Cultural sensitivity is vital to remember when any firm does any business in a foreign market. Certain strategies and procedures used in the United States may not translate the same way in other countries or have the same impact. Other areas in the world operate their businesses with different priorities and in different cultures so it is crucial to consider how these differences may affect how business is done. Ethical situations will inevitably arise when a firm begins operations in a new international market so it is best to be prepared to face such situations with character.
Company A now feels ready to enter the Eastern Asia market to continue its plans to grow the company and its profits. Taiwan is the country chosen for the next international expansion and there are many things to consider before entering this market. After researching several Eastern Asia markets to globalize in Taiwan, a republic of China was chosen as the country to expand in because there is the potential to manufacture a large volume of their engine parts there while paying very little in labor costs. The absence of any organized trade union is also a factor because there will be little resistance offered from any form of union.
With expansion to any new country or region there are always cross-cultural ethical differences to take into consideration since all countries or areas hold their own world-views, religions, politics, traditions etc. Expanding to Taiwan with obviously has an impact on both Company A and Taiwan itself. While labor costs in Taiwan are much cheaper than the United States Company A must act ethically with concern to culture of Taiwan and the people who the employ there. Some people in Taiwan are grateful for American expansion to their country because there are more jobs available but there are also currently many in Taiwan who look at the American expansion in their country as a negative. There is a major concern in both Taiwan and the US that many of the multinational corporations doing business in Taiwan are doing far more that just operating a company there. Most believe that these multinational corporations have a significant influence on the political agenda’s of Taiwan who have the interest of their company in mind before that of the people of Taiwan.
There is also major concern for the worsening of government regulation in Taiwan, as there appears that they are not protecting workers from any physical, mental or social risk in the workplace. Company A should also consider creating some form or insurance benefits package for its Taiwanese workers as this would go a long way in showing them that they are ethical, that they care about their workers, and that they respect the Taiwanese people. This all has an affect on company A because they must make a conscious effort protect their image and brand so that they can continue to grow their business within the US and worldwide. Company A must make ethical decisions towards their operations across the company and within Taiwan so that they are not branded as a company who is simply taking advantage of cheap labor in a foreign country. With the majority of Taiwan believing that workers are not protected and that multinational corporations are attempting to influence political issues, I think it would be wise for Company A to make massive effort towards showing the people in Taiwan that they will protect their workers and use any influence they hold to help improve government regulation and attempt to mutually benefit both the company and the people of Taiwan.
Company A must also consider the traditions and general way of life for the Taiwanese people. For instance learning their foods, drinks, religious practices, and recreational activities and somehow blending them into the company culture may help workers feel more comfortable and trusting towards Company A. Taiwanese people drink a lot of tea and juice drinks with boba in them so maybe offering or selling those within the company property would be a good idea. Also Buddhism, Taoism, and Chinese folk religion are the common practices in Taiwan so perhaps offering a place of worship on company grounds would be a great gesture. As far as work hours are concerned, Taiwanese people are working similar business ours that Western countries typically will work so they are hard working people and are accustom to similar schedule to what the factory in the US would for Company A.
The will also be critical adjustments needed to be made regarding Company
A’s marketing strategies in Taiwan versus how they would typically market their products in the US. There are different consumers in Taiwan because of their dense population and their culture. Most Taiwanese people would not tend to purchase large trucks or vehicles that would necessitate the heavy duty parts that Company A manufactures so they must concentrate almost all of their marketing efforts around a specific group of Taiwanese consumer or business that utilizes larger vehicles on a consistent basis. Company must market their product mainly to businesses that use heavy-duty equipment in their operations and in industrial areas since the average Taiwanese consumer would not buy a large truck, as they are not sold in such large volumes as they are in the US. As far as marketing to consumers Company A’s focus should be on the wealthy people of Taiwan who can afford to operate and maintain larger vehicles. Company A should also reduce the price of their product to accommodate for a smaller volume of sales on trucks in Taiwan and also to begin attracting new clients since they will be new to the area. This price reduction should be offset somewhat by the less expensive labor costs experienced in Taiwan.
Cross-cultural communication is also important for Company A to build a strong relationship with its Taiwanese workers. The first barrier to communication is language. The primary language in Taiwan is Mandarin Chinese and while most Taiwanese businessmen do speak English, it would be a good idea for some representatives from Company to a learn some Mandarin Chinese to help with communication efforts. Company should also consider having some translators available to maintain clear communication as well. Taiwanese business is based mainly off of respect so it is important to meet fact-to-face whenever possible, include senior executives meetings whenever possible, direct presentations to the senior ranking person and also make sure to give and receive any gifts with both hands as a sign of respect, and always look people in the eyes.
It is also very important to refrain from being too frank or outspoken because this will be viewed as disrespectful. Is it vital to keep these practices as well as learning other important cultural traditions when conducting business in Taiwan or with any Taiwanese people. As far as marketing is concerned, while in the US marketing can be based around creativity and branding, it is important in Taiwan to focus their marketing around integrity and respect. Taiwanese people and their businesses are less concerned with gimmicks and flash and maintain an emphasis on ethics and as always respect is absolutely vital.
There will without a doubt be many cultural differences to overcome when opening a new plant in Taiwan. Marketing strategies and how businesses are viewed will not be the same in Taiwan as they are in the US so while A Company may be accustomed to operating their plants at home in a certain way, they must make adjustments to accommodate for the cultural variances of the environment their new plant is operating in. The impact that the cultural differences will have could be minor or they could be significant depending on how well Company A does their research and how they handle adapting their new plant to conform to the Taiwanese market while maintaining efficiency and their core company beliefs. Taiwan is densely populated country and their consumers purchase mainly small fuel efficient vehicles and since Company A specializes in engine components for heavy duty trucks they must focus their marketing strategies on smaller sized trucks with an emphasis on the advantages of their engine components, along with businesses that utilize heavy duty trucks in their operations.
Courtney from Study Moose
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