1. Cultural effect on cost
of doing business
By: Manish Goyal (157)
Suvash Timalsina (142)
Cultural effect on cost of doing
business
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2. What is culture?
• Learned behavior, transferring from
generations
• Custom, tradition and way of living
• Norms and values
• Varies in different places
Cultural effect on cost of doing
business
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3. Elements of culture
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Language
Religion
Manners and customs
Aesthetics
Education
Social institution
Cultural effect on cost of doing
business
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4. Language
• Mirror of culture
• People highly comfortable speaking
their own language
• Verbal and nonverbal
Cultural effect on cost of doing
business
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5. Verbal
• Written and formal
• Difficult language may cause in
promoting or publicity; difficult
pronunciation
• Mainly in country like China and
Japan
Cultural effect on cost of doing
business
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6. Non-verbal
• Sign language or silent language, body
language and gestures
• Example- Latin Americans and Arabs
like to stay close to people they are
talking with, if other just stays far it
might give negative impression to
them
Cultural effect on cost of doing
business
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7. • Example- an American manager may after
successful completion of negotiations,
impulsively give a finger-and-thumb OK
sign, French manager perceive that the
sale is worthless, Japanese think a little
bribe has been asked for the gesture and
insulting to Brazilians
Cultural effect on cost of doing
business
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8. Religion
• Defines ideals for life
• Existence of Supernatural beliefs
• Example- When beef or poultry is
exported to an Islamic country the
animal must be killed in the ”halal
method”
• Major holidays often tied to religion
Cultural effect on cost of doing
business
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9. Manners and customs
• Way of behaving or presumed
thought
• Example- American interpret silent
as negative sign, Japanese executives
tend to expect that their silence can
get Americans to lower prices or
sweeten the deal
• Even small deal might take many days
Cultural effect on cost of doing
business
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10. • Concerns use of right hands and left hands
• Example General Foods Tang is positioned
as a breakfast drink in the United States
in France, where orange juice usually is not
consumed at breakfast
• A company decided to launch new peanut
packed chocolate bar in Japan targeting
teenagers; quick energy during exams
• Failed because children were told eating
chocolate with peanuts cause nosebleed
Cultural effect on cost of doing
business
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11. Aesthetics
• Concerned with taste, art, and colors
• Color often used as brand identification,
for differentiation
• Example- British bank wanted to expand
operation in Singapore, wanted to use blue
and green as identification color
• Had to make some change in green color as
it was associated with death in that
country; green was made shade and dark
Cultural effect on cost of doing
business
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12. Education
• Formally or informally plays role in
sharing culture
• Less education may increase cost of
business
• Extra training expenses required
• For instance a high level of illiteracy
will suggest the use of visual aids
rather than printed manuals
Cultural effect on cost of doing
business
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13. Social institutions
• Family and kinship
• Family size differ in western countries and
country like ours
• In country like ours, joint family
• Consumption pattern high in such family,
need to identify market potential
• In country like Nigeria, concept of kinship
in human resource management
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business
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14. Conclusion
• Knowledge of culture plus point in
International business
• Culture awareness can avoid a huge
loss
• Keep in mind “Culture eats business
strategy as a breakfast”
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business
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15. Cultural effect on cost of doing
business
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