The Cultural Challenges Of Doing Business Overseas

Introduction

Steve Kafka, an American of Czech origin and a franchisor for Chicago Style Pizza, has decided to expand his business into the Czech Republic. Steve knows his decision is risky because he had to overcome a great deal of difficulties to become a franchisor. Steve anticipates he will face some of these difficulties again at the new location in Prague, Czech Republic. Although he was born in the U.S., he has family and friends in the Czech Republic, speaks Czech fluently, and has visited the country of his origin several times. An attempt is being made to find out the various cultural differences between American and Czech cultures and their affect on Steve Kafka's decision to expand his business.

Differences between American and Czech cultures

In order for Steve to do business in Czech he has to take the various cultural differences into account to mitigate any risk that might arise out of the cultural differences. In the United States a great deal of fast food restaurants offer people foods like fried chicken, hamburgers, pizza, french fries. These foods are popular in most segments of the population reflecting a busy lifestyle as much as preference. In Czech dining out is a rarity and Czechs only eat pizza as a snack on the street sold by street vendors. Friends often socialize in pubs, wine bars and coffeehouses. People eat with the fork in the left hand and the knife in the right however, in America people generally eat with a fork in the hand with which they write.

In Czech eye contact is very important while conversing. They might stare at other people in public without any bad intention. Gesturing with hands is often used to emphasize the meaning in a conversation. Speaking loudly is considered impolite but is common in pubs. Americans while conversing generally stand two feet apart. Unlike Czech, moments of eye contact are necessary for Americans to ensure their sincerity. The handshake is usually firm in both the countries. The Czech workday begins between 7 and 8 a.m. and ends between 3 and 4 p.m. The factory workers begin and end their workday an hour or two earlier. Stores in town centers stay open in the evening. In America many grocery and retail stores are open 24 hours a day seven days a week.(CultureGrams: The Czech Republic retrieved from Univeristy of Phoenix Online Library) The information on differences in culture will help Steve maintain business relationships and avoid offending anyone.

Evaluating Czech Business Environment by using Hofstede's four primary dimensions

Culture affects how people thing and act hence, it becomes necessary to understand the different cultures with whom a business relation is to be formed and maintained. In order to explain the differences in the behavior of people from various cultures, the Dutch researcher Geert Hofstede found four dimensions of culture.

A) Power Distance can be defined as an individuals desire to be in the good books of their employer. Employees are ready and willing to follow orders. Low power distance can be found in organizations with a flatter structure, small portion of supervisory personnel and qualified workers even in the lower level. The Czech society emphasizes conformity and cooperation, they are very cultured and hold their professionals and tradesmen in high esteem indicating that Czech is a Low power distance country. This information would allow Steve Kafka to employ qualified workers to run his business.

B) Uncertainty Avoidance can be defined as the extent to which individuals want to stay away from the unknown by generating beliefs and institutions in order to avoid a feeling of uncertainty and insecurity. High uncertainty cultures will have lower labor turnover. In Czech more than three fifths of economically active Czech are satisfied with their work and economically active Czech think having a job is most important (Work attitudes and satisfaction with job retrieved from The Public Opinion Research Center: http://www.cvvm.cas.cz) . Czech has a high uncertainty avoidance culture where employees are loyal to their job. Steve's employees will be loyal to their job and will perform their best because they feel secure thus making Steve's business successful.

C) Individualism and Collectivism. Individualism can be defined as the tendency of people to look after themselves and their family members only in contrast to Collectivism which is the tendency to belong to groups to look after each other in exchange for loyalty (Hodgetts-Luthans-Doh 2005: The role of Culture: The Meanings and Dimensions of Culture: The McGraw-Hill Companies). The Czech society is individualistic.

D) Masculinity and Femininity. A culture with dominant values of money, success and things can be called a culture with high masculinity index and a culture where the dominant values are caring for others and quality of life can be called a culture with high femininity index. Cultures with a low masculinity index indicate that they place more importance on caring for others and quality of life over money. Czech culture is feminine because they place more importance on caring for family. The American culture on the other hand is moderately masculine as they give more emphasis on professional