Abstract
The Maharaja Mac is unique, this burger can only be found in India. The McDonald's Big Mac is among the best selling consumer products in the world; it is even used by economists to compare market conditions in different countries, each year economists publish a chart with the different prices of this fast food product in different countries1. The Big Mac is the symbol of globalization; in almost every country where McDonald's is present, the Big Mac is made in the same way, using the same ingredients.
But not in India, where the Big Mac has been renamed, and the recipe is different. In fact, Hindus who constitute 80% of the Indian population don't eat beef, as they revere the cow. Therefore, McDonald's when entering the Indian market had to change its menu to suit the Indian palate and beliefs.
According to Edward Tylor, the culture is "that complex whole which includes knowledge, belief, art, morals, law, custom, and any other capabilities and habits acquired by man as a member of society2" (Tylor, 1924). But many sociologists, anthropologists and economists give their own definitions. Most of them generally conclude that the culture is a set of values and norms shared by a group of people.
In International Business, the culture is an extremely important aspect of the success of a company when it operates in foreign countries. The culture is different in every country, which means that a company will have to adapt itself to the local culture. This involves new management methods, new marketing approaches, and new strategies.
In this essay, we will study the different cultural factors that influence international business and how they influence international business, and then, we will apply this information to the case of India.
Firstly, we need to identify the determinants of the culture. According to Charles Hill, there are six determinants of culture that can be easily identified3 (Hill, 2010):
- Religion
- Political Philosophy
- Economic Philosophy
- Education
- Language
- Social Structure
The religion is often considered as a supra-national value, some such as Islam has a direct impact on the way business is done in Islamic countries. For example, the Islamic finance regulates the practice of loans and prohibits interest rates. This is why many financial products have been especially created for Muslim clients.
The political philosophy is related to the political system in a specific country, the main difference arises between totalitarianism, e.g. North Korea, and democracy. Today, most political regimes are democratic. The political philosophy has a direct influence on the way business is done in the country. It defines the economical policies and the relationship between the private sector and the public sector.
The way you run a business in China is different from the way you run a business in U.S.A. In China, the government will be more interventionist while in the USA, the government refuses to participate in any kind of intervention. As mentioned earlier, the economic philosophy is often related to the political philosophy; democracy tends to be more liberal, encouraging free market, while totalitarianism tends to be more protectionist.
Tags: Indian corporate culture, Hofstede cultural dimension index,PESTL analysis
