Introduction to Political and Economic Risk/Cultural Issues

Cultural Issues
Anthropologists view culture as “the sum total of the beliefs, rules, techniques, institutions, and artifacts that characterize human populations”1. Cultural differences can be a significant barrier to understanding and can lead to risks for both buyer and seller. You must explore some of the more common problems that arise in cross- border transactions as different languages, business practices, religions, histories, and ways of doing business collide. You will need the ability to identify and to find sources of information to determine what the level of risk may be in conducting cross-border transactions so that you can protect against some of these risks. For example, the size, shape, language, color, material content and price of a product to be sold are impacted by socio-cultural forces. These forces play an integral part in the decisions of buyers. Neglecting to evaluate the way buyers will respond to the product can be very costly for a manufacturer.