The Cultural Challenges of Doing Business

The Cultural Challenges of Doing Business

The main purpose of the paper is to study and analyze the cultural challenges of doing business overseas. There are a number of important factors, which impact starting a business in different regions of the world. Special attention is always paid to a series of specific features within a concrete region, as it is the basis of successful entrepreneurship and stable business development in the future. Therefore, one of the basic aspects observed and researched by business analytics when setting up in business overseas is not only a level of economic development of a particular state or region, its population size, and the division of dominant business spheres, but also great importance is attached to the culture and its specifications. Cultural differences can play the key role in running a successful business overseas, and therefore unique details typical of a particular culture and its representatives are extremely important for developing a business strategy. It is important to understand that the American culture is really different from the one of a series of other nations. Special attention has to be paid to European countries, because the myths about the closeness and similarity of a number of cultures in Europe can play a decisive role in the process of doing business overseas.

The current issue is concentrated on specific differences and incompatibilities of the American and Czech cultures. As a result, Steve Kafka, who is an American citizen of Czech origin working for Chicago Style Pizza as a franchisor and wanting to expand this business project overseas by opening a branch in the Czech Republic, has to deal with them successfully. Although Steve has a family and friends in this country and is of Czech origin, he has been raised in an absolutely different social and cultural environment. Therefore, a different vision of many facts can make it extremely difficult for the franchiso to make his business in the other country. The incompatibilities of two cultures can be found in a wide range of issues. First of all, it is necessary to mention differences, which are present in dining and drinking. In particular, the Czech people are more used to homemade meals and prefer eating at home to going and dining outside in cafes and restaurants (Molinari, 2006). It will represent a serious challenge for a new department of Chicago Style Pizza, as in the United States having breakfast, lunch, dinner, and supper in a restaurant has become something ordinary. Moreover, differences are felt in the drinking traditions. Unlike citizens living in the United States, where drinking has become stigmatized in some way, the Czech people can easily drink in a good company. For the restaurant business, the second difference looks more like an advantage that can be used to expand the client base as the Czech people are encouraged to drink and celebrate in a big company. Therefore, during big holidays, Chicago Style Pizza can attract a number of clients that want to celebrate together. In addition, it is important to take into account the fact that while Americans are more concentrated on the size of portions, the Czech people are more about evaluating taste and look of a meal.

 

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In this area, it is extremely useful to take into account the Hofstede’s cultural dimensions theory, whereby the researcher represents a framework for the settlement of effective communication across cultures. Considering the theory, the analysis of different cultural values and their roles in communication among cultures is made through four dimensions: power distance, individualism-collectivism, masculinity-femininity, and uncertainty avoidance (Milner, Fodness, & Speece, 1993). To conduct analysis of the differences between the USA and Czech cultures, the latter can useful for Steve, as uncertainty avoidance can show different indexxes in regard with the two cultures. The Czechs seem to be more certain, better at planning, and controlling their emotions than Americans. In contrast to that, it can be underlined that based on the gender equality dimension, as well as the collectivism and individualism issues, these two cultures will show almost the same results.

Together with such issues as cultural differences in social traditions and tendencies, Steve can face a series of trade barriers in relation to running a new business, which will also play an important role in the development of Chicago Style Pizza in the Czech Republic. First of all, tariffs can have an impact on the development of a new branch. Although they will not be extremely high, average prices in the Czech Republic are lower than the ones in the United States. Therefore, an increase in prices because of paid quotas and tariffs can negatively affect the concurrent ability of a restaurant. This barrier can be followed by the non-tariff one, namely, currency devaluation that can be used by the Czech Republic (Radcliffe, 2011). 

 

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As it can be seen, prices in pizza restaurants in the United States and Czech Republic are slightly different. This issue can be assessed by Steve as a stimulus for the development and change in the monetary policy of the company. Chicago Style Pizza can change product suppliers in this region to local producers. Therefore, lower product prices set by local companies will give the ability to lower the price of pizza. However, Steve can choose to keep prices higher than the average ones within the local market and to put stress on specific taste and unique recipes of American pizza, as well as offer excellent quality. It will attract specific kinds of customers. Both of these decisions can be really effective and can make Steve a successful businessman, who has expanded his business to the Czech Republic.

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