Published on July 30, 2009
‘‘BUILDING BLOCKS OF CULTURE AND ITS IMPACT ON POLITICAL, ECONOMIC AND BUSINESS SYSTEM’’ Prepared By: ---JAY MODI--- § 1
MEANING OF CULTURE Culture refers to the possession of knowledge, values, ideas, beliefs, religion, attitude and experience by a group of people from their family or environment and can be applied over a period of time. E.g. People in India follow different Marriage rituals based on their culture. INTRODUCTION TO BUILDING BLOCKS OF CULTURE In customized world of today, each and every individual or institution wants to increase their scope, they wants to be recognized by others but what stop them are cultural boundaries. Though we say that now the whole world is one global village but still it lacks cross-cultural literacy i.e. people are ill- literate in understanding of how cultural differences across and within nations can affect the Political System, Economic System, Business System and Social System. POLITICAL BUSINESS CULTURE ECONOMIC Building Blocks of Culture Jay R Modi
CULTURAL IMPACT ON POLITICAL SYSTEM Political system is so strong that it defines economic and business system of every country. To get the better understanding of cultural impact on political system, we can take the example of India. In early 1990’s political ideology in India has shifted away from state planning toward a free market orientation i.e. Privatization of state-owned enterprise but yet there were roadblocks of culture differences between different states came in the path of success and it failed to attract many foreign companies. In one of case from Harvard Business School, ‘‘Exporting American Culture’’, an American entertainment company tries to enter the Turkey market for the expansion of business but the political system in Turkey made it difficult and the main reason was protecting the Islamic culture from the exposure of western culture(American culture). • Difference in culture within the country forces the political system to prevent the entries of foreign culture. • Even resistance by the people to adopt different culture affects the political system • In Gujarat, India political party is unstable since more than a decade because of the riots between Islamic and Hindu culture. Building Blocks of Culture Jay R Modi
CULTURAL IMPACT ON ECONOMIC SYSTEM Even in Economic System, culture has it root. The type of goods and services to be produced in a particular country is basically determined by the culture of that country. E.g. McDonalds serves wine in Germany and beef in America but this is not the case in India as it is against the Hindu culture to eat beef. Several companies failed to succeed in the foreign market because of their ill-literacy in learning cross-culture. In 1992, Disney opened $5 billion Park in Paris but it failed to meet the customer’s expectation because of following reasons: • Disney’s policy of serving no alcohol in the park whereas in Paris a glass of wine is must with the lunch. • Disney thought Friday will be the busiest day in terms of customers but people in Paris prefer to visit park on Monday. • Europeans don’t prefer to stay at the park as long as American’s prefers to stay. From the Disney’s example it is clear that culture plays an important role in shaping the Economic System of any country. Building Blocks of Culture Jay R Modi
CULTURAL IMPACT ON BUSINESS SYSTEM According to several economists, due to the rise in Global Corporations, whose products can be found around the world, has created conditions for merging of culture and a reduction in variation of culture which resulted in resulted in less significant impact of culture on Business System. But still there are countries where we can find the cultural impact on Business System. E.g. Microsoft faced a serious obstacle to achieve success in China due of rampant level of software of piracy in China where 90-95% of software used is pirated which is treated as illegal in western countries but still Chinese Government was supporting the piracy and it also allowed to export the pirated CD-ROMs to Hong Kong for $52 which were originally worth $20,000. Many companies failed to succeed in foreign markets because of cultural problems like: • Differences in the taste and preference of Customers • Difference in the language, religion and training requirement of people in different countries. • Even difference in the standard of living plays an important role. Building Blocks of Culture Jay R Modi
SUGGESTIONS TO OVERCOME THE PROBLEM: • To learn the political environment of country where the company is doing business. • To train the employee’s on how to learn the local culture before sending them to other country. • To analyze the market potential in terms of customers taste and preferences. • To establish good relation with various stakeholders’ like suppliers, Government and customers where the company is doing the business. • To study the SWOT analysis of the same industry before a company enters any new country. CONCLUSION: If we study the examples given above, it is clear that culture is building its block in all the system. Cultural blocks have its influence not only in domestic market but even in international market. But there are several steps which should be taken in order to overcome this problem. Building Blocks of Culture Jay R Modi
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