This report will explore the importance of understating the context of culture for the success of business.Culture plays a very important role in the shaping and directing company’s path of success and failure. In this era of globalization, almost all firms have the desires to expand their business in the international market. Companies will achieve success and growth only, if they understand the cultural differences between both the countries and adopted business style accordingly . Thus, this report will provide a brief introduction about the culture of China and United States of America. Further, discussion will also be done in regards with the importance of culture of these countries in the success of one’s business.
Cultural context and its contribution to business success
Organizational culture is habitually whispered as a subset of national culture. The view is common, as almost every company conducts its operations in a given nation and engages people for employment from that particular national culture (Schein, 1990). In each and every organization, Culture is being shaped by the type of leadership and its different managerial values and principles established in the company. Every employee of the firm, whether he is from top level management or lower level management need to abide by its culture and norms . A culture helps in fostering ample of growth opportunities to its employees and motivates them to work efficiently and effectively.
An organization will achieve the path of success and growth only when it is effective and efficient. This can be brought by first understanding the culture of the country in which it is operating its functions and than by developing an effective workforce (Organization Code of Ethics, n.d). This is because willingness and commitment of employees increases productivity. Workforce will be dedicated towards their work only, if they are being aware about culture of their organization . Organization culture plays a very important role in shaping the behavior of each and every individual in the company. It includes many things such as the amount of work to be done by the employees, cooperation among them, customer relationship, rules regarding the workforce behavior and coordination between different activities of an organization.
Culture of China
When taking a gaze at the Chinese culture, more prominence is given to ‘Confucianism’. This phenomenon is vital in order to uphold good relationships and maintaining loyalty with the patrons . Thus, it becomes clear that any business concern who wants to enter in to the market of China, need to be strong in the point of ‘Confucianism’ at the time of dealing with those customers. There are many other factors, which need to be considered for while operating business in these countries (Lunenburg, 2007). National culture may impact behaviour of people within the business and thus, becomes a tedious task for the management to administer it. Chinese people believe in honesty. They want each and every transaction to be full of integrity and transparency. Those firms, whose culture does not foster honesty, will not be able to sustain in the market of China. However, through efficient and class services, company can position itself in the market of China, but they will not be able to gain a dominant position (Heaps, 2009). Therefore, it becomes significant for the firms to understand the context of culture with a view to flourish their business and company. Another important aspect of the culture of China is that people prefer to be very formal at times of making deals and contracts (Chung Shen, 2004). They want to ignore nuisance and jokes and have a preference of healthy and serious business contracts. Hence, organization must adopt this type of a culture, if they wish to do business with Chinese people.
Culture of USA
On comparing the culture of china with U.S.A, a far difference can be noticed. People of USA prefer to have every transaction by way of contract or through written agreement . On contrary, there are many countries, where word of mouth is considered as sound business dealings. Ethical values and standards will be different when making business with those citizens .In USA, bribery is considered as an unlawful and beyond the ethics activity. But, in some countries like French and Germany, it is being regarded as the fabric of life and is not illegal. Thus, companies expanding their operation in international markets like china and USA, need to embodied such ethical standards and culture that is supported by those companies and their societies. People of USA believe in amicable environment to precede task and further dealings and therefore they are not formal while making deals and contracts. But, Chinese people do give importance to formal behaviour and they require someone to honour them again and again .
Importance of culture in business success and growth
In today’s era of business world, International trade has become the name of a game. In simple words, understanding the culture and its differences can mean achievement or losing the contract at the first meeting . Culture helps in creating a good reputation and can influence the behavior of other individual. It also helps in altering the way one’s business is viewed by the rest of the world. Following are the factors that demonstrate the importance of understanding culture in the success of business.
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Culture is more significant than strategy
For each and every firms, culture matters a lot. In fact it is more important than any strategy of business . A company’s innovative and strategic decision will be successful only if the culture of the company is good. In other words, if company understands the culture of a particular country, than they can capture the market share for extended period of time. Thus, the successfulness of any type of strategy employed by the firm is largely dependent on its appropriateness of cultural attributes.
Alignment of culture and strategy
Alignment of culture and strategy is very critical and vital. From several data collected, it was found that companies whose culture is unsupportive and has very poor strategic alignment, always underperform their competitor. Firm’s having supporting and good aligned innovative strategies have higher growth and profits prospects. For instance, if one company who wish to adopt innovative strategies in their product in the market of China. In such a context, they need to first understand the culture o China, whether they will accept the innovative product or not or is company’s strategy is aligned with the culture of china or not . If all these questions are answered properly by the firm, firms will likely to achieve the path of success and growth. On the other hand, if there is no configuration between the culture of China and firm’s strategies, than it would be difficult for the firms to sustain a competitive position in the market.
Encouraging the culture of individual nation is the key to success
In order to align the strategies and culture of a particular country at higher degrees, there is a need of gaining greater understanding in regards with the attributes of culture of a particular country (Business success with China requires understanding beyond culture, 2012). Every nation has its unique set of culture and values. It is very obvious that a company’s product will be accepted in the market, if it fulfills all the necessary requisites. Each and every country has different meaning in terms of words, color, phrase etc. In Pakistan, green color is being considered as the most religious color, while in some other countries, it is not so (Pitta, Fung and Isberg, 1999). In some religion white color is treated as the color of peace, while for others it is being taken as curse. Therefore, in order to internationalize the business, each and every firm should take into consideration the cultural differences (Lunenburg, 2007). By understanding the context of the culture, company will be in a position to expand their operations more easily and will achieve the path of success and growth.
Culture is the value, belief, attitude and principles of an individual or a group. Every country has different standards in accordance of which they function. Cultural factors impact the business in a greater extent (Hurn, 2007). The culture of China and USA varies in various ways. So, it is imperative for the business to engross such practices and culture that can help them to achieve a competitive edge over the other firms in the market. People always accept only those products and services which are according to their system, society and culture (Archive for Determinants of Organizational Culture, n.d). Those products and services which are beyond these expectations or in other words exploit their social feeling and morals are probably rejected by them. By analyzing the above facts it can be articulated that the context and detail understanding of culture of a nation is very important and indispensable for the growth and success of business (Moran, Harris and Moran, 2012). Although, firms can sustain its position in the international market by catering with their demands, but a dominant and competitive position will be achieved only through high degree of cultural alignment (Business success with China requires understanding beyond culture, 2012).
For a good business practice, ethical standards and culture is requisite but, this is not enough. When organization deals with employees from diverse cultural background, they must be in a position to understand their perception . With reference to the above discussion, it can be concluded that it is very important to understand the context of the culture for the growth and success of the business. In this report, cultural differences between the two countries i.e. China and USA were being explored. Many factors need to be kept in intellect while making any type of dealings with personnel’s of these countries . The successfulness of the business is largely dependent on its degree of alignment of strategies with the culture of a particular nation. Therefore, to succeed and flourish in the international market, culture is considered as an important key .
Books and Journals
- Chung Shen, M., 2004. How to Do Business in China. Dorrance Publishing Co.
- Hurn, B. J., 2007. The influence of culture on international business negotiations. Industrial and Commercial Training,
- Lunenburg, F. C., 2007. Educational Administration: Concepts and Practices. 5th ed. Cengage Learning.
- Martin, J. S., and Chaney, L. H., 2006. Global Business Etiquette: A Guide to International Communication and Customs. Greenwood Publishing Group.
- Moran, R. T. T. Harris, P. R. R., and Moran, S., 2012. Managing Cultural Differences. 7thed. Routledge