Why culture is important in doing international business?

Essay by dolphi_darrenUniversity, Master's March 2005

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In the business world today, borders are blending and multi-national mergers are causing many company nationalities to become indistinct. As the globalization of markets rapidly increases, many companies are finding international expansion a necessity of competition. The world is greatly affected by this movement towards a global market, and many companies are finding it extremely important to adapt to other cultures. The most considerable obstructions to successful international marketing involve misinterpretations and contrary views resulting from cultural differences. Being both aware of some of these issues and prepared to make the necessary accommodations can save companies time, effort, and a considerable amount of money.

Culture, being intangible in shape, builds up of a particular society's behaviors, from religion beliefs to dressing style to art to methods of farming. Trompenaars and Hampden-Turner (1997, p.3) consider that culture is a shared belief of a group of people. Also, according to Mahoney, Trigg, Griffin and Pustay (2001, p373), culture is "the set of values, attitudes, beliefs, behaviors and customs that distinguish a society".

Besides, in the context of international management, culture is defined as "everything that people have, think, and do as members of their society." (Holt & Wigginton, 2002, cited in Ferraro, 1990). Culture reflects social rules however it might be defined, while business must be conducted within the context of the society, a society culture thereafter guides the firms how to run in such society. Understanding culture constituents might help companies visualize the effects on conducting business.

The reasons why understanding culture is important in doing international business will be discussed associated with examples. In further response to this question I will subdivide benefits from appreciation of culture as marketing products, managing workforces, and dealing with host country governments (Mahoney et al, 2001). Finally, the paper will conclude that doing...