Cultural Challenges Of Doing Business Overseas

1854 words - 7 pages

Doing business overseas has its rewards, as well as its challenges. This paper will analyze the economic environment and the foreign investment climate for the Czech Republic, in order to help Steve Kafka, an American of Czech origin, to expand his business in his country of origin. Steve is a franchiser for Chicago Style Pizza and wants to open a new franchise in Prague, the capital of the Czech Republic. The paper will present the cultural differences between US and Czech culture that Steve must be aware of, the comparative advantages that exist in the Czech Republic, as well as the macroeconomic and investment factors, trade barriers for his country of origin. Based on this analysis, Steve will be able to successfully conduct his new business, knowing how to mitigate the risks that may be involved because of the cultural differences, as well as how to asses the cost structure and the demand for his product.Differences and Incompatibilities between US and Czech CulturesThe cultural differences between Czech Republic and United States stem from their unique historical evolution across centuries, from their specific traditions, structure of population, geographical position, surrounding peoples and cultures, and traditional cultural and economic ties with other countries.The Czech Republic was part of the Austro-Hungarian Empire for several centuries. Their civil law system was based on Austro-Hungarian codes. During 1945-1990, the Czech Republic had a communist regime, as part of the Socialist Republic of Czechoslovakia. Nowadays, the Czech Republic developed a free market economy, being one of the most prosperous countries of the ex-Communist bloc. Their legal code was changed to eliminate the Marxist-Leninist concepts and to accommodate the requirements of the Organization on Security and Cooperation in Europe (OSCE). While building-up and maturing their own business legislation, the business practice in the Czech Republic has remnant German and Russian influences. Their commercial and civil codes have many gray areas, giving way to different interpretations. For example, the current bankruptcy procedure, jeopardized by slow and uneven courts, tends to drag the proceedings for years. The Czech Parliament called for a change in the bankruptcy legislation that would enable out-of-court settlements, to provide fast and effective solutions to the troubled companies in a similar way the US Chapter Eleven does. Still, the number of companies with unsolved bankruptcy cases is baking-up for years. One of the biggest challenges while doing business in the Czech Republic is the bureaucracy. Moreover, the decision making process takes longer than for US counterparts as the business people in the Czech Republic prefer a methodical approach on analyzing proposals to in-depth details.Business relationships in the Czech Republic are more productive when trust is built by taking time to know the counterpart personally. In addition, business people maintain a...

Find Another Essay On Cultural Challenges of Doing Business Overseas

Cultural Challenges in Doing Business Overseas

1180 words - 5 pages businesses owners have closed their oversea businesses within three years. Steve Kafka is one of the American business owners who want to expand his business into the Czech Republic. Although Steve Kafka's origin was from Czech, knowingly only the Czech language would not help Steve Kafka's business to succeed in the Czech Republic. The tips below might help Steve Kafka to overcome the cross-cultural challenges.Major differences and incompatibilities

THE CHALLENGES OF DOING BUSINESS OVERSEAS MBA 501

1450 words - 6 pages Steve Kafka is an American business man of Czech origin and a franchiser for Chicago Style Pizza. Steve has determined he would like to extend his business into the Czech Republic. Steve will encounter cultural challenges and will have to overcome risks related to starting up a business in a foreign country. By looking at the major differences and incompatibilities between the U.S and the Czech Republic it will be identified what it will take to

The True Cost of Doing Business Overseas

1193 words - 5 pages tag that says made in china, who are you really hurting when you put it in your cart? It used to be that people didn’t care about the lowly factory worker who was laid off because they sent his job overseas, but it now happens on such a regular basis that people are taking notice. While some people would say “but it saves me money so I don’t care”, the truth is that the savings aren’t always being passed along to you. A perfect example of this is

Cultural Challenges of International Business

1747 words - 7 pages several competitive advantages in the Czech Republic that make it a good location for starting a new franchise. The general labor costs are low and technical skills are considered high compared to the rest of Western Europe. This could be used to the advantage of the business to foster stronger growth. Contrasting viewpoints, however, highlight that the challenges of the Czech labor market is labor mobility. Workers are not willing to move around

Cross Cultural Doing business in China

7232 words - 29 pages of these cultural differences on their management practice from five aspects: cooperative strategies, conflict management, decision- making, work-group characteristics, and motivation systems. In one survey, cultural difference was the biggest barrier to doing business in the world market, as it ranked first in all eight items including law, price competition, information, language, and delivery. According to Hofstede (1993), management differs to

Challenges of Business Communication

2526 words - 10 pages business is the primary reason for the failure of American businesses overseas. A perfect example of this would be Walmart in Germany. While in Germany, Walmart store clerks resisted the company policy of smiling at incoming customers. This simple gesture was misinterpreted by customers as flirting. Eventually because of this and several other cultural mistakes, Walmart had to leave the German market (Bovee and Thill, 2010). The lesson learned here

Cross-Cultural Differences Between Doing Business In France And China

1970 words - 8 pages -cultural problems while doing business. First we will give a general overview of the two countries and then discuss some management practices that may vary between these eastern and western cultures. General Overview: France  Geographical location: Western Europe  Population: 62.000.000 people  Language(s): French: 42,100,000 (92%) Oc languages: 1,670,000 (3.65%) German and German dialects: 1,440,000 (3.15%) Oïl

The Possibilities of Expanding the Business into New Overseas Markets

3347 words - 13 pages The Possibilities of Expanding the Business into New Overseas Markets As international marketing consultant of Mackie’s of Scotland, the ice cream maker, it is my duty to consider the possibilities of expanding the business into new overseas markets, successfully. The Scottish ice cream market will be researched thoroughly. The UK target market of Mackie’s will be analysed. Finally a suitable country will be chosen to market the product

Doing Gender: Challenges of Lyndall and Em in Story of an African Farm

1509 words - 7 pages Olive Schreiner published The Story of an African Farm in 1883 with the pseudonym “Ralph Iron” (Waterman, 43). Like many other women writers of the Victorian era, Schreiner used a male pseudonym to exploit the sexism of the Victorian publishers (Younge, 4). In doing so she demonstrated the necessary role-playing required by women to be involved in the literary culture (Tigges, 189). Women writers like Schreiner disguised their identity as men

the importance of cultural awareness in doing business internationally

103 words - 0 pages САНХҮҮ ЭДИЙН ЗАСГИЙН ДЭЭД СУРГУУЛЬ ӨДРИЙН ХӨТӨЛБӨР ХЭРЭГЛЭЭНИЙ МАТЕМАТ

Law of the Land Knowing your host country before doing business

1044 words - 4 pages clear of prohibited conduct. Our "common sense" interpretation is not international, even when you feel as if you are making the only reasonable decision.Works Cited"Businesstravelogue.com: China (Mainland)." http://www.businesstravelogue.com/Cina$20Mainland.html"Doing Business Overseas." (Company booklet for Raytheon.)Leftridge, Kristyn. "Volunteer Views. The Peace Corps."http://www.peacecorps.gov/wws/views/index.html

Similar Essays

The Cultural Challenges Of Doing Business Overseas

2570 words - 10 pages The Cultural Challenges of Doing Business Overseas Introduction There are several challenges such as the impact culture and management practices to succeed overseas with business ventures for an American Company that takes the greatest risks in making decisions. In this Scenario, Steve Kafka, an American of Czech origin and a

The Cultural Challenges Of Doing Business Overseas

1967 words - 8 pages The Cultural Challenges of Doing Business Overseas The fall of the Soviet Union in 1989 and the Velvet Revolution ended Czechoslovakia turbulent political history, and establishing democracy. The Czech Republic is embracing the western style models of political and economic reform. In addition the Czech Republic made an agreement and is now a member of the European Union. This will increase their potential for expanding markets and creating

The Cultural Challenges Of Doing Business Overseas

1152 words - 5 pages countries.During 1945-1990, the Czech Republic had a communist regime, as part of the Socialist Republic of Czechoslovakia. Nowadays, the Czech Republic is a free market economy. One of the biggest challenges while doing business in the Czech Republic is the bureaucracy. The decision making process takes longer than for US counterparts as the business people in the Czech Republic prefer a methodical approach on analyzing proposals to in-depth details.Steve

Cultural Challenges Of Doing Business Overseas

3123 words - 12 pages to make to their product and service offerings." One of the major barriers that a business faces while doing business overseas is the cultural differences between the nations. According to Hodgetts, Luthans, and Doh, "A major challenge of doing business internationally is to adapt effectively to different cultures."Steve Kafka, an American born Czech origin is one of these hundreds of entrepreneurial, who is considering expanding his pizza