Cultural Challenges in Overseas Business
Cultural Challenges in Overseas Business
A major challenge of doing business internationally is to adapt effectively to different cultures. Hodgetts and Luthans (2005) define culture in terms of characteristics and acquired knowledge. Acquired knowledge that people use to interpret experience and generate social behavior forms values, creates attitudes, and influences behavior. This can relate to businesses, where culture is not inherited or biologically based but rather learned (Hodgetts, Luthans, & Doh, 2005). Steve Kafka, an entrepreneur trying to pursue the expansion of his Chicago Style Pizza restaurant into the Czech Republic will find some complications due to dissimilarity in the two cultures. U.S. and Czech Cultures
There are major differences and incompatibilities between the U.S. and Czech cultures. In the American culture they pose an active lifestyle, hence the popularity of the fast food chain. The abundance of fast-food restaurants in the U.S. would seem to indicate that the national foods are hamburger, french-fries, pizza, and chicken. While these foods are popular among most segments of the population, they reflect a busy lifestyle as much as preference (Culture Gram, 2005). In the US, your typical household consists of a working husband and working wife and maybe one or two children. Since both people are working there is little time to prepare food for the family so the easiest choice is eating out which explains the growing popularity of express or take out restaurants. Family pizza parlors like Showbiz, Pizza Hut, Shakeys, Pizza Pirate used to be the popular weekend dinner establishment. Now most of these are non-existant or turned into express type pizza places where it is take out or delivery like Little Ceasars or Dominoes. Czech families are traditionally close and tight knit therefore most Czechs do not dine out often, instead women generally prepare the meals at home (Culture Gram, 2005). A problem that may arise for Steve in his venture to expand his business to the Czech Republic is that pizza, in the Czech Republic is usually eaten as a snack from street vendors and not in restaurants (Culture gram, 2005). Since Czechs have this stereotype that pizza is an express meal, Steve has to market his Chicago Style Pizza restaurant as a dine-in family establishment for his venture to be prosperous here. Traditional Chicago style pizzas are usually made in a deep dish and has a thick crust, therefore patrons maybe compelled to use utensils, changing the stereotype of pizza being an express meal. Hoftedes Cultural Dimensions
According to Hoftedes there are four Cultural Dimensions; power distance, uncertainty avoidance, individualism, and masculinity. Power distance is described by the extent to which less powerful members of institutions and organizations accept that power is distributed unequally. You have high power distance and low power distance. High power distance culture is one which exhibits centralized and tall organizational structures, strict obedience found at upper level, a structure which encourages and promotes inequality between people at different levels, and where people blindly obey the orders of their superiors (Hodgetts, Luthans, & Doh, 2005). This is evident in the many levels of the Czech Republic government, where there is a president, who is head of state, a prime minister, who is the head of government and leads Parliaments majority party or coalition, and the Parliament comprised of a Senate and a Chamber of Deputies (Culture Gram, 2005).
Uncertainty avoidance can be described as the extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these. There are certain degrees of uncertainty avoidance, high or strong uncertainty avoidance and low or weak uncertainty avoidance. High uncertainty avoidance countries like the Czech Republic have a tremendous arrangement of structuring of organizational activities, more written rules, less risk taking by managers, lower labor turnover, and less ambitious employees (Hodgetts, Luthans, & Doh, 2005). As Czech Republic government is in a state of reform, the great arrangement of structuring of organizational activities and written rules is evident in the Republics drive to gain European Union accession has brought new legislation and regulations compliant with EU norms. Unemployment is also low due to the lower labor turnover. Looking upon the accelerated industrial restructuring, unemployment is about 9 percent, which is low by regional standards (Country Watch, 2005).
Individualism can be described as the tendency of people to look after themselves and their immediate