Impact of Culture on International Business
Organizations always have a clear statement in their mind which is to increase the financial belongings and shareholder’s equity from different angles. An organization usually deem as a place wherein people belong to different demographics and mindset work together merely for the achievement of a single and pre-specified goal in particular. There is an obvious fact that whatever the organization does and delivers is to attain financial competitiveness for a long span of time.
Continuous development and enhancement are some of the major aspects lies with the organization as far as increasing its financial and strategic belongings are concerned, and all of these aspects are important and effective from the viewpoint of an entity. In terms of continuous development and enhancement, the name of cultural based aspects is extremely important and effective. In fact, the productivity of an organization depends upon the fact that in what culture a company is doing their own operations (Menipaz & Menipaz, 2011). Usually International and multinational organizations encounter the problems and aspects of cross cultural management, and it is required to attain significance and effectiveness on the basis of cross-cultural management and tradition.
The main theme of this paper is to analyze and pen down the effects of cultural based aspects and beliefs over the international business. The country that has been chosen for the same analysis is Pakistan. It is required to use Hofstede’s measures of national culture to complete this particular assignment as it is the best model used for analyzing the impacts of cross cultural management to an organization. There are certain quotes which have been discussed the same and among them, below mentioned are some of the famous quotes relates to Cross Culture:
Every culture enjoys some form of humor. But, humor has difficulty crossing cultural boundaries because what is humorous in one country is often not humorous in another (Skills, 2012).
The essence of effective cross-cultural communication has more to do with releasing the right responses than with sending the ‘right’ message (Skills, 2012).
Every country has its way of saying things. The importance is that which lies behind people’s words (Skills, 2012).
No two languages are ever sufficiently similar to be considered as representing the same social reality. The worlds in which different societies live are distinct, not merely the same world with different labels attached (Stanford, 2014).
- According to Hofstede’s cultural dimension theory is a framework used for the cross-cultural communication which has been developed by Greet Hofstede. It is usually based upon cross-cultural based communication. There are a number of dimensions that specifically come under the ambit of Hofstede’s theory and all of these dimensions are important for an organization before physically entering in a new region for the business purpose.
A country that has been chosen for the same analysis is Pakistan. Pakistan is a sovereign country of South Asia with a population of more than 180 million people. It is known as the sixth largest populous country of the world. Pakistan is a member of the United Nations and other Islamic Conferences. The gross domestic product of the country in the year 2013 was US$ 574.068 billion with per capital income amounting to US$ 3,144.
The national culture of Pakistan is Islamic, but the entire cultural and political situation of the country is under severe pressure and influence of overpopulation, terrorism and poverty. All of the problems have been increasing in the chosen country from a last decade that is creating problems for the citizens of the said country and for the rest of the world as well, as most of the people are claiming that Pakistan is promoting extremism and terrorism in the world. The current economic scenario of Pakistan is very miserable as high terrorism, low check and balance and high corruption totally ruined the entire economic and business structure of the country (Adekola & Sergi, 2007). According to the Hofstede Development Index (HDI), Pakistan has a rank of 146 with an index value of 0.515 which is extremely low and it cannot attract the high amount of people for doing businesses in the country.
Apart from that, Uncertainty, which is an important factor of Hofstede, is also not in the favor of the country because the political as well as economic situation of the country is extremely uncertain subject to the current view of terrorism and other inner problems. Apart from that Indulgence of the government and restrictive authorities are on the lower level for the country that is again an ineffective sign for the country that hampers the investors in parking the money in the country.
- Apart from the Hofstede dimensional index, there is certain information that could have been found in the country as far as their cultural management stance is concerned. Pakistan has a mixed culture, and there are some very talented people as well live in this country which can be an asset for a company that is wishing to enter in this particular region. Apart from that, the tax legislative and license authorities of the country is also not very strict which is a golden chance for a company to invest in this region. It means that new companies will not face any sort of hindrance in terms of cross-cultural communication and maintaining the business accordingly in the state. The government of Pakistan is not very strong to strengthen their companies, but they are very much effective as far as having foreign direct investment (FDI) of foreign investors in the country.
- Before the current problems of terrorism and other problems, the financial structure of Pakistan was extremely miserable, and it was among the list of those countries in which the rate of growth were between 8 to 10% per annum. The current situation of terrorism and extremism in Pakistan is extremely high, and the people of Pakistan have a mindset that the root cause of all the problems in their country is due to America and thus they are not in the mood to have any company with the said region. The cultural and political pressure of the citizens would also pamper the government not to intervene in this menace. Hence an American company should not enter into this particular region for the time being and should wait for the right time to enter and expand.
Conclusion
The main theme of this paper is to analyze and pen down the effects of cultural based aspects and beliefs over the international business. A country that has been chosen for the same analysis is Pakistan. From the entire analysis, it is found that cross culture has a certain impact over the position of the company and it should be analyzed while entering into the region for business purpose.
References
Adekola, A., & Sergi, B. (2007). Global business management (1st ed.). Aldershot, England: Ashgate.
Menipaz, E., & Menipaz, A. (2011). International business (1st ed.). Los Angeles: SAGE.
Skills, s. (2012). Cross-cultural quotations - Speaking and Presentation Skills. Speaking and Presentation Skills. Retrieved 5 June 2014, from http://speakingandpresentationskills.com/free-info/cross-cultural-quotations/
Stanford,. (2014). Relativism > The Linguistic Relativity Hypothesis (Stanford Encyclopedia of Philosophy). Plato.stanford.edu. Retrieved 5 June 2014, from http://plato.stanford.edu/entries/relativism/supplement2.html
