Doing Business Abroad

In today’s globalized corporate world, managers have much more to worry about than the mere administration of a business or the proper management of industrial plants. The success of the organization not only depends on the demand of the product or service it provides, but the cohesiveness in which all its elements work towards the same objective. This cohesiveness can be disrupted by the very nature of an organization, which entails a diversity of cultures, backgrounds, and values among the people it employs or do business with. This is more evident in companies that transcend their businesses far beyond their national localities where not only a difference in culture and values exists but oftentimes there is diversity in languages. As clearly noted on the article Intercultural Communications, some companies mistakenly translate their slogans and advertisements or fail to express their vision while unaware of this cultural diversity. Another example of this element of cultural diversity is noted on “The intrigue of international assignments” where a newly “expatriated” manager failed to consider the way a national employee would take her constructive criticism.

Language diversity is fairly obvious, but a more complicated influence on the management of global organizations is caused by the “culture-driven” factors affecting the demand of the product or service they offer. Just as “you won’t try to sell a farm tractor in the city;” the culture that the organization is targeting will directly affect the success of a particular product or service offered. According to the article Managing cultural diversity in a global world, the development of transnational business organizations requires managerial approaches that allow for variations of this diversity factor. Therefore, the management of these organizations must employ vast amount of resources studying the culture it intends to target.

Another cultural factor affecting the management of a global organization is the specific customs employed in the country the organization pursues doing business with. The awareness of the fact that South Africans consider a form of disrespect to look in the eyes of their elders when addressing them can help a manager avoid misunderstandings and confrontation when put in a position where addressing members of this social group is necessary (The intrigue of international assignments).

As globalization of the corporate world becomes more evident, organizations have to take consideration of diversity factors that are unavoidable when doing business abroad. According to the Hofstede’s Model of cross-cultural values, these factors can be categorized into five variables; individualism versus collectivism, power distance, uncertainty avoidance, masculinity versus femininity, and long-term versus short-term orientation.

While the diversity in language is a more “physical” aspect, it can lead to culture-driven factors that can be explained by one or more of Hofstede’s variables of cultural values. Let’s take the example mentioned in the article Intercultural communication about Pepsi Cola’s “Come Alive with Pepsi” campaign, that when translated to Taiwanese conveyed the message that “Pepsi would bring your ancestors back from the grave.” In a country like Taiwan where high uncertainty avoidance is employed, this type of statement would not be welcomed, therefore affecting the success of the Pepsi campaign.

As for cultural driven factors that influence the demand of the product or service an organization offers, let’s take for example countries like Japan and United States (high in the dimension of cultural values “Masculinity”) versus South Korea and Sweden (high in the dimension of cultural values “Femininity”) and their approaches to certain products or services. As the definition of this dimension of cultural values refer to “the degree that people value assertiveness, competitiveness, and achievements (this being the masculine aspect of the dimension) versus relationships and the well being of others (this being the feminine aspect of the dimension);” an organization may be able to conclude that products or services directly related to, for example, the success in sports, goal achievements, and self confidence would have better demand in the US and Japan than in South Korea or Sweden.

As for the diversity in customs and the effects this may have in the management of an international organization, we could say that the dimension of cultural values that most influences is “Power Distance.” A country with a high degree of Power Distance would accommodate customs or understand as existential the privileges people with different aspects