THE ROLE OF CULTURE IN INTERNATIONAL BUSINESS
Research Paper presented in partial fulfillment of MBA course in International Business and Trade to Professor Manfred Brauchle
Abstract: This paper reviews the role of culture in international business, the evolution of globalization and cultural changes, and the characteristics of culture. The paper examines the impact of culture and the importance of culture, and finally the elements of national cultural similarities in international business.
Key words: Culture and international business; evolution of globalization; cultural changes; elements of national culture.
In this era of globalization, only few entrepreneurs' can rely on domestic business opportunities without thinking about the global commercial environment, knowledge of culture impact will promote international business success across the globe. The emergence of globalization and the removal or reduction of trade restrictions and barriers on international trade has promoted businesses across nations. There are various cultural practices across the globe therefore international businessmen need to understand how cultural elements can undermine business if ignore, and how they can impact growth when integrated into international trade. (P.Kotter & Heskett, 1992).
Societies are governed by certain rules. These rules are linked to the countries culture hence international firms should be aware of the values, customs and believes that shapes the life of the people within those societies.
National cultures impact greatly on international trade, as cultural values are highly perceived and recognized by each national boarder. Geert Hofstede's identifies five different dimensions that can be used to evaluate differences in cultural practices and these differences among cultures may have effects on international trade.
Due to trade liberalization and globalization, international trade has broadened the minds of entrepreneurs across the globe to operate businesses outside their home country. This has spurred the need for cultural awareness and integration for the purpose of conducting effective business across nations.
The importance of national culture has become relevant in recent times as a result of the work of Geert Hofstede, The improvement in cultural awareness recently has impacted greatly in promoting international competence in conducting business globally. (Hofstede, 1980)
Culture is the collection of values, beliefs, behavior, customs and attitudes that distinguishes one society from another. The elements of culture are interrelated and complimentary to each other and international firms should integrate these elements of culture into its management style in order to operate successfully.
Major elements that define culture include language and communication, religion, personal achievements, social behavior and socialization among cultures.
Language is an important element in national cultures and there are various languages spoken across the globe. An international marketing manager should be able to promote products in national cultures by first identifying the suitable means of communication and dissemination of information across national borders.