The following research is titled as “Impact of cultural differences in international business and management of price negotiations”. The research is based on some of existing companies who are facing these issues during operations in various international locations.
BACKGROUND OF THE RESEARCH
The present research illustrates the effect of culture difference on the operations of an international business. In the current scenario there are lots of changes observed with the emergence of globalisation and internationalisation. To expand in the global market has become one of the major objectives of the businesses (Baker and Hart, 2008). But at the same time, proper handling of the business operations outside the boundaries has become tough task for the management of the firm. There are same sort of issues for the small and medium business who processed their business in the international market and the multinational corporations (Beamish and Ashford, 2007).
With the increased competition in the international market, the foreign firm has to perform harder to remain in position than the new ones. Among the major issues faced, culture is regarded as one of the most critical issue that has been effecting the business operations to the most. There are many ways through which the culture can put its impact on the business (Brink and Berndt, 2008). Generally, it has been analysed that language problems, pricing difference and culture clash on some factors are initial problems faced by the businesses. Therefore, the companies should determine some effective measures that are comfortable with any culture without disrespecting it. It is important for the firm to inform the members about the customs and behavioural pattern of the place where the company is planning to get set-up (Jha, 2008). The business has to adopt all the processes that are followed by the other existing firm. It will help the business to create a proper balance of culture and healthy revenue can be generated for the businesses. The final measure can be learning the language of the host country along with offering respect to it (Gill, 2006). This research is an indication towards all these issues and provides proper recommendations as per need.
RATIONALE FOR THE STUDY
As far as the topic is concerned, it is one of the major issues that have limited the operations of many emerging business who proceed to the international market. The major reason behind this research is to determine all those issues that are related to culture at the age of globalisation and rectify them with effective improvements. Following the previous researches on the following node, there is a huge gap found while understanding the concept of cultural differences. This research is processed to fulfil this gap and create a new perception in the mind of the new emerging market leaders regarding cultural factors. With a view to the recent competition in the global market, every firm has to work hard and cooperate with the crowd where it is placed (Cuervo, 2007). This research will define some new scope for further research and will bring up some new learning for the current players of international market.
RESEARCH AIMS AND OBJECTIVES
The aim of the following research is to evaluate the Effects of cultural differences in international business and the issues related to the price negotiations.
For achieving the above aim of the research, the objectives designed are as under:-
- To determine the role of culture in business operations.
- To evaluate the influence of cultural differences on international business.
- To analyse the cultural issues considered by the company while entering the international market.
- To assess the improvements that can be brought in the international business to resolve these cultural issues.
- To evaluate the issues faced by the companies due to price negotiations.
- To examine the techniques to control the price negotiations among companies.
Based on the following objectives, the research questions focused in the research are as follows:-
- What is the role of culture in business operations?
- How cultural differences are influencing the international business?
- What are the cultural issues that are considered by the company while entering the international market?
- What are the improvements that can be brought in the international business to resolve these cultural issues?
- What are the issues faced by the companies due to price negotiations?
- What are the techniques to control the price negotiations among companies?
The concept of market has changed a lot and as per the changes the business has to transform their process of working. The changes in the market are generally observed in the technological segment but away from that the firm who are entering the international market is facing some cultural issues as well (Badi and Badi, 2005). To remain in the competition, the company are trying their level best to produce quality goods as per demand and offer them at low prices to the consumers. Due to this, the local companies are struggling to reach the same level (Buttle, 2009). As per the recent management strategy, the companies are expanding their business in those market whose culture and preferences match the products and the company more. With a slight change in the culture factors, the company may face many issues that are critical and delegate in nature (Paul, 2011). If the management of the company makes a right choice while entering the market, the company can apply the same strategy for positioning and marketing the product (Deari, 2015). Once the company get sufficient profit from entering one foreign country, then the company can also plan to move to some other country of the same nature. As per the recent market demand, language is one of the major issue that restricts the profit making process of the new emerging companies (Rugman, 2009). Therefore, the company are either training the staff with the local languages where they are performing or as substitute try to recruit new talents from the same places so that actual demand of the customers can be understood and served (Mahamid, 2012). Along with this, following the same cultural values is equally important for the firm as the products in today's scenario are sold more by adding cultural touch to it. Among with the cultural issues, the company has to manage the price of the goods and services at the same time (McAuley, 2011). Once the goods are out of the boundaries, there are ample of cost added to the products which finally increases the product MRP. Due to this, the company has to build new strategy to sell the products in the foreign market with profits (Hultman and Hills, 2011).
As per the views described in research work of Czinkota in 2007, there is a crucial impact observed by the management of the company on the flow of the business (Dlabay and Scott, 2010). As per his research, there are some key elements of culture that need to be considered while planning for expansion of the business in foreign countries (Aswathappa, 2010). Among those, some of the important elements are numbered below:-
- Values and attitudes
- Manners and customs
- Material elements
- Social institutions
As per the need of the market chosen, the firm has to transform its operations and strategies related to business (Friedman, 2007).
RESEARCH DESIGN AND METHODOLOGY
Based on the nature of the topic, qualitative approach has been chosen by the researcher. With the help of this technique, the data can be analysed from the previous research and collected from the interviews of the members of some international firm.
As per as data collection is concerned, both primary and secondary sources are used for determining the qualitative information.
In the present research, the senior level managers will be chosen randomly and will be interviewed as per need. As the research topic is involvement in the business operations completely, therefore, random sampling will bring the mixed responses for the research. As per the need, 10 managers of various companies will be chosen to be interviewed.
As per the nature of the data collected, thematic approach has been chosen. With the help of the objectives of the research, various themes will be designed and as per the responses of the participants, research will be summarised.
There are major four limitation associated the study:-
- The research is time bound which restricts its boundaries.
- There are managers of various companies involved which will make the research bias to some extent.
- The research includes the international behaviour which is itself a broad issue to be covered in a research.
- The availability of the data can be another limitation of the research.
As the research involves the cultural values of many countries, therefore the information are disclosed to the limit required for the research. The personal information of the managers of various companies are also kept hidden under the ethical norms. The research includes the practical experiences of the companies but no company has been included in the discussion and targeted unethically.
The data are collected from various websites that are associated with the issue. Along with this, to determine the gap of research, previous thesis are also considered and analysed properly. Some of the online portals and social media sites are also included as the issue is related to cultural values.
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