Discuss the role of market culture and language in developing and maintaining cross cultural business relationships
- An INDIVIDUAL Report (50% of total marks)
Background to Assignment
You are the New Business Development Manager for a large UK â€“ based upmarket fruit juice packager and distributor that specialises in high end quality fruit juices (variety of exotic tropical fruits, such as mango, passion fruit, guava etc). These are sold through numerous retail outlets.
Some months ago it was decided that your current supplier in Spain would have to be changed as there were a variety of problems that had led to an irretrievable break – down of the relationship. A review of the partnership concluded that your personnel had insufficient knowledge of the linguistic and cultural aspects of dealing with the Spanish supplier, and this had resulted in a variety of problems, contributing significantly to a lack of trust, and ultimately to the break- down of the relationship.
Consequently, the MD has sought a new supplier for your current range of products â€“ the basic requirements will not change, and have already been agreed with a supplier in Costa Rica. You are due to go to Costa Rica next month to visit this supplier, and look at their operations, and premises. However, in view of the breakdown of the previous relationship, the MD has asked you to prepare a report in which you detail the cultural and linguistic requirements of working with a Costa Rican company. This report will then be passed to your HR department, so that they may devise an appropriate training schedule for those who are likely to be involved in the development of this relationship.
INDIVIDUAL Written Report
Your task is to:
â€˜Discuss the role of market culture and language in developing and maintaining cross cultural business relationshipsâ€™.
You must prepare an individual report, of no more than 3000 words (excluding references and appendices). This report must cover the following areas:
- An analysis of culture and how it influences business. (25%)
- An analysis of foreign language competence and how it is useful in business. (25%)
- In the context of the task outlined above, how would you use culture and language in developing business relationships with the Costa Rican company? (40%)
The Role of Market Culture and Language in Developing and Maintaining Cross Cultural Business Relationships
This paper/report discusses the role of market language and culture in establishing and sustaining cross cultural business associations, with the aim of ensuring that the company establishes a robust business relationship with the novel, Costa Rican Company (i.e. supplier). The paper accomplishes this goal in three parts. The first part analyses culture and its influences on business. The second part analyses foreign language competence and its significance in business. The paper concludes in the third part where it disuses how language and culture could be employed in establishing business associations with the Costa Rican supplier.
Analysis of Culture and How it Influences Business
In the current world, which is associated with a high level of globalisation, culture has managed to stand among the core factors that determine the success of businesses in the international market (Kilng et al., 2014). According to Leisinger (2015), culture refers to the set of rules, beliefs, values, and institutions that a particular group of individuals uphold. Cultural factors have a significant effect on the business flow. Every society possesses its cultural elements. These cultural elements are manifested through values and attitudes, religion, material elements, customs and manners, education, aesthetics, and social institutions. Zhang et al., (2014) assert that for an international organisation, adaption to these cultural elements is dependent on its level within the market participation (e.g., licensing relative to direct investment, and service or product).
An organisation cannot solely depend on its present mechanism of conducting business when it chooses to move its operations to the international level. In a focus on the international negotiations between companies, Sarapovas et al., (2013) assert that fruitful negotiations do not only call for technical proficiency (i.e. communication strategy/technique), but should comprehend the context/setting in which such negotiations are being performed with the aim of securing profitable contracts. The expansion of business into foreign territories can occur via international growth or acquisitions and merger. Such a development can result into a cultural mismatch when it comes to internal growth and the choice/decision to establish a basis within the foreign nation from scratch, as it takes a long period to learn the cultural aspects of another country and adopt to the traits of such a nation. Kling et al., (2014) inform that an acquisition or merger of an already developed organisation is a more advantageous mechanism of international growth since the parent organisation can progressively learn the beliefs and norms of the target firm via the acquired unit, which is being managed in relation to the local cultural preferences.
White et al. (2011) focused on the study of the effect of culture in international firms within the context of expansion into novel regions with different existing cultures. The researchers concluded that is significant for any such company with the intent of moving into new regions to comprehend the cultural differences and map such differences to bridge or fill the gap between the units of business performing in multiple cultures. Gilbert & Heinecke (2014) established that a multinational firm that operates in different cultures often possesses a smaller cultural gap relative to a firm that is only operating in few different cultures. The abridged gap was attributed to the learning factor that arises due to the operation in different cultures.
Škerlavaj et al., (2016) assert that multinational companies often attempt to expand into nations that have more similarities/resemblances and fewer or limited differences in two cultures to ensure that issues of cultural mismatch are avoided. However, Samiee et al., (2015) has established a positive effect associated with companies operating in nations with greater cultures differences. Managers should possess adequate knowledge of organisational culture, particularly in the processes of extrinsic and intrinsic rewards, and feedback. For example, Leisinger (2015) points out that the association between job satisfaction and level of pay is robust within the U.S, but weal within Japan. As such, an international manager can experience problems motivating staff in Japan through increments.
The significance of cultural comprehension in successful multinational organisations is mirrored in their marketing approaches, which are founded in the target industries’ cultures. An organisation with a weak comprehension of the target organisation’s local culture can perform disastrous errors in establishing market approach via designing advets that offend individuals due to culturally unacceptable content. Firms that do not totally comprehend the culture of their target regions always develop marketing approaches that do enhance customer attraction (Reis et al., 2015). Several examples exist in relation to the use of culturally incompatible contents of marketing. For instance, the use of an owl in executing an advertisement in India can be futile, as an owl is considered a symbol of bad luck. Another example of an unsuccessful advertisement can occur when animals that wear eyeglasses are displayed in an advert meant for the Thailand consumers who consider animals lower life forms.
According to Santos et al., (2015) greater cultural distance within multinational organisations can have negative impacts that hurt the company’s reputation and its overall business performance in the long run. Zhang et al., (2014) point out that a cultural mistake can arise due to the loss of consumers. Such an occurrence can subject the company to problems particularly through general public outrage and pressure groups, thereby attracting negative response/feedback. Loss of consumers implies lesser revenues, which in turn translate into lesser gains. Besides, individuals offended by cultural errors performed by organisations can file lawsuits that can lead to settlement payouts or fines.
Reis et al., (2015) established that possessing an adaptive business framework with an open-minded strategy is vital for the success of a company, particularly when the organisation operates in different cultures. These aspects (i.e. adaptive business framework and an open-minded strategy) facilitate information flow to and from consumers. The significance of comprehending various cultural values and mechanisms of operating efficiently and effectively within the bounds of such cultural values can contribute significantly to the cusses of the business.
Analysis of Foreign Language Competence and its Usefulness in Business
According to Thitthongkam et al., (2011), the significance of the roles played by foreign languages in businesses lies in the communication with employees, employers, consumers, and peers. Communication is a process that commences in the early stages of person’s life, and becomes complex as one grows older. In the business world, communication plays a vital role when it comes to the conveyance of messages/information to receivers. In relation to this, Thitthongkam et al., (2011) point out that foreign language competency plays a significant role in terms of increasing opportunities for comprehending and learning other cultures.() add that foreign language competency contributes to the enhancement of internal and external communication processes.
Owing to the effect of globalization, the significance of effective communication in foreign languages cannot be overlooked by businesses. For global rivals/competitors, the most significant aspect is the potential to communicate in broader, clearer, and quicker basis (Thitthongkam et al., 2011). According to Samiee et al., (2015) international organisations often direct the ability in communication towards foreign languages that are widely spoken. Apart from the benefits that foreign language competency grants to employees and organisations, consumers can also experience certain benefits from it. Foreign language competency enables consumers to acquire appropriate services and products. For example, consumers can get what they have ordered in a wholesale shop with productive or effective communication in foreign language. On the other hand, when organisations cannot engage in productive foreign language communication with consumers, they cannot manage to provide quality services or products to buyers.
In a business, the employment of foreign language is significant as it has a tremendous impact on business operations. According to Santos et al., (2015), foreign language competency contributes significantly to the creation of consumers’ satisfaction, which in turn serves a s source of competitive advantage to a company. An organisation cannot manage to present a stiff communication to its competitors when it lacks the potential to handle its consumers in an appropriate manner. The ability to handle consumers appropriately stems from the company’s potential to address buyers in a language that they comprehend and respond to their needs in an effective way. Foreign language competency offers suitable platform o which organisations can accomplish this objective.
According to Kim et al., (2015), foreign language awareness is a vital element when it comes to winning the global business. Language proficiency is essential for introductory meetings, while the aspect of fluency essential for the growth of market share (Arregle et al., 2013). Foreign language competency confers a definite business potential or advantage to an organisation, as it enables consumers to perceive the company as dedicated to the market. It also enables the company to send the message of courtesy on the side of buyers. Zhang et al., (2014) inform that fluency enhances the building of robust associations between the organisation and consumers, and other stakeholders, particularly in markets associated with high growth such as Arabic states and China. In these markets, establishing and sustaining relationships is essential for winning and expanding the business. In situations where organisations need to ensure the localization of their offers for certain markets, language can serves as a vital component of such a process (Gilbert & Heinecke, 2014).
In certain markets such as China, a person cannot get travel from the city to the airport without encountering a foreign language (Zhang et al., 2014). Some of the methods that organisations often employ to address the issue of language barrier are training employees on foreign languages, and hiring expatriates, and consultants. In relation to this, Reis et al., (2015) point out that several issues can occur in international trade when the organisational employees lack foreign language competencies. Some of these issues are misunderstanding of agreements and inability to comprehend foreign language policies, as well as the general differences/discrepancies in language in situations involving the translation of business terms.
How Culture and Language would be Employed to Develop Business Relationships with The Costa Rican Company
Considering the afore discussed literature, the company can employ the aspects of culture in establishing business relationship with the Costa Rican company in many ways. It is vital to note that when executing business operations in a foreign nation, culture and language should often go hand-in-hand. Leisinger (2015) argues that culture and language cannot be separated. Culture possesses an aspect that comprises words. As such, attempting to communicate meaning via message transmission to an individual from a different culture can result into misunderstandings.
The comprehension of a language and its perfect use calls for the comprehension of its cultural aspect, as well. Mitri & Golder (2012) assert that certain words that have similar meanings can be employed in different circumstance or certain words can appear rude in some languages. For instance, the words “pumpkin” (i.e. an English word) and “fuktong” (i.e. Thailand word) can be offensive. As such, culture takes into consideration the sharing and learning forms of norms, behaviors, values, and material objects. Comprehending the Costa Rican culture serves as a vital steps when it comes to the establishment of how language can be employed in establishing robust association with eh Costa Rican supplier.
A nation’s culture can be determined in relation to six metrics including masculinity, individualism, uncertainty avoidance, power distance, indulgence, and pragmatism. Power distance focuses on how willingly individuals who lack power embrace the unequal distribution of power within the society (Brzozowski et al., 2014). Masculinity focuses on the level at which individuals value the accomplishment of objectives and the significance of status over the goal achievement process, and emphasize on their life quality. Individualism expresses the level at which the loyalty of people lies within themselves first or whether it lies within the group to which they belong. Uncertainty avoidance measures the level at which regulations and rules are desired/needed in order to handle life’s unpredictability and more particularly the future. Indulgence focuses on determining the level at which societal members try to regulate their impulses and desires (Homburg et al., 2009). Pragmatism focuses on measuring the level at which a culture possesses a pragmatic and practical, time-watch future-oriented view, as opposed to a time wise near-term or historical perspective.
In relation to Hofstede’s framework, Costa Rica resembles many Latin American nations. Costa Rica is associated with a higher UAI (Uncertainty Avoidance Index), which stands at 86 (International Business Center, 2012). As such, this society possesses a lower tolerance for uncertainty. As such, when doing businesses with the Costa Rican supplier assurance will be made in all business transactions such as making of payments and timely making of orders. Besides, the company will also have to adhere to strict regulations, policies, laws, and rules to minimise the level of uncertainty that exists on the part of supplier (i.e. Costa Rican Company).
International Business Center (2012) informs that the ultimate objective of the Costa Rican population is to regulate everything to avoid or eliminate the unexpected. As such, adequate care will be embraced when dealing with eh suppliers, while allowing the supplier a limited degree of control over business deals to make to ensure that the supplier company feels comfortable. Martin-Ogunsola (2004) points out that, since the Costa Rican society is associated with a higher level of uncertainty avoidance, individuals do not readily welcome change. Thus, care will be taken to ensure that business transactions and supply deals and orders are made within the provided laws and policies to limit issues of change.
In relation to the dimension of PDI (Power Distance Index), Costa Rican is different from other Latin nations, having the lowest score (i.e. 35) relative to the average of 70 associated with all Latin nations (International Business Center, 2012). The low PDI indicates the aspect of de-emphasis within the Costa Rican society on wealth and Power. As such, during the execution of business deals with the Costa Rican company, the organisation should ensure equality and opportunity for both parties. Such an undertaking will enable the company to win the trust of the supplier, which is essential for smooth execution of business deals.
According to the International Business Center (2012), Costa Rica ranks lower when it comes to the aspect of masculinity (i.e. 21) relative to other Latin nations (i.e. 48). This rating indicates that there exists a low level of discrimination and differentiation between genders. As such, when executing business dealing with eh Costa Rican Company, the organisation should ensure that females are accorded the same respect as that accorded to males in all societal aspects.
Costa Rica possesses a low IDV (i.e. individualism) raking/rating of 15, as in the case of many Latin American nations. Such a score suggests that the Costa Rican society is collectivist relative to individualist (International Business Center, 2012). As such, this society is characterised by a close or intimate long-term commitment/loyalty to the member group, be that an extended family, extended relationships, or family. In a collectivist society/culture, the element of loyalty is paramount (International Business Center, 2012).Martin-Ogunsola (2004) adds that the Costa Rican society fosters robust associations where every person is in charge of fellow group members. As such, the organisation will have to be loyal to the Costa Rican Company by avoiding any side dealings with other suppliers within the same country. The company will have to ensure that the aspect of loyalty overrides most other regulations and rules of the society. Such an undertaking will contribute significantly to the establishment of robust association with the supplier.
In most of the Latin American nations, with the inclusion of Costa Rica, the population is majorly Catholic ( International Business Center, 2012). As such, the combination of the aforementioned cultural dimensions and Catholicism reinforces a philosophy or principle predicated within the belief that there exists an absolute reality/truth (Martin-Ogunsola, 2004). In relation to this, the company will have to exercise utmost transparency or honesty when executing business transaction with the company even in situations where the organisations feels that exercising the truth can compromise its position.
The aspect of language will also be considered during the execution of business operations with the Costa Rican supplier. The company will train some of tis representative on the Costa Rican language, and motivate them to use this language when communicating with representatives from the supplier company. This approach will serve to affirm the confidence of the supplier in the organisation’s commitment to enter into a long-term business relationship, thereby strengthening the association between the two parties. Besides, languages or ads that send message of gender discrimination will not be embraced. The use of words or terminologies that shows a collective responsibility such as “we” and “us” will also be encouraged.
The aspects of culture and foreign language play a vital role in determining the success of a multinational company within the international market. Language and culture go hand-in-hand, and should be learnt together. Comprehending the culture of a nation contributes significantly to the comprehension of the appropriate circumstance in which the language of such a nation can be used. Understanding the culture and language of the nation in which a company executes its business operations contributes largely to the establishment of robust relationships with the consumers of such a nation. As such, the organisation should ensure that the measures discussed in this paper are employed during the execution of business operations/transactions with the Costa Rican supplier company.
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