Global Businesses Cultural

Analysis In Japan Cultural

Studies Essay
Published: 23rd March, 2015

This paper is a global business cultural analysis of Japan. The Japanese culture (communication
and customs) is very complex. In order to show how the United States should conduct international
business with Japan, this paper answers four research questions. First, what are the major elements
and dimensions of culture in Japan? The seven major elements and dimensions discussed are
communication, languages, religion, ethics, values and attitudes, manners and customs, and social
structures. Secondly, how are these elements and dimensions integrated by indigenous people
conducting business in Japan? Thirdly, how do these elements compare with United States' culture
and business? Lastly, what are the implications for United States businesses that wish to conduct
business with Japan?
If Businesses wish to do business with Japan, they must first understand the major elements and
dimensions of Japanese culture along with its impact on how the Japanese conduct their business. If
businesses fail to understand and make appropriate adjustments, they may unwittingly offend
Japanese sensibilities and fail in their pursuits. Therefore, this paper will discuss these elements and
dimensions, along with their impact on Japanese businesses. Furthermore, these critical factors will
be compared to the United States business culture and identify appropriate adjustments, which must
be made. However, prior to discussing these matters, it is prudent to consider the historical macro-
cross-cultural relationships between Japan and the United States.
Although Japan has an extensive and interesting history, for the purposes of this paper, the first
significant milestone is that the Tokugawa Shogunate brought political stability to Japan in 1603.
Subsequently, Japan was not influenced by foreign countries and its culture flourished in isolation.
However, when her ports were opened to trade with the United States in 1854, Japan began to
modernize and industrialize . Eventually, the country became a regional power. Seeking further
domination in the Pacific, Japan attacked Pearl Harbor in 1941, making United States Japan's
enemy. Rather than subjugating Japan, after her defeat, the United States helped her rebuild.
Therefore, Japan recovered, became an ally of the United States, and remains an economic power
today (Japan, 2010).

What are the major elements and dimensions

of culture in this region?
Communication in Japan is very complex. Spoken words can have several meanings; therefore,
both verbal and non-verbal communication is important to understand. Context is important part of
understanding what the meaning of what is said. Non-verbal communication is important since
verbal communication can be interpreted in so many ways. The smallest expression can change the
meaning of what is being said. For instance frowning while someone is speaking can be interpreted
as disagreement (Japan-Language, Culture, Customs and Etiquette, 2004). Japan is considered to
be a high-context country. This affects the way that the Japanese communicate. Information is
conveyed indirectly and silence is considered a mark of maturity (Cooper-Chen & Tanaka, 2008).
Japanese is the predominate language spoken in Japan. However there are many other languages
and dialects spoken in Japan. As the foreign and indigenous minority populations increase, so does
the number of other languages spoken. Some of the other major languages spoken are Ainu,
Ryukyuan, Chinese, English, and Korean. Ainu and Ryukyuan are indigenous languages that are
spoken in different regions of Japan, while the other languages listed are mainly spoken by
immigrants (Maher, 1997).
English is a secondary language, spoken by many educated Japanese. English is studied in many
Japanese secondary schools and in higher education. There are between 40 to 50 international
schools in Japan that instruct in English. "The historical notion of a language 'model' (usually British
or American) has declined considerably in recent years. Multi-accented English, including Asian
Englishes, is increasingly acceptable" (Maher, 1997).
Shinto is the ancient native religion of Japan. The origins of Shinto cannot be traced because it was
transmitted orally until writing was introduced by the Chinese in the fifth century. The Japanese
worshiped forces and forms of nature. Shinto has many deities with no supreme deity. The Shinto
shrine is a simple wooden building that houses an object that is believed to be the dwelling place of
the Kami. As Buddhism entered Japan, Shinto was influenced and the shrines became more
elaborate. Shinto is still widely practiced in a form that is influenced by Buddhism and Confucianism.
The present form of Shinto is less like a traditional religion and more observed in festivals, traditional
ceremonies, and customs. The disestablishment of state Shinto came after the country's defeat in
World War II. The present-day Shinto religion has no dogmatic system or any code of morals. The
philosophies of newer sects stress world peace and brotherhood (Columbia Electronic Encyclopedia,
2009)
Another major religion in Japan is Buddhism. Buddhism entered Japan in the 6th century A.D.
(Columbia Electronic Encyclopedia, 2009). Buddhism originated in India about 2500 years ago. It
was started when Siddhartha Gotama, now known as Buddha, was said to be awakened.
Buddhism's basic concepts of faith are the Four Noble Truths and the Noble Eightfold Path. Buddhist
do not believe in any deity. The goal of Buddhism is nirvana, which means cessation. Buddhist
believe that to become enlightened the human spirit must be free of the struggle to prove our
existence to the world and therefore be free of reincarnation (Buddhism, 2010). 84 % of the
Japanese citizens claim to be following both Shinto and Buddhism, but many only practice during the
New Year, weddings, or funerals (Taylor, 2008, p. 33). Traditionally the Japanese ring out the old
year at Buddhist temples. Buddhism in Japan is often called funeral Buddhism, because the
Japanese have traditionally held Buddhist funerals. Buddhist priest fear that Buddhism in Japan will
soon die out (Onishi, 2008).
Japanese ethics is mainly influenced by Shintoism, Buddhism, and Confucianism. The Japanese
believe in an ideal human equality. They respect those who work hard to better the Japanese society
as a whole and put a lot of emphasis on the importance of the group. Long-term and give-and-take
relationships are important to the Japanese for a harmonious society. It is important to the Japanese
to work together and help the fellow man. Each person must learn how to rely on each other and
support others (Japan, 2003).
Before conducting business in Japan it is important to understand some basic values and attitudes.
Since the Japanese culture is considered high-context, even little gestures go a long way. Respect is
something that the Japanese highly valuable. Direct eye contact is also not the norm, to lower one's
eyes is considered a sign of respect. (Etiquette, 2010). Being on time is very important to the
Japanese, as it shows respect for the attendees. However, the Japanese like to take their time
making decisions (Japanese Meetings, 2010). As stated earlier the Japanese attitude toward work is
that it is the individual's duty to work hard. They view work as a way to better their society and to
help their fellow man. There is a big push from the Japanese government for change. However, this
is not the attitude of the Japanese people. The Japanese fear that change will have a big impact on
their way of life and cause more harm than good (Gaijin at the Gates, 2007).
It is easy to see where Japanese manners and customs derive from once basic Japanese values
and attitudes are understood. Some manners that derive from Japan being a high-context country
are: it is considered inappropriate and even rude to express dramatic gestures especially pointing.
When pointing something out the Japanese wave their hand, palm up, towards the object that they
are pointing out. Blowing one's nose in public is considered very inappropriate. Bowing with one's
hands at their side, is the traditional greeting. Male and female touching in public is considered
inappropriate, even among married couples. The Japanese like to observe personal space when
having a conversation. The person should go somewhere private and blow their nose with a
disposable tissue. To the Japanese, smiling and laughter can be confusing. These forms of
expression to the Japanese may convey embarrassment, confusion, shock, or even being upset.
Respect also drives some of the manners and customs. To be invited to a person's home is
considered a big honor. When entering a Japanese home, it is important to remove one's shoes to
show respect (Etiquette, 2010).
The modern Japanese society can be divided into six social groups; i.e.,the Imperial Family, Nobility,
Upper Middle Class, Lower Middle Class, Industrial Proletariat, and Peasants. The Imperial Family is
not a ruling position, but more of a symbolic position. The second highest group is the Nobility group,
which is divided into three sub-groups. The highest in the order are descendants of the old court
nobility called the Kuge. They also have little political power. Next is the Daimyo group, who are
descendants of the dukes and counts that ruled after the seventeenth century. The final nobility
group is the New Nobility. These are people who were ennobled since 1868. A large part of this
group is the descendants of the Samurai. Many of the people in this group have moved up from
lower social groups to this position. Out of all the nobility groups the New Nobility group has the most
power in modern Japan. The Upper Middle Class can be divided into two sub-groups, the gentleman
group and the top-ranking civil servants. The gentleman group mainly consists of those who have
graduated from a university. The top-ranking civil servants gain their prestige through being in
governmental service. The lower middle class includes people like shopkeepers and white collar
workers. The industrial proletariats are from the rural population that came to the city to become
industrial workers. The peasants have very little and do not have much social standing. The armed
forces are not included in the general social structure. The armed forces provide a way to move up
socially in a different social group by ranking up (Levy Jr., 2000, pp. 18-21). Women in modern
Japan have the same legal rights as men. When it comes to family life though, women are expected
to be house wives and take care of the children (Women in Business in Japan, 2010).

How are these elements and dimensions

integrated by locals conducting business in the
nation?
Everyday Japanese communication is also found in communication during business transactions.
There is usually an underlying meaning to what the speaker is saying. According to a study done by
Emmett, the speaker will present a generalized theme-oriented opinion to persuade, explain, or get
approval from the addressee. He states that the addressee will have little room to disagree with the
speaker, because the generalized theme-oriented opinion gives the impression that the belief is
shared and supported by other people (Emmett, 2003, p. 77). The Japanese are careful in how they
communicate, especially in business settings.
Japanese is the most common language spoken in Japan and when dealing with local business.
"The need for the clear and precise use of language is never greater than in such situations"
(Japanese Communication Styles, 2010, para. 3).
Shintoism and Buddhism influence how the Japanese conduct business. Business people who work
hard to contribute to the greater cause of their companies are respected by the Japanese. It is
widely believed that "through sacrifice and diligent work, the individual can connect himself with a
greater, pooled life-force and comply with the ethical expectations of Japanese society" (Japan,
2003, para. 4).
Japanese business ethics reflect their culture and religion. Japanese workers are expected to be
subordinate to their companies and the companies in turn are expected to be subordinate to their
nation. A sub-group may be ridiculed or punished as an unethical entity if it violates the expectations
of the next larger group in the chain. These group ethics only apply to their individual groups or
spheres. They are not expected to have the same ethical consideration to other rival corporations or
foreigners. Japanese businesses are expected to work diligently to create mutually beneficial
transactions. If they fail to do so they will face consequences and even sanctions (Japan, 2003).
Integration of values, attitudes, manners, and customs into local business go hand in hand.
Politeness, sincerity, and good manners are important to Japanese business etiquette. The way that
the Japanese conduct business is very formal. The formality starts in the first meeting, with the
presentation of business cards. Business cards should always be presented by holding it with two
hands to the most senior member of the Japanese party first. The person presenting it should bow
slightly and then present a card down the ranks. The business card should be treated with respect
and never written on. It is important to be on time, but if a person is running late they should call at
least one hour ahead. It is good to take a lot of notes during a meeting. This shows the company that
they are interested in the meeting (Japanese Business Etiquette, 2009).
Social classes can also be found in Japanese business. Upper middle class and even new nobility
are often members of large corporations and directors. The lower middle class are often the white
collar workers and shopkeepers (Levy Jr., 2000, p. 20). Japanese business decision making process
is based on consensus and co-operation. This gives the people a feeling of being actively involved
and they become committed to their company. "Japanese companies, like Japanese society, are
hierarchically organized with individuals knowing their position within a group and with regard to
each other" (Japanese Business Structures, 2010, para. 2). Women take the roles of lower grade
tasks and are expected to leave once they marry or have children. Japanese women's annual
income is about 50% less than a male co-worker (Women in Business in Japan, 2010, para. 1).

How do both of the above items compare with

US culture and business?
Communication can be one of the biggest dilemmas between US businesses and Japanese
businesses. It is important for the Japanese to develop relationships with business partners early on,
which is often dependent on the person's ability to read the underlying truth to what is actually
spoken. This may be difficult for US business men and women. It is important to ask enough
questions in order to ensure a clear understanding (Japanese Communication Styles, 2010).
Communication differences can be found between the two countries, because Japan is a high-
context country while the US is considered a low-context country. As discussed earlier, the smallest
gesture to the Japanese can change the context of what is being said. In low-context cultures, like
the US, people rely on what words are being said (Satterlee, 2009, p. 41). This can cause some
major miscommunication. Another communication barrier is how American and Japanese business
people arrive at an agreement differently. This causes difficulties during the negotiation process. The
Japanese are concerned with pursuing social relationship goals during this process. Meanwhile,
Americans tend to be individualistic. Americans focus is on the immediate and not the long term
relationships that the Japanese look for. This can cause some issues between Japanese and
American businesses (Kumar, 1999, p. 63-78). Communication between Japanese and American
businesses may be difficult; but, with patience and an understanding of the Japanese, a great
business relationship can be formed.
Language can be a problem for American and Japanese business meetings. There are few
foreigners who can speak Japanese well; therefore, the meetings must be spoken in English. Most
levels of English in Japan are patchy. This can cause confusion. Often what is said is either not
understood or it is misunderstood (Japanese Communication Styles, 2010).
The major professed religion in the United States is Christianity. As of 2007 only 0.7% of Americans
claimed to be Buddhist (United States, 2010). This is a drastic comparison to the 84% of Japanese
who claim to be following both Buddhism and Shintoism. However, moderation and toleration is
becoming a norm in America. Americans are celebrating differences and look down upon those who
judge another's beliefs (Orwin, 2004, pp. 26-27). Buddhism teaches its followers to be tolerant of all
beliefs and religions. They agree with moral teachings of other religions (Buddhism, 2010). There
should be no conflict dealing with religion in business, because Americans are becoming more
tolerant to other beliefs and Buddhism embraces other religious teachings.
The Business Ethics Index (BEI) for Japan is very similar to that of the US. There have been a few
more incidents of unethical behaviors from Japanese companies than that of the US. Like Enron did
in the US, Liverdoor did the same thing in Japan. Some of the other Japanese scandals include
Snow Brand Foods and Tokyo Electric Co. Based on the BEI, Japanese and American managers
had the same views on corporates responsibility and unethical business practices. Differences in
ethics can be found in some areas. For instance, Japanese focus on the group (collectivism). The
Japanese have the "good-of-the-group" mentality while the American mindset is that of the good-of-
the-individual (Tsalikis, 2008, pp. 379-385). Since Japanese and American business ethics are very
similar, Americans should have little ethical complications when dealing with Japanese businesses.
There are differences when it comes to American values and attitudes from those of the Japanese.
The major driving force for the differences is the individualism of Americans versus the collectivism
of the Japanese. The American dream is to make a name for one self. The Japanese, as stated
many times earlier, are concerned with how their actions affect everyone around them. "Japanese
hierarchy is based on consensus and co-operation rather than the top-down decision making
process which often typifies western models of hierarchy" (Japanese Business Structures, 2010,
para. 3). Respect is important to both Americans and Japanese, but the Japanese have a more
formal stance on respect. An example of this would be how Americans find that not looking a person
in the eye as disrespectful or even the person is trying to hide something, while the Japanese lower
their eyes to show respect. There may be differences when it comes to values and attitudes, but
American businesses should have no problem understanding the Japanese values and attitudes
with a little research and study.
Whenever someone is dealing with a new culture, there is going to be differences in manners and
customs. The typical American greeting is a firm handshake and looking the person in the eyes. The
traditional Japanese greeting is a bow with the person's hands at their side and with their eyes
lowered. The Japanese are aware of the handshake being the typical Western greeting and they will
greet Westerners with a handshake, but it will be often weak. The American dream allows a person
to be in a high position in the company based on their education and hard work. This is in contrast to
the Japanese, where age equals rank. Both cultures will use professional titles in formal situations.
The Japanese word for Mr. or Mrs. is san. The exchange of business cards is common in both
cultures. The Japanese, as discussed earlier, take it to another level. American business men and
women should have business cards that are printed in English on one side and Japanese on the
other side. The person receiving the cards should take time to read it. It should never be put in one's
back pocket or a wallet. American hosts usually allow everyone to order food and drinks; this is not
true for Japanese hosts. The host will order drinks and meals for everyone in the group, because
they are responsible for paying the bill. Silence can be uncomfortable for Americans, but this is seen
as useful and generative to the Japanese. Dress is important to the Japanese. Americans also take
pride in how they dress, but acceptable dress clothes in America may not be appropriate in Japan.
Vibrant colors, bold designs, and flashy jewelry should be avoided, as this is not the norm. Women
in Japan do not wear revealing clothing in a business setting, full or longer length skirts is
acceptable. Learning the differences between American and Japanese manners and customs can
lead to a successful business relationship between American and Japanese companies (Etiquette,
2010).
The American social structure is different than that of the Japanese. American social classes can be
broken down into upper class, upper middle, lower middle, and lower class. The upper class refers
to the rich, while the lower class refers to the poor. Unlike the Japanese, there is no royalty or
nobility in the United States. CEOs are usually found in the upper class, while the majority of
business workers can be found somewhere in the middle class. The American dream allows for a
person to move upward through the social classes based on how hard they work and getting a better
education. This is where the Japanese and Americans will find contrast. As stated earlier, the
Japanese know their place in society and remain there unless they join the armed forces. American
women have come a long way in the US. Many American women are found in high ranking
positions. There will be difficulties for American women working in Japan. Women in Japan do not
hold high positions. American women may encounter difficulties when dealing with Japanese male
colleagues. They sometimes are accepted as an honorary man (Women in Business in Japan,
2010).
One way to understand the difference in culture between Japan and the United States is using the
Geert Hofstede Cultural Dimensions. This study is considered the most comprehensive study of how
values in the workplace are influenced by culture. Geert Hofsted analyzed a data base of employee
values from IBM between 1967 and 1973 which covered more than 70 countries. The dimensions
that he included were Power Distance Index, Individualism, Masculinity, Uncertainty Avoidance
Index, and Long-Term Orientation. Japan scored higher in the Power Distance Index. This means
that more members of organizations in Japan accept and expect that power is distributed unequally.
Americans scored higher in the Individualism dimension. As discussed earlier, the Japanese are
more concerned with collectivism, while Americans are concerned about individuals. Japan scored
higher in the Masculinity dimension. This shows that there is more of a gap in Japan between men's
values and women's values. According to Geert research the masculine values are very assertive
and competitive, while the feminine values are modest and caring. The Japanese also score higher
in the Uncertainty Avoidance Index. The Uncertainty Avoidance Index pertains to a society's
tolerance for uncertainty and ambiguity. The Japanese are uncomfortable in unstructured situations
where the outcome is uncertain. Countries with a high Uncertainty Avoidance Index will minimize
uncertainty with strict laws and rules. The last dimension is where there is the biggest difference
between the two countries. The Japanese scored a lot higher on the Long-Term Orientation
dimension. Virtues associated with Long-Term Orientation are thrift and perseverance, while values
associated with Short-Term Orientation are respect for tradition, fulfilling social obligations, and
protecting one's face (Geert Hoftede Cultural Dimensions, 2009). The Geert Hoftede Cultural
Dimensions helps international businesses understand how the host country's culture compares with
their home culture. To be successful at international business in Japan, a U.S. company should look
at the five dimensions and use it to further their understanding of the Japanese culture.

What are the implications for US businesses

that wish to conduct business in that region?
Understanding current U.S. and Japanese relations is important before conducting business in
Japan. U.S.-Japan alliance is responsible for the U.S. security role in East Asia. This alliance has
helped the with U.S. national security strategy in the region. In return the alliance provides protection
from Japan's neighbors, particularly China and North Korea (U.S.-Japan Relations, 2009). Japan
recently elected a new prime minister, Naoto Kan of the Democratic Party of Japan. Relations
between the U.S. and Japan were harmed by the former Prime Minister Mr. Hatoyama. During
elections Mr. Hatoyama pledged to reconsider the agreement on the relocation of the US air base on
Okinawa. The U.S. pressured Mr. Hatoyama to later reverse his position, which infuriated the
inhabitants of Okinawa and many leaders within the Democratic Party of Japan. This was the major
factor that lead to his resignation. The new Prime Minister, Mr. Kan, has pledged to implement the
original agreement. There are about 47,000 U.S. Troops stationed in Japan. More than half of these
troops are stationed on the island of Okinawa. This dispute has caused the goodwill between the two
countries for the past fifty years to be undermined (Japan: Country Outlook, 2010).
Japan is considered one of the United States' most important economic partners. Japan is
responsible for the second largest source of imports for the U.S. outside of North America. They are
also the second largest source of foreign direct investment for the U.S. Japan has helped to finance
the U.S. deficit and reduce U.S. interest rates by being the second-largest foreign holders of U.S.
treasuries. Even though the two countries are facing tensions over base relocation, they are
economically dependent on each other (U.S.-Japan Relations, 2009).
The Japanese banned all U.S. beef imports in December 2003, after the discovery of the first U.S.
case of "mad cow disease." This ban was finally lifted in December 2005, but quickly re-imposed it in
January 2006, after finding bone material among the first beef shipments from the U.S. The
Japanese lifted the ban in July 2006 on cattle 20 months old or younger. After much pressure from
the U.S. in May 27, 2009, the Japanese Ministry of Health, Labor, and Welfare and the Ministry of
Agriculture, Forestry, and Fisheries reportedly were ready to ask the restrictions to be more relaxed
allowing U.S. beef imports from cattle younger than 30 months (Federation of American Scientists,
2009).
Japan asked the World Trade Organization (WTO) for permission to impose sanctions on U.S.
imports on January 2008 for the failure to comply with WTO decision against the U.S. practice of
zeroing in antidumping duty determinations. These sanctions on U.S. imports were valued around
$250 million. On April 24, 2009 the WTO ruled in favor of Japan stating that the United States was
not in compliance with the WTO ruling. "The practice of zeroing is where the U.S. Department of
Commerce treats prices of imports that are above fair market value as zero dumping margin rather
than a negative margin" (Federation of American Scientists, 2009).
There are many reasons that an American company should consider doing business in Japan.
Japan is considered the center of new trends and creativity. Businesses around the world are
partnering with Japanese companies. Japan External Trade Organization (JETRO) gives ten
advantages to investing in Japan (Investing in Japan, 2010). They are listed as follows:
Japan has an enormous market that has huge potential.
Japanese consumers are early adapters. These consumers like to stay on the cutting edge when it
comes to new technologies. Many companies find that Japan is a good test market for new products
and services.
Japan provides promising markets and industries. Many of Japan's industries are globally
competitive. Four sectors that are showing potential for future growth are: Information and
communication technology, medical and health care, automotive parts, and environment-related
markets.
Japan is home to many of the world's top companies.
Many small and medium-sized enterprises (SMEs) can be found in Japan like SMEs that possess
unique technologies. Partnerships with these types of companies can help foreign companies
seeking to enter the Japanese market, boost their technological capacity, and open up markets and
sales channels.
Japan possesses the ideal conditions to be a center of innovation due to its cooperation between
foreign companies, universities and other organizations.
Japan is also becoming a gateway to the Asian market. Companies from around the world are using
Japan as a location for regional headquarters.
There are a number of foreign companies seeking to expand their businesses in Japan. Japan is
becoming a destination that offers potential for foreign companies to increase their profits.
Japan has a mature investment infrastructure. Japan's industrial structure and business environment
is similar to U.S. and European environments.
Japan has a secure, comfortable living environment. Japan has welcomed many foreign cultures
and provides clean and safe urban environments.
There are some risks that foreign companies will face when looking into investing into Japan. There
is the risk of being scammed by people who will pretend to be experts in various aspects of doing
business in Japan and pocket the company's money. Doing business in Japan can be extremely
expensive if cost are not properly controlled (Making Japan Work for You, 2009). The Japanese
government is trying hard to attract foreign direct investment (FDI). The government has changed its
commercial code, making it easier for foreign firms to buy Japanese ones. The government does not
desire foreign cash; but it hopes that foreigners can help reform companies and introduce
competition. For instance, Starbucks forced other Japanese coffee shops to improve. While this may
sound good to foreign companies looking to conduct business in Japan, it has not been very
successful. Consumer spending is becoming sluggish and the Japanese population is shrinking. Tax
codes make life difficult for foreign firms. Many Japanese companies are resisting foreign takeovers.
They fear that foreign take over their companies would result in a loss of jobs. Some foreign
investors are finding that investing in Japan involves too much effort for a little profit (Gaijin at the
Gates, 2007). Despite the risks involved, international business in Japan can be a good investment.

Conclusion
Japan is home to a rich and vibrant culture that offers much for innovation and investment for
businesses. The Japanese are a very complex society from the way they communicate to their many
customs. American business men and women can learn a lot from the Japanese. For instance, the
Japanese have been very successful in globalization and have avoided an economic crisis. Most
importantly, Japanese businesses do a better job of building a relationship with business partners
than American businesses do. Oftentimes, Americans are more interested in making money than
building relationships American business can be more successful by learning about the people they
are doing business with and taking the time to build a relationship with them. Although the Japanese
may seem drastically different from Americans, American companies can be successful in doing
business in Japan. It will require a lot research and preparation, but the payoff can be great.
How Does Culture Affect
International Business Marketing
Essay
PRINT
REFERENCE THIS
Published: 23rd March, 2015
Disclaimer: This essay has been submitted by a student. This is not an example of the work written
by our professional essay writers.
Any opinions, findings, conclusions or recommendations expressed in this material are those of the
authors and do not necessarily reflect the views of UK Essays.

1. Introduction
With the recent increase in the pace of globalization, culture has gained further introspection than
before, especially the role player by culture in the performance of a new business unit in a foreign
region or mergers and acquisitions in businesses. Some of the key factors giving rise to an
increased networking amongst various cultures would be due to advancement in
telecommunications and IT industry. Due to this high formation of global alliances there is more
cross cultural activity which makes it important to understand the critical nature of culture in
international business. Culture has been cited as one of the main reasons which could either help
the new company settle well in the region or result in losses like internal conflicts etc.
In this essay we would be demonstrating the effect if culture through a case study of international
business and analyse existing literature which focuses on culture and international businesses.
According to Geert Hofstede, Culture is the collective programming of the human mind that
distinguishes the members of one human group from those of another, hence it can be termed as a
result of set of values within a community. Edgar Schein defines it as a deep level of basic
assumptions and beliefs that are shared by members of an organisation that operate unconsciously
and define in a basic 'taken for granted' fashion an organization's view of its self and its environment.
Culture is a collective behaviour which is accepted as a common standard within groups and its
basic need to communicate within themselves at various levels (Brown, 1995). This would mean the
various modes of communication not limited to language but actions and social communication
techniques through specific set of actions which may be identified by that group itself. Some
example of it would be:
A community based local language, for example specific description of foreigners.
Religious or Community Rituals like joining of hands in Asia tofor greetings.
Paintings depicting historical information of the region.
Dynamics of power and authority within organisation like the parental management seen in Japan
compared to US culture which is more focused on performance than age of employees.
According to research done by Ember and Ember, 1973 on culture, they state that it is a part of
various social structures and it helps in providing a common direction to a group of people thereby
leading to formation of social dynamics, power structures and overall roles in the community.
Therefore it implies that if the nature of culture has a major impact on social dynamics of that region,
leading us to conclude that even though there may be similar businesses running in two different
parts of the globe, due to a different culture there may be a different operational structure of the
same company in form of flat or bureaucratic management or power control of an organisation. This
also means a separate set of expectations from the employee perspective in different regions.
Given such an important role of culture, it becomes important for business operating or planning to
operate in a different culture to utilize the impact of culture at macro and micro level to their
advantage through an understanding of various places where culture plays a role in the new
business.
Understanding the micro level culture of all regions globally may seem a hard task due to the
amount of data involved and hence culture cannot be measured region specific but there can be
certain assumptions taken at a broader level to group certain regions or cultures in a similar set of
characteristics (Ember & Ember, 1973). Such a type of comparison would be feasible for
understanding the link between workplace culture along with social culture and the overall
perception of employees at a generic level (Pearlin & Kohn, 1966).
For a business operating globally, culture may have impact at various levels and departments. Some
of the direct impacts which culture may have on an international business would be understanding
the consumer behaviour of the new region which in turn may lead to higher sales. Since there may
be a different management style in the new country of operation for the company, adhering to local
culture within reasonable limits to set up employee management strategy would play a key role in
the overall performance of the business.
Further, companies need to understand that the overall process of culture is continuous and may
vary according to different regions according to their development. While some regions would have a
stable culture due to either lack of development or self development without foreign intervention,
there may be other regions with a gradual shift in culture or fast paced change in culture due to a
new group formation or high influence of foreign culture due to modernization and development
experienced in the new region.
Some of the key elements of culture could be classified as
1. Social structure - The historical influence or existing social structure forms a key aspect of
whether a culture is masculine or feminine etc. For example,. In the case of capitalistic countries the
social structure is based more on self achievement while it may be contrary for socialist countries
like the UK and hence a difference in culture.
2. Religion - Regions which have specific policies on following religion may have a deep impact on
culture. Countries in Middle East which strictly follow Islam as a religion would have a cultural which
follows the religious teaching of it. This may mean a culture with less influence of alcohol etc.
3. Language - Common language like in UK would mean the culture has some level of
standardization compared to a country like India where culture varies due to different language in
every region.
4. Education - Countries or regions which invest heavily into education have a culture where
decisions are more based on research and information rather than countries which have low
education and thus more belief in the traditional stories.
5. Economic Philosophy - As discussed before, the countries philosophy towards its public services
would also impact culture. In a country where there is high tax structure to be used in public
services, there is less capitalism found and thus a standardized way of life for most of its citizens.
6. Political Philosophy - A region under a dictatorship rule may have a culture which is more
subdued and unable to express political opinions openly. While countries like USA which have an
open political philosophy and rights of expression have a more open culture towards social
discussions.
The above understanding of culture helps us understand and validate the assumption of how it
affects business performance in a new region.

2. Literature review
Maslow proposes that in any region irrespective of culture, the company employee relations
characterized mainly by their autonomy (Maslow, 1970). Employees would prefer options like
independence with privacy without a need to be controlled. While this view may be in contrast to the
culture of the region, they would still hold respect and follow traditions at a superficial level.
In his research whilst working for IBM, Hofstede developed four dimensions of culture which were
analyzed from over 116,000 responses to a survey instrument from 66 countries. This was one of
the major research done on cross cultural influences and is also used as a benchmark research for
further studies.
These four dimensions were
Uncertainty avoidance - This finds out the extent till which a person would feel threatened by or
avoid unwanted situations through setting up of formal rules. Employees who have a higher score in
these criteria will mean they would prefer to avoid uncertain situations completely. People who
scored high in the research were found to be from various culture in the research, some of these
countries or regions were; Greece, Portugal, Guatemala, Uruguay, and Belgium while those who
scored low were from countries like Singapore, Jamaica, Denmark, Sweden, and Hong Kong
(Hofstede, 1980).
Power distance - This dimension measures power dynamics within various groups of different
cultures. It would be the extent to which an individual would accept and serve a senior in workplace
which would have authority over the employee. Cultures which scored high in this part were from
countries like Malaysia, Guatemala, Philippines, and Mexico etc while those which scored low were
from Austria, Israel, Denmark and Ireland etc (Hofstede, 1980).
Masculinity / Feminity - This dimension classifies the culture as a masculine or feminine based on
certain factors identified by Hofstede. Cultures which focus on assertiveness and capitalism were
termed as masculine, regions identified in this were Japan, Austria, Venezuela, Italy, and
Switzerland while those which focused more on socialism or community nurturing were from
countries like Sweden, Norway, the Netherlands, Denmark etc. A common theme seen in feminine
countries would be a higher overall tax structure and an attempt to create a median of the average
income by higher taxes on high income and lower taxes on low income thereby to create vast public
wealth to sustain public service in form of benefits and medical care.
Individualism/Collectivism - Here the criteria is how individual goals and group goals are compared
with each other and which is given a higher priority. Regions which were more focused on
collectivitism were Guatemala, Ecuador, Panama, Venezuela, and Colombia while countries like
United States, Australia, the United Kingdom, Canada, and the Netherlands were having a more
individualistic culture as the norm. Overall employees in this culture were found to be more
entrepreneurial due to their liberty of independent decision making process.
Bottom line: Thus from the Literature review of Maslow's theories and Hofstede's four dimensions, it
helps to validate that performance and communication skills of residence of a particular country
depends on the culture i.e. norms, values or philosophies embedded in the society (depending upon
individualism/collectivism, power distance, uncertainty or masculine/feminine). Hofstede has further
quantified the scores for each country on the basis of the four dimensions which can provide some
stereotyping of individual residing in a particular company. Example countries high on power
distance scale can have aggressive communication style due to power play in personal or
professional life. For our research, it is useful to understand the nature of various regions and how
they could be resolved by utilizing the right strategy. For example an international business based in
the US operating in a culture like that of Norway would mean that employees would need a higher
form of support from the company compared to those offered in the home country however they
would be open to higher taxes as well.

3. Case study of IKEA Shanghai

In order to further understand the impact of culture on real life basis, we will consider studying the
case study of IKEA in China which would provide the cultural view from a marketing perspective.
Marketing which forms a key aspect of the company's strategy to enter a new region needs to be
customized according to the culture of the region. IKEA Shanghai focused on the local culture and
behaviour whilst creating its marketing strategy for the local customers.
IKEA Shanghai's marketing mix of 4 P's will further elaborate on this customization to meet local
culture.

Product
Ian Duffy, IKEA's CEO of Asia-Pacific region, said "IKEA's localization in China is to appeal to
Chinese customers' taste. For example, the range of products offered in the Chinese market should
match the customers' preference. The showrooms should be designed and arranged in accordance
with a Chinese style".
The company adapted such a product strategy that was insync with the oriental design which
achieved success (Armstrong and Kotler 2006). The company took into consideration of the Chinese
eating habits and produces its range of cooking style cutlery which were 3 kinds of meat cleavers
and 3 kinds of chopsticks together with Western style of knives and forks. Anders Dahlvig, IKEA's
CEO, states that "that 5% of the products IKEA sells in China is for China only, in contrast to 1% in
IKEA's European market" (China-CBN 2005).
While the company is known for creating furniture and fixings which have a simple design, they
introduced specific designs for the Chinese new year which were dark in color as preferred by the
Chinese customers while designs which have an oriental touch to it. Thus company further imbibed
the local culture in its products by placing logo of a red rooster indicating the new year, which is
considered as auspicious by the Chinese customers and hence it was a move which was well
appreciated by the local buyers.
One of the areas which the company has not looked into it is its form of simple packaging while the
Chinese customers prefer a brighter and fancy packaging which also matches the goods inside.
However the company communicates and focuses to say to its customers that it uses simple and
recyclable wrappings. Another point which the company makes and is in line with the customer
preference is that they do not use such expensive packaging and hence are able to keep the end
costs low, which remains the critical selling point of the company.

Price
Understanding the Chinese customer preference for items tagged as low priced, the company
focuses on reducing prices, which has effectively attracted more customers. Initially when the
company entered the Chinese market, it focused on customers in the tier 1 segment of income as
their buyers, however when the company realized the preference of cheaper priced goods by tier 1
segment of customers as well it further reduced its prices substantially thus attracting more
customers from all classes of income. From 2000 to 2005, IKEA managed to reduce the general
price of its products by 46% to 70%.
Initially, when the company started operations in China, a large number of products were being
imported thus inviting more duty and import taxes on it making the final price go higher. This was
perceived by the Chinese customers as a brand with expensive products, later on the company
decided to source locally and thus cutting down the prices which were easily affordable by the
customers (Song 2005). Other moves to cut cost were to expensive product brochures which were
thick to a thinner brochure with cheaper quality of paper (AFX News Limited 2006).
Thus it can be seen that the company understands price as a critical part of their selling process and
customizing it according to the local culture preference which is for lower priced goods.

Place
Usunier (2000) proposes that according to the view from culture, any option of place or distribution is
one of the two elements of the marketing mix, which are important in reaching out towards the
customer. Since distribution also interacts with the consumers in an indirect manner, it can be
termed as a key point in the cultural consideration as an efficient distribution can result in better
priced products. For this reason, the company established efficient and low cost network of
distribution channel and thus managed to reduce price or keep them in control. The company built its
own logistics centre rather than depending on other providers which was seen as a key move to cost
cutting since they could contain more than 300,000 cubic metres of products (Chen 2006). These
actions by the company solidify the fact that the company has always looked out to keep operation
costs in check and thereby offer the best prices possible to the Chinese customers, which is one of
their key preference.

.
Promotion
The company's strategy of promotion mainly includes its mixture of advertising, sales promotion,
public relations and other marketing tools. While the company uses these set of tools to
effectively communicate customer value it also needs to be careful while delivering such messages
so as to be in the boundary of the local culture (Armstrong and Kotler 2006).
The company does not market its products specifically to each type of customer but rather
Let the customers to make their own choices through its catalogues. As seen from the literature
review that independence and liberty in decision making is well appreciated by employees of a firm,
it may well apply to the Chinese customers as well who would like to make their own decision rather
than be told what to buy.
Using local faces for better assimilation in an advertisement is useful to get customers' attention
(Mummert 2007). Hence, characters in IKEA's commercials are mostly Chinese
trying to show that IKEA is suitable for a Chinese home.
The company also blends well with the Chinese cultural value developing relations rather than just a
business deal by selling things at the right price when they are needed and not bring guided by
profits by selling umbrellas when it is raining at the standard price (Fan 2000)

4. Conclusion
Based on the case study of Ikea along with Hofstede's cultural dimensions framework we cam
propose that culture has a critical influence on any international business performance as it involves
not only the consumers or the end users of services or products of the company but also employee's
performance and communication skills. While the Hofstede model provides a useful tool to quantify
the new regions location on four important dimensions, the case study provides a product and
service based view for the new company to focus on with regards to culture of that place. In the
current scenario where there is an increase of travel of company executives, culture is much more
exposed than it was before thus an employee transferred from a high power distance country like
USA to low power distance country like Malaysia may have aggressive communication style which
could be perceived in a negative manner, thereby causing turbulence in the management of the
company in that region. While at the same time the importance a company gives to tis marketing mix
which is customized according to local requirements as seen in the case IKEA also remains critical.
Some of the limitations of this approach would be the critique of Hofstede model by other
researchers wherein they state that he quantifying of cultural issues may possibly hamper validity of
research. This also remains the same case for various companies entering different regions with an
entirely different culture thus creating culture clash possibilities. The employees of the parent firm
may be working with newly hired employees in a foreign region either in person or remotely however
culture would play a key role if the new development has to take place smoothly.

A Case Study Of Ikea In China

Market Marketing Essay
PRINT
REFERENCE THIS
Published: 23rd March, 2015
The purpose of this report is intending to understand how the diverse culture impacts on the
operation of the company in the global business. Meanwhile, it is also aiming to come up with an
effective solution of dealing with the cultural differences for managing the cross national activities.
With the continuous rapid development of the globalization, in particular, the increasing of global
trading and corporation, it is inevitable that different cultures meet together. However, since the
complex of the culture in difference areas, exhibiting the multifaceted characteristic, the culture
conflict is unavoidable as well. The people from diverse culture find it is difficult to communicate with
each other, not only due to the language barrier, but also the influenced by the difference of the
culture styles. As the diversity of culture enhances the ambiguity and confusion and it deteriorates
the effectiveness of the team working, the companies or organizations involving in the global market
are directly facing the challenge with regard to adopting in cultural diversity. In the end, the cross-
cultural management is getting more and more important, and it is able to bridge the gaps between
the difference cultures. The management of the across cultures becomes a priority for multinational
companies and the global organizations in pursuing their international strategy.
In this report, it analyses the case of IKEA's cultural management, a Swedish furniture company, and
understand how IKEA successfully conducts its business operation in China market, where has the
significant difference culture with western countries.

Cross-cultural Management
Cross-cultural management, as a new field, is very complicate and involving multifaceted issues,
therefore it is very difficult to define this new business concept.
Cross-cultural management is usually involving in the international business activities in globally,
and it is the subject regarding how to maintain the local culture, basing on the new thoughts, dealing
with cultural difference.
For the multinational companies, the technique of cross-culture management is able to help the
management to face the challenges and opportunities of managing their employees in a cultural
diverse organizational situation. Increasing globalization has created more awareness of the need
for managers to be sensitive to the cultural aspects of decision-making (Miller, 2010).

Analysis
The analysis starts off by discussing the difference between from western culture to Chinese culture.

Difference between Chinese and Western

Culture
There is a significant difference between the key philosophies of Chinese and western life. China is
an ethnically and culturally diverse country, and its dominant cultural tradition has been heavily
influenced by Confucianism and Taoism, which is entirely different from western heritage.
As the Chinese culture has its own values, background and unique belief system, therefore
westerners find the Chinese culture complex, and hard to understand. Due to the diverse culture
between western and Chinese, the lifestyle of western and Chinese is also vast difference in some
aspects. The western has a luxurious lifestyle, while most of Chinese are prone to having a modest
way of living. For example, the Chinese may have no more than 40 sq. feet of living space on
average (Wang & Li, 2006).
There are at least three major differences between western culture and Chinese culture, setting forth
as the following:
- Westerners believe in individualism, while Chinese are more incline on collectivism.
- The western culture encourages expressing the affection freely, and Chinese culture express the
emotion puritanically.
- The western culture believes in a materialistic approach, with a pragmatic and emotional attitude,
whereas the Chinese believe in relationships, and searching for inner happiness through mediation
(Wang & Li, 2006).
As mentioned earlier, due to the significant culture difference from difference geographical region,
the multinational enterprise or the global organizations must adapt themselves in the given business
environmental and situation with diverse culture, with a view to improve the competitive edge
through taking advantage of the culture difference.
It is interesting to look at how IKEA to operation its business from the cross-cultural management
aspect. The business culture of IKEA Sweden is be used as a base for the comparison with IKEA
China.

The Development of IKEA

IKEA, based on south of Sweden, was set up in year 1943 by Ingvar Kamprad, in his 17 years old.
IKEA is only global-scale furniture Distributor, its furnitures are widely acknowledged as the
international, low-cost and good -quality home products and IKEA's furnitures are also known for its
modern design (Dhanyasree, 2007). Currently, the Group has established more than 292 IKEA
stores in thirty-six countries and the other stores are run by franchisees which are out of the IKEA
Group in 16 countries (Johansson & Thelander, 2009).
One of IKEA's business principal is to provide a wide mix product, and functional right furnishing
articles, with the lowest price possible so as to attract as many as possible people to purchase them
(Johansson & Thelander, 2009).
IKEA has widely succeeded globally and it has a highly strong business culture with aSwedish
image. In order to enhance the culture perspective of IKEA, they make sure to interpret symbols
(such as pictures or objects)in specific countries.

IKEA's Cultural management in China

As the real-stated of commercial and residential establishments boosted, it also increased the sales
of home decoration and furnishings.
To fill the increasing demands of decoration market, especially the high quality furniture products.
IKEA started its retailing operations in China and set up its first store in Shanghai in year 1998. The
decision of IKEA to enter Chinese market stems from supporting political, social and economic
conditions that allow IKEA to beneficially acquire advantages in the Chinese market (Pan, 2005).
IKEA needs to face various challenges in terms of business practices, socio-economic and political
conditions, as well as its unique culture in Chinese market. Chinese people from different regions
may exhibit distinct characteristics as well. Taking the language for example, the spoken language
varies greatly from region to region. It is not surprised that someone from Shanghai cannot
understand residents of Guangdong province, if without special study of Cantonese.
In China, IKEA's products have the image of catering to high-end consumers, whereas the
perception of IKEA's products is regarded as a 'good value' buy elsewhere in world. In order to
attract larger number customers and maintain the company in reasonable profit, IKEA continues to
implement the effective strategy both from external and internal cultural management.

External culture management of IKEA

From the external cultural management perspective, to help Chinese customers deeply understand
the IKEA concept, the company also posts in-house instructions and design suggestion, publishes
brochures, which is distributed in the stores and through the mail, and operates a completed
company website.
Meanwhile, in order to better understand Chinese people's lifestyles and their home aspirations and
frustrations, IKEA performs a large number of home visits, surveys, and focus group meetings. In
additional, IKEA also study the customers' comments on IKEA'S product range, price and service
levels, and it provide the useful information for the company to position its target consumers.
At the very beginning, most of IKEA's China customers are range from 20 to 35 years old. As a
result of the market repositioning strategy, the stores are now attractive an increasing customers
with age closing to 45. Among these customers, many are generally well-educated couples and earn
higher double-income with no children (Blomqvis, 2005).
In terms of housing, the average square meters per person in Sweden is much large than in China.
Until recently, now Beijing and Shanghai apartments average 80 m2. To suit the specified needs of
Chinese consumers, IKEA needs to design and provide more storage containers and facilities
(Blomqvis, 2005).
In additional, with keeping up-to-date study on Chinese home-life, IKEA alters products to meet the
local customers need. For example, IKEA sold standard size beds in mainland China, while the
consumers in the Sweden generally prefer larger items.
In additional, the value of "the customer is kings" is also deeply acknowledged in the Chinese people
minds, and the Chinese customers prefer to enjoy the completed services in the whole process in
their furniture purchasing activities. Normally, the Chinese customers would like to shopping
accompany with the store staff to introduce the products to them. Meanwhile, for most of the
Chinese customers, it is perfectly that the store staff to distribute the products directly to their house
and install all the furniture as well (Pan, 2005).
Nevertheless, IKEA creates the unique shopping environment in China, and teaches customers of
the concept of self-services. It encourages the customers coming to personal if they have any
question or need for any assistance. Nowadays, Chinese people would use IKEA Beijing Store as
the theme part, hanging out in the store and directly experience the furniture.
Moreover, IKEA also adapt its do-it-yourself assembly concept to the Chinese consumers, which are
very appreciated in the West. As the labor costs in west are much higher than in China, the western
people prefer the assembling product for saving money and some of them actually enjoy install the
furniture. In China, the people prefer to the ready products and use the IKEA's assembly services
more than in other countries (Miller, 2010).

Internal culture management of IKEA

From IKEA's internal culture management aspect, there are differences among the working culture in
every country. The western culture and Chinese culture is significant difference in some aspects,
therefore the business culture of Sweden and China is also obvious diverse.
The theories mentioned that western culture is more inclined to the individual way, in this regard and
the managers of IKEA Sweden are pretty good at marking contact and build up team work, and they
often want to jump into projects and participate. In the same time, the communication in IKEA
Sweden works vertical and the employees are not afraid to disagree with their superiors. The
management style is informal, for example they address each another with their first name. The
management style is also based a lot on delegations. Meanwhile, IKEA Sweden has an open-door
policy, every employee is welcome to directly go and speak to their superiors if there are some ideas
on their mind. In the end, the atmosphere around the store managers in Sweden is quite open and
friendly and the employees all seems to be comfortable to talk and make jokes with their boss. This
kind of management style and the working environment is very important in IKEA's culture (Pan,
2005).
As mentioned earlier, the Chinese culture is prone to more connotations, and Chinese prefer to
express their own emotion and idea in the puritanical way.
The unique characters of Chinese culture lead the traditional Chinese corporate culture tending to
emphasize the relationship and respect their seniors (Pan, 2005)
The traditional Chinese corporate culture tends to emphasize seniority and relationships more than
responsibility and accountability which is contrast with the Western emphasis on personal
accountability and demonstrated merit and ability (Chen, Wang & Chu, 2011).
The values of caution make the store managers in China taking a long time to make a decision and
unwilling to make the risky decision. What's more, if the store managers in China under this
conservative management style, the employees in IKEA China, who most directly people connective
with customers, would not create the new ideas and express the useful information for their
supervisors.
In another hand, due to the rapid economic development in China in the recent decades, the value
of "time is money" is deeply caved into China business culture, in particular in the residents who
living in big cities in China. Hence, the time is also as a further more environment factor to manage
in majorities of companies in China, and it is used thoroughly, budgeted properly and should not be
wasted. However, this is not really how IKEA works when they making their decisions, actually IKEA
allows the mistake to be made in the working, and something that would cost time (Miller, 2010).
In order to make sure that important values are spread throughout the entire organization, even out
among the customers, IKEA has implemented team-building activities throughout the entire store in
IKEA China.
To avoid the store managers unwilling to take risk in general would do in Chinese companies, IKEA
provide the internal in-house or oversea training to the store managers and the general employees
in IKEA China, with a view to enhance the management understanding the values of IKEA and every
member in IKEA make their points. After putting lots of the efforts in cultivating the open and free
working environment, currently, IKEA China is well organized on how to take care of the new hires.
As soon as a new employee step into the companies, he or she needs to take the short-term or
median terms of orientation training, and they would be taught of the values of "IKEA way" (Miller,
2010).
Meanwhile, with willing to be in consistence with the human orientated culture, IKEA organize the
annual outing, the big kick-off parties when IKEA catalogs launch and sport activities occasionally for
the entire stores in China, and this helps to create the happy working environment for everyone in
IKEA. Through building up this internal company culture, it is helpful for the store managers to take
their own responsibilities and initiate the innovative ideas in the management. Meanwhile, it is
obviously improve the employees' feeling of belonging of "IKEA" and the employee feel more casual
to express the own ideas and suggestion to their boss. In IKEA China, the employees are also come
up with the difference opinions on some essential and valuable ideas, which are useful for running
the business (Miller, 2010).
Based on the implementing effective cultural management strategies in China, IKEA overcome the
barriers of western and Chinese culture and significant gains the diverse cultures in China.

Conclusion
The above analysis with regard to cross-cultural management has shown that there are highly
distinguished differences in the attitudes and behavior of managers and employees from different
countries/regions which worked in the multinational companies or global organizations. In this
regard, the cross national companies and organizations shall make the great efforts to understand
and document cultural differences when they step into a new situation, including the deeply
understand the people's characteristic, their ways of things, lifestyle, belief and so on. From the case
of IKEA's business operation in China market, noted that the communications, particularly in the
process of integration the dissimilar companies is an effective approach in the cross-cultural
management. In this regard, the management of the multinational companies shall be clearly
awareness of the important of the communication. Effective communications are able to establish a
friendly understanding of the difference values and beliefs of people in the diverse culture (Dietz, Orr
& Xing, 2008).
In the end, the managers shall build up a common strategy and clearly mission for to articulate the
local culture, including the specific responsibilities and roles of employees in each level.
Meanwhile, the multinational companies must recognize of the advantages and disadvantages of the
cultural difference in the business activities, establishing the suitable cross-cultural management,
and build up the competitive edges in the international market.