International Business
Question One: Implications of cultural literacy on business location
Cultural literacy may be defined as the development of awareness through the acquisition of knowledge on matters that relate to a particular culture. In that regard, such knowledge is fundamental in ensuring the sustainability of relationships during cultural interaction. In essence, international corporations such as Multinational Corporations (MNCs) should be culturally literate. The need for cultural literacy for MNCs has direct implications on their costs of business. Hence, it is important for the management of an MNC to carry out substantive research that would help divulge issues regarding cultural dynamics. Such research ensures that the business engages in activities that are cohesive in respect to the cultural practices and beliefs of persons from respective regions. Moreover, such a step ensures that the business sufficiently utilizes its resources to meet the expectations of the persons from the diverse cultures.
Definitively, culture can be described as a collection of values, beliefs, customs, attitudes and behaviors. All serve to define certain standards of shared practices (norms, customs, and behaviors) regarded as tradition. The same traditions are further embedded in the fabric of beliefs, religious artifacts, rituals and tribal artifacts. Essentially, a particular culture will present various aspects of its practices that are unique in terms of norms, values and beliefs, among others. Nonetheless, cultures are dynamic implying that cultures are subject to change. No cultures remain fixed or static; cultures borrow from other cultures and are also absorbed by other cultures. Thus, transformations in cultures are commonplace as cultures evolve, people similarly change since their cultures change their behaviors, beliefs and practices. On this note, culture is learned, shared and integrated into the fabric of the society. As such, it is passed down from generation to generation.
Specifically, culture is what defines the rules of engagement in a society; society which refers to the people who share a common set of values, norms and beliefs. In this respect, a peoples’ culture defines the rules and regulations that people in the culture are required to adhere to. Equally, the same cultural dictates have an influence on the rules and regulations governing business transactions with persons from that particular culture. Hence, culture presents implications especially when choosing a location for setting up business.
The implication for a business venturing in territories with different cultural perspectives are such that cultural attributes such as norms, attitudes and beliefs, among others, present unique challenges. For instance, peoples’ attitudes about the business or the culture where the business is from or based influence the marketing strategies the business is to employ. Further, norms and beliefs may also influence the management’s selection as well as dictate the mode of work and work schedule. Such elements are based on the attitudes of workers towards work and change.
Centrally, cultural competence is essential for an organization to be successful in interacting with diverse cultures around the world. To achieve the same, the management must take four decisive steps in ensuring cultural competence. First, the firm must be aware of its cultural world view; secondly, its attitudes towards cultural differences should be accommodative. Thirdly, the business should develop knowledge on different cultures in which its operations are based. Finally, the organization should invest in the development of cross-cultural skills in understanding, communicating and interacting with people across cultures. These four steps prove crucial when evaluating suitability of a location for investment by a business.
Iceberg Analogy in Cultural Literacy
According to the Iceberg analogy of culture certain aspects of culture are visible to foreigners at first sight while others are submerged on the bigger portion of the iceberg. See figure illustration below;
The implication of the analogy on cultural literacy is such that foreigners are mostly unaware of aspects of culture that cannot be seen. These are those hidden from their line of sight above the water. However, beneath lies a host of various aspects that the custodians of the culture hold dear. Therefore, on matters regarding literacy, it is essential that foreign individuals gather necessary information to ensure that they know all aspects of culture whether hidden or in plain sight. Only in doing so will the foreigners be regarded as culturally literate.
Religion plays a crucial role in the development of an understanding of culture. Religion is often a fundamental component of culture because it is largely incorporated in cultural practices. For instance, religion dictates certain holidays on the calendar. Furthermore, religion dictates the type of calendar that is adhered to by members of a particular culture. The Islam calendar, for instance, is different from the Christian calendar. Similarly, holidays for Christians such as Christmas differ marginally from those of Muslims such as Haj. Likewise, religion places several restrictions in law regarding certain aspects in society. For example, the Islam religion prohibits the consumption of pork, while the Hindu religion prohibits the consumption of most animal protein especially beef. Ultimately, understanding religion imparts cultural knowledge and cultural understanding since it develops explanations into why certain cultures are accustomed to particular ways of living.
Question two: Purpose of Cultural Concepts in the Context of Business
First, the Kluckhohn and Strodtbeck concepts speak of value orientations in that their concern focuses on cultural manipulation for maximum financial gains. The purpose of this module is to develop an understanding of the framework within which a particular culture is organized. Such an understanding will then help the management of a business to effectively organize its resources in line with the expectations of a particular culture. For instance, if a culture’s time orientations are such that their experiences are shaped and determined by past events, it would be imprudent to set up a business, say if past experiences were unsuccessful. On the other hand, if dealing with an optimistic cultural constituency who are apt to venture into new experiences, a futuristic oriented culture would support the setting up of the business. Similarly, the business should take time to understand the drive from which a particular culture draws its motivation. In this regard, the business should verify whether the culture is based on spiritual, contemplative or carefree beliefs. Thus, developing such an understanding ensures that resources are channeled to functions that maximize on the business’ performance in order to reap the most value from investing in that cultural environment.
Secondly, Hofstede’s concept is focused on the framework on which society is based in particular regard to individualism versus collectivism, uncertainty avoidance, power distance, achievement or nurturing and long term orientation of the individuals in a particular culture. These aspects of culture according to Hofstede’s concept, present an understanding of the social constructs in a society. In this regard, the purpose of understanding social constructs is to develop a basis on which foreigners can interact with members of a particular culture. Therefore, when a culture is say tolerant of power distance meaning that extreme poverty can exist side by side with extreme wealth, a business can develop an effective strategy for recruiting employees to work in the organization. The strategy would be effective in evaluating the pay for various levels of employees in the organization. Moreover, the same helps in the comprehension of how society regards status and positions of authority. As such, the organization will be in an appropriate position to exploit the same without insulting the local culture by going against its beliefs. In addition, Hofstede’s concept is important to a business since it helps in the development of an understanding of the orientation of the entire culture of a particular region. For instance, if a culture places importance on the individual rather than the community, the business would result in awarding individual effort. On the other hand, if a business is operating where communal importance comes before individual interests, the case would be different. In case of the latter the business may opt to engage more on issues regarding corporate social responsibility rather than focusing on the individual’s interests. Hence, Hofstede’s module is quite influential in business’ decision making regarding such concerns.
Thirdly, a review of Trompenaars’ cultural dimensions reveals that there are similarities in ideologies between Hofstede’s theories and those presented by Trompenaars. To a great extent, the ideas in both theories seem to intertwine since they touch on the same aspects such as collectivism versus individualism, time orientation and achievement versus ascription, among others. Therefore, the purposes of Trompenaars’ cultural dimension are as well similar to those of Hofstede’s. The similarity between the two is based on the premise that both are concerned with the framework of the society. On this note, Trompenaar is concerned with the ideologies of a certain culture whether they are futuristic, present or past oriented culture. Similarly, whether such a culture is a collectivist or individualistic one. Therefore, the development of an understanding of the framework of a particular culture has the effect of developing an effective strategy for the entry of the business into the region inhabited by such cultures.
Taking the example of Trompenaar’s beliefs with regard to the environment, the ideology communicated is such that people are either inner-directed or outwardly directed towards the environment. On the former, people believe that they have power to control what happens in their lives. On the other hand, the latter suggests that people have no control over environmental surroundings and thus their life takes a natural course. Henceforth, cultural understanding is crucial for a business enterprise as it can be able to tailor its business strategy to align with the expectations of the cultures in which it seeks to venture.
Lastly, the Edward T Hall’s Low Context High Context Approach, has everything to do with communication emphasizing on the development of understanding what is said and what is not said. The implication is such that culture is symbolic, hence, it is important to take cognizance of signs that shape the manner in which a particular culture is organized. The purpose of this cultural dimension is to understand the best approach to engage with a particular culture during business. In this respect, a business would develop long lasting casual relations in a high context culture, while on a low context culture, the converse prevails. In this regard, a business will be in a position to evaluate the best strategy among its low and high context options that best suit development of a business interaction.
