Business culture is a term used to define the way business is conducted in a region. Business culture differs from one region to another. Some norms that are acceptable in one region and considered to be rude or abnormal in another region. The familiarization of the business culture is extremely important for an organization which intends to carry out its operations in a region. Without the required familiarization with the business culture, there is little chance that the organization will succeed in its endeavors.
The main factors that constitute the business culture include: the power distance, uncertainty avoidance, individualism and collectivism, and masculinity and femininity. Power distance is the intangible distance between a position of power and a subordinate. In western cultures, power distance is considered to be low as subordinates are able to freely communicate with their managers. On the other hand, in more conservative cultures such as Japan and Middle Eastern countries, power distance is found to be high which keeps the subordinates from communicating freely with those in power Similarly, there is difference in the level of uncertainty avoidance in different business cultures. Some cultures encourage taking risks as they recognize that higher returns require taking bigger risks. Contrarily, some business cultures take lower risks therefore there is high uncertainty avoidance. Such cultures are more inclined towards long term orientation of an investment despite its low returns. Individualism and collectivism also shape the business culture in a region. Some cultures encourage personal growth of an individual therefore provision of opportunities such as career growth, on-site training, and paid training are considered to primary motivation factors for individuals. Contrarily, in cultures where collectivism prevails; the objectives and targets of the team are prioritized over personal objectives and goals. Ultimately, the level of masculinity or femininity represents a culture’s inclination towards competition or development of relationships. If a business culture encourages high level of competition, achievement of personal objectives, and does not give much consideration towards retention of relationships; it is said to be highly masculine.
In conclusion, if an organization determines to make its endeavors successful in a region other than its home country, it is absolutely necessary for the organization to understand the business culture prevailing in that region. Without familiarization with the business culture, the organization and its representatives may not be able to build relationships or carry out transactions in that region. Therefore, the first step towards international growth of an organization is acquiring an in-depth understanding of the business culture of the targeted region.
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