Cultural Considerations in International Business, Essay Example

Introduction

With the expansion of international business operations into a new country it can have both positive and negative impacts. It is often a catalyst for the creation of new jobs and as such contributes towards the growth of the company. This can often create difficulties for ex-patriot staff posted to overseas subsidiaries. The difficulties of a new language, understanding cultural barriers whilst having to maintain HQ (Home based) requirements of the job. Common misconceptions may occur that can hamper the ex-pat from operating efficiently in the new role.

The exclusion of understanding different ethnic backgrounds and cultures also results in promoting a degree of ignorance that can lead towards serious consequences in a society that is part of a global marketplace (W. David Rees, 2001)

Misconceptions That May Occur

One big issue with ex-patriots is that when transferred to an overseas office they tend to socialise with similar staff posted from home. Many fail to immerse themselves in the local social scene and as such use the opportunity to diversify and understand the host countries language, culture and ethical values. The British were particularly poor at this with many companies running their overseas subsidiaries like colonial offices. BP was one company that recognized the shortcomings of this approach and the value of recruiting local skilled managers that were much more in tune with local economic and business considerations. By changing the mix of ex-pats and locally hired managers they were able to break the barriers down. (Richard M. Steers, 2006)

There are essentially two main areas that can cause issues in conducting international business i.e. Language barriers, not understanding the host countries language, cultural ignorance or not being aware of the cultural imperatives of the host country and thereby creating an offence. Sometimes correcting these problems can be difficult to resolve. It is also useful to examine the perspectives of Weber in line with that of Marx. Weber asserted that society is in a continued state of conflict fighting over limited resources. Weber asserts that there are many groups in society that seek to grab dominance and power; unlike Marx who only believed there were two i.e. the capitalists and the workers. Functionalism looks at the creation of stability and social order in society, applying it the problem of where an offense was created. You need to regain stability. This might be achieved through the following action : (1) An apology for the offence given (ii) Explanation of the misconception and cause of the mistake – you understand the reason for the apology (iii) Putting it behind you as friends – scoping a path forward to stability.

The path forward might include an interactionism approach by forming a small working group comprising members that are fully inclusive i.e. local community, business cultural advisory etc. in order to avoid future misconceptions.

Ethical Considerations

The concept of ethics in international business now extends beyond the conventional into that of the global market place and use of the internet. Journalists involved in marketing have no clear cut code of ethics or responsibilities to follow. The professions can only regulate so much in terms of prescribing a code of ethics. They can make it a conditional part of their membership but in the wider context it becomes a social responsibility of business engaged in marketing practices. We therefore need a framework, similar to that shown above, in order to regulate ethical behaviour within the market place. It becomes a social problem to resolve and similar to juvenile crime in the USA. As the Police cannot prevent juvenile crime neither can the professions fully regulate marketing behaviour or the way corporate business goes. (Kline, 2010)

References

Kline, J. (2010). Ethics for International Business: Decision-Making in a Global Political Economy. New York: Routledge.

Richard M. Steers, L. N. (2006). Managing In The Global Economy. In L. N. Richard M. Steers, Managing In The Global Economy (pp. 282-290). New York: M.E.Sharpe.

W. David Rees, C. P. (2001). Skills of Management Ed5. In C. P. W. David Rees, Skills of Management Ed5 (pp. 96-97). New York: Cengage Learning .