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The globalization of the labor market offers new competitive advantages to international businesses. Creating production platforms in low-wage countries is a mutually beneficial agreement, as the countries in question receive workplaces and payments, while the producers save money on labor and have the opportunity to reduce the price on the provided services and products, thus becoming more competitive and available to the customers.
Nevertheless, opening a business in different cultural environments presents a set of specific challenges attributed to certain cultural and political aspects of the chosen region. The purpose of this paper is to analyze the components of Chinese, Saudi Arabian, and Brazilian cultures from a business standpoint.
The three chosen countries have different economic systems, which were founded and influenced by various geopolitical and historical processes. Saudi Arabia is a capitalist market economy. This economic system allows the market players to compete freely, with the government regulating the legal relationships between the producers and the customers (Heider, 2017). Despite being a monarchy, Saudi Arabia was influenced by the West and profited greatly from being a major trading outpost between Asia and Europe. The country adopted a free-market economic model to make itself more attractive to western investors.
China has a command economic system. In such a system, the government plays a central role in resource management, production, and legislation (Heider, 2017). Such a system was adopted due to the lasting influence of the USSR on the country’s political and governance systems. However, in recent years, China has become more accepting of foreign businesses and opened borders for companies wishing to establish production facilities there to benefit from the Chinese abundance of the labor force. This also signified a slow shift from a command economy to a mixed economy. Right now, China is one of the most prominent economic partners of the West.
Brazil is considered the largest growing economy in Latin America. It has a mixed economy system in place. A mixed economy is a combination of traditional, command, and free-market economic systems (Heider, 2017). As a result, the government retains a modicum of influence over strategic resources and socialist policies, while free-market forces govern the businesses. The traditional economy is left to the rural outskirts of the country, which remain relatively separate from the rest due to lush jungles and rough terrain. This system was created because of the fading influence of the USSR mixed with the rising influence of the US and the global markets.
Brazil, China, and Saudi Arabia have their distinctive business cultures, which need to be understood to conduct business in these countries successfully. Brazilian culture is oriented on relationships, meaning that the personal qualities of a supervisor are more important than the status of the company he or she represents (Rohlfer & Zhang, 2016). Brazilians enjoy forging relationships in informal environments.
Meetings over lunch, communal sports practices, and other activities would be necessary to ensure intercultural collaboration. Another important supervisory skill for Brazilians is patience, as they pride themselves on maintaining a calm disposition. Punctuality is not considered a virtue in Brazil, and being 15-30 minutes late to an informal meeting is considered a norm (Rohlfer & Zhang, 2016). Although businesspeople in Latin America appreciate informality, it is important to behave politely and respectfully, while in the US it is considered less important.
Chinese business culture has some similarities with the Brazilian culture in that they enjoy establishing a strong relationship with the representatives of other companies before closing out a deal (Rohlfer & Zhang, 2016). However, their other qualities are in stark contrast. For example, while Brazilian culture remains relatively light-hearted and informal, the Chinese cultural components involve hierarchy, punctuality, and etiquette.
Following the Chinese concept of Guanxi will help facilitate collaboration across cultures. As Chinese workers and businesses are very disciplined, they expect the same from their supervisors (Rohlfer & Zhang, 2016). An important supervisory skill is to be capable of handling long and difficult negotiations, which the Chinese often use to gain an advantage. Etiquette and good manners are at the heart of the Chinese negotiating tradition.
Arabian business culture is largely informed by Islamic practices, which are predominant in almost every aspect of life in Saudi Arabia. They even have banks that operate under Sharia Law and have a specific title of “Islamic banks” (Rohlfer & Zhang, 2016).
Therefore, a supervisor must be aware of various religious nuances of the country, such as the five daily prayer times. Arabian business culture is similar to Brazil and China in that they also seek to form personal relationships before closing a deal. Sharing meals and participating in small talk is an important part of such activities (Rohlfer & Zhang, 2016). To facilitate collaboration between cultures, a supervisor must be patient, as Saudi Arabians have a relative concept in time and consider patience to be a virtue.
US-Style Management in Other Cultural Environments
US business culture differs greatly from that of China, Brazil, and Saudi Arabia. For example, Americans are highly individualistic, while the Chinese have a collectivist nature. Brazilians put friends and family above working arrangements, and Saudi Arabians are governed by tradition and religion (Rohlfer & Zhang, 2016).
One of the first things to be changed when operating in these countries is the negotiation process. Americans tend to be direct, aggressive, and persuasive in their negotiations, which would be considered rude in China and Brazil. Saudi Arabians, however, are also very aggressive in negotiations, meaning that with them it is possible to do the same.
Another important change would be the hierarchy and perceptions of individualism. While in the US ambitious employees frequently challenge the hierarchy, the respect for the leaders in China, Saudi Arabia, and Brazil is much higher.
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These countries are more suited to the hero-style leadership that was prominent in the US during the 1970s, whereas servant leadership and transformational leadership would not be accepted so easily, as it would confuse the hierarchical structure (Rohlfer & Zhang, 2016). The success of multicultural teamwork would involve combining the positive aspects of local business cultures with those of the American management style.
The transition from the American management style and economic system to a different kind of environment in Brazil, Saudi Arabia, and China will be difficult, as it would require the adoption of cultural norms foreign to those of the US. However, the potential benefits of the cheap labor force, additional market share, and global brand promotion outweigh the difficulties associated with establishing an international business.
Other companies, such as Apple, Microsoft, Volkswagen, AT&T, DHL, and many others have already established operations in these countries, proving that successful intercultural cooperation is achievable. Studying their strategies would help provide much-needed information on how to run a business in a foreign cultural environment.
Heider, K. G. (2017). The economic organization. New York, NY: Routledge.
Rohlfer, S., & Zhang, Y. (2016). Culture studies in international business: paradigmatic shifts. European Business Review, 28(1), 39-62.