The factors that are important for foreign expansion by business organizations are, on the magnitude of the domestic market, the production facility and ability, and the availability of resources on the foreign market. The motive here is business organizations can position on an internationalization level ranging from the domestic market to globalization.
Thus, business functions commonly improve when individuals from different cultural background identify new approach to general problems, creating solutions by involving cultural aspects and skills to view issues from different angles. Often the problem of "Ethnocentrism" occurs, i.e. when an individual feels culturally superior to others. The situation creates chaos and misunderstanding within the organization.
Linguistic Barrier and communication:
According to scholars, language becomes one of the major barriers when it comes to negotiating among the foreign trade partners and customers. Though is not possible to be multi-linguistic in all the time, but studies show that there is a strategic market plan to succeed in communication in the linguistic diverse market. “When interacting with group from different cultures, communicating in a neutral pitch and making a alert attempt to be considerate of others' input, even if it is given in an approach to which many business organizations are not habituated, but is can help promote effective business communication” (Ferraro & Brody, 2015 ). International Business Communication is build up when the management understands the areas of commonality. The problem arises when an international business hires talents from different background and country, the diverse workforce fails to communicate and understand others. A language failure among cultures usually comes as 1) inappropriate translations; 2) cultural diversity between speakers of the similar language.
Environment and Technology:
The world economy is expanding in the age of innovative technology, which helps business organizations to conduct business overseas. However, business organizations may face some adversities in conducting overseas business. Technology helps business organizations easily connect with the stakeholders and distributors easily, but few rules and protocols should maintain. For instance, Spanish business organizations have longer lunch breaks than British or Americans have, so it is favorable to connect any Spanish businessperson during lunch hours. Also, if a business organization plans to launch technologically improved gadgets or appliances where people are less used to or not accustomed with updated technology and culturally more traditional; the product will not gain popularity in the particular market.
When a business organization, plans to expand in the foreign market for the new business opportunity, it is advisable to conduct a proper analysis of the target audience in the selected market. The factors like, gender preferences, beliefs and attitude, ideologies, traditions and level of conservatism changes and vary in large amount from society to society and country to country. Therefore, if a particular product, service, or promoting a campaign hurts sentiments of a community or the target audience can create difficulty for the brand image of the product or service. “Being conscious of cultural norms can also help your company narrow down the target audience” (Pieterse, 2015). For instance, McDonalds’ has launched vegetable products in India like McAloo, VegPizzaMcPuff, McAloo Wrap with Chipotle Sauce, MCVeggiee, McSpicy Paneer, etc. primarily targeting the larger vegetarian customers residing in India. Thus, McDonalds' penetrated the large customer base in India and gained popularity especially among the younger generation and urban areas modifying their product according to local customs and beliefs.
A business organization, which functions in different diversely cultured countries, it is important to maintain all the cultural norms and ethics to avoid any chaos or misunderstanding in business process, which includes the fundamental traditions, mannerisms, and gestures of a cultural group. A business practice in one country may represent unethical or absurd in another. For instance, conducting informal business meetings in Australia is quite natural and often conducted in large corporate organizations, whereas in the USA business, meetings are always formal and taken attendees should be formally dressed and formal in conversations. Therefore, an American businessperson may find it shocking when interacting with Australian counterparts for the first time.
Concept of power:
Different societies have different viewpoint towards power and authority, which affects the interaction in the business situation notably since it forms the outlook of how communication will received, based on the relative position of the communicator the recipient. To be precise, conceptions of power manipulate the forms that decision-making and other business communications occur in a business organization. “In functioning with cultures in countries like Israel and Sweden, which have a comparatively decentralized power idea, one may expect better recognition of a ‘participative communication management model’ than in business cultures such as France and Belgium where participative management models are less utilized and relying as an alternative on authority-based decision making”(Moran et al., 2014).Cultural Influence on Customer’s Behavior:
Strategically decisions to manage cultural diversity in international business:
- Critically analyzing the social and cultural norms in the newly selected market
- Appointing representatives from the diverse social background in the workforce so that decision and market actions taken according to the selected society or community. This way a business organization can avoid hurting or engaging communal sentiments.
- The management should take initiative to form a dedicated team to handle social diversification issues and challenges within the organization.
- Promoting different social functions and gatherings to increase familiarity and acceptance among increasing brand awareness.
Disregarding diversity issues include revenue, time, capital, and incompetence. Successful managing of the cross-cultural edge is a vital source of a business organization's competitive advantage. Management and leaders should develop not only empathy and patience toward cultural diversity but also obtain an adequate amount of accurate information about the beliefs and values of selected market. In the above study, the author has studied why business organizations face cultural differences when expanding globally and the different aspects and factors that can come up as a challenge in the process of internationalization. It is vital to recognize how the cultural diversity influences performance, enthusiasm, achievement, and communications with others. As internationalization of business organizations is quickly reshaping, so it is important for business leaders to manage the diversity and differences to bring effective performance.
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