Cultural differences in internationalization of companies

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In this increasingly interconnected world, it is hard to take the time to analyze it and analyze us meticulously, because we are part of an increasingly competitive and dynamic global environment that changes international relations.

 

What is this internationalization?

Companies have, in this context, a constant need for change and innovation, which means: a desire for growth that translates into expansion in new (foreign) markets, or what is the same, internationalization. There is so much competition that self-analysis and the challenges of finding strategic plans become a priority for any company that wants to consolidate itself in a new market. It is Essentials, at the same time, that companies acquire a cosmopolitan and international vision to be able to rethink their strategies within each country where they want to internationalize.

Internationalization, then, appears as a response to the survival and growth of companies, but it is logical to think that this is an arduous process: leaving the domestic market can cause a deep shock (both for the company and for the natives) in many ways. There are a series of challenges and/or inconveniences that will take time, calm, respect and knowledge. These challenges can be found in different practical aspects (new legislation, logistics, possible new human resources policies, time differences, etc.). However, I would particularly like to focus on the cultural differences that are likely to arise in the new markets of a different geographic environment. I do not intend to do a comprehensive analysis of the internationalization of companies, but rather give a sociological and anthropological approach to this phenomenon framed within globalization.

 

How can we look at this cultural differences?

The decision of “how to enter a new market” requires a rigorous study that should not only address the aspect of “growing” and “obtain the maximum benefit”, but should aim to coexistence and respect with the country of destination, in order to achieve good social and, therefore, commercial relations.

Illustration by Monica Ramos

 

Today, studies such as Hofstede’s and GLOBE *, are taken as top studies when assessing cultural differences in work. But let us focus on going one step further: leave the idea of taking a country as something national, unitary and equal. Hofstede developed a whole classification of countries according to different characteristics; The main indicators were 1) distance from power, 2) individualism/collectivism, 3) masculinity/femininity and 4) long-term orientation – from these dimensions (simplistic, in my opinion) he measured cultures and scored them according to their degree of compliance. How is it possible to measure a culture? Are there really dimensions that represent in general what the culture of a country means? It is, on the one hand, a way of obviating the many socio-economic, cultural and other differences that exist within one country and, on the other hand, it doesn’t take into account the meanings that each culture give to these dimensions: is assertiveness seen the same in India as in Spain? And what about individualism?

On the other hand, the GLOBE study in global leadership -developed from the Hofstede model- is much broader: 200 researchers from 62 different countries have studied within the different industries of 24 countries. However, researchers come from the field of strategic leadership and focus on issues of work culture, leaving aside other important aspects. The study has been done through quantitative techniques that tell us little if they are not accompanied by a qualitative approach.

Punctuating and measuring a culture is the antithesis of anthropology as we understand it today: it means losing the account of detail, the human perspective, and the qualitative approach.

There is a wide literature that criticizes these methods, proposing to overcome the axiom of a nation – a culture to understand the perspective of multiple cultures **.

Illustration by Monica Ramos

 

The proposal and claim open here advocates for local ethnographic studies of the different regions where the company wants to open market. Any categorization contributes to regional cultural homogenization, it’s true, but it is important to overcome different fallacies, as in this case the ecological fallacy: inferring the nature of individuals, for example, from the statistics added to the group where these individuals belong; This means supposing that all the individuals of the same social group share the common traits that define the group. It is important to overcome this to review and accept that: subcultures are influenced by a national culture but within a country there are intra-cultural differences. Each individual perceives and understands the culture of the society where they live in very different ways, and this is something that we should not ignore.

Taking into account all this cultural framework, a company can end up focusing on the aspects of labor relations, work modes, human resources policies. It is not only a job of adaptation of professionals settled in a new environment, or a good translation of languages, but it is a process so that companies and future workers can have the greatest possible understanding both for labor rights issues such as for negotiations, marketing programs, or production itself.

 

What can an anthropologist do and say in all this?

How interesting it would be to form a working group, similar to the one of GLOBE (more info below), in which anthropologists from all over the world interested in giving a new approach to the dealing of cultural differences in the internationalization, come together to do different studies spread by the different continents. What would this consist of? briefly:

-The coexistence Turing months in different societies, with the subsequent participant observation to frame the behavior of a particular society. It should be done not only to carry out an empirical study but to deepen into the history of the country to give a “national” framework and dismantle or remark ideas about the culture with which it coexists. Anthropologists could even work with them to apprehend the habits and ways of working. As we see in the next point

-Field study in local companies: forms of operation, behaviors and labor relations, habits, etc.

-Interviews to collect the demands, concerns, and proposals of the local people.

The result of this complex project of coexistence and ethnographic study would be a big report to which companies interested in expanding could be directed. And where do companies come to find advice when they want to internationalize? The majority of companies that are internationalized are SMEs and they find themselves lost when initiating an expansion of this type. They consult the Chambers of Commerce of each country to get information about the country to which they are to be internationalized (previous experiences of other companies, approximate costs of salaries, costs of renting offices, institutional support in the country to which they are going, etc.), or to the national / regional institutes responsible for the export (as is the case of ICEX in Spain).

Thus, it would be interesting to present the final report of the alleged ethnographic project to the Chambers of Commerce around the world, which could provide this information to future companies interested in expanding.

Would not this lead us to a reaffirmation of our capacities and knowledge in the social field? We would show the importance of taking these factors into account for the development of more interdisciplinary and intelligent projects, and I’d even dare to say more human.

When we collaborate, we all win: the company achieves better adaptation, fewer labor conflicts and care for the society where it has been established. On the other hand, the host culture is going to be understood and can, in turn, take advantage of all those positive aspects that the company can bring.

 

Ana Granados, of Antropomarketing, presents some examples of large companies that did not know how to adapt or understand the new market where they were established: https://antropomarketing.com/2016/12/19/internacionalizacion-productos-globales/

 

 

* Learn more: Hofstede cultural dimensions and GLOBE studies

Https://geert-hofstede.com/national-culture.html

Http://globe.bus.sfu.ca/studies

** George and Zahra (2002); Sackman and Phillips (2004)

In this article we have used illustrations by Mónica Ramos. You can know more about her art at: http://www.monramos.com

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