Running head: Cultural Challenges
Cultural Challenges of Doing Business Overseas
Cultural Challenges of Doing Business Overseas
Introduction
Steve Kafka, an American of Czech origin and a franchisor for Chicago Style Pizza, has decided to expand his business into the Czech Republic. He knows this will be a risky decision; when he became a franchisor, he had to overcome a great deal of difficulties. Steve anticipates he will face some of these difficulties again at the new location in Prague, Czech Republic. Although he was born in the United States, he has family and friends in the Czech Republic, speaks Czech fluently, and has visited the country of his origin several times. This paper includes research on the Czech Republic and gives vital information that will help Steve move forward in his decision to expand his business.
Major Differences and Incompatibilities Between U.S. and Czech Cultures
Major incompatibles between U.S. and Czech cultures are 1) solid competition from European companies with historical and economic connections to the market, 2) purchasing power lags behind Western Europe and the U.S. and 3) corruption in government. The Czech Republic is geographically small and is a market where quality personal relationships are critical, and everyone seems to know everyone else. Therefore, it is recommended that Steve approaches his endeavor using the family and friends ties as a business agent. The Czech Republic has become a wise destination for foreign investors. Less popular, are joint venture. "Although the law allows 100% foreign ownership, foreign companies are sometimes reluctant to acquire a Czech firm outright because of environmental or other long-term ...