There are many risks when doing business in Asia. The biggest risk is that of terrorism. Once should be partnered with a person or company that understands the business cultures and practices. There are guidelines for manufacturing in Asia that are very important in understanding how to operate a successful business. There are both governmental and cultural differences that must be considered. The owners of XYZ Construction Company must be aware of the changes in the business claim over the last few years. Asia is an exciting place to do business and it will provide interesting changes ahead for all of you. The channel structures in each of these countries are undergoing dramatic changes over the next 3 to 5 years (Suk, 2005). Asia is rapidly becoming a business haven for much business during the economic upward and downward trends. The world of Asia is opening up for businesses in the United States, however, businesses need to be aware of cultural, social and business conditions that can determine success or failure abroad. On account of high competition from every country, the construction organizations have to finalize some due diligence field analysis before venturing into a construction endeavor in Asia. It will be imperative that he Construction Company moves to Asia with caution to avoid the complications cultural differences. The organization will face challenges they have never experienced in the United States.
The Asian countries business markets can pay hugh dividends for United States companies that can co-exist in a culturally diverse climate. However, without spending the proper budget for acclimation, cultural training and examination of the political landscape could be risky for any business. The idea of expanding the Construction company is Asia can be considered to be good investment because Asia has begun to invites United States business to make direct investment in a business in Asia. However, with that notated new businesses should be aware of the governmental policies in Asia including the implications or impact to the company. When opening new ventures or expanding to Asian countries such as India or China, the social and political issues cannot be underestimated. When the XYZ Construction Company begins the new venture in Asian it will be imperative to hire an cultural guide for acclimation. The true maze will be finding out all the business requirements for a startup and how much time and cost will be required for this expansion to Asia.
Cultural Diversity Considerations
A few critical things they must consider are Asia’s cultural, social atmosphere and business acumen. Culture is one of these obstacles that will have an effect on the entire company especially when the landscape of Asia is extremely different from the United States. The Asia culture will affect the construction business in numerous ways which as foreign language difficulties, business licenses, pricing problems and culture misunderstandings. The business has to be able to manage these challenges in a manner that allows the business to become an integrated part of the business culture instead of an intrusion. This intrusion could damage the company business relations beyond repair. However, the venture to Asia may be worth the risk because North America business have become successful and wealthy by doing business in Asia. Among one of the top regions currently the focus for overseas expansion by commercial groups from Europe and North America is Asia, where the number of international retailers operating successfully is still quite limited and fragmented(Schmekel,2004).
There are a number of basic guidelines the company always should have in mind before and during cooperation on the global market place. It is vital, even before entering the Asian country, to report to the right business officials about the right conduct and traditions in that new culture. If the very first appearance becomes negative, this is often difficult to shake. Asian societies have various ways of conducting business, for instance with regards to preparing ahead and maintaining shipping and delivery times. Asian tradition could be both a positive and negative impact and many corporations are having difficulties in the new and international environment. The essential thing to always have in mind is that the overseas culture is much less we have been accustomed to in the USA and to be ready prior to starting the new overseas operation.
To know who you are is to understand, social economic, environmental, cultural, political context of your business. (Plante & Bendell, 1998). Respecting and comprehending the new Asia culture without pushing our personal values on people, are issues that can be extremely beneficial to think about. By discovering the host country’s dialect, can appreciate and have confidence in more easily be won, and more competitive rewards can arise. It is important for XYZ Construction to have a clear understanding of the business etiquette in Asia because they have a diverse and different culture. Asia Culture continues to be described in numerous alternative ways, reflecting the assortment of cultural phenomena which might be discovered. Increasingly more organizations begin to search in foreign countries to broaden their businesses as the globe becomes increasingly more connected. To administer business functions across foreign borders will be the most significant problems the XYZ Construction expansion will encounter. Recent developments in the Asia-Pacific region suggest that managers operating in the new, more globalized economic environment will need to work more closely with colleagues operating in other countries (Albaum et al., 2007).
There are some positives about the XYZ Construction Company moving to Asia to expand their business operations. Asia’s economic reform is driven by the same capitalist motivations as the United States historical capital gains. Asia has perfected this concept by opening up their economy to foreign businesses and allowing global businesses to bring new start-ups into Asia. To be on the uneven road towards transnational globalization still remains a perilous task for makers of materials, forms, and affiliated to national culture(Wilson,2000). Another positive factor is Asia reforms are developing privatization in Asia while outsourcing or contracting to outside businesses for the United States is encouraged. Asia has become innovative in finding way to attract businesses such as lift taxations, price controls lowered while state monopolies remained in place. The success of Asia business and economic policies and the manner of their implementation has resulted in immense changes in Asia society.
In Asia the XYZ Company must be prepared and educated on the many administrative and bureaucratic tasks that are very complicated. The company will have to adapt to the time frames to open a bank account or registering your company, to gaining product approval which could drag on for months. The Asia business climate and strong rule of law equals an inconsistent application of regulations means that such processes are not always designed for your company’s convenience. In addition, many procedures that would be handled electronically in the United States would be handled by reams of paperwork, which need to be completed and stamped by hand. The time required to complete these efforts can be unexpectedly lengthy. To be successful in Asia, your company will also need a full-time administrative team in place, which can handle all of your company’s paperwork in Asia. This support will free up time for your sales staff to focus exclusively on promoting your company’s products, without having to spend time getting approvals from offices all over town.
A great number of countries and cultures frequently have common qualities which can be based on the origin of their mother tongue languages, culture, traditions and cultural backgrounds. Here are few things the XYZ Construction Company should considering before traveling to Asia:
- Handshakes-Traditionally are accompanied by a slight nod but an aggressive firm handshake means the company or person may be to brash
- Dual Business Cards-Dual business cards means the business has the courtesy to respect the Asian customs by purchasing a Asian business that has their language and a American business card.
- Elderly-The Asian culture has high esteem and respect for the elderly. It’s imperative that the business person understands the eldest person in the room in Asia is the most respected. In Asia age indicates wisdom and experience.
- Name-Asian usually have three names with the first name being the family name, so the employees have to be careful with which name they use to approach Asian population. .
- The Asian culture are about being on time and very friendly. The personal and business side of relationship is all the same, respect is required at all times and definitely humility.
- In Asia good eye contact is necessary but too much direct eye contact can be disrespectful so do not hold ling intimidating stares it might create a miscommunication about your intentions..
- Many Asian cultures have large populations and it’s necessary to stand very close together on public transportation and in lines. However, they tend to stand farther apart than many other cultures when engaged in business interactions.
- In Asia, posture is very important because slouching or being fidgeted indicates you are uncomfortable with the person and make sure your hands are place by your side on your lap. Your voice must be very low.
XYZ Construction Company must complete a detailed analysis of the culture, business, social and political foundation in Asia, before making any decisions about expansion. The research has determined that the primary barrier will be the culture and the business climate which is completely different from the United States. The company must consider all cultural, social, political and business etiquettes before making a drastic decision. It is true that Asia is opening up the country for new business from all over the world but the company must understand the political and business climate. The company must be prepared for long lines of paperwork because Asia still does business based on a stamped versus a computer signature. It would be a smart investment for the company to spend a few months in Asia adapting to the culture because you only get one chance to create a good impression. A bad impression may prevent your business from operating in Asia.
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Plante, C. S., & Bendell, J. (1998). The art of collaboration: lessons from emerging environmental business-NGO Partnerships in Asia. Greener Management International, 24), 91.
Schmekel, V. (2004). The Strategic Importance of Retail Investment in Asia and Its Implications for the Metro Group in Asia. Journal Of Global Marketing, 18(1/2), 133-150. doi:10.1300/J042v18n0108
Wilson, R. (2000). Imagining ‘Asia-Pacific’: forgetting politics and colonialism in the magical waters of the Pacific. An Americanist critique. Cultural Studies, 14(3/4), 562-592.doi:10.1080/09502380050130446
Young Suk, C. (2005). International Rights business in Asia Frankfurt book fair an overview of doing business in Asia. Publishing Research Quarterly, 21(2), 46-48.