Paper Presentation

1. Problems Related to Global Business due to Cultural Diversity
Sonali Srivastava & Rubana
Acharya Academy of Management Studies (ABBS)
Andhrahalli, Bangalore- 560091
This research aims at studying Problems Related to Global Business due to Cultural
Diversity. There are areas in management whereby differences towards attitudes,
behaviors, functioning, communication issues and cultural implications can be seen.
Different cultural comes from the different backgrounds of each culture. This difference
can be witnessed clearly while taking a business decision. Because of the differences in
cultures, there might be some kind of misunderstanding among people working or
purchasing product of foreign companies, etc. For a successful business, any person
should be able to work with people from different cultural backgrounds and offer product
and services according to their preferences no matter what their cultural orientation is
because of different country. An evidence on this is the successful management of
many western companies operating in different parts of the world with effective results.
Key Words: Global Business, Cultural Diversity, Global Problem
Introduction
Doing business globally brings new opportunities for growth and profit, but global
businesses are not easy or else all would have done it. The path of global business is
full of risks and challenge can provide your business with exciting new opportunities for
growth and profit. One needs to not only employ people who are trustworthy but also
understand the customer in global operations in order to be successful internationally.
Certain related issues are as follows:
Language Issues
Language barriers are an obviously a downside to business going internationally. One
may be needed to rely on translators when speaking to business contact’s and the
quality of what the contacts say may be lost in translations. If one is outsourcing
customer service to another country, then the customers may also struggle to
understand the people whose first language is different than their own.
Legal Issues
When one carries business another country, they have to be familiar with that country's
laws. They may also have to pay additional taxes and import duties in India if they are
importing products from other countries. The legal complexities of international business
are challenging, and without proper legal advice one might be subject to fines and

2. penalties. It’s better to make sure that one has a excellent international lawyers who
have a firm knowledge in the laws of their home countries.
Cultural Barriers
Different cultures carry different values, and sometimes these differences can be
unpleasant. Like for example, Gender could be prove problematic in the where women
are not given equal rights to men. One may find himself wondering if they can safely
send female employees to certain countries. Marketing styles in other countries may
differ, so and polite behavior in the United States may be impolite elsewhere. Some
cultures don't take contracts as seriously as others, and many cultures view the group
as more important than the individual. It's important to learn the cultural differences of
the places one do business.
Supervisory Oversight
Whether one is opening a factory in another country or simply buying and selling
property, distance reduces the oversight. It's wise to employ people who can tell you
about the status of the business in other countries and who can warn one of any
potential problems. Without proper oversight, one may find that they’re paying for
sweatshop labor or signing an unfair deal. There have been instances involving unsafe
products imported from other countries, and it's vital to ensure the products for which
you are paying don't put your customers in danger.
Political Problems
Many people are strongly opposed to outsourcing, globalization and other international
business practices. One may lose some of their customer base if begin trading in other
countries. Moreover, if the company is involved in human rights abuses in other
countries even if the company has no idea about these abuses were occurring one may
be subject to an onslaught of bad publicity and lost business.
Cultural Diversity in the following countries
Japan:
 Culture: Saving face is crucial in Japanese society. The Japanese believe that
turning down someone’s request causes embarrassment and loss of face to the
other person. If a request cannot be agreed to, they will say, “it is inconvenient”
or “it is under consideration. There is great emphasis on politeness, personal
responsibility, and working together for the universal rather than the individual
good. Facts that might be unpleasant are expressed in a gentle and indirect
fashion. Since the Japanese strive for harmony and work well in groups, they
often rely on facial expressions, tone of voice, and posture to understand others.

3.  Business relationships: The Japanese prefer to do business on the basis of
personal relationships. One way to build and maintain relationships is with
greetings and seasonal cards. In general, being introduced or recommended by
someone who already has good relationships with the company is extremely
helpful as it helps then know how to place others in a hierarchy relative to
themselves.
 Business meeting etiquette: Greetings in Japan are very formal and ritualized.
While foreigners are expected to shake hands, the traditional form of greeting is
the bow. How far someone bows depends upon their relationship to the other
person as well as the situation. The deeper someone bows, the more respect
they show.
France:
 Culture: The family is the social adhesive of the country, and each member has
certain duties and responsibilities. The French are private people and different
rules of behavior for people within their social circle and those outside it.
 Business relationships: The handshake is a common form of greeting. Friends
may greet each other by lightly kissing on each cheek. First names are generally
reserved for family and close friends; one should not address someone by
his/her first name until invited to do so. Mutual trust and respect are required to
get things done.
The French like to use their own language; someone who does not speak French
could apologize for not knowing the language as this may aid in developing a
relationship.
 Business meeting etiquette: Business cards are exchanged after the initial
introductions without formal rituals. In business, the French often appear
extremely direct because they are not afraid of asking probing questions.
Meetings are held to discuss issues, not to make decisions. The French are often
impressed with good debating skills that demonstrate an intellectual grasp of the
situation and all its ramifications. Discussions may be heated and intense. One
should never attempt to be overly friendly as the French generally
compartmentalize their business and personal lives
Germany:
 Culture: In many respects, German can be considered the masters of planning.
This is a culture that prizes towards forward thinking and knowing what they will
be doing at a specific time on a specific day. Business and personal lives are
regionally divided. In a culture where most communication is rather formal, the
home is where one can relax.

4.  Business relationships: Germans do not need a personal relationship in order to
do business. They tend to be interested in others’ academic credentials and the
amount of time their business partners have been in business.
A quick, firm handshake is traditional greeting. Business cards are exchange
after the initial introductions without formal rituals. German do have open-door
policy. People often work with their office doors closed. Visitors should knock and
wait to be invited in before entering someone’s office.
German communication is formal. Following the established protocol is critical to
building and maintaining business relationships. One can expect a great deal of
written communication, both to back up decisions and maintain a record of
decisions and discussions. Letters should be addressed to the senior- most
person in the relevant functional area and should include the person’s name as
well as their proper business title.
 Business meeting etiquette: Punctuality is taken extremely seriously. If one is
delayed, it is important to call immediately and offer an explanation for the delay.
It is extremely rude to cancel a meeting at the last minute and it could jeopardize
a business relationship.
Brazil:
 Culture: Brazil is a mixture of races and ethnicities, which has resulted in rich
diversity in the population. Unlike many other Latin American countries where
there is a distinct Indian population. Brazil have intermarried to the point that it
sometimes seems that almost everyone has a combination of European, African,
and indigenous ancestry. Families tend to be large (although famiy size has been
diminishing in recent years) and the extended family is quite close.
 Business relationships : Business people usually shake hands when greeting one
another, while maintaining steady eye contract. Women generally kiss each other
on the cheek. Brazilians need to know who they are doing business with before
they can work effectively. They prefer face to face meetings to written
communication as it allows them to know the person with whom they are doing
business. The individual they deal with is more important than the company.
Communication is often informal and does not rely on strict rules of protocol.
Anyone who feels they have something to say will generally add their opinion.
 Business meeting etiquette: In Sao Paulo and Brasilia, it is important to arrive on
time for meetings. In Rio de Janeiro and other cities it is acceptable to arrive a
few minutes late for a meetings one should not appear impatient if kept waiting –
Brazilians see time as something outside their control and the demands of
relationships takes precedence over adhering to a strict schedule. Meetings are

5. generally rather informal. One can expect to be interrupted while speaking or
making presentation. Business cards are exchanged during introductions with
everyone at a meeting.
Some barriers in Global Business:
1. McDonald- It used pre advertisement before launching in India. But as it started it
faced the cultural issue where people complained of using Beef in burger as a
result they were forced to re-launch with Vegetarian products like Aloo Tikka.
2. Markey- The cosmetic company used door to door selling and other direct selling
methods in US because US women like to take buying decision in private but
company was unable to use same selling procedure in Mexico because women
their consider this attitude to be interruption in their privacy.
3. Mattel Inc- Boyfriend culture is very well in US and other western countries so
they created Ken concept in Barbie doll series, where Indian culture is too much
sensitive towards Boyfriend/ Girlfriend concept where Brother/ Sister concept is
so much popular so Mark was introduced in Barbie doll series in India.
Countries like Indonesia and Malaysia are Muslim dominating so some rules
considered are like:
I. Company builds separate prayer room for Muslim men and women.
II. Company Provides holiday on Friday.
III. Muslim foods are provided in the canteen
IV. Workers are provided leaves of religious activity
V. In the fasting month employees who are performing fast, their schedule
are adjusted according to them
4. General Motors- Nova model of car did not worked well in Spain because in
Spanish language the meaning of Nova is “The object does not go” so General
Motors find hard to position brand in Hispanic area
5. Olympia- Roto model also failed in Spain because the meaning of Roto is
“Broken”.
Conclusion:
In conclusion, it has been found that difference in cultures do exist among the different
countries. These differences impact business globally. Since there are many companies
that have to operate in different parts of the world, people are exposed to different
cultures that they have to absorb and get used to. As a result, many barriers occur.
Such barriers cause lack of effective business processing and transactions. Thus
understanding of different culture brings advantage in running of the business properly
in country which is not the home place.