Cultural issues in the International Business environment

In todays world business and commerce globalization is increasing gradually worldwide. Goods and services trade has risen up by 25% of total world GDP (Govidarajan & Gupta, 2000). But in terms of manufacturing goods, the international trade has multiplied 100x times since 1955 (Schifferes, 2007). Due to globalization there are number of important challenges that business have to face for emerging internationally. Flexibility is the main ingredient required to adapt changes locally, regional bases and internationally. The main issue that is being focused in this research paper is Culture issues and how it impact on international business environment. The term Culture has received numerous definitions so basically culture is the knowledge which is shared by common relatively large group of people. They share similar attitude, values, beliefs, norms, experiences, religions etc. Hofstede (1984) found that the main dimensions of the culture that would affect the work practices are long vs short term orientation, individualism vs collectivism, uncertainty avoidance and masculinity vs femininity. The national culture structure, great power detachment is able to render into possible corruptive practices in businesses. Takyi-Asiedu (1993) has connected power detachment to corruption within sub-Saharan Africa. Pant, Cohen and Sharp (1996) also initiate that high power-detachment cultured people be likely to outlook unethical practices as acceptable in business. On the other hand, Grey (1988) associated the high power distance by means of equivalence of accounting and financial practices, which may be more costly to the company

because of the manner of doing the business. Individualism vs. collectivism is an significant characteristic that manipulate to the costs of business. For example, Hansted (1999) has initiated an important correlation among the individualism criterion and software privacy. Collectivism has been related with corruption and unethical behavior in workplace (Hooper 1995). Masculinity vs. femininity also is liable to manipulate business expenses. For example, high masculinity cultures will have been linked with unethical practices at workplace (Vitell et al 1993). Feminine cultures could result in conservatism and top secrecy in accounting and finance (Niswander & Salter 1995). Religion has a vital impact on doing business. For example, Bill (2005) noted that Islamic culture support secretive endeavor and the exact to private assets. This entail that doing the business in Islamic culture way might have reduced political threat and whose avoidance can turn out to be more costly. Uncertainty avoiding states are inclined to have more strict rules and solid legal framework of doing business (Halperin & Pagell 2001). In provisions of entry form hooked onto the state, businesses might find that uncertainty avoidant countries favor solid structures such as established local ownership or subsidiaries, which can be more expensive and risky. Conclusion, as this paper has shown the possible cultural issues and what will be the impact of them on international work practices. However, the company should carefully analyze its strategies and be more cultural sensitive to take advantage in global opportunities.

References
Hofstede, G. (1984). Cultures Consequences: International Differences in Work Related Values. London: Sage. Husted, B.W. (1999) Wealth, Culture, and Corruption. Journal of International Business Studies, 30(2), pp. 339-359. Husted, B.W. (2000). The Impact of National Culture on Software Piracy. Journal of Business Ethics, 26(3), pp. 197-211.