How Cultural Differences Impact International Business

Culture refers to the learned norms based on values, attitudes and beliefs of a group of people and cultural difference is the variation of the belief, valued, and behavior. In this era due to globalization the culture seems to vary from each other’s nation. And in doing business this internet technology makes it easier to know other cultures before doing any business.

As companies continue to expand their business across border and the global market becomes more accessible. Multinational and cross-cultural teams are likewise becoming ever more common, meaning businesses can benefit from an increasingly diverse knowledge base and new, insightful approaches to business problems. However, along with the benefits of insight and expertise, global organizations also face potential stumbling blocks when it comes to culture and international business. But in the concept of international business, what is common and accepted norm in one country may be different for another country.AS we are trying to expand the business to England we need to consider few issues for an example -like demographic, culture, economy, social status, peoples income, religion. But to specifically in doing business the three core main thing we need to consider is communication, workplace etiquette, and organizational hierarchy.

Effective communication is very important in business, as our business function will operate from there, an assigned employee will be there to do the work along with other sub -ordinate. The first barrier for communication is language, so the manager or employee from Bangladesh needs to well train in English language and speaking skills. Along with verbal communication nonverbal communication also make an important impact for communication. Usually English people are very reserve which makes people to think them as a moody but in reality they are very friendly with foreigner and helpful. Bangladeshi are also very friendly but people are reluctant to talk in English so which cause a discomfort to communicate with people. Bangladeshi people usually greeting each other with Salam whereas English people greet each other with by saying Good morning , smiling at each other etc. Shake hands with everyone present -- men, women, and children -- at business and social meetings. Shake hands again when leaving. The handshake must be firmly not very tight. Tightness indicate very ill manner in their society. But Bangladeshi don’t follow any rule. A coworker relation between male and female needs to maintain a certain distance in Bangladesh but have to talk in a very formal way, whereas English are very fond of this relation. A certain physical contact may consider a ill manner like patting on coworker (female), or hand shake but British don’t follow this instead this sort of behavior is very normal. English people Use last names and appropriate titles until specifically invited by your British hosts or colleagues to use their first names. But in Bangladesh people usually call their bosses with sir or madam. The British like a certain amount of personal space. Do not stand too close to another person or put your arm around someone's shoulder. Bangladeshi people can put their arms on someone’s shoulder which is very normal. Staring at other consider a big crime in British whereas Bangladeshi people are always curious at others. These are the some basic differences in the culture.

Workplace etiquette is another vital issues. In Great Britain, punctuality is important for business meetings and they always try to be on time but the corporate culture of Bangladesh is something very opposite scenario. But Bangladeshi people are hard working. Meetings should be scheduled well in advance. Meeting need to have a concrete objective such as making a decision, developing a plan. Etc. British always try to set goals for their business and try to achieve those goals. Presentation should be detailed and perfect.

In British culture the Board of Directors is the source of power and the principal decision-making unit in a company. For every business function formal approval from the hierarchy is needed that’s why decision making is very slow. Business organization traditionally is multi-layered with a vertical chain of command. A network of committees, formal and informal, exists in larger companies. Group consensus is preferred to individual initiative.

England is a highly industrialized economy with a well-established trade infrastructure. Ever since colonization started, trade has been the most prominent factor of England’s economy.

England, recorded a figure of $351.3 billion in 2009 and ranked 10th in the world when it came to exports. Although the recession brought down the figure from $466.3 billion achieved in 2008, the economy was still helped by the amount of exports.

England’s most common exported commodities are: Manufactured goods, Fuels, Chemicals, Food, Beverages, and Tobacco.

Major export partners are: US, Germany, Netherlands, France, Ireland, Belgium, Spain.

Imports in 2009 were recorded at $473.6 billion, in contrast to $639.3 billion in 2008. England was the 7th country in the world in terms of import volumes.

England’s imports are dominated by the following commodities: Manufactured goods, Machinery, Fuels, Foodstuffs.

England’s major import partners are: Germany, US, China, Netherlands, France, Norway, Belgium, Italy

After UK exit from Europe union many economist thought that British would collapse but it didn’t happen. Their pound rate increase by 9% than dollar according to Forbes. Their GDP increases by 1.8 % in 2016. Economic growth has been sustained up to now, therefore unemployment has sunk to 4.3%.Much uncertainty remains with the official exit from the EU scheduled for March 2019. Some U.K. companies are holding off on investments to see how Brexit effects trade relations, and growth is forecasted to slow in 2018, but Britain’s business climate remains attractive. The U.K. ranks first for the first time in Forbes’ 12th annual survey of the Best Countries for Business. Many big companies are investing on their country to make a hub in Europe. International companies locate to the UK because they want:

• to access new or existing customers
• develop new products
• find new suppliers and partners
• do more business in other countries across Europe.

Companies based in UK can reach more than 500 million customers across Europe. No payments have to make while transferring any inventory through UK because it’s free.

The UK has a workforce of over 30 million people. This is the 2nd largest in the EU. The UK has:

• a workforce with strong skills
• a flexible labor market
• regulations designed to protect employees

England government has made a “flexible labor law “which means companies can employee staffs in a way that suits the need of the business. Labor costs in the UK are the most competitive in Western Europe helped by low employer social security contributions. The UK’s overall cost of labor is lower than countries such as France, Ireland, Netherlands and German.

In England there was a Department of international trade which was run by the government to provide free essential service to foreign investor to establish business in England. This help includes:

• identifying market opportunities in the UK and Europe
• providing access and introductions to the right people
• setting up in the UK
• market research
• selecting the best location
• tax advice
• ongoing government support after establishing yourself in UK
• applying for visas and entry to the UK
• finding staff
• support for entrepreneurs

Transportation system in UK are very good and efficient which will make easy to transport inventory from one state to another. England already has the 2nd largest port in Europe, largest air transport system in Europe, most improved rail network in Europe.

Cross-border communications and managerial issues

Regardless, certain areas of business are likely to be impacted to varying degrees, particularly by changes to/ divergence from existing trading rules.

Contract reviews

While the future shape of the UK’s trading relationship with the EU is unclear, contingency

Legal issues planning involving contract reviews should start now with a view to identifying and managing risk.

Reviewing strategic contracts in place where there is a dependence on UK trade and where pricing mechanisms are in place that assume no tariffs, quotas or other barriers

Reviewing contractual terms that could be triggered (against you) because of the circumstances of a UK exit from the EU (including market volatility)

Reviewing contractual terms that should perhaps be varied because of a UK exit from the EU. This should also be considered for any future tender or evaluation process for new arrangements.

On exit, EU competition laws (which incorporate three main areas: merger control, anti-competitive agreements and state aid) will cease to be applicable in the UK. The British will have their own competition laws that Irish companies carrying on business in the UK will need to comply with (independent of EU competition law).