Dr. Ellen Szarleta-Instructor
August 27, 2006
The Cultural Challenges of Doing Business Overseas
For an American company to be successful overseas with business ventures they have to take risks in making business decisions which can be challenging. 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 great deal 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. For this business venture to be successful Steve has to evaluate and take in considerations of the cultural differences between the United States and Czech Republic before moving ahead.
Differences and Incompatibilities between U.S. and Czech Cultures There are many differences and incompatibilities between the U.S and Czech Republic cultures and if Steve wants to expand his business here in the Czech Republic he is going to have to weigh the differences and take them into consideration in his business decision-making process. According to the information presented by CultureGrams, there are some obvious difference between the American and Czech cultures in regards to food and diet. In Czech, dining out dining out is a rare occurrence. In the United States the pizza which is a favorite and popular dish is considered a whole meal itself that can be consumed at the restaurant, carried, or delivered to the home for consumption whereas the Czechs eat pizza only as a snack on the streets where it sold as by street vendors. Czechs tend to eat with the fork in the left hand and the knife in the right where in the U.S. the American uses the fork in the same hand that write with. With these differences to contend with, Steve has to develop a strategy that will allow his business to succeed here in the Czech Republic. CultureGrams also mentioned that Czech enjoy to consume beer through out the day whereas in the U.S beer is often consumed with pizza and taking this under consideration Steve can think of a marketing strategy for selling beer and pizza in new foreign market. Steve may have and idea for dealing with the pizza but he has to understand the Czech business culture so that can create relationships to help with his business venture. Direct Eye contact is very important during a conversation especially during business meetings, whereas in U.S it is somewhat important. In the Czech Republic, workdays begin between 7 and 8 a.m. and end between 3 and 4 p.m. and in the U.S. the working hours are not set because businesses operate on 24 hour basis. These difference have to be taken understand consideration so that no one is offended during the business relationship.
Evaluation of Czech Business Culture Applying Hofstede's Four Primary Dimensions Culture affects the beliefs and the actions of people from different countries in different ways. In International Management (Hodgetts and Luthans, 2006), the author notes that culture has several characteristics and is defined as "acquired knowledge that people use to interpret experience and generate social behavior". An individual has to understand and respect the different cultures with whom they have relations with. Steve may be a Czech origin but he was born and raised as an American with the values and customs that are instilled within all Americans. Steve has to take this understanding, remain open-minded, and pay attention to the actions because culture affects how people act and think. Power distance exposes an employees' desire to fall within the good graces of his or her superiors. The individual...