Cross Cultural Barriers in Korea
The purpose of this report is to examine the cross cultural issues faced by a firm while doing business in one of the world’s highest populist countries. When the world trade organization emerged international trade increased drastically and countries began actively participating in foreign trade pushing their gross domestic profit and products respectively. With such an increase in and active participation in foreign trade it allows countries to create specialized goods and services. Trading agencies are facing certain trade barriers which restrict their expansion in foreign nations. Some trade barriers include, government policies, taxes, economic conditions, and cross cultural issues. Cross Cultural issues in Korea
In Asia, Korea is becoming a super power and is challenging the world economic leaders. The Asian market has under gone massive social and economic changes at a staggering rate. Korea’s economic growth has grown substantially in the last four decades. Based on statistical analysis, Korea could potentially overtake the United States (global economic leader) within a few decades becoming the world’s largest economy in terms of gross domestic production. The incentives and opportunities of trading with Korea are substantial. Korean businesses have a tendency in the course of direct contacts to be more complete. Something as simple as Face to face contact or shaking hands with the customers during the negotiation processes is a type of marketing strategy that our selected company uses instead of contracting through email or telephone communications. Contacting potential customers in the Asian market by email or telephone won’t help a company to increase the market share in an Asian market. In the United States people rely more on their own views to decide what they should do but in Asian countries people will always cooperate with each other to take the decisions due to strong collectivism.
In addition they are more dependent on groups or institutions. An example would be that a company in an Asian market would focus on the group of owners instead of focusing on the individual owner. The people of Korea have high risk avoidance characteristics so the a given company must clearly declare its products (components of a widget) cost, and benefit if it fails to prove these key points then it would not be successful in the Korean market. Most Korean people consider the sense of belonging to the group and devotion to the group are more significant than the single component. A company’s approach to a marketing strategy instead of fulfilling the expectation of the individual must fulfill the expectation of the group. The theory is that if the group succeeds than that through word of mouth that particular group’s sales will increase.
Communication Cross Culturally
“Cross-Cultural communication states that the ability to successfully form, promote, and improve relationships with members of different cultural group” (Weisbrot, M. 2011, April 27). Cross cultural communication can depend on many factors; such as manners of the different social group, perceptions, social structure, and understanding of group communication like nonverbal, verbal, and writing. In the Korean market, a company’s market approach must be towards nonverbal as well as verbal communication because Koreans’ are still following formal traditions and they believe oral words are more important, and mean more than written words. While communicating nonverbally the facial expression is most important. For example, in the Western countries the message or interest and honesty is conveyed through eye contact while in Korean culture eye contact is seen as rude or disrespectful. Many companies are reluctant to expand business in the Korean territory with the assumption that it will be unprofitable and highly uncertain.
The fact that there is also military turmoil between North and South Korea also makes small businesses even more reluctant to invest. To resolve common problems in the international trade the World Trade Organization faced by the small business, they have created opportunities to earn substantial profit, possibilities, and incentives through reducing complexity of doing businesses with the what are considered high risk countries like Korean. Cross cultural studies shows that often small companies fail to examine what other countries have to offer or Korean marketing techniques. There are specific cultural and logistical pros and cons involved in dealing with the Korean market but with the right support and market analysis, it can benefit small businesses to become naturally profitable businesses. Cross Cultural Ethical differences
“Corporate ethics are of pivotal importance in global business, though globalization also complicates ethical questions, because an individual’s culture affects his/her ethical decision making”(Anusorn Singhapakdi, Mohammed Y.A. Rawwas, Janet K. Marta, Mohd Ismail Ahmed, 1999). A hindrance to a marketer’s attempts to go international would be a failure to take into consideration the effects of differences in the culturally based ethical values of a potential consumer. Comparing consumers from the USA and Korea in terms of their perceived notions of marketing ethical situations, often time’s attitudes toward salespeople and business in general as well as their personal moral philosophies can have a great impact. There are significant differences between consumers from the USA and Korea and those differences must be taken into account if a firm expects to do business with both.