An exact definition of culture is very difficult. Therefore the characterisation of society is very broad. Several authors have tried to define this phenomenon. For instance Foster (1962) defines it very abstract: ‘Culture is the way of life of the group of people’. A More detailed description comes from Ball and McCulloch (1999). In their point of view on culture ‘the sum total of the beliefs, rules, techniques, institutions, and artefacts that characterize human populations’. Dresser and Carns (1969) have a more practical view on this topic, culture: it enables a communication through a common language, allows a calculation of possible response on the action which had taken place, to define what is wrong or right. These different explanations disclose how complex an understanding of a foreign country could be. All the more the volume of international trade illustrates that a high awareness of local specifics is indispensable. Every year goods and services with a value of 11783 billion dollars were traded around the world. Especially Europe, Asia and North America have been responsible for over 90% of the exchanges. Hence, in nearly 60 years the international trade has grown approximately around 200 times (World Trade Organisation, 2007). Furthermore, the relation between trades to GDP ratio increased around 12.7% in all OECD countries between 1992 and 2005. Today an average trade to GDP ratio from 45% for all OECD states shows how essential international commerce is (OECD, 2007). But why is international trade so attractive for companies? They diversify themselves and get more independent from a single market. The next reason is that they get the opportunity to sell more goods and be more profitable, and they benefit from economy of scale and reduces costs. Getting into a new market has the advantage of gaining technological expertise from the local worker. Moreover a production in the target market enables the company to adopt faster new demands and avoid trade barriers against their goods. Thus, it is no wonder that the 500 largest MNEs got annual sales of 14.9 trillion dollars (Rugman, Collinson, 2006).
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Findings
- Political Issues
- Cultural Issues
- Importance of Language
- Importance of Religion
- Importance of Values
- Hofstede's theories of culture
- Power Distance
- Uncertainty Avoidance
- Individualism - Collectivism
- Masculinity - Feminity
- Critics at Hofstede
- The impact on the 7 P´s
- Ethnocentrism
- Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This document aims to analyze the political and social-cultural factors that influence international business. It provides a framework for understanding the importance of considering cultural differences when operating in a globalized market.
- Impact of political and cultural factors on international business
- The importance of language and cultural understanding
- The relevance of Hofstede's cultural dimensions in international business
- The significance of ethnocentrism and its potential impact
- The role of international trade and its influence on companies
Zusammenfassung der Kapitel (Chapter Summaries)
The introduction defines the concept of culture and its complexity, highlighting the importance of understanding local specifics in international trade. It provides insights into the increasing global trade volume and the motivations behind companies expanding into new markets.
The "Findings" section delves into the political and cultural factors affecting international business. It explores how political issues such as trade barriers, subsidies, and labor laws can impact companies. The section also examines the significance of cultural differences in international business, emphasizing the importance of language, religion, and values.
The "Cultural Issues" section specifically focuses on Hofstede's theories of culture, analyzing the dimensions of power distance, uncertainty avoidance, individualism-collectivism, and masculinity-femininity. It also addresses criticisms of Hofstede's model and its impact on the 7 Ps of marketing.
Schlüsselwörter (Keywords)
This document focuses on key themes such as international business, culture, politics, globalization, Hofstede's cultural dimensions, ethnocentrism, and international trade. It examines the influence of political and cultural factors on business operations, highlighting the importance of cultural awareness in a globalized market.
- Quote paper
- Roberto Niesing (Author), 2008, Culture in relation to Walmart, Munich, GRIN Verlag, https://www.grin.com/document/92855