CULTURES IN INTERNATIONAL BUSINESS

Cultures in International Business

Cultures in International Business

Introduction

In this paper discussES business as an aspect of the group element, because managing diversity especially cultural diversity in business is an important issue in today's changing and globalized economy

According to Hofstede, culture refers to the collective programming of the mind, which distinguishes the members of one group or category of people from another. Hofstede identifies four dimensions of World culture: power distance, uncertainty avoidance, individualism/collectivism, and masculinity / femininity.

I think although some cultural gaps were not very disruptive or were even complementary, differences between two cultures in uncertainty avoidance were potentially very problematic for international cooperation because of differences in tolerance towards risk, formalization, and the like.

At the agency level, differences between cultures, according to these dimensions, have many consequences for management practices. For example, both power distance and individualism affect the type of leadership most likely to be effective in a country. In collectivist cultures, leadership should respect and encourage employees' group loyalty; incentives should be given collectively, and their distribution should be left up to the group. In individualist cultures, individuals tend to be more mobile, and incentives should be given to individuals. Hofstede has shown that in countries with lower power distance scores, there is considerable acceptance of leadership styles and management models that are even more participative than those that presently exist (csrpolicies.org). According to Hofstede, the ideal leader in a culture in which Power Distance is small would be a resourceful democrat. On the other hand, the ideal leader in a culture in which Power Distance is large would be a benevolent autocrat.

Discussion

Cultural differences significantly influence management approaches and the performance of employees within organizations. General principles of management and specific human resource practices evolving out of management theories are currently being seriously questioned in various cross-cultural settings. Cross-cultural understanding and intercultural communications skills, therefore, can contribute to the success of negotiations. Owing to modern travel and communication technology, intercultural encounters have multiplied at a prodigious rate. Embarrassments occur between ordinary tourists and locals, as well as between business partners. Subtle misunderstandings still occur in negotiations between modern diplomats and government leaders. Avoiding any cultural conflict should be one of the themes of training and education.

Developing Leadership in Global Negotiations

Negotiation is a process in which two or more entities discuss common, as well as conflicting interests in order to reach an agreement of mutual benefit. In international negotiations, some of the aspects that differentiate the negotiation process from culture to culture include language, cultural conditioning, negotiating styles, approaches to problem solving, implicit assumptions, gestures and facial expressions, and the role of ceremony and formality (www.philodialogue.com). For international negotiations to produce long-term synergy, and not just short-term solutions, individuals involved in the negotiation must be aware of the multicultural facets embedded in the process. The negotiator must understand the cultural space of his or her counterparts. Negotiating is a skill and it can be ...