Discuss the political, cultural and social challenges in doing business abroad

To begin to talk about this topic, first I would like to admit that it is rather hard to understand challenges in doing business abroad, so for easily understanding I will show you it with the help of example of such foreign country as China. Success ultimately depends on suspending your beliefs about what you think you know about doing business in China. China’s sustained growth is without precedent. Over the last 20 years, China has experienced an astounding 9.5 percent growth per year. Companies such as General Motors, Procter & Gamble, and Caterpillar have done business in China investing enormous resources to make headway. But it wasn’t until five years ago when China joined the World Trade Organization (WTO) and opened its economy more to foreign competition that doing business in China has really become profitable. New opportunities have opened up in industries in which foreign companies hold a competitive advantage, such as insurance, banking, retail, and a whole range of services.

Challenges of Doing Business in China*

Even with China joining the WTO, protections for intellectual property rights are not consistently enforced. *

Markets are subject to sudden changes in the government’s economic growth policy. *

Multinationals often must compete against local players with lower cost operations and lower prices. *

The diversity of the Chinese market is significant, requiring a variety of products to meet segmented needs. *

Infrastructure is less developed than in U.S., making transportation a challenge. *

Conducting market research and identifying market sectors is extremely difficult.

Cultural and political differences also present significant barriers to doing business in China. When Western businesses enter the Chinese market, they tend to focus on the language barrier and bureaucratic red tape. But to be successful, you must also understand China’s long history and culture. China is rapidly transforming from an agricultural society to an urban society and from a command economy to a market economy,the government still plays a much greater role in the economy than in the West, so Chinese tend to think in more bureaucratic terms. If you want to do business there, you need to understand a whole new set of the monetary, regulatory, and legal issues that are involved. It’s not enough to have a good business plan. You need to understand and respect the culture.

So, to be successful everyone should pay attention to such points*

Make a Deal - negotiating tactics, the value of connections, recommended business card style and content, business card protocol, sitting and presenting yourself in meetings, language for brochures and promotional material, pace of business, preferred presentation styles, final agreements, thinking styles, adherance to company policy, and more business culture info . . . *

Entertaining - typical mealtimes throughout the day, best venues for business entertaining, punctuality for social events, dinner table seating etiquette, mealtime etiquette, importance of alcohol, toasting. . . *

Appointment Alert - typical vacation times, recommended apppointment times, length of the lunch hour, signals that indicate beginning or end of an appointment, best arrival time (early, late, right on time), and more on business culture info. . . *

Gift Giving - recommended gifts, gifts to avoid, good and bad colours for wrapping paper, how to present a gift to individuals and groups, guidelines for receiving gifts. . . *

First Name or Title - using titles such as 'Doctor', naming conventions to avoid, when to use first names, and more business etiquette info. . . *

Public Behaviour - how to greet strangers and introduce yourself, the rules for men shaking hands with women, rules for eye contact, gestures/sayings to avoid. . . *

Business Dress - is dress modest, conservative, etc., specific dress requirements for men and women, what visitors should wear to social functions, and more on business etiquette info. . . *

Conversation - welcome and unwelcome topics of conversation, the role of compliments, the tone of voice to be used, whether your hosts are physical or more reserved, and more on business culture info. . .

Overcoming cultural hurdles, however, can be a major challenge. For example, Western companies want to strike a deal very quickly, while Chinese prefer to negotiate and seek concessions.

So, doing business abroad requires big attention and a large amount of information.