The Cultural Challenges of Doing Business Overseas

The Cultural Challenges of Doing Business Overseas

Introduction

Taking risks in making business decisions has been a key to success for many American corporations. Steve Kafka, an American of Czech origin, realized this fact when he became a franchisor for Chicago Style Pizza and decided to expand his business into the Czech Republic. The first risk Steve took was becoming a franchisor, in that he had to overcome many difficulties, and he anticipates that he will encounter some of the same hurdles at the new location in Prague, Czech Republic. Steve has family and friends in the Czech Republic, speaks Czech fluently, and has visited several times. Nevertheless, he was born in the United States and needs to completely understand the people and culture of the country of his origin in order to make his business venture successful.

Differences and Incompatibilities between U.S. and Czech Cultures

Steve wants to expand his pizza restaurant into the Czech Republic, so it is important to analyze the differences between American and Czech eating and diet cultures. As researched by CultureGrams, while Americans eat with a fork in the hand with which they write, Czechs tend to eat with the fork in the left hand and the knife in the right. Pizza is a popular food in America, often consumed as an entire meal, and is eaten with hands. It can be delivered to the front door, served in a restaurant or carried out on the way home. As dining out is a rare occasion in the Czech culture, pizza is considered a snack that can be purchased from a vendor on the sidewalk. Because of these differences, Steve must figure out a way to attract the Czech culture to the fast food and restaurant industry. In America, beer is frequently consumed with pizza. In the Czech culture, beer is a beverage that is consumed throughout the day. Considering these facts, Steve must intelligently develop a plan to incorporate beer on his menu (and marketing strategy) with the pizza. In addition to the actual food product, Steve must also understand the Czech culture in order to establish successful business relationships with others to support his business venture. In America, direct eye contact is necessary to ensure that the conversation is genuine, but is not needed during the entire conversation. Czechs feel that eye contact is important during a conversation and tend to issue a harmless stare. Business hours in the United States are long, and many are open 24 hours a day. In the Czech Republic, workdays begin between 7 and 8 a.m. and end between 3 and 4 p.m. Respect for these aspects of Czech culture is important to nurture business relationships and ensure that individuals are not offended.

Evaluation of Czech Business Culture Applying Hofstede's Four Primary Dimensions

Culture affects the beliefs and actions of different people from different places in different ways. In the international work setting, Chapter 4 of International Management (Hodgetts and Luthans) notes that culture has several characteristics and is defined as "acquired knowledge that people use to interpret experience and generate social behavior." Because people and their respective cultures are so diverse, when dealing with individuals of a culture that is different to that which one may be accustomed, one must be aware of and attempt to understand the cultures of the individuals with whom they associate. Although Steve's origin is Czech, he was born and raised as an American, and he may not necessarily know what differences exist between the two cultures. Steve's values, customs and his way of doing business were instilled in him in the American culture; therefore, he must remain open-minded and pay attention to the Czech actions (as well as his own), as culture affects how people think and behave.

Power distance exposes an employee's desire to fall within the good graces of his or her superiors. The individual in this subpart understands and accepts that he or she is at the lower end of the hierarchy. They are willing to receive and follow orders and find great pride in doing so. This person is not looking for any type of personal praise for doing his or her job, as long as the superiors are pleased and satisfied, and that the result is beneficial to the company. The concept of power distance can be subdivided further. Low-power-distance exists in organizations with flatter structures in which the employees on the lower levels are just as qualified as the employees in the supervisory/management positions. CultureGrams suggests that the Czech culture is one of low-power distance because the people are loyal, well-educated and obey orders given by superiors. The Czech society has a high regard for skilled professionals and tradesmen. These aspects