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MNCs Are Also Victims Of Cultural Shock Cultural Studies Essay


Multinational corporations are dedicated to the development of an activity ( Internet Explorers ) in several states where they will seek farther growing of its operations, a major enlargement of its activities, ensuing in important economic growing, given the low costs that will take down monetary values andA an enlargement of its market

When MNCA?s move to a different state, different barriers are presented, and they have to cover with different issues, some of these issues belong to the state they are come ining and some others are brought by the MNC ‘s

After analysing assorted of these aspects/barriers such Distance from parent company, different Torahs and legal systems, different phases of advancement in the art of using accounting, different accounting patterns, different types of currency.

We found that civilization was non normally defined as a chief barrier, some facets of civilization like Different linguistic communications and the ensuing barriers to ease communications are normally reference but civilization itself as one of the chief barriers is non normally quoted.

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We consider that in some specific states, civilization could go if non the chief barrier one of the chief barriers for MNCA?s when come ining and seeking to succed in a new state because it influences the whole construction of the state, their legal system, authorities and peopleA?s behaviour. To endorse up our thought we would wish to show as an illustration the Starbucks instance in China, the immense impact Starbucks caused when come ining Chinese market, a state marked by its traditional civilization ; where Tea has been the historical national drink for centuries.

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The decision in non merely that in some specific instances civilization is one of the chief barriers when come ining a new civilization and that non merely MNCA?s are affected by the local civilization but that besides that the local civilization could be modified by MNCA?s.


From the beginning of clip people tend to trade the elements or objects they create with other men.A The same inclination is seen on the little feudal economic systems, the great imperiums and today on the so called nation-states.A This due to the fact that an efficient autonomy is really hard to accomplish, and does non take to a state ‘s overall public assistance.

Trade among states finds its beginning in a really concrete fact: It is good to all parties involved.A For states that export because they put their production and bring forth foreign exchange, and the 1s that import because they receive goods, and in some instances to bring forth them themselves would be more money.

The fact that each state or part has different features in footings of allotment of production factors ( natural resources, physical capital, human resources and engineering ) provides specialisation in the production of goods.A Besides different gustatory sensations and penchants of consumers, and can take to the economic systems of graduated table.

The universe tendency of economic globalisation and unfastened markets, has forced states to seek ways to promote non-traditional exports, pulling foreign investing to make new occupations, increase foreign exchange net incomes and accomplish fight.

Modern MNC ‘s arose with the U.S. direct investing in Europe in the 50s and 60s decennaries of the twentieth century.A This phenomenon became worldwide when European and Nipponese companies joined the tendency.A

Today, assorted figure of MNCA?s have emerged in states such as China, India, Mexico, Brazil and Southeast Asia.

When these MNCA?s move to a different state, different barriers arise, and they have to cover with different issues, some of these issues belong to the state they are come ining and some others are brought by the MNC ‘s.

First we would wish to advert some of these facets MNCA?s have to cover with when come ining a new state, to eventually concentrate on how civilization could go a large barrier for MNC ‘s when come ining a state, explicating and analysing the Starbucks instance in China and the cultural daze presented after the company entered the Chinese market, a market being strongly influenced by a traditional Tea Culture, where Tea has been the historical national drink for centuries.

MNCA?s and itA?s barriers

Multinational corporations or multinational corporations are those that are non merely established in its state of beginning but besides in other states, to execute their concern activities ( both gross revenues and buying and production ) in states where they have settled.

Multinationals are able to spread out its production and other operations around the universe, and to mobilise industrial workss from one state to another.A The amalgamations and confederations between them, let them to run into turning power and influence in the planetary economic system.

ItA?s doctrine is an overall construct, which maintains a planetary position on their concern, market ( client ) , services and merchandises, under which is conceived the whole universe as your mark market.A These companies are characterized by the employment of both the state of beginning and the state in which they settled.

The term “ transnational ” is understood as a market refers non to the nature of the company: in fact, it is usual to measure up the term “ transnational ” of delusory and prefer to name “ multinational ” because although they operate inA several states, its location and top executives every bit good as the beginning of its scheme and direction in general, it located in their state of beginning without any influence from their abroad subordinates.

When companies are interested in take parting in international trade or seeking to diversify markets, the demand to negociate with foreign business communities and several problems/barriers normally arise.A As is known, an international dialogues involves two or more parties, ensuing in the demand to decide struggles or reverses which normally becomes a large job for MNCA?s.

The civilization has a direct influence in international dialogues, since non all states are traded in the same way.A Aspects as cardinal values, wonts, imposts, faith, moral, etc. Are indispensable to cognize, before you can hold good communicating and so negociating for a reciprocally good.

In this work we will speak about how civilization influence international dialogues, cultural differences, which is an international dialogue, how is the procedure of international dialogues and eventually analyse how to make concern with Mexicans, advantages, benefitsA and why puting in Mexico.

We would wish to advert some of the most common jobs that MNCA?s have to cover with but to chiefly concentrate on how civilization has a direct influence in international dialogues, since non all states are used to pattern trade in the same way.A Or some facets as cardinal values, wonts, imposts, faith, moral, are indispensable, and could impact the whole procedure of the MNC.s.

Distance from parent headquarter: this trouble is presented by the distance between the chief headquarter and its subordinates at the clip of roll uping information from different motions and minutess, which are necessary for the readying of fiscal statements, these delaysA be reflected when the clip comes to register amalgamate studies.

Foreign Law: Each state has its ain Torahs and administrative bureaus that regulate accounting in that state, so when it ‘s the clip to fix the fiscal statements some demands are non complied with the regulations given in each countryA?s jurisprudence and can do jobs in the company.

Some companies require that all its subordinates follow the same methods of accounting, which is why transnational companies make an accounting manual that provides a chart of histories, standard rates of depreciation and a figure of study signifiers, leting them toA Account and to compare costs among states.

Differences in accounting patterns: When a subordinate conducts its fiscal statements, these are made harmonizing to the Torahs of each state, but to consolidate the information can be someway difficult.A

When the are different subordinates, they have to accommodate their statements to the patterns established by the parent headquarter.

Seeking to accomplish a greater assurance and credibleness of minutess and motions of each subordinate the parent HQ chooses to use some of their patterns in other states, sometimes without being cognizant that this can convey administrative and legal effects to its subordinates, which is why it is best to develop foreign forces to execute their maps resembling what you want to central offices, but harmonizing to the development of these states.


there are about as many definitions of civilization as anthropologists, most of them conceive of civilization as the amount of beliefs, regulations, techniques, establishments and instruments that characterize human groups.A In other words, A?culture consists of common forms of behaviour that are learned by members of a given society, which represents the peculiar manner of life of a specific group of individual ” .

When people work in societies and civilizations that differs from their ain, the jobs faced multiply by covering a individual set of civilizations by the figure of cultural sets found in each foreign market.

( Gelles 2000 ) International Journal of Good Conscience. 2 ( 2 ) : 156-228. Septiembre 2007. ISSN 1870-557X.

Unfortunately, really frequently those who knows a individual cultural form believe, they have knowledge of the cultural features of other topographic points, when in world it is non achived, unless they are able to do comparings with other civilizations, and may non even know the most of import characteristics of their own.A Possibly it is besides unnoticed the fact that each company believes that their civilization is superior to others ( ethnocentrism ) and their efforts to present their manner to happen a stiff opposition.

There are several facets that from civilization that could interfere in MNCA?s operations, harmonizing to some experts in general and as we studied on the class Organization and civilization, in general the most of import are:

Aestheticss, Attitudes and beliefs, Religion, Materialistic civilization, Education, Language, Social organisation.

So concentrating on civilization as an of import issue for MNCA?s when come ining a new state, the research inquiry proposed by us and which we want the reader to analyse and make scruples about is:

A?Could civilization go the chief barrier for MNC ‘s when come ining a new state?

With the constructs mentioned before, meaning to reply the proposed research inquiry and seeking do a deeper analysis we would wish to show the Starbuck instance in China, as a peculiar illustration of how civilization and its chief constituents could go the chief barrier for MNCA?s when come ining a new state.

Harmonizing to some surveies, “ Chinese Culture is one of the universe ‘s oldest and most complex civilizations in the universe. The country in which the civilization is dominant screens a big geographical part in eastern Asia with imposts and traditions changing greatly between towns, metropoliss andA states ” 2.

“ Chinese Dynasty Guide – The Art of Asia – History & A ; Maps ” .A Minneapolis Institute of Art. Retrieved 10 October 2008.

The Starbuck ‘s Case in China

Starbucks is an international java concatenation based in Seattle, Washington.A It is the largest java company in the universe, they sell processed java and espresso, hot drinks and other drinks, bites and besides sells some other merchandises such as mugs and java beans.

Starbucks Experience is about passion for a quality merchandise, first-class client service, and people. With about 3500 cafes in 44 states, it is clear that Starbucks passion transcends linguistic communication and civilization.

Since its international journey began in 1996 with its first cafe in Tokyo, “ we have been amazed by the planetary credence and visibleness of our trade name in all our international markets, ” ( 3 ) says Howard Schultz, president and head planetary strategian. All this information was taken from the Starbucks web page.

During a convention in China when the executive Lawrence Maltz distributed free cups of Starbucks java to Beijing hotel invitees They identified there was important involvement from both aliens familiar with the Starbucks trade name and Chinese who did n’t cognize the trade name an involvement to take part in this component of Western civilization. Starbucks ‘ desire to spread out into the Chinese market grew doing it a fact.

Starbucks ‘ end of set uping a house presence as the prime java concern in China has the company pouring 1000000s into Chinese companies, resources, real-estate, and revenue enhancements.

A Web Page Starbucks. ( September 16, 2007 ) ,

But it was non after taking this city manager determination, that they made a city manager find ; one time they established the Chinese market, they had to cover with the fact that the fact that Tea has been the historical national drink for centuries in China.

Chinese Tea Culture

The Chinese have a expression: ‘Firewood, rice, oil, salt, sauce, acetum and tea are the seven necessities to get down a twenty-four hours. ‘ ( 4 ) Though tea is last on the list, we still can see the importance of tea in day-to-day life. It

Not merely this, moreover there are some particular occasions in which tea is prepared and consumed:

As a mark of regard

For a household assemblage

To apologise.

To link big households on marrying yearss:

Making some research about the tea civilization we found this information in several pages and that we would wish to cite as it is because it explains how immense and of import is the tea civilization in China

A?The Chinese take their tea earnestly. Everyone, from cab drivers to company presidents, drinks tea every twenty-four hours, all twenty-four hours long. Tea is consumed in litres: cups upon cups of the lovely, steaming, fragrant material. But any Chinese tea expert knows that much of the action and exhilaration takes topographic point long before the first sip. While most mundane tea is merely a affair of H2O sloshed over tea foliages, a true tea fan knows there are punctilious inside informations of brewing clip, H2O temperature, quality of H2O, types of tea pots and cups that make a large difference in the consequence. And that ‘s after all the attention has been taken to turn and ferment the delicate foliages, to intermix and so on. Tea tasting has besides a cultural significance, tea and tea wares should fit environing elements such as zephyr, bright Moon, pines, bamboo, plums and snow. All these show the ultimate end of Chinese civilization: the harmonious integrity of human existences with nature. Tea could be compared to personal character, the aroma of tea is non aggressive ; it is pleasant, subdued and permanent. A friendly relationship between gentlemen is besides like a cup of tea. With a cup of tea in manus, basking the green foliages in a white porcelain cup, you will experience peace. Fame, wealth and other earthly concerns are far off. Tea is the symbol of elegance.Tea is a cryptic but harmonious combination ; it is religious every bit good as stuff, and invigorating every bit good as pacifying. Its character is flexible in different environments. For illustration, as tea goes in a different way, a different tea civilization is formed. Tea-drinking wonts vary in different parts of China. Roughly, scented tea is popular in northern China ; green tea is preferred in eastern China, and black tea is optimal for people in Fujian and Guangdong. Notably, Yum Cha ( tea imbibing ) is really popular in Hong Kong and Guangdong Province. Though subdued amount, the true high spot of Yum Cha, is what attracts epicures, tea is an indispensable portion of the repast. While tea civilization has regional differences, it has reached its highs in Taiwan and in Fujian Province, and cultivation has been the support of legion tea agriculturists for eons. This is besides the beginning of the luxuriant tea pouring “ ceremonial. ” First, a tray is presented keeping no fewer than 10 points, all of which are carefully introduced. The bantam teacups are used entirely for sipping. Once decently steeped, the tea is foremost poured into a high, narrow cup called the keeping cup or sniffer cup, whose olfactory property is meant for you to bask. From this cup, the tea is poured into the bantam teacup. ( 4 )

After adverting this we would wish to discourse the cultural troubles that Starbucks had to confront when set uping in China

Cultural Shock

There were some specific troubles that Starbucks had to confront when come ining in China. The first 1 was that the non-smoking policy of Starbucks would be against the high smoke Chinese consumers who would non be such as happy to be kept from smoking while imbibing a cup of java inside the cafe. Starbucks doctrine does non desire anything, even cigarette fume, to interfere with the great odor of its java beans. However, unexpected was the consumers ‘ good reaction to this policy, as the tobacco users say they do non hold job with smoke exterior.

( hypertext transfer protocol: // 2nd challenge was a small spot more serious and harder to face. Taking attention of face is a really of import cultural affair for Chinese people and they would hold preferred non to imbibe or eat in public because by that manner they could lose their face. However, even though they prefer to hold their repast or java inside Starbucks, after all the market entry scheme and the good known trade name name, one really can see many people passing a Starbucks cup on the streets, proudly demoing the Starbucks logo on the cup and reflecting a lifestyle and category position. This can merely go on because of the high consciousness of the trade name achieved by Starbucks, and this combined with a Chinese market so brand-oriented. Customers go to Starbucks non for the java, but to show themselves as modern Chinese in a public scene.

In United States, Starbucks is a lifestyle, and most people at that place buy their java to imbibe it while walking or driving to work. So, most than half of Starbucks ‘ gross revenues within the US are for take-away. Besides, most of gross revenues in US market occur during the forenoon, since people use to hold there breakfast or merely purchase it to devour it at work.

On the other side, a big bulk of Chinese prefers to imbibe their cup of java inside Starbucks and have a dainty with some friends or coworkers. They take the clip to decently bask their repast and java. Besides, another pronounced difference in ingestion is that most Chinese usage to travel to Starbucks during the afternoon and at dark after work looking for loosen uping themselves and believe about what they did all twenty-four hours. Peoples in China go to Starbucks non merely for the java, but besides for the relaxing environment is inside the cafe. Besides, contrary to American, they about ne’er drink the java entirely ; they use to hold some repast with it, and that is why Starbucks in China have to worry about offering great repast options to their clients. Then, as in the US, Starbucks in China is besides a life style, evidently with its ain peculiar affairs different from American.

Tea is an of import issue of Chinese civilization. However, Starbucks has successfully entered in the Chinese market offering a western manner and western merchandises to people who merely want to populate something different from their ain civilization. So clients do non travel to Starbucks merely to hold some spirit they can happen everyplace ; Starbucks is the western civilization representation, and that is how the Chinese have seen it. On the other manus, the java ingestion in China is turning in really high rates each twelvemonth, and it is being conceived as a more informal drink. Nestle was the first company to come in java in China, but Starbucks is the first 1 in offering existent java to the multitudes.

After analizing this we can see how civilization became one of the chief barriers for them when set uping in China, and give us the cognition to province that non merely Starbucks had to accommodate to the fact China had a traditional Tea civilization, but besides see how they change peopleA?s heads and made them seek something new, inviting Chinese people to go forth behind some of their traditional imposts and seek new things.

( Most of the information related with China was taken from “ Coffee Goes to China: An Examination of Starbucks ‘ Market Entry Strategy ” , by Jen-Lin Hwang )


In fact in some specific occasions civilization can go the chief barrier for MNCA?s when seeking to win in a new state, giving civilization a large relevancy for MNC ‘s due It is of import for foreign investors to cognize that there are differences between their states and ours, and that many basic things that seem, may be unknown to them or merely handled otherwise.

The key to Starbucks ‘ success in China is non related to the constitution o a “ coffee civilization ” , their success alternatively is based on their “ lifestyle placement ” . Since the 1980 ‘s reforms, non merely the rich category has grown, the in-between category within the immense addition of spent, which makes Chinese to desire more eldritch, rare and new material every twenty-four hours.

Ultimately, what is pulling consumers to Starbucks in China is non the drinks but the ambiance and feeling of being hip/modern etc. Sounds like a simple proposition, but it takes a certain sum of nuance to draw it off, plus a big helping of positive coverage in the media. Starbucks has suceded on both facets in China.

Sing the tea civilization, java has brought a simpler and less formal manner of disbursement clip, or a manner to hang out. Tea is closer to civilization, and covers a great portion of the Chinese 1. Coffee is more of a societal event than a day-to-day necessity.


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Journal of Undergraduate Research

Volume 6, Issue 8 – July/August 2005

China ‘s Burgeoning Coffee Culture hypertext transfer protocol: // id=467

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