Corporations are expanding and the increasing globalization of the world allows this important process to be increasingly easier. However, it is clear that the economic and social changes wrought by globalisation have not occurred equally or with the same speed, thus, companies have to adapt to a new situation in each country they are able to expand do. The major arbiter of the success of an expanding business in a new country is that country’s culture: businesses can run into major cultural issues both in the market and within their organization’s workplace when expanding to a new country. Moreover, culture is “slow to change” – so companies must develop strategies to deal with business issues arising out of cultural concerns (Garbis, 2015).
In the workplace, much of the difficulty for companies expanding into new countries comes from the individuals’ differences between their employees at the original firm and their new hires. Duggan (n.d.) states that there are four areas where cultural misconceptions are likely to arise: mismanagement of business practices, language, religion and labor demographics. The mismanagement of business practices refers to a situation where, for example, a certain way of doing things in a company’s home country is found to be strange and incompatible with local sensitivities – with obvious moral and efficiency consequences for new employees. Language, of course, refers to the potential of a language barrier between new and old employees, crucially, problems can arise in regions where business English is never taught or it is taught poorly (or strong accents get in the way of comprehension). Religion can impact the ability of new employees to cooperate as well as highlight the need for different holiday periods for different people. Finally, differing labor demographics by country may call for new hiring strategies where less or more skilled workers are available.
Outside the company itself, many of these factors can impinge on how the company goes about its business in its new market. Companies selling certain products may have to take into account cultural sensibilities of the individual. For example, selling McDonalds burgers in India would not achieve major profits due to the vegetarianism preferred by believers of Hinduism (Dutta, 2015). This is what can be termed as “cultural preferences” of the consumer (Brooks, 2013). These preferences can be so ingrained that some countries would have no idea what the incoming business is trying to do, even if there is a possible market there. More broadly, however, language poses one of the greatest issues in expanding into a new market. Whole strategies must take into account the small things in each language in order for the customer to understand what is being sold or discrepancies can arise in a business deal over seemingly small matters such as humor (that can significantly differ even in closely related cultures).
How does a company interested in international expansion address this? It is crucial that such a business develop a clear plan. Within the company, the first step would be a survey-centric engagement with the new staff to get a sense of what some of the major cultural issues may be; this engagement should be constant. Also, it is essential that language education is provided to those who require it that also includes the subtleties and so on of the company’s host country. Both actions would go far in addressing cultural issues for incoming employees. For the original employees, it would also be beneficial if some sort of sensitivity training is encouraged in order for relations with both new employees and potential customers goes more smoothly. Lastly, it would be crucial that any market research done within the new country includes some of the individual sensitivities highlighted above. By implementing these potential strategies businesses will have an increased ability to thrive in the new, globalized, world.
- Brooks, C. (2013, May 1). Global Expansion Requires Cultural Preparation. Retrieved from
http://www.businessnewsdaily.com/4429-global-expansion-cultural-preparation.html - Duggan, T. (n.d.). Examples of Cultural Problems in the Global Workforce. Retrieved from
http://smallbusiness.chron.com/examples-cultural-problems-global-workforce-71072.html - Dutta, S. (2015, August 6). Where You Can and Can’t Eat Beef in India. Retrieved from
http://blogs.wsj.com/indiarealtime/2015/08/06/where-you-can-and-cant-eat-beef-in-india/ - Gabris, N. (2015, March 2). Cultural differences: inevitability in a global economy. Retrieved
from http://futurehrtrends.eiu.com/report-2015/cultural-differences-inevitability-in-a-global-economy/
