The Relationship Between Culture And Foreign Direct Investment (FDI)

Basically, the culture is known as a way of life. All the social behaviours and norms that are found in the different societies of humans come into the culture. These social behaviours and norms are transferred from one generation to other generation with the help of social learning. When a particular company owns another company in another country, then this thing is known as foreign direct investment or FDI. The company owner doesn’t only shift his capital to other country but he also shifts the necessary skills, knowledge, and technology to the other country. If you don’t have enough idea about culture or FDI, then you can get help from coursework writing services. The relationship between culture and FDI is explained below;

1) Communication 

It is a fact that to run a business, there requires effective communication. In the case of FDI, the most common cultural problem that is faced by foreign investors is the lack of communication. Due to the lack of communication skills, it is almost impossible for you to convey your message in an effective way. Before foreign investment, it is necessary for investors to get an idea about all the professional interactions. 

2) Workplace etiquette 

If you are going to invest your capital from one country to the other country, then you will face innumerable differences in workplace norms. In order to meet the workplace etiquettes of another country, the investors should put together a useful infographic. This useful infographic is helpful for foreign investors to get a quick reference about the cultural differences of businesses in different countries. Moreover, there is also a difference of formality of addresses between the colleagues and business partners. You should try to get an idea about the possible titles and surnames that are given to colleagues and owners in this country. These things will provide enough help to foreign investors to get enough interaction with their cultural norms. 

3) Organizational hierarchy 

No doubt, there is a key role of the management team for the success of an organization. The attitudes and hierarchy of these management team members also vary from one country to another country. Due to these reasons, the speaking norms in the meetings, questioning norms from the seniors and the norms that are relevant to the expressions of the people are also different. Therefore, for foreign investors, it is also an unavoidable thing to get an idea about these things. By getting an idea about these things, it will be easy for an investor to develop an effective management team for his organization. 

4) Some other ways that can affect FDI in a new culture 

Along with these cultural effects on the foreign business, there are also some other ways that can affect the business in a new culture. These are given below; 

A) The difference in the contract and relationship norms 

C) Direct and indirect methods of communication 

D) High and low sensitivity to time 

E) Some high and low emotionalism effects 

F) General or specific forms of agreements 

G) Bottom-up or top-down building agreements

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