How does the culture of a country influence the costs of doing business in that country? Provide examples in your answer.

The culture of a country influences the cost of doing business in a given company in various ways. For example, the bottom line of companies in a country which values its afternoon siesta, thereby losing valuable business hours, will be compromised.

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There are a number of ways in which the culture of a country could have an impact on the way business is done in that country—and this in turn will affect the cost of doing business. For example, consider countries in Europe in which it is traditional to have a...

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There are a number of ways in which the culture of a country could have an impact on the way business is done in that country—and this in turn will affect the cost of doing business. For example, consider countries in Europe in which it is traditional to have a siesta after lunch. While businesses may open again in the evenings, taking this break in the afternoon makes doing business more expensive, because no profits are made during siesta time.

In other parts of the world, in which Sharia is practiced, the financial costs of doing business are increased by cultural and religious obligations to make contributions to charities.

A third example would be the case of South Africa, which is still trying to heal the wounds caused by Apartheid. Under Apartheid, it was very difficult for the black majority to get an education, which has created great inequalities. This means that if a company does not have Broad-Based Black Economic Empowerment (B-BBEE) strategies in place, it is not eligible for any government contracts, which means it is likely to have to charge private clients more so that it can earn money.

In collectivist cultures—in which the community is seen as more important than the individual—the cost of business may be higher because companies will support other companies in their community rather than taking advantage of the economies of scale and scope that can be capitalized on by companies who buy raw materials from multinational conglomerates.

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The culture of a country can have a significant impact on its business and therefore its overall economy. The main issues presented by a culture are the access to resources. If it is difficult to access electricity or other utilities, businesses will likely not flourish in those areas.

Additionally, cultural tendencies have led to shifts in business practices that are entirely unrelated to resources. For instance, most European nations take several weeks of rest at the end of the summer for personal relaxation—and this means that the majority of businesses operating in those countries shuts down. This makes international business difficult during that time period.

A final consideration is that some cultures value certain businesses and careers over others. For instance, primarily Hindu India is not nearly as accepting of McDonalds as other nations are because of the prominence of beef in its products. These cultural differences make doing business internationally difficult at times.

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Culture basically refers to a way of life or a set of beliefs that guide a society. The culture of a particular country influences the costs of doing business by affecting the various processes involved in running the business.

Let's take a look at India, which ranks as one of worst places to do business. In India, it's all about the papers. Your business should have PAN for Income Tax, DIN for Directors, and CIN for Companies. These documents are collected from different departments, which could take ages to get them approved. Now, when applying for your business license, you have to create copies of these documents and then take them to the responsible department. You may also have to pay a bunch of fees that you may not even understand. The time and money spent will be more than if you had chosen to do business in Singapore.

On the other hand, Singapore is one of most favorable places to do business according to world rankings. In Singapore, people want to move forward and not play catch up with the rest of the world. This is why the government offers tax deductions to businesses that are focused on innovation. That means that the costs of doing business reduce as your company puts more money into research and development.

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There are several examples of how local cultures, traditions, and languages can affect the cost of doing business. The World Bank ranks nations on the "ease of doing business," factoring in issues such as the time it takes to get regulatory approvals for starting businesses, access to reliable electricity, ease of registering property, and ability to resolve disputes. Many of these affect the cost of doing business.

In many postcolonial cultures, such as India, efforts to build a robust national economy also featured a strong nationalistic culture, which emphasized independence of foreign influence and limiting foreign ownership. This means that many foreign investors incur costs of partnering with local business.

In Japan, the culture of politeness means excellent service is expected in retail outlets. This means that such outlets needs higher staffing levels, and also better-maintained facilities, than they would in North America.

In some cultures, religion affects the cost of doing business. For example, in Muslim countries, charging interest is considered usury, and thus banks or other firms that might accept payments over extended periods cannot recover the costs of offering credit through the Western tactic of charging interest.

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