Cultural Barriers in International Business Essay
The business in Middle East is very much dependent on the culture and the trends followed there. Success in international business needs the improvement and implementation of business strategies that are responsive to environments formed in the particular region business is expected. In the Middle East, the economic, social, and political dimensions differ from any other region.
Multinational companies are usually aware of the problems they can face when entering Middle East. The Persian Gulf region has a significant level of international commerce and investment, as represented in part by an estimated $120 billion in exports and the presence of nearly 1,200 foreign-affiliate firms, with approximately $29 billion in investments in the region (Kavoossi, 2000). Recent trends point to increased international investment.
The region’s major international strengths include oil and natural gas, major international airports, ports along the Persian Gulf, high disposable income per household, an educated labor force, a growing high technology industrial base, and world-class financial centers. In addition, the region is home to many international and regional organizations. In the aftermath of the Arab-Israeli peace accord, people feel more confident about the stability of the region.
International weaknesses, however, include a lack of positive image, a serious need for surface
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With much of the global industrial expansion and promotion now focused on the Middle East, from direct marketing of water sports equipment and cosmetics, to liquor, tobacco, food and beverage, and health care products cultural differences will affect not only the internal conduct and organization of multinational firms and consumer attitudes toward product “country of origin”, but also affect foreign and domestic marketers’ competitive strategies in relation to advertising in all media. It might be expected, therefore, that cultural differences will also affect competitive advertising strategies used in foreign and domestic markets.
The management of Muslim markets also requires understanding of variations in governmental attitudes toward access to domestic markets. Many Muslim nations have adopted an open-door policy for foreign investors and exporters. This spirit of open access has spread throughout the Middle East, with the exceptions of Libya, Syria, and Algeria. However, private ownership grows in strength in Iran, Iraq, Egypt, Saudi Arabia, Kuwait, Jordan, Morocco, Tunisia, Turkey, and other, smaller Persian Gulf states, including the United Arab Emirates.
Many entrepreneurs in the private sectors of these countries are responding to market demands for modern products. Both foreign and domestic businesses must begin to recognize the need to apply appropriate marketing strategies and to position themselves to capture new market segments through a better understanding of the determinants of consumer behavior in Islamic society. Dimensions of religious and cultural context of consumer behavior must be specifically analyzed to determine the degree of integration of specifically consumer behavior and the dominant Islamic paradigm.
In contrast to non-Islamic capitalist economics, Islamic theory considers the consumer to be a seeker of the good life in this world and the world hereafter. It must be noted that the accumulation and maintenance of wealth is not entirely undesirable or negative. The Islamic system, by virtue of its very nature, maintains a high rate of savings. The inherent forces of the Islamic system make the investment perspective an integral part of the savings decision. Saving is positively related to investment opportunities and expectations.
This relationship implies that at times of declining investment expectations, saving will decline, and consumption will rise. This in turn increases demand. It can be reasonably argued that in most Western industrial free market economies, particularly that of the United States, the dominant societal organizing principle is the foundation of the economics. In Middle Eastern Islamic societies, however, there exists a serious challenge and tension caused by economic forces attempting to dominate the cultural and religious components of these societies.
In short, the societal process is in flux and inherently less stable than in the West. However, it is less unstable than those of many of the newly emerging markets of Eastern Europe. The relationship between language and culture has been a major issue of concern for psychology and anthropology for some time, since Sapir and Crocker (1977) first advanced their hypothesis that language determines, or at least influences, the way we look at our world.
Although a range of studies have challenged the validity of both linguistic determinism and linguistic relativism on empirical and theoretical grounds, recent reconceptualizations of the language culture relationship have focused more on the sociocultural context of language and culture acquisition. Such studies suggest that a more useful approach is to assume there is an interactional relationship between them. According to these views, cognitive processes affect our language use, yet language also shapes our inferences and value judgments, by virtue of its inherent involvement in the process of acquiring cultural practices.