International Business Practices Phase 2 Ip
Phase 2 Individual ProjectColorado Technical University (Re-Used from MGM355-1502B-04November 01, 2014Prof. Lester Wills)May 31, 2015 Cultural factors are so important they can sometimes raise the cost of doing business. Britain is an example of high cost of business due to culture. Firms operating in Great Britain found it difficult to achieve cooperation between management and labor. Class divisions led to a high level of industrial disputes and raised the costs of doing business in Great Britain relative to the costs in other European countries. Keeping this in mind I believe that I’d avoid countries that still operate under a caste system and instead choose cooperative cultures in Kuwait, Japan and Colombia. The cultural environment is in turn influenced by some of the other environments:The economic environment is the standard of living comfortable, or stressed. The technological environment how people are able to do things. Whether they walk to work, drive and can they use a phone, access the internet. Lastly, the geographic environment effects weather, growing food, and housing and living conditions. The cultural environment strongly influences the labor environment and the politics of the populace. Regardless of where I start the business the strongest equalizer in cultural challenges are Language, Trust, and Respect.
Kuwait is one of the smallest countries in the world in terms of land area. Kuwait City is located on Kuwait Bay, a natural deep-water harbor. 90% of Kuwaits population lives within the Kuwait Bay coast. Kuwait has a petroleum-based economy, petroleum and fertilizers are the main export products. The Kuwaiti dinar is the highest-valued currency unit in the world. 60% of Kuwaits population is Arab (including Arab expats). The majority of Kuwaits citizen population is Muslim. (About.com)Doing business in the Middle East it is imperative to learn about areas such as business culture, business etiquette, meeting protocol and negotiation techniques. Through such knowledge stereotypes are broken and barriers to communication reduced. Islam permeates all levels of society. It provides guidance, values and rules for personal life, community relations and ways of doing business. Respect is needed highly in this culture as Muslims are obliged to pray five times a day. Daily routines, appointments and meetings must be fitted in appropriately around prayer times. Days of worship and the religion of the populace must be given respect in any business. Trust is another key note in doing business in this culture as the Arabs do not separate professional and personal life. Doing business revolves much more around personal relationships, family ties, trust and honor. There is a tendency to priorities personal matters above all else. It is therefore crucial that business relationships are built on mutual friendship and trust. The Arabs were a trading people and are excellent negotiators. Haggling takes places everywhere, whether at the shop or in the board room. Decisions are made slowly. Bureaucratic formalities tend to add to delays. High pressure tactics used in US Business negotiations will be counter-productive.