Question

Please analyze why the culture of a country might have influences
the cost of doing business and investment in that country. Illustrate your
answer with examples.

Answer 1

Culture is an important factor which impact business positively or negatively. Culture differ from countries to countries. It is very important for the businessman to know the culture of their market to serve them better . Cost of business and level of investment is also influenced by the culture of their market or country where they are working. The culture of a company have significant impact on the business that cause to increased cost of the business. Every Culture has diffrent style, ideas , tastes, and business tactics that affects the cost of the business in many ways. Culture has diffrent styles of dress codes, religion ,beliefs as how they work. Language for communication also differs which affects operations of the business. The level of investment in the country is also influenced by the culture. The differences in the culture may lead to decrease in the level of investment as the cultural differences may reduce the incentive to invest.

All of the above mentioned leads to increase the cost of doing business as the business has to work according to the perferences of the different cultures.

Consider as example, As there are some countries which takes rest for some period of time during summer. This leads to shut down of many businesses in those countries. For those businesses its been difficult to work in that time and the business isn't earning profits and the fixed cost is still incurred.