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Culture and International Business Strategic Management

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Strategic management is a function of business determining the internal and external forces and strengths to chalk out suitable plans and policies. In the case of international business when the space and forces of external threats, innovation, and out-of-the-box business solutions are widespread, awareness of the culture of respective nations and markets helps understand the expectations and perceptions of different entities involved- employees, customers, and stakeholders. Cultural differences. As propounded by Geert Hofstede (Thomas 2003:50), countries vary form each other on the basis of five aspects namely power distance, individualism, uncertainty avoidance, masculinity, and long term orientation.

Interactions between individuals, societies, businesses, and nations are attributed to these dimensions manifested in variations and these give rise to cultural differences. Other eminent researchers like Schwartz, Trompenaars and Kluckhohn and Strodbeck have analyzed differences in cross-cultural context on the basis of relationships, time and spatial perspective and even the very own nature of the person itself which gets reflected in his/her activities (Thomas 2003:59). Cultural differences may lead to the complete failure of even the most powerful brands and products known worldwide.

Wal-Mart, while registering success in Mexico and Canada had to encounter serious troubles owing to match diverse customer and supplier preferences in Japan and South Korea. Thus, a mismatch between organizational home culture and host country culture resulted in complete back out of operations of a company that is known for its global innovation. An organization plans its strategies and policies keeping in mind the perceptions and expectations of its customers and employees. Since these expectations and perceptions change across cultures, the implications of strategic management also change. Thus, addressing cross-cultural differences in multinational businesses can help organizations better conduct need assessment and provide for better business practices. Management competencies and cross-cultural communication and negotiation.

Not only behavioral traits but also culture demonstrates different communication styles altogether. Managers in international business have to communicate and negotiate with global managers where knowledge of etiquette and customs of specific nations matter a lot. Nations are categorized into high-context and low context nations (Thomas 2003: 116) whereby some belief in the explicit form of communication while others are implicit.

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