import and export all over the world. Merger between domestic companies and foreign ones are seen as normal. Every day international acquisitions and joint ventures arise by reasons of global business. All in all globalisation has provided many opportunities and challenges.

A lot of companies choose going global primarily to gain a greater market share. Facilitating conditions makes it much easier to act global. For example by the foundation of the General Agreement on Tariffs and Trade (GATT), barriers to international trade have been considerably lowered. These international agreements include amongst others the reduction of tariffs, creation of free trade zones, reduced transport costs, reducing or elimination of capital controls and so on. Other facilitating conditions are the revolution in transport, telecommunication and information technology (John et al, 2000, p.219). Altogether these premises call for global business.

Globalisation has opened national boundaries. For this reason, globalisation means for the majority rivalry and competition. Boudreaux distinguish “the good consequences of this competition (such as the lower prices it brings to the customer) and the bad consequences (such as the elimination of particular jobs)” and suggests in this context that “competition is real as well as important” (Boudreaux, 2007, p.2). In business, competition can bring an enormous positive effect: Organisations are permanently under pressure to be better, faster and larger than their competitors. This leads to a continual procedure of improvement of their products, their services and their whole business concept and strategies.

One of the scientists, who deal with this complex subject “competition”, is Michael Eugene Porter, University Professor at Harvard Business School. He considered that, when a company wants to gain higher profits than the other ones in the same industry, the company has to possess a competitive advantage over its competitors. “The goal of much business strategy is to achieve a sustainable competitive

advantage” (QuickMBA, 2007). For this purpose, Porter defines two basic types: the cost advantage and the differentiation advantage. Cost advantage means, that a company can deliver the same goods and services as their competitors, but at lower prices. Differentiation advantage exists when a company offers benefits that exceed those of the other firms. Thus, with a competitive advantage organisations can produce superior value for its costumers and can gain higher profits for itself (QuickMBA, 2007).

But how can an organisation gain these profits? In this point Porter underlines the importance of capabilities and resources, which should be superior to those of the competitors. Without that superiority every competitor could reproduce and clone the firm´s strategy and any advantage would disappear very quickly. According to Porter (cited in QuickMBA, 2007), essential resources are firm-specific assets, which are useful to create a competitive advantage. For example, you need patents and trademarks, brand equity, proprietary know-how and a good firm reputation. Capabilities refer to the ability of the organisation to utilize its resources effectively. Porter named as such capabilities for example the ability to bring a product to the market more quickly than other companies. These capabilities Porter identify as routine actions of an organisation, which are not easily documented and according to this it is difficult for competitors to replicate them.

But how can organisations gain access to these necessary resources and capabilities, Porter mentioned? Especially when companies go global, when they want to enter a foreign market, they need a lot of knowledge about the target market. Business managers have to know about the environmental factor given in the chosen market, for example political restrictions, technical standards, social issues and culture. In this context we will focus on the latter in more detail. There is a theory that “internationalisation will create, or at least lead to a common culture” (Trompenaars and Hampden-Turner, 1998, p.3). Actually, that would make international business life much easier, but is that statement right? Does globalisation bring us a common culture all over the world? In fact, globalisation called for standardisation in design,

systems and procedures. But nevertheless managers also have to adopt various factors of the different countries, such as the legislation, socio-political and cultural issues.

On closer examination it has to be noticed that the impact of cultural diversity on global business is much more complex than it appears to be on first sight. In fact, worldwide consumer tastes converge more and more. Italian food like pizza and pasta is available in Sweden, American Burgers are eaten in Spain as well as in the United Kingdom and the Chinese cuisine is very popular in Germany. International brands like Mc Donald´s and Coca Cola sell their products in countries all over the world. Indeed, products are becoming more and more common worldwide. But do they mean the same to all people of the different cultures? For example, dining at Mc Donald´s is a symbol of status in Moscow whilst it is only a simple fast meal for a fast buck in New York (Trompenaars and Hampden-Turner, 1998, p. 3).

In a global business environment this is analogue. There are various challenges which international manager has to cope with. Many writers, for example Geert Hofstede, have demonstrated how attitudes to work, authority, equality and other important factors differ from country to country (Hofstede, 2001, cited in Johnson, 2008). Such differences result from history, religion and climate and have been shaped over many centuries. These differences in culture and mentality are reflected in the way of doing business as well. Accordingly, many problems can occur in global business. For example, many western companies move into the Chinese market, but understanding and coping with the Chinese culture and their way of doing business becomes crucial as David Hands, manager of the real estate company Jones Lang Lasalle knows from experience: In China it is difficult to organise a meeting, because everybody turns up at different times and there is no specific agenda for the meeting. Furthermore, Hands states, whereas in the western countries products like cars and clothing brands symbolize status, Chinese manager usually are dressed more inconspicuously. In addition, in China, managers get few regard when they appear to a meeting alone. More seriously it seems to appear with one or more assistants (Slater, 2006, cited in Johnson, 2009, p. 191).