Role of Culture in International Business

Document Type:Dissertation

Subject Area:Business

Document 1

The number of female people interviewed was 70 and the rest were male, translating to 46. 7% and 53. 3% respectively as indicated in the following table. Gender Frequency Percentage (%) Male 70 46. 7 Female 80 53. Extent level Frequency Rate (%) Cumulative rate (%) No extent 30 20. 00 Average extent 100 66. 00 Great extent 20 13. 00 Total 150 100. 00 According to the above table, most of the respondents, represented by 66. 00 Zero extent 30 20. 00 According to the results above, 33. 30% of the research respondents indicated that cultural belief in host country have an influence on the choice of foreign market to a substantial extent with 40 percent indicating that culture has very little entry on the choice of foreign market. 67% of the respondents were indifferent concerning the same issue with 20 percent showing that national culture of the host country has no influence on the entry country.

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According to this outcome, a national culture of the foreign country has an influence on the choice of market entry. 40% acknowledged that cultural beliefs by foreign countries have very little influence on the mode of entry but it is only very few of them felt that cultural differences have no influence on entry mode. 3 Effect of culture on the mode of operation on the international business The researcher sought to determine if the current operation mode in the two multinational companies has been influenced by the national culture from the host countries. A scale ranging from 1 to 5 was used to determine the extent of the effect of national culture to the current mode of operation in both GM and Coca-Cola companies.

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The responses obtained from the interview were analysed and presented as shown in the following table. Extent level No. According to Hofstede, these dimensions are “power distance, individualism versus collectivism, uncertainty avoidance, and masculinity versus femininity. ” The dimensions scored within a three-point scale where 1 shows no significance and 3 shows highly significant. The following table shows a paired comparison of responses from the interview. Pair Dimension Mean N Standard Deviation Standard Error Mean First Pair The difference in a culture based on personal achievement 2. 244 Difference in culture based on group achievement 1. 005 significance level and -0. 688 correlation coefficient. This shows a clear difference between business organizations from regions that have high uncertainty avoidance compared to the ones that have low levels of uncertainty avoidance.

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7 The relationship between national culture and business performance The research aimed at determining whether the national culture of a foreign country has effect on the different performance aspects of a business organization. The study was based on five aspects of performance that were assumed to be important in indicating the overall performance of the multinational companies. 39 and highest value of standard deviation. Generally, this is to show that cultural beliefs have a significant influence on the overall performance of a company. This inference is in line with research by Pankaj and Sebastian who argued that cultural differences play a significant role towards the success of any business organization and failure to acknowledge them may result to a lot of blunders that may end up dragging down the firm’s performance in the long run (Pankaj and Sebastian, 2011).

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