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The Cultural Challenges of Doing Business Overseas

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The Cultural Challenges of Doing Business Overseas
MMPBL/501
August 23, 2011
Dr. Sangeeta Bishop
Steve Kafka, an American of Czech origin and a franchisor for Chicago Style Pizza, has decided to expand his business into the Czech Republic. He knows it is a risky decision. When he became a franchisor, he had to overcome many difficulties. Steve anticipates he will face some of these difficulties again at the new location in Prague, Czech Republic. Although he was born in the United States, he has family and friends in the Czech Republic. Steve speaks Czech fluently, and has visited the country of his origin several times. In other words, he knows the people and the culture. Or does he? The purpose of this Cultural Challenges of Doing Business Overseas paper is to analyze the major differences and incompatibilities between the U.S. and Czech cultures. I will analyze the cross-cultural differences between the United States and Czech Republic, determine comparative advantages in this country, and recommend ways to minimize the risks of establishing a franchise overseas. It is important for Steve Hafka to understand Czech Cuisine being that he has decided to expand his business in Czech. If he does not research the Czech culture, his pizza franchise may not be successful. Both cultures are quite compatible and the major differences come in attitudes of people. Americans are generally optimists, where the majority of Czechs are pessimists. Another difference between the Czechs and Americans is their level of confidence. Americans seem to be overly confident in anything they do where Czechs have a hard time to take a stand. This could be explained by Americans being brought up embracing individualism and the Czechs being taught to align their interests with a larger group. Steve wants to expand his pizza restaurant into the Czech Republic. To be able to make the expansion successful Steve must analyze the differences between American and Czech eating and diet cultures. CultureGrams (2006) states, while Americans eat with a fork in the hand with which they write, Czechs tend to eat with the fork in the left hand and the knife in the right. In addition, Pizza is a popular food in America, often consumed as an entire meal, is eaten with hands, is often delivered to the front door, served in a restaurant or carried out on the way home. As dining out is a rare occasion in the Czech culture, pizza is considered a snack that can be purchased from a vendor on the sidewalk. In America, beer is frequently consumed with pizza. In the Czech culture, beer is a beverage that is consumed throughout the day. Steve needs to completely learn and understand the people and culture of the country in order for his business to be successful. Geert Hofstede found there are 4 dimensions of culture that help to explain how and why people from various cultures behave as they do. The four now well-known dimensions that Hofstede examined were power distance, uncertainty avoidance, individualism, and masculinity. A major challenge of doing business internationally is to adapt effectively to different culture. Such adaptation requires an understanding of cultural diversity, perceptions, stereotypes, and values (Hodgett &Luthans, 2005).

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