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 an ideal environment for foreign trade and business investment opportunities (kwintessential, 2008).
There are major differences and incompatibilities between the United States and Czech cultures that can create issues. The major difference in Czech culture is that the family is the center of the social structure and the obligation to the family is one’s first priority. The Czech people are polite and reserved until a personal relationship is built. Some of their concepts include a logical, practical and efficient way of forward thinking to provide a sense of security through careful planning, in both business and personal life (commuicaid, 2007). The etiquettes and customs of Czech should be learned, because it is different compared to the United States etiquettes such as meeting and greeting, giving and accepting gifts and dining etiquette. In Czechoslovakia initial greetings are formal and reserved; most greetings include a firm handshake and eye contact. Also an invitation must be given in order to use one’s first name or an informal greeting which shows a sign of friendship (kwintessential, 2008).
The culture or customs of Czech Republic is carried into the business aspect of life. The protocol of business etiquette in Czech Republic is similar to their society. Since family is a priority to them, they do not schedule meetings on Fridays; and many Czechs leave for extended weekends. When doing business in Czech, realize that in the month of August almost all business are closed (small town/cities). Business conducted in Czech is a slow process before decisions are made, meetings are held to build cohesion and to establish a comfortable environment to conduct business with clients (kwintessential, 2008). The structure and hierarchy in Czech companies is leadership and authority is a vertical ladder. Within the Czech business a leader’s knowledge and ability to show power is worthy of respect. Czech places a high value on privacy and prefers to separate business from their personal life (commuicaid, 2007). Czech has a low tolerance for unstructured situations; they adhere to rules and regulations to reduce any uncertainty, which extends the business sense to a practical approach.
Based on the Hofstede graph on four dimensions of culture (see Table 1), the United States and Czech scored closely in the Power Distant Index (PDI) dimension. The second dimension is the Individualism (IDV) dimension, which the United States has a higher score compared to Czech. The third...