Module 4: Investigating the cultural factors influencing international business

Impact of cultural factors on international business

Contract negotiations

Local practices can be crucially important in discussions. As mentioned above, it is important to be on time to meetings in China but in India this is not as important. In China relationships are also very important. The Chinese call this 'Guanxi' which is to have personal trust and a strong relationship with someone.

In Japan, gift giving is normal and you should ensure that you give gifts with both hands. In other countries, however, this could be seen as an attempt at bribery.

Workforce composition

The social make-up of a country will also have an impact on the composition of a workforce and in turn, the culture of a workforce will have an impact on business culture. A business needs to be aware of how the workforce is likely to work, respond to management, its attitude towards taking days off work, illness and so on.

Management approach and its impact on the workforce and organisational culture

The culture of a country will have an impact on the management style of organisations in that country. In his book When Cultures Collide Richard Lewis notes that cultures that prioritise efficiency and productivity, e.g. the US and Germany, favour a task-oriented style, whilst countries such as Japan and China focus more on relationship building. Some countries adopt a time-oriented style, common in cultures that place an emphasis on punctuality and planning, e.g. Switzerland and the Netherlands.

Marketing, branding and advertising strategies

As businesses begin to operate all over the world, it has become increasingly important that their marketing strategies and branding work in more than one area.

Sometimes this is not possible, e.g. Burger King operates worldwide under one brand but when they planned to start trading in Australia, they discovered that a company called Burger King already existed there. Therefore, the name was changed to Hungry Jacks in Australia. There are many other examples of branding being changed for different countries.

In 2009, HSBC announced that the bank would rebrand after their $10 million marketing campaign failed. This was because the slogan 'Assume Nothing' had been translated in several languages to mean 'Do Nothing' – the exact opposite of the bank's message.

Pause for thought

Are you able to match these UK brand names with their alternative brand names across the world?

Research the reasons why different names exist in different countries.