Culture refers to norms and value systems of any society or a country on a larger scale or a set of shared attitudes, values and practices that are unique to an institution, organization or even a group and it impacts on behaviour and beliefs of those it forms part.
Culture affects the cost of doing business in any country around the world, culture would affect work and payment of interests and across the board culture plays a vital role in social structure of the society and would affect the behaviour of people.
Cost of doing business in any country raises when there is industrial disturbance, industrial disturbance may result from cultural conflicts in that country or in interconnected economies, cultural conflicts in any may affect the way of doing business in the other.
The fact that local or international businesses involve people of probably different backgrounds is a reason enough to conclude that these people have different cultures which will bring up cultural challenges in the businesses. “Historically, class divisions were important aspects of British culture, firms operating in Britain found it difficult to achieve corporation between management and labor, class divisions led to a high level of industrial disputes and raised the cost of doing business in Great Britain relative to the costs in other European countries” (Hill and Mckaig, 20).
Culture influences competitive advantage, many philosophers believe that Japan forms a good example of how culture may influence the way people conduct their businesses, it is believed that the Japanese culture decreases the cost of doing business in that country. The successes of such culture depends on societal values in the country, for example in Japan some values such as loyalty with the employers, unity, self responsibilities, truthfulness, and innovation are believed to be the values behind the success of their culture which has resulted in competitiveness of Japanese companies(International business, par. 1).
Sometimes in the 1980’s Japanese companies are said to have shunned investments in Canada due to bilingual policy adopted by the Canadian government and instead opted to invest in United States if America where they would operate in English but with demographic changes in the 2000’s many people realized to operate in US is to operate in English and Spanish (Hill and Mckaig, 24).
When deciding on target business country it is always necessary to consider their culture since it defines days of business operation, for example in Islamic countries Friday is considered to be the holy day contrary to Christians who have theirs on Sunday this may bring out confusions when scheduling business transactions between Islamic and Christian countries.
In Egypt or any other country with firm Islamic foundations, workers would only work for 6hours a day during the month of Ramadan, for any business to thrive in these countries this cultural practice should be considered and factored in company policies failure to which production and business transactions during this period would heavily be affected.
Some cultural practices in some countries generate income to a country either through tourists who bring in foreign currencies strengthening country’s economies or through selling of cultural products, an example is African countries where some communities remain true to their cultural practices like the Maasai in Kenya whose skin products and local made ornaments generate export earnings or even create job opportunities. Same case could be said with Cook Island where weaving forms a strong cultural practice for women, the weaving industry contributes direct or indirectly in job creation, brings into the country export earnings, and plays a major role in tourism industry, this cultural practice may not be recognized in its contribution to the country’s income but may instead be hidden in manufacturing and retail, if this practice (Griffith, 1 & 2).
In the past culture was never considered a factor in supply chain, business entities would put up strategies on improving the sector by establishing supply relationships with total disregard of corporate culture and its role in facilitating or hindering these relationships, in this kind of environment business lapses would arise whenever personnel changes occur. It is necessary to entrench corporate culture in cooperates to ensure continuity of norms even with personnel changes.
In some countries some dressing codes are forbidden, a practice which may affect some forms of investment like music industries, where dressing codes remain dynamic, an example is Malaysia where some cherished US musician dressing codes are forbidden, a case of Beyonce in October, 2007, a well known Musician who had to cancel some musical concerts planned for Malaysia on grounds that, the authorities would not allow some dressing code due to its strict policies on dressing. Music industry remains a very lucrative business both locally and internationally and cultural policies in different countries are bound to affect the businesses on this sector.
Language forms a major part in culture, language barrier may affect development or success of businesses in a country, some countries which succeeded in the past are believed to have done so partially due to their common languages like the United States of America where all people speak the same language thus making it easy to transact and make business deals and the Roman empire strength in the past was attributed to the fact that most people spoke Latin.
In clothing industry culture also plays a big role, for there are some forms of dressing which are only unique to specific group of people. The extend of success of any business dealing with clothing as the main item would depend on whether the business entities have incorporated cultural preferences of the target population, for example there are some cloths the Islamic community would find offensive but Christians would comfortably wear.
It is necessary to understand surface culture and deep culture for unless you are from a certain culture some things may be taboos, for example as a non Japanese, it would be very difficult to phrase a question about Nagasaki or Hiroshima without offending some one in Japan (International business, par. 4-5), thus for any business transaction in Japan or involving Japanese to succeed it would be advisable to avoid conversations which may touch on the Nagasaki and Hiroshima since it is a deep rooted culture which brings up bad memories and may easily affect international business between Japan and United states of America.
Some cultural practices can be destructive to trade, since some prohibit their loyals from partaking in some activities like farming of tea and coffee amongst seventh day Adventist, who believe that tea and coffee are like drugs and prohibit their believers from taking or contributing to production of the two cash crops, this would affect production and both local and international trading especially in countries where these two crops are major sources of income.
In conclusion culture is a vital consideration when planning a successful business and depending on how one incorporates it into the business, it may impact the business both positively or negatively thus it is necessary to ensure cultural practices and beliefs are well factored in any trading whether local or international.
Griffith, Rhonda. “Culture: counting the cost of culture”, how much culture contributes to the economy. 2007. Web.
Hill and Mckaig. “Global business today”, cultural considerations. 2009. Web.
International Business. Cultural consideration. 2009. Web.