Starting a business outside the geographical boundaries of a country requires assessing a number of factors. Drawing up a business plan, assessing demand and supply, applying for loans and grants, getting permits and licenses and deciding on the location of the business are important issues that preoccupy the entrepreneur. Very often, an entrepreneur focuses only on the technical aspects and ignores the cultural aspects of a business. A good business plan is useless, unless people believe in the success of the plan and are willing to do business with the entrepreneur. This is when cultural differences gain prominence. An entrepreneur who is unaware of the differences in intercultural communication will find it exceedingly difficult to communicate with potential suppliers and buyers and foster relations, that are necessary for any business.

Cultural differences in International Business

Role of the Government and Bureaucracy: This is an important factor that is often overlooked by American entrepreneurs, who expect minimal government intervention in the affairs of the private sector. Generally, in developing countries the government plays an important role and as a consequence the private enterprise has to deal with red tape and bureaucracy. In fact, even in case of a few industrialized countries, the government and the private enterprise maintain close ties. For instance, it is a common practice in France, for retired government officials to occupy positions of responsibility in a private company. In case of South American countries, administrative complexity and bureaucracy are common problems that are encountered by an entrepreneur. Read the rest of this entry »