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International Expansion and Cultural Barriers

A major producer of polymers in the United States is about to expand its business. As part of this expansion, it will begin to sell its products in Europe and Asia. In addition, it plans to open a plant in Asia. Maverick, the President and CEO, is concerned; he has heard many stories of companies that have tried to expand globally but operations either failed miserably or did not live up to expectations due to the cultural differences between workers and customers in each country.

Imagine Maverick has asked you to research problems other companies have had with this issue and develop ways in which the errors those companies made can be avoided by his company.

Please select a multinational corporation or international nonprofit agency that has encountered these problems (this can be a previous or current employer of yours). Using the Internet and the library, research that organization to discover any cultural barriers that organization encountered and what its managers did to try to overcome those barriers.

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Xenia Jones

Issues in Asian Expansion

Asia is such a vast continent. It would be irresponsible for a corporate entity or business to 'lump' Asia as one singular corporate and business culture as, being the world's largest continent, it is home to a myriad of peoples and cultures with different belief systems, worldviews and lifestyles. For example, the disciple of the Japanese in terms of work-performance cannot be expected as standard, in say, Vietnam, Cambodia or India. The labor practices in China (i.e. cheap labor) cannot be expected in South Korea and the scientific pool of specialists in South Korea cannot be expected in Pakistan, for example. Religion, language, history, cultures, philosophies, ideologies, economic might, government and capacities divide and unite Asia and Asians therefore one territory or country will be a different kettle to deal with than another, whatever the similarities. Asians include Koreans, Japanese, Chinese, Filipinos, Thais, Vietnamese, Indonesians, Laotians, Indians, Bangladeshis, Sri Lankans, Bhutanese, Nepalese, Mongolians, Kazaks, Afghanis, Pakistanis and a number of Arabic peoples including Saudis, Qataris, Yemenis and even Israel (the Middle East is part of Asia). It is possible to generalize issues with corporate expansion but always, the issue from one Asian territory to another will differ in the details. We can generalize the following however:

1. Language/Communication Barriers - a Western company expanding into Asian territories will find language to be a barrier and an issue in the challenge of successfully establishing a foothold in the market.

2. Cultural Barrier - there are 2 sides to this, personal and professional cultural practices. In Asia, especially in the Far-East and South East Asia, personal and professional lines are blurred and they operate in a 'family'-based organization. This means a different way of securing deals and agreements and an entirely new way of strategizing to get things done in relation to Western practices.

3. Political Barrier - some of the countries in Asia are easy to do business in, while some are notoriously hard despite the promise of the market. Some countries are so corrupt that the lines between legal and illegal are blurred while some are so efficiently-run they eclipse the West. This all comes down to political stability. The strength and state of politics in an Asian territory can become a barrier or a tool for success.

4. Legal Barriers- the laws in Asia might be familiar but is never similar to that in the West. With different legalities, corporate practices must be attuned to local expectations; otherwise doing business just might be difficult if the company is not willing ...

Solution Summary

The solution is a 1,704 tutorial that provides insight and a discussion of the barriers companies will likely face in expanding into Asia, with a focus on the likely issues that cultural barriers will bring. References are listed for expansion. A word version of the solution is attached for easy download and printing.