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Government Involvement

The culture of a country may also determine the level of government involvement that is present in a market. Laws developed based on a society and its religion will ultimately impact the business law structure of the country as well. Issues that international managers may encounter include these:

1. code law (written law) versus common law (application of precedent) systems
2. level of development of the business law system: consider the British system which has been around for centuries versus the Chinese system which is being created daily
3. cultures that prefer to litigate over a dispute versus those that prefer to arbitrate or mediate
4. systems that require that laws be written before business is conducted (Europe) versus those that wait until issues arise to legislate (US)
5. inclusive versus exclusive statements: many countries in the Middle East will not allow product to pass through Israel. The US does not allow exclusionary statements such as this to be made in business documents.
All of the above issues may cause delays in the simple ability to conduct or understand how to conduct business, receive payment in a timely manner, or move currencies to make payment for products.

Summary

Culture is an enormous topic because it differs over time by location and by age group. Trying to learn the details of every culture would be close to impossible; however, understanding that there are similarities and differences is the first hurdle. An important step before going abroad for business is that an international manager should prepare by researching the cultural norms, business etiquette, and the taboos. Developing strong personal relationships is critical.

Culture does affect business and the ability for a business to be financially successful. Culture may also determine the ways business is conducted and the speed at which transactions take place.
Research, prepare, and be ready for anything to happen.

Resources

Print resources
Cultureʹs Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations, by Geert Hofstede, 2nd Edition
The Global Entrepreneur, by James Foley, 2nd Edition

Web resources
Geert Hofstede - www.geert - hofstede.com
MSU Globaledge Modules – www.globaledge.msu.edu - Culture
Transparency International - www.transparency.org

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