Cultural Challenges of Doing Business

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Cultural Challenges of Doing Business

Cultural Challenges of Doing Business
MMPBL/501 Forces Influencing Business in the 21st Century
University of Phoenix
July 20, 2008

Executive Summary
A major challenge of doing business internationally is to adapt effectively to different culture. Such adaptation requires an understanding of cultural diversity, perceptions, stereotypes, and values (Hodgetts & Luthans, 2006). In this paper I will analyze some of the challenges and rewards in doing business overseas. I will discuss some of the major differences and incompatibilities between the United States and Czech cultures as well as comparative advantages and trade barriers that one should be aware of when conducting business overseas. Hofestede’s four primary dimensions will be discussed as it pertains to the circumstances of conducting business with other cultures. The effects of macroeconomic forces such as demand, prices, cost structure and price and income elasticities will also be discussed.

The Cultural Challenges of Doing Business Overseas

Steve Kafka, an American of Czech origin and a franchisor for Chicago Style Pizza, has decided to expand his business into the Czech Republic. He knows it is a risky decision; when he became a franchisor, he had to overcome a lot of difficulties. Steve anticipates he will face some of these difficulties again at the new location in Prague, Czech Republic. Although he was born in the United States, he has family and friends in the Czech Republic, speaks Czech fluently, and has visited the country of his origin several times. In other words, he knows the people and the culture.

There are several factors that need to be addressed in order for Steve to own and operate a successful business. There are a number of questions that should be addressed and considered in order to develop and mitigate any issues that may arise. The differences and incompatibilities between the United States and Czech cultures are;...
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