Global Mindset: The Unique Qualities of the Business Climate of Prague (Czech Republic)

Global Mindset

Introduction

The consequences of globalization on business’ operations are inevitable. Globalization has profoundly changed how business is envisaged and conducted. Its impact on business operations is both universal and wide-ranging, thereby, necessitating a review of the current tactics and historic rules of thumb such as the standard operating procedures. For instance, a globalized business requires that processes such as business planning at all levels must be undertaken with deeper knowledge about the local and global environment. The knowledge of local regulatory requirements is as important as global knowledge of economic activity when developing strategic corporate goals. Moreover, when executing business operations and procedures, cultural practices and local customs must be recognized. A failure to review the strategies of doing business to conform to the foreign environment may lead to a significant impact on the business’ performance.

Key Dynamics Underlying the Globalization of Business

There are numerous key dynamics that underlie the globalization of businesses. The laws and policies governing businesses around the world are varied and change very often. Concerns relating to policy instability and taxation are among the leading problematic factors in business globalization (The Economist Intelligence Unit 1). Business in different countries such as the Czech Republic suffer from the tax burden, especially payroll taxes and excessive OECD standards, although not as high as those in neighboring countries such as Slovakia. Also, regional and bilateral agreements undertaken by European Union (EU), the Organization for Economic Cooperation and Development (OECD), and policies imposed by organizations such as the International Monetary Fund (IMF), the World Trade Organization (WTO), and the World Bank impact on the market-driven process of globalization.

The Unique Qualities of the Business Climate of Prague (Czech Republic)

The Czech Republic has numerous unique business climate that impacts to the global marketplace. For instance, the country is a medium-sized economy that is open, export-driven and is heavily reliant on foreign demand, particularly from the Eurozone (Export.gov n.p.). About 84 percent of the country’s exports go to its counterparts in the European Union (EU). Out of these exports, over 60 percent are dispatched to the Eurozone, while another 32 percent is shipped to the Republic’s greatest trading partner, Germany (Export.gov n.p.). Prague is strategically located in the EU region. The country has well-developed infrastructure and skilled labor force. These factors have enabled the small country with a population of around 10.5 million to hoist itself as an important regional and global manufacturing hub and consumer market for Eastern and Central Europe (Export.gov n.p.). On the other hand, U.S.’s companies are going abroad to invest in other countries, unlike Prague which is hosting many foreign companies. As a result, the U.S. companies and those from other parts of the country can take advantage of the conducive business environment in the Czech Republic to invest in the country and the markets the country exports to.

Czech Republic’s location in the European Union region makes it an uncertain business environment. European integration influences numerous factors, which contribute to the establishment of the business environment in the Czech Republic and thus impact on the performance of organizations in the country (Litva 37). Political instability in the region, especially the recent threat of Britain to withdraw from the EU creates uncertainty to Czech Republic’s business environment. The withdrawal will affect business performance in Prague since EU countries are the leading markets for Czech Republic companies. The location of Prague in the EU region distinguishes the country from the U.S., which has minimal influence from external market environments. In the Czech Republic, expatriates from America and Western European countries are considered to be highly paid than the local population. This factor can sometimes lead to the foreigners being overcharged for different services such as accommodation and taxis (Kwintessential Ltd n.p.). Despite the efforts of successive governments to stamp out this behavior in recent years, it is still witnessed in different areas of the country.

Both the U.S. and Czech Republic business cultures display preference to hierarchical leadership in organizations. In the U.S., hierarchy in organizations is established for convenience. Superiors are often accessible and managers depend on individual workers and teams for their expertise. The managers and employees are consulted and information is frequently shared (Cook 49). Similarly, in the Czech Republic, most business organizations maintain a hierarchical chain of command (Santander). However, decision-making in the two countries’ organizations varies since, in the U.S., decision-making is undertaken through consultation across an organization, whereas in the Czech Republic, business leaders make decisions for their organizations. In the U.S., there is a lot of delegation to workers in U.S. businesses rather than all processes and power being concentrated in the top management (Cook 49). The conduct of decision-making processes in the U.S. is influenced by equal rights concept, which is evident in all aspects of the country’s society and government (Cook 49). As a result, in American organizations, hierarchy is created for convenience rather than for command and control of organizations. Superiors are accessible and managers depend on individual employees and teams for their expertise. However, in Czech, decisions are made from the top down. The leadership’s opinion is usually valued and weighed (Santander). Subordinates cannot challenge the decision made by managers because Czechs tend to adhere to the established procedures and pay great attention to detail.

What I Should Do to Further Develop My Global Mindset and Become an Effective Global Manager

Business managers should attain competence in global business operations in the current business environment. The world is becoming a global village where the hindrances of national boundaries are continuously becoming weaker, allowing businesses to operate beyond their countries of incorporation. As a business manager, I should have global intellectual capital which comprise the knowledge on the global industry, business competition, and opportunities. Through the international study tour, I learned that the business environment in countries around the world are based on market size, number of firms in an industry, legal and regulations, and business operation costs. As such, I should always study business environments in different countries to increase my global intellectual capital. My studies should focus on understanding different industries in the world, how to transact business internationally, the risks involved and opportunities available among others.

I should improve my global psychological capital by improving my knowledge of diversity. I should develop a passion for diversity, seek to understand cultures and people around the world, expose myself to people from different parts of the world, and visit different countries. International business operations bring together people from different parts of the world who uphold different cultures and speak different languages. Since I desire to become a manager for a multinational company, I should prepare myself for the world beyond my nation’s borders. I will visit different multinational companies around the world such as Coca Cola, Toyota, Samsung, and Uber among others to gain some knowledge from the companies’ leadership. I will inquire from the companies’ leadership about the challenges and opportunities they encounter in their operations and the strategies they apply to compete effectively and overcome the challenges they face in the many countries they operate in.

I will seek to improve my global social capital by ensuring that I gain the ability to work in multicultural environments. I am focusing on improving my intercultural empathy to gain the ability to work in different parts of the world and work comfortably with people of different nationalities and cultures. During my schooling, I will build friendships with my fellow students from different parts of the world so that I can learn more about their cultures, norms, languages, and habits. Through friendship, I will have opportunities to visit their countries during my school holidays. After my studies, I will look for employment in organizations that display diversity in their employee teams. Also, I will build networks with people from different countries through various channels such as social media platforms that include Facebook, Twitter, and Instagram. I will join professional organizations with international membership to build global networks. Channels such as LinkedIn will help me build networks with professionals around the world and to understand how they improve their leadership competencies. I will undertake research in libraries and online to learn how I can improve my cross-cultural communication skills.

Conclusion

Managing the operations of multinational businesses is demanding and challenging. Varying and ever-changing policies around the world complicate the management of multinational corporations. International agreements and regional blocks agreements affect business operations. Also, the presence of organizations such as IMF and WTO necessitates managers to be conversant with the policies laid down by these organs as they impact the global business environment.

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