Effects of cultural differences in international business and price negotiation

• Main Authors: Deari, Hasim, Kimmel, Viktoria, Lopez, Paola
• Format: Others
• Language: English
• Published: Växjö universitet, Ekonomihögskolan, EHV 2008
• Subjects: International business; negotiation; pricing; culture; Business and economics; Ekonomi
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:vxu:diva-2215

The number of companies operating internationally is growing constantly. The world is opening up for foreign firms and new destinations in the company´ business are increasing. Because of high competition the companies operating abroad are faced with a much larger task then before. When going international the challenges the company must handle are new and unfamiliar. Obstacles the firm never faced before are becoming crucial in the every day work. Culture is one of these obstacles and can affect the entire co-operation. Culture can influence the business in different ways. Language problems, pricing difficulties and culture collisions are not uncommon, especially in the beginning. The company must be able to handle these difficulties in a way that is satisfying also for the other part. Mistakes can be difficult to correct and disrespect for the foreign culture can destroy the entire operation. There are some general advices the company always must have in mind before and during a co-operation on the international market. It is important, even before entering the foreign country, to inform the personal about the manners and customs in that new culture. If the first impression becomes negative, this can be hard to shake. Foreign cultures have different ways of doing business, for example when it comes to planning ahead and keeping delivery times. Culture can be both a positive and negative influence and many companies are struggling in the new and foreign environment. The important thing to always have in mind is that the foreign culture is not as we are used to at home and to be prepared before starting the new foreign operation. Respecting and understanding the new culture without forcing our own beliefs on people, are things that can be extremely helpful to consider. By learning the host country’s language, can respect and trust more easily be won, and competitive advantages can arise.