International Business Management

In international business, two challenges are commonly encountered that must be addressed by corporate managers. These problems include (1) expatriate failure: the inability for managers of international operations, including international human resource managers, to bridge the divide between the corporation’s existing culture, the demands of headquarters, and culture in a new environments, and (2) negotiation failure resulting from the inability to appreciate the challenges of cultural diversity.

Other disciplines in international business management include international business strategy, international law, international finance, logistics and marketing. However, under this discipline at BrainMass.com, we are going to focus on the people aspect of international business management - and all the failures that are associated with the challenges of working with different people from around the world.

According to the literature, a significant number of failures in international business result from a lack of cross-cultural competence on the part of firms, negotiators and managers. For example, it is estimated that the failure rate for expatriates sent overseas is somewhere between 40% and 55%.¹ These failures are typically ascribed to a failure of expatriates to bridge the gap between new cultures and new work environments.

As multinational corporations continue to expand their operations around the globe, more and more focus has been paid to the knowledge, skills and attributes that are required to successfully navigate international business cultures. These typically include areas of competence such as negotiation styles, language, body language, employee management and etiquette.

Business etiquette can be broken down further in terms of forms of greeting, style of dress, and business protocol such as gift giving, punctuality, scheduling meetings and business entertaining.²

A major contributor to the field of organizational culture comes from Geert Hofstede’s cultural dimensions. Hofstede looked for differences in thinking and social action (what he called "mental programs") between over 100,000 IBM employees from 50 different countries. He determined that cultural diversity manifests along five dimensions: power distance, uncertainty avoidance, individualism vs. collectivism, masculinity vs. femininity, and long-term vs. short-term orientation. His work is especially important when considering international organizational culture. That is, using his model we can look at how international business cultures vary along these five dimensions.

References:
1. Black, J.S., Gregerson, J.B., Mendenhall, M.E. and Stroh, L.K. (1999) Globalizing People through International Assignments. Addison-Wesley: Reading, MA. 
Retrieved from: http://www.dpcdsb.org/NR/rdonlyres/0535EFD9-639D-4D95-B7AA-461E34742340/87692/Chapter_832.pdf.

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