Cultural Challenges of Doing Business Overseas

Essay by vanraj May 2009

download word file, 13 pages 0.0

21st century is an era of world globalization of business, opening many countries to foreign investors. According to Sherman, "Each year, hundreds of entrepreneurial and growing companies consider international expansion as a marketing and growth strategy. When developing a strategic plan to launch an international business program, growing companies and their advisors must always consider the potential barriers and adjustments they might need to make to their product and service offerings." One of the major barriers that a business faces while doing business overseas is the cultural differences between the nations. According to Hodgetts, Luthans, and Doh, "A major challenge of doing business internationally is to adapt effectively to different cultures."Steve Kafka, an American born Czech origin is one of these hundreds of entrepreneurial, who is considering expanding his pizza franchisee to Czech Republic. Going into a new market blindly could prove costly and lead to many disputes, resulting in huge losses.

The biggest dispute could arise from not understanding the cultural differences between United States of America (U.S.) and Czech Republic. To help Kafka with his endeavor, this paper will present an understanding on the general cultural differences between U.S. and Czech Republic by applying the cultural dimensions of Hofstede. This paper will also identify the risks that might arise due to these differences and will identify mitigation techniques for the risks identified. This paper will help Kafka understand the business environment in Czech Republic and the pricing strategies that can be adopted for the new pizza business to be successful in this new market.

Differences between Czech and U.S. culturesKafka needs to be aware of the cultural differences between Czech Republic and U.S. to make his pizzeria successful. Although Kafka has roots in the Czech Republic and knows culture of the Czech Republic, as culture is not...