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across cultures communicating business globally
Global business benefits may include allowing firms to increase their profitability in ways not available to purely domestic enterprises. Firms operating internationally are able realize location economies. Location economies are value creation activity in the optimal location, using lower-cost locations reduces overall costs and product differentiation for super pricing and creating a Global web for value creation.
I use to ask myself why the Le Mans car continues to be sold even though it was considered in the U.S. as a low rating vehicle. That question was answered as I read more into global and international business. Because of location economies and cost the car was a great production for GM. In Germany the car was made cheap but the gain for GM was great. If we look at Hyundai cars we use to say it was a piece of junk but the company use of location economies created a continuous gain. In Korea the Hyundai factory made outstanding cars but for the U.S. they were made with just enough quality to create a gain and start a name. Longtime goal had to be the focus of Hyundai for the U.S. market in which they have succeeded.
Global business also benefits the use of cheap labor. We all wonder why a business move to overseas and the answer is “cheap labor” which is part of product and skills localization.
Because of low employment rates and lack of trades a country like Mexico have skilled workers that will work twice as hard and half the pay of Americans. A globalize business will relocate or expand to reap the benefits to maximize productivity. Large businesses normally get a big tax break from the country it setup in. Can we call this type of business strategy a greedy business? No, it’s just business. Now that I have a clear understand of the Global and international business I would like to break it down in my terms. Global business refers to the exploit of other country resources to include labor rate, tax cuts and etc….. Where as international business is to expand your product to other countries that can use your product over their own.
Where there are advantages there are also disadvantages. The following are some advantage and disadvantage with global business strategies:
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• Advantages
– Facilitate entry into foreign markets.
– Enable partners to share fixed costs and risks associated with new products and processes.
– Facilitate transfer of complementary skills between companies.
– Help establish technological standards.
• Disadvantages
– Risk of giving away technological know-how.
– Risk of opening local market access to foreign alliance partner.
– Risk of not getting anything in return
When dealing in the realms of global and international business communicating across cultures will place a major role. Cross culture communication simply deal with getting to know the culture of the country you will be dealing with. The first step in a successful cross culture communication is to familiarize yourself with that culture work norms, address terms and attitudes toward time. Most countries have different culture background therefore it is best to study ones culture.
Though it is impossible to fully understand all the intricacies of other societies, it is worth learning at least the basics -- how to greet and address others, how to dress, how to handle business cards, personal space, eye contact, and punctuality to name a few. First impressions are always important so showing cultural respect when greeting others is essential. In many western countries a handshake is the preferred greeting, but even differences exist there.
In Germany a firm, brief handshake with good eye contact is expected at introductions and departures while in Italy handshakes can be warm and spirited in business meetings. And in both countries it is customary to shake hands with everyone in the group upon entering and leaving, avoiding general group salutations.
Some cultures, such as the French, may kiss one another when greeting at work, but it is best to refrain from the behavior unless they initialize it, extending your hand instead.
The Japanese often shake hands with westerners as a sign of respect and appreciate when westerners bow out of respect to their culture. Chinese may bow or shake hands.
In respect to the different cultures that you may face it is operative that we master this communication barrier and over come it.
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References:
Globalization;
http://www.su.edu/faculty/dpavsek/ba455chapter12.PDF
Charles hill; International Business, fifth edition
Chuck Williams; Effective management, A Multimedia Approach
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