Question

PLEASE TYPE RESPONSE

Consider a hypothetical case where a company has to choose between two countries, A and B, for locating a production facility. Both countries are characterized by low labor costs and good access to world markets. Both countries are of roughly the same size (in terms of population), and both are at a similar stage of economic development. In-country Page 124A, the education system is underdeveloped, the society is characterized by a marked stratification between the upper and lower classes, and there are six major linguistic groups. In-country B, the education system is well developed, social stratification is lacking, group identification is valued by the culture, and there is only one linguistic group. Which country makes the best investment site?

Country B probably does. In country A, the conflict between management and labor, and between different language groups, can be expected to lead to social and industrial disruption, thereby raising the costs of doing business.84 The lack of a good education system also can be expected to work against the attainment of business goals. The same kind of comparison could be made for an international business trying to decide where to push its products, country A or B. Again, country B would be the logical choice because cultural factors suggest that in the long run, country B is the nation most likely to achieve the greatest level of economic growth.

But as important as culture is to people, companies, and society, it is probably less important than economic, political, and legal systems in explaining differential economic growth between nations. Cultural differences are significant, but we should not overemphasize their importance in the economic sphere. For example, earlier we noted that Max Weber argued that the ascetic principles embedded in Hinduism do not encourage entrepreneurial activity. While this is an interesting thesis, recent years have seen an increase in entrepreneurial activity in India, particularly in the information technology sector, where India is an important global player. The ascetic principles of Hinduism and caste-based social stratification have apparently not held back entrepreneurial activity in this sector.

Write a 1-2 paragraph response on why the culture of a country might influence the costs of doing business in that country. Illustrate your answer with at least one example.

Answer 1

ANSWER -

These days it is a common practice to do business globally. As we break down technological barriers and accelerate towards creating a global economy, we are faced with the challenges of cultural diversity among countries.

Today the business environment has become more dynamic, more competitive and increasingly complex and adding a little cultural diversity to the mix, we have a whole new ball game in our hands. The challenges of cultural diversity not only affect the way our business is operated internationally but it also affects the cost of running a business abroad. China being one of the contenders for the upcoming global trade market opens the door to its trade for the Western world. Coming from the era of communism, it has become more challenging for international companies to conduct business practices, especially the cost of running a business. Establishing a reputation requires companies to invest heavily in learning how to do business in each country, so to speak, this can be a classic case of business deals happening at the dinner table. Most deals take place outside of more traditional office environments, regardless of cultural influence.

Sometimes it pays to know the right attitude and the right people, as they say in the game that it is not what you know, but who you know. We face challenges to understand cultural diversity in an increasingly complex business environment and to become more dynamic, more competitive.

This means evaluating the work force to understand customer needs around the world, building new relationships and capabilities in diverse markets, balancing talent and productivity with cost and competition, and with standards consistent with holism The focus is on navigating the regulatory environment. world.

EXAMPLE-

An example is how IT jobs are being outsourced in countries like India. The labor market there is becoming significantly cheaper and is highlighted by the book My Job Want to India: 52 Ways to Your Job (Progressive Programmers) to get a good idea of ​​how companies are benefiting from the cultural diversity of countries. is. The front cover in this book shows and shows how they would work for food. In fact, some international companies are benefiting from outsourcing their services to countries like India and China. Those who exist mainly because of cultural social status are trying to build their economic viability by working for international trade and almost for peanuts. This is not only a plus and encourages more Western businesses to outsource their operations side to reduce the cost of their operations, but also to provide greater economic acceleration in countries such as India and China.

There has also been recent interest within Australia to expand its alignment with India for information and operational management and for labor management in China. Countries in turn are getting prestigious opportunities to align internationally. It is no secret that China has requested the talent of Australian sports officials to prepare for the 2008 Olympics. This has given Australia an opportunity to learn Chinese culture and how to do their business. Both countries are benefiting from this exchange of skills for opportunities. The benefits of cultural influence have shown that early investment can lead to large gains, just like the fruits of labor.