiency and misunderstanding etc. Security and exchange commission (SEC) is the example of ethnocentrism where SEC refuses to accept Indian accounting standard (IAS) as the same and equal accounting method of SEC. Ethnocentrism plays a very important role at the time of purchasing because the consumer think that the purchase of a product which belong to a different ethnicity is antisocial and wrong because it will harm the domestic economy. So the companies belong to different culture and ethnicity can face many problems such as braking into new market etc.

Face to Face Level

Companies which have employees from different ethnicities and culture can face so many difficulties at the time of face to face communication such as meeting and negotiation etc. The main reason for this is that these people will have to handle the language and behaviour of one another, and it is known that these two factors are very important at the time of any meeting or negotiation. For example at the time of negotiation one negotiator may think the negotiation process from different aspect in comparison of the other one. The extent of trust also differs from country to country such as in Asian nations most of the foreign citizen confronts the issue of mistrust and denial of the negotiation process. The formation of negotiation team also differs from culture to culture. For instance one person may form a team on the basis of technical abilities and other person select a team on the basis of level of authority. Time factor also differ in the process of negation between different cultures such as at the time of negotiation process Japanese are very formal and at the same time Americans are very casual. There are several other factors which plays a very crucial role at the time of negotiation such as style of negotiation (At the time of negotiation American make eye contact while Japanese dont like to make eye contact to their senior.), sitting style, dressing sense etc. are the issues which are important in the negotiation process. Difference in values is a very essential factor in negotiation as it can result into the failure of the negotiation.

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Source: Book Importance of culture by Stefan Bode

Company to Company Level

Companies face so many difficulties at the time of penetration in different market (International market), because companies cannot penetrate in foreign market without the help of the local distribution channel of that particular place. Moreover rapidly growing companies might decide to acquire new companies from other ethnicity. At that time cultural differences can result into the clash and is one of the biggest problem multinational organizations facing these days. So the pace of work and the working style has to be considered at the time of contract. Apart from this structure of organization, labour relationship, motivation and process of decision making differ from culture to culture and has to be considered. For instance Americans like the promotion on the basis of their performance while Asians like the promotion on the basis of the level of seniority.

Company to Customer Level

Culture plays a very important and critical role at the time of interaction with a customer who belongs to different culture and it is the most important factor in the overseas market. The customer from different culture has to be convinced to buy the product. As it is a known fact that preferences of the consumers differs from culture to culture. So companies should adapt the marketing strategies according to the respective market including 4ps i.e. Product, Price, Promotion and Place. In various studies it was found that failure to adapt cultural differences resulted into the failure of business. For example most of the goods from the International market need to be modified such as taste of the Dominos pizza differ from country to country. There are very few products which needs no modification or a little modification.

Conclusion
So it is found in various studies that if a company want to be successful in overseas market, it has to adapt the local environment and local taste. According to Brian Dawes Culture is the single greatest barrier to the success of the business in overseas market. In many examples it was found that cultural differences resulted into misunderstanding and poor relationship. Therefore it is necessary for the companies to adjust their business strategies according to the local market and develop a new business model which fits into that market. Moreover companies also face other problems such as government norms, competition from local player or from other international players etc. In order to set up a good distribution channel companies should train their employee to adapt cultural diversities. So the companies need to adapt local duties and responsibilities, such as sales people from different culture should learn different languages to tackle the problem of cultural diversity. Companies should consider the different cultural values before starting a negotiation process. By doing these things companies can be benefited in the overseas market.

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Source: Book Importance of culture by Stefan Bode