Cultural Awareness & Business Part II Flashcards
1
Q
4 factors determine the need for cultural awareness in international business relationships:
A
- Control of Foreign Operations
- Extent of Foreign Operations
- Number of Foreign Operations
- Degree of Cultural Difference
2
Q
Control of Foreign Operations
A
- Companies that have distribution outlets/plants in other countries managed by local people doesn’t need to spend a lot of time learning about cultural differences
- Sooo…. businesses should research the culture to ensure that there is a market for its product before deciding to set up a plant in a foreign country.
3
Q
Extent of Foreign Operations
A
- The extent to which a business needs to be aware of a country’s culture depends on the depth and type of business the company does in the foreign country
- Canadian businesses that strictly export a commodity (oil, gas), require less cultural awareness
4
Q
Number of Foreign Operations
A
- The more operations a business has in foreign markets, the greater the need for cultural knowledge
- General Motors (GM) success in China with its Buick brand was no accident.
- GM understood that ownership of foreign-owned vehicles is a status symbol in China
5
Q
Number of Foreign Operations ll
A
- GM understood that ownership of foreign-owned vehicles is a status symbol in China
- GM adapted to the market by introducing a luxury Buick minivan (Buick GL8) when it noticed that business executives in China preferred roomier minivans over cars for doing business on the road
- By adapting to the Chinese consumer, GM became the minivan leader in that country.
6
Q
Degree of Cultural Difference
A
- If the culture in the foreign market is very similar to Canada’s, it doesn’t need to spend a great deal of time examining cultural differences
- Differences can include language, habits, beliefs, and attitudes
- Learning the language or hiring a native speaker to manage foreign operations is exceptionally helpful
