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How to manage cultural differences in various business environments - the case of Google in China

Doris Jelača and Karmen Šimera, two students of University of Split, Faculty of Economics, Business and Tourism (Croatia) wrote this interesting paper for the Output 2 of the CSB project.


Globalization is the process of synergy and union among people, companies, and governments worldwide. It is the most important trend in the world that defines business transactions everywhere. It is the reason why in our stores we have toys from China, why Croatians can work freely all around the world, or why a small olive oil production company from Hvar can sell its merchandise to someone in Texas. While it brought so many great things and opportunities to people everywhere, it also comes with a lot of challenges that have to be dealt with. One of the biggest difficulties that globalization brings is cultural differences between diverse cultures and its impact on doing business.

Culture is typically characterized as a group of common and established standards and 'rules' shared by a particular society. When you put it in a global business context, what one society views as professional may be different for another foreign society. Just for that reason, in a globalized economy, cultural sensitivity is essential. Knowing and recognizing cultural differences is a vital skill for succeeding in doing business. „Understanding language nuances, etiquette, and cultural time management can help navigate many complicated interactions.“ Corporations and small firms need to understand that cultural differences can affect how they perform in big or little local markets that they are targeting.

Let us take Japan as an example. Japan has an extremely unique culture which pours into their business deals. If you want to have a successful partnership with a Japanise company, it is important to know their business etiquette. Otherwise, you can do something by accident and they can be offended by it. For example, bowing is a big part of everyday life in Japan and to them, it is a sign of respect towards their business partners. It is also done in a certain order, so you have to be very careful to first bow to their senior partner.

All in all, it is evident that culture is now an essential part of business deals in this modern-day in age. This will also be presented throughout this paper, more precisely on the example of Google who tried to enter the Chinese market and after several years full of cyber-attacks and mistakes, failed. We will try to find out and explain in detail why that happened, what are

the reasons that caused that one of the most prosperous tech companies to be unsuccessful on of the biggest markets in the world and how exactly is Chinese culture different in comparison to 'our' Western cultures. We will also try to give our critical views on this matter and highlight things that Google could have done differently to potentially change the final outcome.

But first, lets answer the following question: What are the main characteristics of Chinese culture and how does it affect their business deals?

Read here the full paper.

Doris Jelača and Karmen Šimera - How to
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