INTERNATIONAL BUSINESS

International Business Environment in China

International Business Environment in China

Introduction

The business environment has changed drastically in past few decades. Prior to globalization, companies used to analyze local environment for preparing business feasibility. However, today's business environment is very different. Most of the top businesses establish international business and; therefore, feasibility analysis includes evaluation of local as well as international business environment. International business can be defined as a business operating in more than one country. International business includes small firms engaged in importing and exporting, as well as, large firm known as Multinationals (MNCs) with major operations in more than one country.

One of the major challenge company's faces, when taking on international venture, is learning the culture of another country. Culture varies from country to country, and sometimes culture difference is the sole reason of international business. Culture is defined as commonly held values and beliefs by the society of nation. There are many factors, such as language, history, religion, leadership which defines and form the culture of any nation.

Culture and Business

Culture has been defined differently by different scholars, commentators. One the prominent definition is provided by Hofstede. According to him, culture is “the collective programming of the mind which distinguishes the members of one human group from another” (Bond & Hofstede 1989, pp.195). Another definition is that, Culture is said to be “a pattern of responses discovered, developed, or invented during the group's history of handling problems, which arise from interactions among its members, and between them and their environment”. According to Spencer-Oatey (2000), culture is “a fuzzy set of attitudes, beliefs, behavioural norms, and basic assumptions and values that are shared by a group of people, and that influence each member's behaviour and his/her interpretations of the "meaning" of other people's behaviour.” (pp.12)

Culture has three levels - artefact and attitudes, norms and values and basic assumptions which is the deepest level. The first level determines how people are dressed, what are their daily habits that can be easily observed. The other two levels determine the way people behave. Members of one cultural group respond in a similar fashion to same circumstances. This is because they share a common view about the world. Culture can be also related to the behaviour of people from one organisation or company. However for the business most important is national culture. These are the norms and values shared by members of one country which are different from those shared by members of other countries.

National culture has a deep impact on the whole society - it determines the laws, the work of national institutions and most importantly, the way in which business is done. Doing business in China is completely different from doing business in U.S. Although, representatives of both countries may speak the same language the way the behave will be different and this may lead to confusion and in the worst case to a collapse of the business deal. Hofstede argues that “Cultural differences are a nuisance at best and often a ...