The Importance or Otherwise Understanding Cultural Issues for Business Firms Operating Internationally

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Contemporary Issues in Business

Topic 4:
The importance or otherwise understanding cultural issues for business firms operating internationally.


Why firms want to do business internationally?3

1. Main problems of doing business internationally4
1.1. What is culture?5
1.2. Which factor had company look at when it arrives to another county?5
1.2.1 The employees are doing business internationally6
1.2.2. The company is developing its product or service internationally6

2. Do we need to adapt the product to each culture or we can do global product?7
2.1. Theory: globalisation, global product7
2.2. Glocalization9
2.3. Example McDonald’s : « good example »11

3. What happen if a company doesn’t respect culture?12


Why firms want to do business internationally?
This report investigates importance of understanding cultural differences between countries for business firms operating internationally. There will be examples of firms that understand different cultures and are able to use this knowledge for successful business. International trade includes all the various kind of exchanges as importation and exportation, as well as goods and services, etc. across nations. It grew over the last half of the twentieth century due to many reasons, as the liberalization of both trade and investment or as the opening of the borders. But, why firms want to do business internationally? What is the goal of this international trade? Indeed, there are various advantages to develop exchanges aboard. 1. First, go to others countries permits to open new market and become larger. The aim is typically company expansion. Operations in two or more nations always results in huge benefits. Thus, firms have new opportunities in terms of technologies, consumer behaviours, knowledge’s, etc. Moreover, aboard, companies can find solutions about the problems that they met before as alternative sources labour, new creativity, diversification of the products, etc. They become more and more competitive. 2. Furthermore, more international a company is, more recognized it is. A new market does not only mean new opportunities but also new influence and a firm can develop its reputation. When it is higher, it becomes easier to do business worldwide and vice versa. 3. One of the main reasons why companies go to do exchanges in others countries is the condition of the home market. Sometimes, the economic situation stops the development of the market and it becomes saturated. Thus, it is impossible to do business, or survive, a company needs to have customers, so it will go to find them outside and it commits resources there. 4. Then, there also exists another important advantage. It is the division of the risks. That is to say, when companies work internationally, they do not have the eggs in the same shopping basket; they have the opportunities to lean on the new environment to extend them if the domestic market goes through. It permits to reduce the loss because the problems that are present on one market can be compensated for a new. 5. Sometimes, go to buy some products worldwide is a real necessity because our own country cannot reply to our demand due to a lack of competencies or the specializations of some countries, for instance. So, we can observe that countries are dependents on each other. And we cannot compete with the old expertise of some countries in some industries. It is better to use their know-how than to try to do it by ourselves. To conclude, international business is important for all the countries in the world and all the firms. The opening of the barriers changes the conception of the exchanges. Nowadays, the companies cannot miss it. Do aboard to do business is as well as an obligation as a necessity and a desire. 1. Main problems of doing business internationally

When companies are...
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