Challenges When Conducting Business Across the World

Jose Rivadelo

University of Texas Dallas

IMS 3310
10/10/2017 Exam 1

There are numerous challenges American companies face when conducting business

from around the world. There are issues with the countrys laws, or language barriers, cultural

barriers, and even political problems. The company I selected to explain the reasons for these

challenges is Toyota Motor Corporation. As we all know, Toyota is one of the leading car

manufacturers in the world. What people may not know is that Toyota has multiple factories here

in the United States and that over 25million Toyota cars are now manufactured over here in the

United States. I chose Toyota as my company to compare challenges faced when conducting

business around the world because Toyota is now a leading corporation in globalization as

evidenced by their amount of factories and facilities around the world.

This is a graph of Geert Hofstedes cultural dimensions comparing the country I chose, Japan,

with the United States

As we can see with the graph, the closest dimension that the United States has with Japan is their

Power Distance. Power Distance is the dimension that deals with the fact that all individuals are

not equal. With only a 14 point difference, both Japan and the United States are a small power

distance society. At a score of 54, Japan has a hierarchical society. An example that Japans

culture shows in the power distance scale is that their education system implies that everyone is

born equal and anyone can become the head if one works hard enough. Contrast this with the

United States in that while everyone here knows that everyone is unique that means that

everyone is also unequal. The inequalities in the United States imply that power is what each

person can influence anothers ideas and behavior. Even though there is a small difference in the

Power Distance, Toyota corp. faces challenges internationally because even if the American boss

will be willing to make the decisions because he has power, the Japanese boss will still only
make decisions based on what his higher ups choose and this will result in a longer decision

making process and this might make the negotiations break down or take too long to materialize.

The second dimension is individualism. This is one of the highest difference between the

United States and Japan with the United States being one of the most individualistic cultures.

With the United States having a score of 91, this shows that in the American culture, people are

more likely to look after themselves and their families rather than relying too much on their

bosses. Japans score of 46 shows that their society shows more about being collective and as a

unit. The Japanese would rather get along with everyone and would rather not lose face rather

than express individual opinions. This is a challenge in Toyotas international business because

while a Japanese man would rather not disrupt the arrangement and lose face, the American

might want to give more ideas and gather more information where he might have a chance to

lose face in exchange of being more proactive and showing initiative.

The third dimension is Masculinity. In this context, a high score is Masculine, it is

defined that the society will be driven by competition with success being defined by the winner

or the best in the field. A low score is Feminine, the dominant values in society are caring for

others and quality of life. With 95 points, Japan is one of the most masculine cultures in the

world. However, with low individualism, you do not see the assertive and competitive nature

often attributed to masculine cultures. What we see is the competitiveness between groups and

the drive for being perfect in their aspect of life. Japanese people being workaholic is another

expression of their masculinity, they seldom take breaks and leave their workplaces very late at
night. In contrast, the United States has a fairly middle score of 62. However, because of their

very high individualism score, Americans show their competitiveness individually. In school,

there are motivations to become the best and the top. Also, because of their high individualism,

Americans are more open to talk about their success and achievements. I think this could be a

problem and could cause challenges when the Japanese want to compete with different groups

and with different companies but the American might want to compete against everyone which

would result in not having an agreement at all.

The fourth dimension is Uncertainty Avoidance. Uncertainty Avoidance is how society

deals with the unknown future. With 92 points, Japan is one of the most uncertainty avoiding

countries on Earth. This is mostly because Japan has been hit by many natural disasters such as

earthquakes, tsunamis, and volcanic eruptions. Because of these disasters, Japan has learned to

prepare themselves for uncertain situations. This also shows in their culture, Japan has many

rituals, traditions, and ceremonies. In the business world, Japanese managers ask for as much

information as possible before making any decisions and this high level of uncertainty avoidance

is one of the reasons why change is difficult in Japan. The United States has a low rating of only

46 points in Uncertainty Avoidance. Historically, the United States have not learned to prepare

for uncertain situations as much as Japan. However, this low level of uncertainty avoidance in

the culture shows that the United States is more open to new ideas, innovative products, or the

willingness to try something new or different leading to more free expression. A challenge that

Toyota corp. has is that consumers all around the world are now calling Toyota vehicles boring

and lacking in character. Because of Japans high level of uncertainty avoidance, changing the

designs or the functions of the Toyota vehicles has been going poorly and that they would rather
not fix what isnt broken which can be why consumers are now going for other vehicle brands

instead.

The penultimate dimension is Long Term Orientation. This dimension describes how

every society has to maintain some links with its own past while dealing with the challenges of

the present and future. High scores in this dimension encourage modern education as a way to

prepare for the future. Japan has 88 points in this dimension which makes them one of the most

long term orientation oriented societies. The Japanese companies believe that their work is not to

make them money every quarter for the shareholders but to serve the society for many

generations to come. This dimension is very closely connected to Toyota corp. as one of their

philosophies is always be studious and creative, striving to stay ahead of the times. Toyota is

one of the leading market sellers of hybrid electric vehicles and one of the largest companies to

promote hybrid vehicles across the world. The United States has a low score of 26 in this

dimension and this shows in their companies that measure their performance in the short term,

with profit being desired quickly. Some years ago, Toyota had issued a global recall of millions

of their cars because of defective equipment. This might be the result of Toyota corp. having

placed more importance in their short term profits that they did not think about the long term

liabilities this action would take them.

The final dimension is Indulgence. This dimension is defined as the extent to which

people try to control their desires and impulses. Japan with a score of 42 has a low score and this

shows in the people not putting much emphasis on their leisure time. People with this low
orientation have the perception that their actions are restrained by social norms. A broad example

is that Japanese people are more likely hide their problems from other people and would rather

deal with the problems with their family. In contrast, the United States has a fairly high score of

68 and that they indulge more. Indulgent societies believe themselves to be in control of their

own lives and emotions. Another of Toyotas principle philosophies is always be practical and

avoid frivolousness. This dimension reinforces that philosophy by meaning that you should not

be carefree and wasteful.

In conclusion, while Japanese and United States have similar scores in the Power

Distance dimension, the other dimensions are very different from each other and it shows in how

different the cultures between the two countries are. Even though Toyota corp. is a global

business with facilities in both countries, because the company is based in Japan, the values,

philosophies, and ultimately the shots are all called by the Japanese. While there are numerous

challenges between the different cultures, there is still a lot of collaborations and partnerships

between the countries because of their willingness to work and cooperate with each other.
 Works Cited

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insights.com/country-comparison/japan,the-usa/

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October 09, 2017, from http://www.toyota-

global.com/company/vision_philosophy/globalizing_and_localizing_manufacturing/

Bomey, N. (2017, May 10). Toyota CEO: Don't call our cars 'boring' anymore. Retrieved October 09,

2017, from https://www.usatoday.com/story/money/cars/2017/05/10/toyota-akio-toyoda-

earnings/101502702/

Edahiro, J. (n.d.). Challenges in Globalization: the Pursuit of Quality and Safety, Contributing to the

Environment and Enforcing Compliance. Retrieved from https://www.toyota-

industries.com/csr/reports/items/02-05.pdf