Academic Master

Business and Finance

CULTURAL COMMUNICATION AND INTERNATION BUSSINESS

With the rapidly developing technology and growing concept of the world as a global village, the medium of communication has changed from personal to online and other digital media. However, communication remains one of the most important things in everyday life. Communication decides the way an individual understand the world and its matter. Culture is background, traditions, belief and another physical setting a person lives in, and culture influence people beliefs and perceptions of things they see around them. The learnings in culture are because of communication and because of communication exchange the culture is represented. Advancement and development in the global market have led to the global trade of goods, capital, and ideas. International alliances and global ventures can be helpful in the development of countries and also help the states enter in the free markets. The difference in culture can have an impact on the global exchange and how people communicate. One of the essential components in the making the joint ventures and trade of good success is communication and cultural acceptance (Pothukuchi, Damanpour, Choi, Chen, & Park, 2002). However, studies have shown that difference in domestic culture and vision of international partnerships, and communication can negatively impact the businesses (Sirmon & Lane, 2004). The increase in global trade and global market, it is essential to understand the impact of communication and cultural differences of a country and international ventures. Therefore, this essay will explore the effects of cultural differences on national and international business, how to overcomes the communication and cultural barriers as well as adaption processes for international trade in national cultures.

Globalization is a phenomenon which is multidisciplinary impacting every field of life whether it is politics, community, business or even personal life.  Because of rapidly developing concept and acceptance of globalization it is a political, cultural, social and economic phenomenon. However, in the global world culture and communication plays an important role. Globalization has led to increased intercultural communication in the world. The expanding international business and global market, the intercultural business communication has become an essential concept as global enterprises not only set their joints in other countries but also reach out to those countries to find the right employees for their nations (Schmidt, 2007). A trend with the name “open borders” give the concept that business and trades are international and can be access bypassing the geographic locations. However, it is vital for the global alliances to interact and communicate effectively. The cultural differences can be observed in the fundamental values and primary-activities of the international partnerships therefore both the partners need to communicate in a way that the new venture becomes successful without hampering the cultural values. For example, the business which has same cultural patterns are more likely to be a success than those which have different cultural values and mission (Pothukuchi et al., 2002). The difference in culture can have a different psychological environment for the company, and it can impact the business negatively. An example of cultural difference can be that if a European country wants to establish a join in the Asian nation without consideration of the cultural values of that country, then the venture might end up in the loss.

The level of understanding of cultural sensitivity about values, food restrictions, behaviors, and language between the partners will be the deciding factor for the success or failure of the alliance. Another significant trend in the business market is a joint venture (JV) between two countries. Communication and culture play a role in JV because in these kinds of enterprises both the parties have to work hard to make it work. Both the partners have to work together to devise policies and practices which are cultural friendly and acceptable by people in the locality (Hennart & Zeng, 2002). If the JV is between two countries which have entirely different setup and mother languages than it is will be even more challenging to communicate and develop a plan according. For example, if the JV is between China and the United States and it is evident that the language and the culture of these countries are different which will make the joint venture a hard success. The verbal and non-verbal communication will be different and would have various meanings in both these cultures, so the partners have to put extra effort first efficiently to communicate among themselves and then with the people.

Many of the international business have succeeded, but those who were not competent to cultural values failed. One of the reasons for the international business failures is that the managers managing the business from the other part of the world fail to accept and modify the business values and policies according to the respective culture (Johnson, Lenartowicz, & Apud, 2006). Managers also have a responsibility to choose the local partners and have substantial knowledge about local economy, politics and social environment. Research studies on international business failures concluded that managers lack the ability to understand the cultural needs and also unable to communicate efficiently with their partners in other countries (Johnson et al., 2006). This signifies that more than technical skills and knowledge about specific business it is important to have cultural understanding and effective communication skills. Language is also imperative to the communication between two different cultures. For example, if the managers of both parties have language issues then it will be hard for them to communicate effectively regarding their goals, policies, and trends. This means that the company which is successful at the national level might be a failure at international level because of cultural incompetence and ineffective communication. People in the industry are trying to build an effective relationship, and one of the key element is communication. Intercultural communication can result in dynamic of business and profit general by mixing diverse background and language differences (Schmidt, 2007). Therefore, to overcome the cultural barriers in international business, it is important that the managers are trained to consider the culture and language of the partner country as the primary element in planning. Before devising policies and goals, managers should be aware of the local, social and political environment of the nation and then design accordingly. Religion is a part of the culture and can become a sensitive question if not considered during the planning of the venture. For example, if the target population of a country is Muslim, the alliance cannot serve anything related to pork or pig because it will not only create the religious issue but will also impact negatively for the business. The community will just accept the international business if it is adapted to the values and beliefs of the community. The primary purpose of the company should be to merge in cultural values and not challenge in any way.

Numerous international alliances have expanded their business in the countries of different cultural background and diversity in values. These alliances such as McDonald’s, KFC, and Pizza Hut have expanded their business in most of the states making these alliances multinational. KFC and McDonalds have been widely accepted by countries because they not only have a neutral menu like chicken and others but also have adapted to cultural expectations and needs (Kincheloe, 2002). For instance, in Muslim populated countries such as Pakistan or Indonesia, if McDonalds or KFC start to serve the pork then it will not only lead to riot but also to the crashing of business in all possible way impacting its international image as well. This is the example of how culture influences the business especially international business ventures and how the cultural competence is vital for a business to survive in any community. Therefore, considering the cultural competence, these joints have adapted according to the cultures and their menu are devised in a way that it does not hurt religious or political sentiments of the community. Another adaption McDonald’s have done to merge in the community that on the joints all through the country they have a name written in local language as well. For instance, in Pakistan, it is written in national Language Urdu, whereas, in India, it is written in Hindi. This shows that how McDonald’s have adopted the culture and language of the country to survive in international markets and there is no doubt that because of this adaptability they are one of the biggest international fast food joints. Another example of adaption to culture is Wal-Mart which is world’s most significant retailers. Wal-Mart has managers from the respective countries to make it easier for understanding what the consumer needs (Iacovone, Javorcik, Keller, & Tybout, 2009). For instance, the requirement of consumers in the United States can be entirely different from the demand of consumers in Africa. Therefore, it is essential for the retailers to adapt to the cultural and the consumers’ needs. Having local managers can be a good strategy, but it is not entirely necessary if the manager know the values and needs of the consumers. In other words, managers of international or multinational companies should be aware of cultural and religious values when working in the global market.

In conclusion, culture and language play a huge role in national and international business. Globalization might have increased the trade and improved the international business, but it has not changed the cultural and communication values of the countries. Before planning international business venture, it is important to consider cultural values and language importance. Because if the cultural and language gap is more prominent between two partners than the failure chances of the business are higher. It is essential to avoid anything which will touch the religious and cultural values of the countries as it will impact the business’s image, profit and can lead to a collapse in the operations. The lack of shared values and understanding can be the result of ineffective communication between the partners. Managers should be more willing to get a deeper understanding of the values, local economy, local interest and another aspect of the culture to make the joint venture or international alliance more successful.

References

Hennart, J.-F., & Zeng, M. (2002). Cross-cultural differences and joint venture longevity. Journal of International Business Studies, 33(4), 699–716.

Iacovone, L., Javorcik, B., Keller, W., & Tybout, J. (2009). Walmart in Mexico: The impact of FDI on innovation and industry productivity. University of Colorado.

Johnson, J. P., Lenartowicz, T., & Apud, S. (2006). Cross-cultural competence in international business: Toward a definition and a model. Journal of International Business Studies, 37(4), 525–543.

Kincheloe, J. L. (2002). The Sign of the Burger: McDonald’s and the Culture of Power. Temple University Press. Retrieved from https://books.google.com.pk/books?id=jo88ePT5m0UC

Pothukuchi, V., Damanpour, F., Choi, J., Chen, C. C., & Park, S. H. (2002). National and organizational culture differences and international joint venture performance. Journal of International Business Studies, 33(2), 243–265.

Schmidt, W. V. (2007). Communicating Globally: Intercultural Communication and International Business. SAGE Publications. Retrieved from https://books.google.com.pk/books?id=3vPnpZjJp4QC

Sirmon, D. G., & Lane, P. J. (2004). A model of cultural differences and international alliance performance. Journal of International Business Studies, 35(4), 306–319.

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