4.1: The Impact of Cultural Considerations on Global Business Practice

Question 1

Identify the 6 cultural considerations impacting global business practice

Answer 1

• levels of education
• customs
• holidays and celebrations
• religious beliefs
• business etiquette
• communication protocols

Question 2

Explain the impact of levels of education on global business practice

Answer 2

( how ) - The state of a country’s level of education will impact its citizens’ employability as a result of their available skills and therefore their resulting disposable income. This further determines whether the local staff require further training within the business.
( why ) - In the case of a shortage of people with the required education/skills, a business would need to attract overseas skilled employees. Whereas if education levels are high, citizens would earn higher disposable incomes and would be more likely purchase a business’s products.

Question 3

Explain the impact of customs on global business practices

Answer 3

( how ) - Customs are defined as traditional and widely accepted ways of behaving or doing something that is specific to a particular society. These behaviours and gestures should guide a business’s interactions with potential clients and other foreign firms.
( why ) - If a business does not follow the customs, there is an increased risk of losing out on business relationships with other firms and/or overall negative public image.

Question 4

Explain the impact of holidays and celebrations on global business practice

Answer 4

( how ) - local holidays and celebrations can have an impact on a business’s marketing campaigns. Social media can be used to promote holiday sales or using a celebration as a background to sell products. Businesses need to factor local holidays and celebrations into project schedules and timeframes to ensure success in overseas countries in which they choose to operate.
( why ) - there may be opportunities for businesses that operate overseas to create new products and services based on local holidays and celebrations, to gain a larger market share. The way businesses schedule staff is influenced as business operations may close on specific holidays and celebrations.

Question 5

Explain the impact of religious beliefs on global business practice

Answer 5

( how ) - it is essential that a business not only recognises religious differences, especially between managements, employees and consumers but also the means to promote and include different religions. Although very few religions influence business activities directly, the impact of religion on human value systems and decision-making is significant.
( why ) - religion exerts a considerable influence on people’s actions and outlook on life, as well as on the products they buy. Care must be taken in ensuring a firm remains a neutral ground for all religions to coexist where possible. A firm should not risk alienating employees by endorsing or only adjusting business activities for dominant religions in the workplace.

Question 6

Explain the impact of business etiquette on global business practice

Answer 6

( how ) - A set of manners that is accepted or required in a profession or industry is called business etiquette. Some main aspects include communication styles, dress & appearance, technology and social situations. A firm should consider how it acts within different social and cultural expectations with regards to these aspects.
( why ) - Some forms of business etiquette may come across as offensive to businesses of other religions / cultures, so a business must appropriately harmonize their etiquette with the other’s. If a business successfully does this, they will build a stronger relationship with the other, leading to greater opportunities to continue to collaborate in the future.

Question 7

Explain the impact of communication protocols on global business practice

Answer 7

( how ) - it is important for a business to know and demonstrate the correct communication protocols to display professionalism and respect for business partners. Where possible, businesses should research the professional protocols required when operating in overseas markets and ensure that staff are attentive to body language.
( why ) - Failure to understand communication protocols can jeopardise business deals and partnerships. Coherent and understanding of communication protocols reduce the risk of offensive and hostile behaviour from other firms/consumers. For instance, a firm handshake or making direct eye contact could be unusual or even offensive to foreign colleagues.