Cultural Environment of Global Business

Cultural environment has played a very great role in dictating and influencing international business is being conducted across various demographics. International business is well defined as exchange of goods and services across different countries in the world (Geringer, Ball, Minor, & McNett, 2016). This includes countries in different regions or continents exchanging services and goods. International business has gained a lot of popularity thanks to the current economic developments. Technology development has also played a great role in enhancing international business where people are enabled to travel, advertise their businesses and make hefty innovations which easily reach many people in every corner of the world. He/she will also teach Americans and Africans about his/her culture. As a result, he/she will get some ideas on what people risk or dislike in various cultural environments.

With this knowledge, the entrepreneur will be in a better position to make dynamic and robust business decisions that will be positively accepted by various people across different cultural environments. Most multinational companies have succeed in the international business due to the fact that they have gotten clear ideas about various cultures and have utilized the knowledge during the production and supply of goods and services in those localities. They have understood what people belief is good, what they dislike and the way they consumer various goods and services. The behaviors and altitudes of consumers towards a certain good or service is influenced by their culture. When an organization or business open business doors in a new environment or market, they should make changes on their business model to reflect the customs, preferences and norms of the local consumers.

For instance, modification should be done on the way goods and services are marketed, priced or offered. The success of a business is determined by the drive the local market has on it and if the local community is denied changes to drive it, there are great risk for failure of the business. International nosiness requires a mindset of local involvement of consumers. Factors that have an influence of the motivation of employees, job satisfaction and commitment are different across cultures. Moreover, resolution of conflicts, feedback giving and receiving also varies across cultures and has significant impacts during performance appraisal of employees. Failure to modify these human resource policies to suit the local employees might result to poor performance, resignation, lateness, absenteeism and constant conflict among the employees. The companies might loss very talented and important talents which can negatively affect their performance.

Risk of occurrence of conflicts among the stakeholders. Bearing that in mind, companies have an obligation of understanding the culture of their consumers before they start operating in those areas. There are countless effects that culture has on international business. When a group of people has a belief that a certain good such as pork should not be eaten by a human being, an international company which processes port product might find it hard to operate in that locality. The local community might fail to purchase the product and this might force the company to incur a lot of wastages and losses. Eventually, such companies might close their business doors and shift to other places. However, as a result of global business, these assets have been privatized. Only a small percentage of state assets are managed by the state (Wild, & Wild, 2019).

It was the culture of the Kingdom of Saudi Arabia to support only the domestic firms. However, due to the growth of international business, the government has made it easier for both foreign and joint-owned businesses to operate in the country. Both the government and the local people have changed the negative perspectives they had on foreign companies. S. McNett, J. M. International business. New York, NY: McGraw-Hill Education.