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Impact of Cultural Differences in International Trade Essay


Towards the direction of increasing profitability and attaining competitive advantage over their rivals, many firms have been exploring expansion opportunities in different areas of the globe (Adler 48). To understand and respond to market dynamics that are present in different geographical areas, many firms are now researching on the role played by culture in promoting their business opportunities (Earley 600).

By understanding specific cultures across the globe, firms are able to respond to international market opportunities (Hong 142) effectively. People in different geographical locations have inbuilt attitudes, behaviors, and characteristics that can help to define their capacity to buy given products that may be introduced into their markets (Earley 600). Thus, based on cultural assumptions, firms are able to fairly predict the demand for their products in the given markets (Jung 534). For example, reserved cultures are unlikely to respond to some cosmetic products from western countries (Chang 12).

Often, it is desirable to model business operations based on unique cultures that exist in different geographical locations where given firms operate (Chang 12). Some pattern of behaviors that applies in one area may be considered as a taboo in another (Kerr 231). Promoting a harmonious working environment, firms are thus competed to adjust their operations in accordance with the given cultures where they run their businesses (Jung 534).

Moreover, companies must model their products and services to comply with cultural standards that reflect their business environment (Kerr 231). For example, financial services in areas dominated by Muslims should conform to the requirements of Islamic law (Adler 48).

Moreover, it is important for business companies to understand and exploit emerging cultural trends across the globe (Leung, 221). To some extent, many cultures across the globe are increasingly adopting new values from western culture (Arnett 780). Such a trend has presented many western firms with an opportunity to sell a new type of products in new areas (Chang 12). Many firms have specifically explored a cultural appeal strategy through the media, where they display some aspects of western culture as superior ones (Leung 221). Such a strategy is intended to help in influencing non-western markets to buy products that have been tailored according to the cultural standards of the western world (Cairncross 74).

Cultural considerations have also been helpful in influencing trade agreements and international cooperation (Sassan 58). As a rule, trade has been high between countries that have similar or compatible cultures (Arnett 780). Countries with similar/compatible cultures are also likely to engage in fruitful trade negotiations and agreements (Sassan 58). On the other hand, hostile cultures can deteriorate trade relations between nations (for example, Israel and Palestine). (Sassan, 58).

Works Cited

Adler, Newman. International Dimensions of Organizational Behavior. Cincinnati: South-Western College Publishing, 1997. Print.

Arnett, Johnson ‘The psychology of globalization’ American Psychologist 57(1997): 774–783. Print.

Cairncross, Francesca. The Death of Distance, New York: Harvard Business School Press, 2001. Print.

Chang, Wong ‘Chinese values in Singapore: traditional and modernn’, Asian Journal of Social Psychology 6.2 (2003): 5–29. Print.

Earley, Chen, C.C. ‘‘‘How did I do?’’ versus ‘‘How did we do?’’ cultural contrasts of performance feedback use and self-efficacy’, Journal of Cross-Cultural Psychology 30.5 (1999): 594–619. Print.

Hong, Chiu. ‘Bringing Culture Out in Front: Effects of Cultural Meaning System Activation on Social Cognition’ Yamaguchi (eds.) Progress in Asian Social Psychology, 1.5 (1997) 135–146. Print.

Jung, Ang, ‘A typology of animosity and its cross-national validation,’ Journal of Cross-Cultural Psychology 33.6 (2002): 525–539. Print.

Kerr, Dunlop. Industrialism and Industrial Man. New York: Harvard University Press, 1960. Print.

Leung, Bond. ‘Social Axioms: A Model for Social Beliefs in Multicultural Perspective’ Advances in Experimental Social Psychology, 36.5 (2004): 119–197. Print.

Sassan, Susan. Globalization and its Discontent, Free Press: New York: Free Press, 1998. Print.

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IvyPanda. (2021, February 20). Impact of Cultural Differences in International Trade. Retrieved from https://ivypanda.com/essays/impact-of-cultural-differences-in-international-trade/

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1. IvyPanda. "Impact of Cultural Differences in International Trade." February 20, 2021. https://ivypanda.com/essays/impact-of-cultural-differences-in-international-trade/.


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IvyPanda. "Impact of Cultural Differences in International Trade." February 20, 2021. https://ivypanda.com/essays/impact-of-cultural-differences-in-international-trade/.

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IvyPanda. 2021. "Impact of Cultural Differences in International Trade." February 20, 2021. https://ivypanda.com/essays/impact-of-cultural-differences-in-international-trade/.

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IvyPanda. (2021) 'Impact of Cultural Differences in International Trade'. 20 February.

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