Global Business

Global Business

Today, businesses regardless of their size face competition at a global level. With rapid globalization and advancement of technology, many businesses have expanded their operations to foreign countries. One of the critical aspects of setting up a business unit in a foreign country is to understand and appreciate the cultural differences that exist. For example, business practices and ideas that may be considered lucrative in the United States, might not necessarily be as successful in their implementation in an another country.

Conversely, this essay considers the hypothetical situation of expanding a current American operating business to India in Asia. Coupled with, the aim to answer the different cross-cultural challenges that may be faced by the parent organization OS Group, which is involved in the foods and beverages manufacturing sector. This is entailed in the following discussion.

Three Major Cross-Cultural Differences to Consider

The three major cross-cultural differences to consider for the parent organization operating in America before expanding its business to India are highlighted as follows:

Societal Norms:

According to Hoskisson et al. (2000) many developing countries in Asia and other regions in the world, strongly rely upon their societal norms to progress and bring out a structural social and economic change in their country. Other then China, India is the second large fastest developing economy in Asia. This has attracted many foreign businesses to enter into this fast paced and growing economy to reap various economic benefits.

Similarly, there exist a huge difference in the societal norms of America and that of India. Where, the social norms in America are more oriented towards individualism, while the social norms of India are more family oriented. This also highlights the cultural difference between the two countries where in America the general mind set of people is more self-oriented, in terms the individual is more self-oriented. Whereas, in India be any occasion or even a small decision to be taken by a young individual involves inclusion of the elder(s) of their family or household, peers and neighbors. Therefore, from a business perspective it OS Group must understand the intricacy of strong family and peer bonds inherent amongst the Indians.

Consumer Mindset

For any foreign organization expanding to India or any other country, cultural aspect is of supreme importance as it determines the rate of their venture's success in the new country. According to Ahmed (2000) the business practices, especially the marketing techniques vary according to the social, political and cultural norms of the given country. For example, beers and alcohol cannot be marketed in the same manner or volume in India, like that in the United States, as open alcoholism is socially looked down upon. Moreover, the social class differences and consumer segmentation in India are more evident in their local marketing advertisements, which is largely absent in the American advertisement norms. Furthermore, portrayal of cultural values and norms in the advertising is perceived as favorable by the Indian consumers. This is again another important aspect that OS Group must consider to employ in its advertisement ...