Discussion :

Choose any 2 countries, study overall culture, value system (human values). If
you prefer, you can choose 5 value factors across which you would like to
compare the 2 countries. What are the implications of such knowledge for doing
business in the chosen 2 countries?

Introduction:

In today’s world, with geographical boundaries being blurred every day

(globalization), any international business will have stakeholders from different
cultures, which include employees, customers, competitors, partners etc. The
study of culture and value system becomes essential to any international
business in any part of the world, to ensure that it understands their needs to
serve them better and respects their sentiments which in turn will help make
business successful. While business transactions are always directed towards
making economic sense, the ability to go beyond business and forge long-lasting
relationships requires a keen understanding of the culture, to reconcile
differences arising from separate cultures and capitalise on the same.
Understanding the cultural and value variables and taking them into account in
the country where business transactions will take place, is a critical aspect of
being successful in any international business. Even for a domestic business, the
competition can be an international company and hence the need to study
them. There are often differences which arise in the ways of conducting
business, dress preference, language, and legal and ethical considerations and
more.

Definition –

Culture can be defined as beliefs and values on the basis of which people
interpret experiences and behave, individually and in groups.

For a business, the culture and value system impact can be at the following two
different levels - difference at an individual or group level which will include
regional, ethnic, religious, and linguistic differences and at a higher level of the
country/nation where the policies and regulatory systems differ.

Impact -

It has been observed and proved that when we do not understand any
interaction, people tend to interpret the others involved as abnormal or wrong.
This can be very harmful for any business. Awareness of cultural differences
and recognizing where cultural differences are at work is the first step toward
understanding each other and establishing a positive working environment.

Cultural differences play a key role in the creation of trust, since trust is built in
different ways, and means different things in different cultures. And trust is built
upon the pillars such as effective communication, conflict management, mutual
respect and understanding each other’s needs. Cultural differences in
multicultural teams can create misunderstandings between team members
before they have had a chance to establish credibility with each other.

Many negotiations fail even though both parties want to reach a mutually
successfully business agreement and very often, the barriers to such
agreements becoming successful are of a cultural nature instead of economic or
legal as might be perceived.

Below are some ways in factors in culture differences which influences business:

• The way we present ourselves

• The way we express opinions

• Assumptions based on the environment and context

• Perceptions of voice, and other personal physical details

We choose Sweden and the USA for the purpose of this comparison and
understanding the implications of doing business in them.

 Sweden – It is a country in northern Europe and is the third largest

country in the European Union by area. Sweden has a low population
density and about 85% of the population lives in urban areas. Sweden is a
constitutional monarchy with a parliamentary democracy of government
and a highly developed economy

 USA- The United States of America (also referred to as the USA) is a

federal constitutional republic comprising fifty states and a federal district.
The country is situated mostly in central North America. It is one of the
world's most ethnically diverse and multicultural nations, and is a product
of large-scale immigration from many countries. The U.S. economy is the
world's largest national economy.

The following factors in culture will be used for comparison -

a. Attitude of seeking consensus

b. Team discussions and dynamics

c. Communication

d. Food habits and etiquettes

a. Attitude of seeking consensus: This is a trait which has its root in the
culture of a country/community and is ingrained in the psyche of the
individual, though it the tolerance levels can be different for different
individuals. The difference in perception of the cultural trait here is -
dissent is accepted versus unanimity is needed
 The management approach in Sweden is more which seeks consensus
results. Here, managers are seen more as facilitators or coaches who offer
advice and suggestions, and direct instructions can be perceived as
embarrassing. The decision making includes everybody in the process and
everybody's point of view is listened to and valued. As managers have a
tendency of consensual approach of discussion to arrive at decisions, the
information flow between all the stakeholders is good. But one drawback
of this approach is that consensual decisions can be hard to reach and the
process can be long drawn at times.

The management approach in USA is more individualistic in approach.

Though important decisions are discussed in an open forum, the ultimate
responsibility of the decision is with the manger. Hence managers are
likely to disregard the opinions of their subordinates which are acceptable
and respected. The advantage of this is, that big responsibilities will
inevitably bring big rewards, but at times may leave a bad taste with
someone whose opinion was not counted.

b. Team discussions and dynamics :

c. Communication -

Culture is often at the root of communication challenges. Exploring historical

experiences and the ways in which various cultural groups have related to each
other is the key to opening channels for cross-cultural communication.
Becoming more aware of cultural differences, as well as exploring cultural
similarities, can make communication with others more effective.

The United States has a culture of approaching business in a 'scientific' way.

Every aspect of commercial life is studied and analysed and this scientific
approach is both respected and acted upon. The approach is to quantify and
assess everything and the result of this analysis carries significant weight while
making decisions.
References –

1. http://www.referenceforbusiness.com/management/Gr-Int/International-
Cultural-Differences.html

2. http://en.wikipedia.org/wiki/Sweden

3. www.worldbusinessculture.com

4.