Cultural Challenges of Doing Business Overseas
MBA 501 Forces influencing Business in the 21st Century
University of Phoenix
March 25, 2008
One of the major challenges of doing business internationally is culture. Any business endeavor will need to take into consideration the cultural diversity and what limitations or similarities there are to both cultures so the business will not suffer. This paper looks at several things to consider when opening a business in another country, what to look for and how to best fit the need to the country the company is wanting to do business in.
Before starting a business in another country several factors and decisions will need to be made. Different countries have different cultures, and a manager needs to be aware of the culture of the country the company is going to be dealing with. Hodgetts states, “Culture can affect technology transfer, managerial attitudes, managerial ideology, and even business–government relations. Perhaps most important, culture affects how people think and behave.” Steve Kafka is wanting to open a Chicago Style Pizza franchise in the Czech Republic. In order to begin this business venture, he will need to think first of the cultural differences between the US and the Czech Republic cultures. The way a business is ran in the US could be vastly different in another country, thus the management team overseeing the business enterprise will need to be well aware of this.
The labor force in the Czech Republic is mainly auto industry and metallurgy, with only five percent being in agriculture. The labor force is cohesive and well educated and the country has a program selling stock to the Czech citizens rather than outside countries or industry. One cultural difference that could pose a problem for Steve is the population in Prague. There are several different ethnic groups in this country, which is similar to the US, but the mix is a much...