Impacts of Culture for American Businesses Abroad

Research Paper (postgraduate) 2012 8 Pages

Business economics - Economic and Social History


Impacts of Culture for American Businesses Abroad

U.S. firms that decide to go global experience unique challenges that are not particularly present in typical domestic businesses. Companies that have relations abroad are often met with significant cultural differences that can impact the business – either positively or negatively. The importance of cultural intelligence has led to an increase in cross-cultural training; yet, some firms refuse to acknowledge the significant role that culture plays in their international business. A lack of cultural awareness inherently implies an arrogance that has been associated with American culture by other countries. By ignoring cultural differences, American companies reveal an underlying desire to make money without taking the time to know their partners or employees abroad. Such ignorance can be avoided at a relatively low cost; nevertheless, some businesses manage to fail miserably because of a lack of cultural understanding.

There are many difficulties associated with culture that could result in a firm’s reluctance to provide training to address the issue. In fact, the very definition of culture has been long debated. Hill (2011) explains that “scholars have never been able to agree on a simple definition of culture” (p.94). Most contemporary definitions describe culture as the lifestyle of a society driven by values and norms. By this characterization, a firm might feel overwhelmed by the vast amount of information that might come with learning the values and norms of their partners abroad. Additionally, “recent research suggests that that the relative importance of the different subcultures (identity salience) depends on the kind of behavior that is being analyzed” (Vogt, Beck, & Gregory, 2010) – further convoluting the prospect of cultural literacy (p.7). Companies operating in many countries might feel that learning about so many cultures would be costly and time consuming.



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Title: Impacts of Culture for American Businesses Abroad