Why does an entrepreneur need to be aware of the culture of the country that he or she is entering into?

Question

What will be an ideal response?

Answer 1

• Differences in culture between an entrepreneur’s home and the foreign market they are entering can be large. This means that a product in one market may not be suitable in another market with differing cultural norms and behaviors. Or perhaps the packaging and the marketing will have to be altered in order for it to be accepted.
• The manner in which business itself is done might be very different based on the culture of a country. Decisions might be made more collectively, potentially extending the time it takes to complete a deal. Or communication barriers may lead to confusion and frustration, in addition to added costs for translation services or multiple contracts. The manner in which people work might be different, so an entrepreneur that is expanding manufacturing facilities overseas might find that it takes either a longer or shorter time to complete the same amount of production that they achieve in their home market.
• Some of the cultural distinctions that U.S. firms most often face include differences in business styles, attitudes toward development of business relationships, attitudes toward punctuality, negotiating styles, gift-giving customs, greetings, significance of gestures, meanings of colors and numbers, and customs regarding titles. For example, consider the following:
• The head is considered sacred in Thailand so never touch the head of a Thai or pass an object over it.
• The number 7 is considered bad luck in Kenya and good luck in the Czech Republic, and it has magical connotations in Benin. The number 10 is bad luck in Korea, and 4 means death in Japan.
• In Bulgaria a nod means no, and shaking the head from side to side means yes.
• The "okay" sign commonly used in the United States (thumb and index finger forming a circle and the other fingers raised) means zero in France, is a symbol for money in Japan, and carries a vulgar connotation in Brazil.
• The use of a palm-up hand and moving index finger signals "come here" in the United States and in some other countries, but it is considered vulgar in others.
• American firms must pay close attention to different styles of doing business and the degree of importance placed on developing business relationships. In some countries, businesspeople have a very direct style, while in others they are much more subtle in style and value the personal relationship more than most Americans do in business. For example, in the Middle East, engaging in small talk before engaging in business is standard practice.
• Attitudes toward punctuality vary greatly from one culture to another and, if misunderstood, can cause confusion and misunderstanding. Romanians, Japanese, and Germans are very punctual, whereas people in many of the Latin countries have a more relaxed attitude toward time. The Japanese consider it rude to be late for a business meeting, but acceptable, even fashionable, to be late for a social occasion. In Guatemala, on the other hand, one might arrive any time from ten minutes early to 45 minutes late for a luncheon appointment.
• People around the world use body movements and gestures to convey specific messages. A misunderstanding over gestures is a common occurrence in intercultural communication, and misinterpretation along these lines can lead to business complications and social embarrassment.
• Proper use of names and titles is often a source of confusion in international business relations. In many countries (including the United Kingdom, France, and Denmark) it is appropriate to use titles until use of first names is suggested. First names are seldom used when doing business in Germany. Visiting business people should use the surname preceded by the title. Titles such as "Herr Direktor" are sometimes used to indicate prestige, status, and rank. Thais, on the other hand, address one other by first names and reserve last names for very formal occasions and written communications. In Belgium it is important to address French-speaking business contacts as "Monsieur" or "Madame," while Flemish-speaking contacts should be addressed as "Mr." or "Mrs." To confuse the two is a great insult.
• It is also important to understand the customs concerning gift giving. In some cultures, gifts are expected and failure to present them is considered an insult, whereas in other countries offering a gift is considered offensive. Business executives also need to know when to present gifts - on the initial visit or afterwards; where to present gifts - in public or private; what type of gift to present; what color it should be; and how many to present.
• Gift giving is an important part of doing business in Japan, where gifts are usually exchanged at the first meeting. In sharp contrast, gifts are rarely exchanged in Germany and are usually not appropriate. Gift giving is not a normal custom in Belgium or the United Kingdom either, although in both countries, flowers are a suitable gift when invited to someone's home.
• Customs concerning the exchange of business cards also vary. Although this point seems of minor importance, observing a country's customs for card giving is a key part of business protocol. In Japan, for example, the Western practice of accepting a business card and pocketing it immediately is considered rude. The proper approach is to carefully look at the card after accepting it, observe the title and organization, acknowledge with a nod that the information has been digested, and perhaps make a relevant comment or ask a polite question.
Cultural differences can add to the complexity of expanding into foreign countries. By understanding them ahead of time the entrepreneur can prepare themselves and their organization to prevent any problems or disruptions to their business and ensure that they achieve the benefits that their expansion offers.