The world is an ever changing place. What is taboo today may become a norm tomorrow. There are vast numbers of countries with various languages, religions and their cultural ethnicity. India has been referred to as a country which is a living example of unity in diversity. In today’s age of capitalism and free trade, borders are soon getting irrelevant and people are migrating, more than ever before, to achieve their personal and organisational goals. It becomes all the more important to understand cross cultural dynamics and its implications on international businesses looking to expand in new markets.
Why understand Culture?
Today we see companies looking towards new markets and industries to expand their businesses. Growth in the west is almost at its saturation peak and developed industries are looking to foray into Asian markets to promote their growth and take advantage of developing economies. There are a lot of constraints in entering new markets, businesses have to understand regional aspects and the environment which govern these markets. There are various aspects of the environment which are Political, Legal, Economic and Cultural. Economic, Legal and Political environment differ in different regions and are sometimes governed by their local culture. Culture in many ways influences and has a major role to define these policies. When businesses are entering new markets they can study economic limitations, political and legal environment. But “Culture is a man made part of the environment”(Herskovits, 1948, p.17). Geert Hofstede in 1980 explained that Culture consists of shared mental programs that control individual’s response to their environment. It has been very easy to understand culture in terms of Hofstede’s dimensions and compare countries based on these studies. These are Power distance, Uncertainty avoidance, Individualism-Collectivism, Femininity and Masculinity. I once came across an advertisement from HSBC, where in a...
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