Global Transplant of Corporate Culture
Global Transplant of Corporate Culture
What would be the challenges of opening a business in another country?
The world is a prominent place, and when you consider a business in it, everyone is involved in every aspect of it. Global business operations impact every organization, despite what activities they undertake. Starting a business in any other country is a good decision for all its reasons. For instance, it would encourage the market’s growth, a new market, cheaper tariffs, a better and skilled labor force, and more advanced technology. But there are a few challenges a business person or an entrepreneur will face while considering opening a business in another country.
One of the challenges of opening a business in a foreign county is the language barrier. When considering venturing into a foreign country, a company must consider the language used to communicate in that country or the countries they are looking to launch (Cote, 2020). A good example is when Mercedes-Benz opted to expand its business in China. Considering that China has a different language causing a fundamental language barrier, the company marketing team picked a Mandarin Chinese name, ‘Bēnsǐ, ‘ similar to their name “Benz.” They wanted to mean “Run quickly, speed, and gallop” (Cote, 2020). But that was not the meaning of their intention. Instead, ‘Bēnsǐ’ meant “rush to death,” which showed that the company lost translation due to language challenges. They had to find a better word for their actual meaning, “Bēnchí,” and the market started to bloom. It is crucial to invest in interpreters if this challenge is an essential factor in operating smoothly.
Another challenge is managing global teams. Apart from language barriers, a company may face immense challenges managing employees from different countries on account of time zones, cultural differences, accessibility of internet connection and technology, and various technology levels.
Nuances in foreign relations, policies, and politics can also pose a significant challenge. Since businesses are heavily influenced by country relationships, laws, policies, and politics, it can be highly nuanced, posing a massive problem opening operations in this foreign country. Political leaders’ decisions on the laws and policies can influence educational systems, transportation infrastructure, raw material costs, labor laws, and taxes (Cote, 2020).
What are the pitfalls and challenges of transplanting corporate cultures globally?
Corporate culture can be defined as company behaviors and beliefs. They are written and unwritten ways of operation that management and the employees adapt during their interactions as well as handling things or processes outside business transactions (Tarver, 2021). Corporate culture could be viewed in customer treatment and satisfaction, hiring decisions, employee turnover, benefits, office setups, business hours, dress code, and other operational aspects. Therefore, with this in mind, transplanting corporate culture globally can be hindered by the following challenges;
The first challenge is the difference in the global business model. When a company has to transplant its operations to a foreign country, one of the challenges of the corporate culture is the business model – for instance, customer preferences, habits, and customs. These will be different from the parent business, causing a need to make changes (Kodama et al., 2018).
The second challenge is intranational and international cultural differences. A company will tend to concentrate on dealing with things as per their nation and overlook what happens in the border nations. For instance, in the USA, women make more purchases than men. But in other countries, you might find that men and women have an equal share of retail purchases of men are slightly higher than women. When they concentrate on the US model, the cultural concentration of satisfying customers will be interfered with heavily (Kodama et al., 2018).
Lastly, failing to comprehend management practices across nations. Management practices, models, and theories are usually loaded with culture-specific expectations. When business practices are translated or transplanted to a foreign business environment, it could make a business fail. Hence, it is paramount that a company learns and understands different management practices across countries.
Cote, C. (2020). 5 Common Challenges of International Business | HBS Online. Business Insights Blog. Retrieved 29 July 2022, from https://online.hbs.edu/blog/post/challenges-of-international-business
Kodama, N., Javorcik, B. S., & Abe, Y. (2018). Transplanting corporate culture across international borders: Foreign direct investment and female employment in Japan. The World Economy, 41(5), 1148-1165.
Tarver, E. (2021). What Is Corporate Culture? Investopedia. Retrieved 29 July 2022, from https://www.investopedia.com/terms/c/corporate-culture.asp