Assignment #6
The Cultural Challenges of Doing Business Overseas
University of Phoenix
The following paper will discuss a study of Steve Kafka, an American of Czech origin and a franchiser for Chicago Style Pizza, who decided to expand his business into the Czech Republic. This paper will discuss the major cultural differences and differences between the U.S. and Czech cultures, will take a look at what comparative advantages exist for Steve and how he can take advantage of them, and will also evaluate the Czech business environment by using Hofstede’s four primary dimensions. The cultural differences will create a business risk and how to alleviate these risks. Along with the trade barriers, Steve needs to be aware of and assessing the demand of pizza and the cost structure.
In previous years the Czech economy was sluggish, then in 1989 Czechoslovakia along with Poland and Hungary opened up their markets to the capitalist system. This helped the initial phases of economic transformation in the Czech Republic. During the transformation of state-owned enterprises to private hands the inefficient operations were shut down. Through liberalization, trade barriers, prices, and commercial laws aided ownership to the private sector.
During macroeconomic stabilization, the currency was deflated and the interest rates were permitted and decided by the market forces. Although the economic progress has slowed in previous years in the Czech Republic, the low -labor costs, the exportation of manufactured goods along with a strong fiscal policy, which has led to, balanced budgets ahead of joining the European Union (EU). The major industries are metallurgy, machinery and equipment, motor vehicles, ...