The impact of culture on global business by western nations
Global business has continually been on the rise in the last couple of centuries. Ever since the Mercantilist phase of economic development the scale and sheer volume of trade has ballooned exponentially.
However, the contemporary world has changed dramatically. The way we conduct business is no longer by conquest and proxy. Rather, it is by consent and mutual benefit. (Kwok et. al. 2011) This has necessitated the need for a thorough understanding of the values, views and beliefs of the people in whose countries we conduct business.
In other words, to conduct business in other nations we must at first recognize and appreciate their culture. To help support this thesis are recent articles from some of the most authoritative scholars and professionals in culture and international business. These articles provide an intellectual and exciting discourse on the following areas;
Firstly, they raise questions on;
Which particular aspects of business that are affected by new cultural environment?
What cultural divide, if any exists between the West and the rest of the world?
Whether the response and rate of adaptation of Western corporations to new cultural environments has been effective?
Whether Western governments are facilitating their corporations to cope with the new environments and if so, has this had any impact on the corporations’ bottom line?
Whether the new cultural environments in which Western corporations operate in have affected the way they conduct business back in their home nations?
Which specific examples of Western corporations operating in foreign nations have either failed or succeeded due to their adaptive nature to the foreign culture’s in which they operate in?
Secondly, the sort of data that is provided in the articles to substantiate their assertions therein is as follows;
In the ‘Cultural Comparison on International Business Negotiation Styles’ article, the Dr. Surinder Deol’s and Dr. Pierre Casse models is used. Analysis is done between four styles of negotiations as the endogenous variables while cultural factors are taken to be the exogenous variables. (Jung-Tsung, 2011).
This provides a very clear analysis of how cultural divides exists and how they affect businesses more particularly, negotiation styles.
In the ‘Impact of National Culture and Economic Ideology on Managerial Work Values’ article, a convergence/divergence/crossvergence framework was in use for purposes of the study. To see to the inquiry of managerial work values the investigation utilized the Schwartz Value Survey across four nations namely; China, Japan, The United States and Russia. (Yu Kai Chang, 2011)
This provides us with good insight as to the quality of the data contained therein the article i.e. the sort of data contained. The actual data contained supports the thesis and is dealt with in the next part of this essay.
The articles cited support my thesis in the following ways;
They concur that there is actually a cultural gap between western nations and the rest of the world. For instance, it is discovered in the ‘Cultural Comparison on International Business Negotiation Styles’ that western companies have relative difficulty in establishing operations in the four Asian countries of Taiwan, Singapore, Hong Kong and South Korea.
The author of the article presents the following data having used multiple regression analysis as follows;
For negotiation styles that are factual the R Square is 0.636
For negotiation styles that are intuitive the R Square is 0.776
For negotiation styles that are normative the R Square is 0.441
For negotiation styles that are analytical the R Square is 0.470
R Square shows in empirical terms how much of a change in Y is caused by a change in X. In this case it shows how much of the negotiation styles are caused by cultural differences. It is evident that this is very high since, statistically speaking the highest value of R Square that is attainable is 1 i.e. unity. (Jung-Tsung, 2011).
The articles put it into perspective what we have learned throughout our coursework in terms of how social dynamics can affect businesses and as such to be effective managers, businessmen and policy makers we need to take into account all these factors and adapt to them so as to maintain the main objective of business and economic development, success through increased profit and adaptation.
References
Jung-Tsung Tu. (2011). Cultural Comparison on International Business Negotiation Styles.
Keelung: Chungyu Institute of Technology. Retrieved on Thursday, December 01, 2011 from
http://www.cit.edu.tw/110/20100814034112.pdf
Kwok Leung et. al. (2011). Culture and International Business: Recent Advances and their
Implications for Future Research. Journal of International Business Studies. Academy of
Internatioanl Business. Retrieved on Thursday, December 01, 2011 from
http://ie.technion.ac.il/~merez/papers/jibs_culture_Intern_B.pdf
Yu Kai Chang. (2011). Impact of National Culture and Economic Ideology on Managerial Work
Values.’ Dallas: Dallas Univeristy of Technology Retrieved on Thursday, December 01,
2011 from http://faculty-staff.ou.edu/R/David.A.Ralston-1/12.pdf
