Question

You must provide an assessment for the level of cultural risk (High, Low, Medium) & focus on the implication to business practices behaviors, inter-cultural negotiations, and decision makings in the foreign market Saudia Arabia.

Answer 1

Culture -

“Culture is the integrated sum total of learned behavioural traits that are shared by members of a society”Culture “Culture is the integrated sum total of learned behavioural traits that are shared by members of a society”

Levels of cultures -

We cannot avoid seeing that the business environment is changing in many ways. As well does the cultural environment that is one of the most challenging areas for most international marketplaces. In order to understand and influence consumers’ wants and needs, foreign companies must understand the different cultures. Culture has been defined in many different ways, reflecting the variety of cultural phenomena that can be observed. According to Morrison (2002), cultural symbols include language, religious rituals and art whose shared meanings from the unique fingerprint of a particular society. According to Czinkota (2007), cultural factors have an important impact on the flow of business. Each society has its own elements of culture. These elements of culture are manifested through:

the cultural influences that impact business relationships within Saudi Arabia

 Language

 verbal

 nonverbal

 Religion

 Values and attitudes

 Manners and customs

 Material elements

 Aesthetics

 Education

 Social institutions

Adaptation of these elements for an international company depends on its level in the market participation –for example, licensing versus direct investment and the product or service marketed (Czinkota, 2007)

Business culture -

Brazil is a country with real business opportunities for foreign companies, but doing business in this county can be seen as a significant cultural challenge. Brazil is a colourful culture that attracts many people to learn and experience the core of this vibrant environment. If we see broadly on Brazil culture we can discover that it is a combination of European, American and Asian culture (Maps of world, 2008).

In the below presented model the cultural influence in each country is presented. Culture in each country is meditated through three factors: cultural forces, cultural messages and consumer decision process. Family, education and national identity manifest cultural forces. Ethics and morality, behaviour and roles and design influence cultural messages. Culture is also influenced from universal needs and wants in the society and consumer trends. These cultural differences are different in country A and country B. The foreign company must analyze and cope with these cultural differences and harness the tension to bring about reconciliation between these countries. With combining and synthesizing cultural differences International Marketing Strategy 20 the foreign company can integrate different cultural perspectives and seek a dynamic solution to problems that may arise (Bradley, 2002).

Home culture versus foreign culture -

Tayeb (1998) says that the decision to become involved in international business depends, among others, on the size of the company´ domestic market, its production capacity and capability, and the financial and other resources that the foreign market requires. In that way, firms can be placed on an internationalisation scale ranging from domestic single nation to totally globalise. The extent to which national culture becomes relevant to a firm can be shown in the following table. The company’ own home country culture is of high relevance, though the managers and other employees may not be aware of its influence. The relevance of other people’s culture becomes greater for a firm as it spreads its activities and products past its national boundaries to reach foreigners with different value systems and tastes (Tayeb 1998).

Cultural advantages can arise from different values and ways of seeing the world. To realize competitive advantage from them, it is first necessary to try to understand them. For cultural differences to be lower these should be managed. According to Hoecklin (1994) there are four strategies for managing cultural differences:

1) Building a strong corporate culture internationally

2) Developing a common technical or professional culture worldwide

3) Relying on strong financial or planning systems.

4) Leaving each culture alone

the cultural influences that impact business relationships within Saudi Arabia-

Saudi Arabia is a conservative society. Family values are meant a lot to the majority of the Saudi nationals. Families may live in joint family systems. Extended families are also considered part of immediate families. This culture is also depicted in the business relations of the country. Most of the businesses are family owned with most of the board members from the same families. Therefore, doing business in Saudi Arabia may require a special consideration of the culture and social norms of the country. Trust means a lot in such societies. Winning the trust of the local peoples while engaging in business activities is an important factor in successful business relations.

The country has an acceptance of online means of communications. For example, according to Al-Somali, Gholami, & Clegg (2009), there is an increasing acceptance of online banking in the Saudi culture. Therefore, while trying to start a business in Saudi Arabia, new forms of communication can be utilized.