This analysis will include information on the cultural differences between the United States and the Czech Republic and how these differences may affect the business climate…. For example, Latin American, Asian and Mediterranean cultures often communicate as much through facial expression and tone of voice as through words. In the early 20th century, trade theory has achieved its classical form through the Heckscher-Ohlin H-O theory Leamer 1995. However, it can protect your sales from the risk presented by unstable currency. Find ways to bridge the culture gap.
In the Czech business culture, businessmen avoid risks or take a very practical approach in business dealings. While Coca-Cola is a vast international brand, the structure of your business and the number, nationality, and level of expertise of your team will vary depending on your industry, product, and the size of your business. Then decide if which outweighs the other. The company was forced to pay a for a breach of local tourism laws in Barcelona. The challenges are evaluated and summarized to extract the above discussed solutions for management executives who intend to do business in emerging markets especially India and China.
Organizational hierarchy Organizational hierarchy and attitudes towards management roles can also vary widely between cultures. Culture strongly influences the personal style of negotiators. The group with the strongest preference for consensus organization was the French. In addition, expatriate failures may lead to relationship or reputational damage in the host country. Robert previously worked in Asian corporations at the management level for ten years, lived in the Far East for seven years, and is fluent in reading, writing and speaking Japanese. For instance, the formality of address is a big consideration when dealing with colleagues and business partners from different countries.
While in the other parts of the world, you may be able broker a deal just through formal business meetings; in China it is necessary to spend time getting to know your Chinese counterparts outside the boardroom during tea sessions and dinner banquets. Evidence confirms that the larger and richer countries trade more with each other than with smaller countries. Columbia Journal of World Business, Winter, pp. Determinants of Bilateral Trade: Does Gravity work in a Neoclassical World? I think there is no one right answer to this. If you are about to start this exciting, global adventure, prepare to get creative when you inevitably encounter challenges.
International trade will expose you to unique challenges, and you need to answer the following two questions if you want to succeed: 1 Am I interested in facing and handling these types of challenges? For the French, the essence is to agree on basic principles that will guide and indeed determine the negotiation process afterward. So, in some cases, a Chinese negotiator may interpret the American drive to stipulate all contingencies as evidence of a lack of confidence in the stability of the underlying relationship. The end of global strategy. Harvard Business Review, 63, July-August, pp. In addition, regardless of the size of the company, you should divide employees into small teams which each have a clear leader who oversees the group and reports directly to his or her superior.
Another solution is to negotiate a better deal with the government; for instance, an investor can seek a reduction of tax levels in exchange for accommodating the government Brink 2004. Make sure you have excellent international lawyers who have a firm grounding in the laws of their home countries. Many American teams tend to follow this approach. To mitigate this difference Steve will need to continually reassure investors and be very patient in dealings with them. The lack of a strong rule of law and an inconsistent application of regulations means that such processes are not always designed for your company's convenience. However, Jones 2001 observes that dramatic events such as wars, assassinations and sequestrations are rare in the international business arena. It has seen an explosion in the increase of foreign business investment, outsourcing and Indian companies venturing overseas.
The Brazilians, the Chinese, and the Mexicans to a far greater degree than any other groups preferred one-person leadership, a reflection perhaps of the political traditions of those countries. When defining roles in multinational teams with diverse attitudes and expectations of organizational hierarchy, it can be easy to see why these cultural differences can present a challenge. The complexity of playing at the global level presents companies with different conundrums and choices, many of which are not straightforward. The Importance of Communication in International Business: Four Strategies for Handling Cultural Differences at the Negotiation Table Here are a few simple rules for coping with cultural differences in and transactions: Negotiation Strategy 1. Factor Proportions and the Structure of American Trade: Further Theoretical and Empirical Analysis. Form of agreement: General or specific? Doing business in India offers immense benefits for international organisations, however there are a number of key cultural challenges that can create misunderstanding and conflict as well as huge direct and indirect costs to the organisation if overlooked.
Communication in negotiation is the means by which negotiators can achieve objectives, build relationships, and resolve disputes. Although he was born in the United States, he has family and friends in the Czech Republic, speaks Czech fluently, and has visited the country of his origin several times. For example, Canadians are clock-watchers and expect everyone to arrive on time. He has served as a member of the board of directors for numerous organizations, including World Trade Council, Institute of Management Consultants, North Carolina Japan Center, Japanese Center for Quality of Life, American Cancer Society, and United Arts Council of Wake County. At my company we learned to send the shipping documents to the buyer as well as to the clearing agents before the shipment is sent. Foreign Corrupt Practices Act or the U.
According to the stereotype, Latin Americans show their emotions at the negotiating table, while the Japanese and many other Asians hide their feelings. Thus, the direct style of Western communication can easily create serious offense, despite the best of intentions. If unexpected circumstances arise, the parties should look primarily to their relationship, not the contract, to solve the problem. There are passive Latins and hot-headed Japanese. While western employees tend to delegate responsibility and have flexible lines of authority, Chinese workers are accustomed to a more hierarchical structure in which each person has a clearly defined role.
Understanding Indian English can be challenging, however, as a result of the different vocabulary and expressions as well as heavy accents. Copyright © 2005-2018 Essaypedia Ltd. With this knowledge, you may be better able to understand the negotiating styles and approaches of counterparts from other cultures. Whereas, a low context culture is characterized by Communication that is direct, precise, open and based on feelings. Being aware of Indian English can help you reduce misunderstandings and loss of time. When a company moves into a new market, business models should be modified to reflect local preferences, customs, and habits. For instance, the tradition of family-owned companies in Germany has created an environment of professional secrecy which does not require high transparency Walton et al 2003.