Cultural Awareness in a Global Market

       One of the most interesting courses I took in the preceding quarter was an economics based class concentrating on the effects, both negative and positive, of globalization. The outlooks on globalization were formed on the premise that, as a system, globalization is powerful and inevitable. As technology, communication and international trade continue to expand so to will global markets and it is becoming less and less of a possibility for nations to remain uninvolved in these global markets. It is with this acknowledgment that a balance must be struck between how systems of international trade and business interact with other nations, and how the system can strive to benefit the most nations and people possible, not just those that are most powerful.

       It is with the background in the course that I found our class discussion on global business strategies so fascinating. In the previous course we concentrated much more heavily on the negative impacts of globalization for less developed nations, and I realized I had studied a lot less the positive impacts it can have on businesses, particularly when they are implemented in a knowledgeable, culturally conscious way. We examined many of the reasons a business would be driven to globalize, including to reduce costs, improve their supply chain, provide higher quality goods and services, understand markets, improve operations, and attract global talent. While these are all excellent reasons for an industry to expand towards a more international outlook, I think there are specific ways that these developments can be done in the most culturally sensitive, beneficial way possible, which were also touched on in our class discussion.

        In a recent New York Times article, there is an interview conducted with the author of “All Business is Local: Why Place Matters More Than Ever in a Global, Virtual World.” He concentrates, specifically, on how global markets have directed business ventures towards trade and expansion within China. In one segment of his interview, he argues that are huge benefits to expanding industries being knowledgeable about how to localize their products depending on where they are being implemented. “What we argue is that all great global brands are also great local brands. McDonald’s, for example, adapts its menus and store designs, appoints local business people as franchisees, relies on local raw ingredients and talent, gives to local community organizations. In a large market like China, the upside profit potential of getting the formula right locally is very attractive relative to the extra costs of adaptation.”

       For a company to be successful and powerful in a global market, they need to be strategic and aware of where exactly they are trying to incorporate their product. Cultural awareness and tact are becoming increasingly more important, whether it be through communication strategies or foreign consumer advertising, it is always beneficial to be knowledgeable of the cultures you wish to open trade with. Do you agree that cultural influences are not only ethically important but also important from a business standpoint? If not, what should take precedence when concentrating on implementing a business into a global market?

3 thoughts on “Cultural Awareness in a Global Market

  1. Cultural influences are important from a business standpoint. Going into another country requires a rich and complete understanding of that culture’s unique quirks. If a company wants to be successful, they will have to navigate around culture as competently as they learn to navigate around that country’s tax code.

    We recently did some consulting work for a company that manufactures diesel engines and engine components in the United States. They asked us to examine certain emerging markets around the world to get a feel for what it would take to successfully enter those countries. Research proved that culture is one of the major pillars a firm has to grasp to be successful. In China, for example, there is a cultural norm called guanxi. Guanxi speaks to the importance of interpersonal relationships and networks when conducting business. Our client thought that it was a cutesy, old-school mindset and that they didn’t really have to make friends with business partners. As it turns out, guanxi functions to fill institutional voids in China, especially weak credit analysis structures. It is still important because businesses use it as a way of assessing whether they want to work with somebody just as we use credit reports to determine the same thing in the United States. The client had to modify their plans to account for this cultural issue and change the timeframe for their entry into China to allow time to build interpersonal relationships.

  2. As we all know the United States is not necessarily a top contender anymore in terms of business. Sure, our country still brings in a lot of immigrants from various countries, but a lot of other countries are rising fast to the occasion. I definitely agree that cultural influences play a huge part of in the global market because it allows us to see whether or not we should outsource or to whom we should sell our products to. We certainly have always used globalization with our country’s business and will continue to do so especially with many technological advances come in fast.

  3. In regards to your last paragraph written, I fully agree. As this time cultural awareness for a company is its top priority. Interesting article too.


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