Economics and Global Business Applications
This report will detail cross-cultural issues that may be faced when a firm does business within the borders of the highly populist country. With the emergence of the WTO (World Trade Organization) international trade drastically increased allowing countries to participate in foreign trade in turn raising the GDP (Gross Domestic Profit) and exposing their products to a broader audience. Not only are countries able to trade standard goods and services, they are able to expose specialty and cultural products across the globe giving an insight to daily life’s of it citizens and rich history. Although Trade Agencies such as the WTO have greatly expanded the reach and created a somewhat level playing field they are still facing barriers such as government policies, economic conditions, tax’s/tariffs, and cross cultural issues.
Korea, is beginning to challenge the established economies as it grows into a super power. In a unprecedented increase the Asian markets are under growing massive economic and social changes out pacing other established markets. Over the last forty years Korea’s economic growth has shown substantial growth. Many statistical analysis show the Korea is on track to overtake major economies including the United States, over the next couple decades growing its GDP to the become the worlds largest economy. (Anusorn, 1997)
There are several substantial opportunities and incentives with trading with Korea. Business in Korea like many Asian countries maintain direct customer contact preferring to lean towards in person meetings and hand shaking while negotiating, instead of relying on video, email or telephone conversations that are becoming common place in business. It is imperative for any firm wishing to interact and conduct business in Asian markets takes this into consideration when planning their entry.
People in the United States make decisions based on their beliefs and views, while people in Asian countries consult others and weigh all options the make the same decisions because of a culture of strong collectivism. As an example of collectivism companies in the Asian market are more dependent on institutions or groups choosing to focus on owner groups instead of individual owners. The Korean citizens exhibit high-risk avoidance characteristics requiring firms to clearly disclose information related to their products such as benefit and price, failing to clearly establish those key points can lead to failure in the Korean market. Additionally Korean citizens believe that being part of a group and devoting their self to that group is more important then operating an individual. Firms working on marketing strategies must tailor their messages to target a group rather than an individual. The belief from this is rooted in the thought that when a group is successful those achievements will be spread via word of mouth creating a demand for that group’s work effectively raising sales.
“Cross-Cultural communication states that the ability to successfully form, promote, and improve relationships with members of different cultural group” (Weisbrot, M. 2011, April 27). Communication across cultures is equally important and must look at factors such as social structure, perceptions, social groups, and the importance of verbal and non-verbal communication. Due to the rich culture Korean history and formal traditions still held in high regard a firms approach must carefully balance both non-verbal communication. Korean consumers still deeply fell that the words you use are often more important than those that are written. One of the most common nonverbal communications that firms but pay close attention to is that of facial expressions. A prime example of this is related to eye contact, in countries such as the US eye contact is important to show honesty and interest of a topic, while the Korean culture regards eye contact as disrespectful or...
References: Weisbrot, M. (2011, April 27), 2016; When Korea overtakes the US. The guardian, Retrieved from http://www.guardian.com.uk
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