BTEC L3 Extended Dip In Business Yr2 Gp1
Unit 39: International Business
(D2) Evaluate the impact of cultural differences on international business performance in the
international market.
Introduction
Every country differs in culture which has been there for centuries. The international market is
growing rapidly, with more and more multinational organisations entering new markets each day. In
this assignment I will evaluate how the difference in cultures affects the performance of
international businesses.
Language
When entering a new market, at least one of the company representatives must know the language
of the country. Even though the most common language used in the international business world is
English, many countries have a very poor command of the English language therefore it is highly
beneficial to have an employee that speaks the language. It is in benefit of the business to get the
best deals, make negotiations and agreements however without a common language this can
sometimes lead to misunderstanding and hiring a translator can be very expensive.
When operating in an international market, language could also relate to the human resource part
of the business. Whether hiring local staff or transferring staff, the language between the
management and the staff has to be a common one otherwise human resource activities will be
nearly to impossible. It is also very important that a business selling either a product or a service
labels its products in a local language and the description, the ingredients and the instruction have
to be in a local language, in some countries it is stated so by the law.
Religion
Religion is a very important cultural aspect which has to be considered by international businesses
entering new markets. Different countries have different religious views; therefore it is not always
suitable to introduce the products that you sell in your domestic country to a foreign country.
i.e. a business such as Tesco PLC, could no longer sell pork meat and alcoholic beverages if operating
in Islamic countries, and could no longer sell beef if were to operate in India as they are forbidden by
religion. Tesco would have to introduce alternative products that would meet Halal requirements.
When operating in a foreign market and employing foreign personnel, a business has to make sure
that it designs special uniforms for its employees, such as: head scarfs for the female personnel. If
the business does not provide such uniforms or simply does not allow them, they will be criticized as
a company that discriminates its employees and could even be given a fine by the court.
Values
When operating internationally a business has to consider the values of the customers, the
employees and the business partners. There are a few values that are considered multicultural and
are appreciated by most international businesses – those are; honesty, fairness, concern of others
and achievement. Even though there are many values that are considered multicultural, every
country has its own mentality and therefore a different set of values. If a country wants to succeed
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