Culture of a Country Influences the Cost of Doing Business

An important aspect of any business is to be able to analyze and evaluate the environment, both internally and externally, in which the business is to operate (Plunkett, Attner, & Allen, 2008). The cost of doing business overseas is a concept that is related to evaluating the external environment, where a manager or business owner must consider such elements as “the strengths and weaknesses of suppliers and partners, the availability of additional labor and technology, and the needs of external customers” (Plunkett, Attner, & Allen, 2008). Applying this general notion to international business, particularly to the prospects of working in a different country, the cost of doing business refers to the existing situation or situations in the potential country which will have an effect on the company. The analysis is created by stating limitations and available resources in order to develop an idea of the costs and benefits (Plunkett, Attner, & Allen, 2008).
Culture refers to the system of values and norms which a society shares; it includes beliefs, laws, knowledge, art, and customs (Hill, 2010). Values are a set of beliefs about, or attitudes towards, concepts concerning a society, while norms are unwritten, but accepted, rules and laws about society members’ behaviors. Values and norms are influenced by a number of factors within society such as “social structure, religion, language, education, economic philosophy, and political philosophy” (Hill, 2010). The differences in these factors across the globe provide the diverse societies, which must be viewed individually so as to comprehend the implications they have for international business. An example of potential implications would be a society that values collective achievement. That value alone has the potential to affect the political system of that country to adopt certain socialist principles, or to cause the employees of a firm to work well only in a team environment.
The cost of doing business abroad fluctuates based on the culture of the country in which the operations are being conducted. It is much cheaper to do business in environments where the businessperson does not have to spend an extensive amount of time and resources on analyzing the potential for being wronged. If it is in a particular culture’s norms to have unpunished corruption, it costs a great deal for a business to rectify the probable corruptive acts against it. “[The] changing environment of law, regulation and enforcement makes it hard for business managers to assess and quantify the legal risks to which corruption exposes their operations” (United Nations Global Compact, n.d.). These and other risks influenced by a society’s values and norms are substantial factors in business costs.
References
Hill, CWL. (2010). International business: competing in the global marketplace. New York, NY: McGraw-Hill/Irwin.
Plunkett, WR, Attner, RF, & Allen, GS. (2008).Management: meeting and exceeding customer expectations. Canada: Thompson South-Western.
United Nations Global Compact. (n.d.). Transparency and anti-corruption. Retrieved from http://www.unglobalcompact.org/aboutthegc/thetenprinciples/anti-corruption.html

References: Hill, CWL. (2010). International business: competing in the global marketplace. New York, NY: McGraw-Hill/Irwin. Plunkett, WR, Attner, RF, & Allen, GS. (2008).Management: meeting and exceeding customer expectations. Canada: Thompson South-Western. United Nations Global Compact. (n.d.). Transparency and anti-corruption. Retrieved from http://www.unglobalcompact.org/aboutthegc/thetenprinciples/anti-corruption.html