poid - assignment 1_s

8/6/2019 POID - Assignment 1_S

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Discussion :

Choose any 2 countries, study overall culture, value system (human values). If

you prefer, you can choose 5 value factors across which you would like to

compare the 2 countries. What are the implications of such knowledge for doing

business in the chosen 2 countries?

Introduction:

In todays world, with geographical boundaries being blurred every day

(globalization), any international business will have stakeholders from different

cultures, which include employees, customers, competitors, partners etc. The

study of culture and value system becomes essential to any international

business in any part of the world, to ensure that it understands their needs to

serve them better and respects their sentiments which in turn will help make

business successful. While business transactions are always directed towardsmaking economic sense, the ability to go beyond business and forge long-lasting

relationships requires a keen understanding of the culture, to reconcile

differences arising from separate cultures and capitalise on the same.

Understanding the cultural and value variables and taking them into account in

the country where business transactions will take place, is a critical aspect of

being successful in any international business. Even for a domestic business, the

competition can be an international company and hence the need to study

them. There are often differences which arise in the ways of conducting

business, dress preference, language, and legal and ethical considerations and

more.

Definition

Culture can be defined as beliefs and values on the basis of which people

interpret experiences and behave, individually and in groups.

For a business, the culture and value system impact can be at the following two

different levels - difference at an individual or group level which will includeregional, ethnic, religious, and linguistic differences and at a higher level of the

country/nation where the policies and regulatory systems differ.

Impact -

It has been observed and proved that when we do not understand any

interaction, people tend to interpret the others involved as abnormal or wrong.

This can be very harmful for any business. Awareness of cultural differences

and recognizing where cultural differences are at work is the first step toward

understanding each other and establishing a positive working environment.

Cultural differences play a key role in the creation of trust, since trust is built in

different ways, and means different things in different cultures. And trust is built

upon the pillars such as effective communication, conflict management, mutual


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respect and understanding each others needs. Cultural differences in

multicultural teams can create misunderstandings between team members

before they have had a chance to establish credibility with each other.

Many negotiations fail even though both parties want to reach a mutually

successfully business agreement and very often, the barriers to such

agreements becoming successful are of a cultural nature instead of economic or

legal as might be perceived.

Below are some ways in factors in culture differences which influences business:

The way we present ourselves

The way we express opinions

Assumptions based on the environment and context

Perceptions of voice, and other personal physical details

We choose Sweden and the USA for the purpose of this comparison and

understanding the implications of doing business in them.

Sweden It is a country in northern Europe and is the third largest

country in the European Union by area. Sweden has a low population

density and about 85% of the population lives in urban areas. Sweden is a

constitutional monarchy with a parliamentary democracy of government

and a highly developed economy

USA-The United States of America (also referred to as the USA) is a

federal constitutional republic comprising fifty states and a federal district.

The country is situated mostly in central North America. It is one of the

world's most ethnically diverse and multicultural nations, and is a product

of large-scale immigration from many countries. The U.S. economy is the

world's largest national economy.

The following factors in culture will be used for comparison -

a. Attitude of seeking consensus

b. Team discussions and dynamics

c. Communication

d. Food habits and etiquettes

a. Attitude of seeking consensus: This is a trait which has its root in the

culture of a country/community and is ingrained in the psyche of theindividual, though it the tolerance levels can be different for different

individuals. The difference in perception of the cultural trait here is -

dissent is accepted versus unanimity is needed


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The management approach in Sweden is more which seeks consensus

results. Here, managers are seen more as facilitators or coaches who offer

advice and suggestions, and direct instructions can be perceived as

embarrassing. The decision making includes everybody in the process and

everybody's point of view is listened to and valued. As managers have a

tendency of consensual approach of discussion to arrive at decisions, the

information flow between all the stakeholders is good. But one drawback

of this approach is that consensual decisions can be hard to reach and the

process can be long drawn at times.

The management approach in USA is more individualistic in approach.

Though important decisions are discussed in an open forum, the ultimate

responsibility of the decision is with the manger. Hence managers are

likely to disregard the opinions of their subordinates which are acceptable

and respected. The advantage of this is, that big responsibilities will

inevitably bring big rewards, but at times may leave a bad taste with

someone whose opinion was not counted.

b. Team discussions and dynamics :

c. Communication -

Culture is often at the root of communication challenges. Exploring historical

experiences and the ways in which various cultural groups have related to each

other is the key to opening channels for cross-cultural communication.

Becoming more aware of cultural differences, as well as exploring culturalsimilarities, can make communication with others more effective.

The United States has a culture of approaching business in a 'scientific' way.

Every aspect of commercial life is studied and analysed and this scientific

approach is both respected and acted upon. The approach is to quantify and

assess everything and the result of this analysis carries significant weight whilemaking decisions.


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References

1. http://www.referenceforbusiness.com/management/Gr-Int/International-

Cultural-Differences.html

2. http://en.wikipedia.org/wiki/Sweden

3. www.worldbusinessculture.com

4.
http://www.referenceforbusiness.com/management/Gr-Int/International-Cultural-Differences.htmlhttp://www.referenceforbusiness.com/management/Gr-Int/International-Cultural-Differences.htmlhttp://en.wikipedia.org/wiki/Swedenhttp://www.worldbusinessculture.com/http://www.referenceforbusiness.com/management/Gr-Int/International-Cultural-Differences.htmlhttp://www.referenceforbusiness.com/management/Gr-Int/International-Cultural-Differences.htmlhttp://en.wikipedia.org/wiki/Swedenhttp://www.worldbusinessculture.com/

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