Running head: THE CULTURAL CHALLENGES OF DOING BUSINESS OVERSEAS
The Cultural Challenges of Doing Business Overseas
The Cultural Challenges of Doing Business Overseas
Steve Kafka, an American of Czech origin is considering opening a Chicago Style pizza franchise in the Czech Republic. He understand that their will be many difficulties for him to overcome if he is to be successful at doing business overseas. For 45 years, Communism dictated the rules of the Czech Republic. Employment was guaranteed, but the notion of ownership did not exist and entrepreneurial sprit was prohibited. In 1989 the Communist regime broke down and democratization immediately triggered an economic boom. This opened the door to franchising in the Czech Republic and in 1991 the first foreign franchise was established. Today many types of franchises are prospering in the Czech Republic, from restaurants, clothing and hotels to car rentals, household appliances and education creating a good opportunity for Steve to open a pizza franchise in this country.
In this paper the major differences between the U.S and Czech cultures will be addressed in regard to how they affect doing business in the Czech Republic for a foreigner. The comparative advantages of the Czech Republic will be identified. Hofstede's four dimensions of culture will be applied to the Czech business environment. The current barriers to trade affecting the Czech Republic will be examined. Finally, the demand and cost structure used to determine the price for pizza will be assessed.
Differences and Incompatibilities Between the U.S. and Czech Cultures
A number of differences and incompatibilities between U.S. and Czech cultures create major business risks for Steve. H ...