1.

Explain “Cultural Dimensions” and “Cultural determinants” and how they will affect your shop
Malaysia?

Cultural Dimensions”

Hofstede's cultural dimensions theory is a framework for cross-cultural communication,

developed by Geert Hofstede. It describes the effects of a society's culture on the values of its
members, and how these values relate to behavior, using a structure derived from factor analysis.

Hofstede developed his original model as a result of using factor analysis to examine the results
of a worldwide survey of employee values by IBM between 1967 and 1973. It has been refined
since. The original theory proposed four dimensions along which cultural values could be
analyzed: individualism-collectivism; uncertainty avoidance; power distance (strength of social
hierarchy) and masculinity-femininity (task orientation versus person-orientation). Independent
research in Hong Kong led Hofstede to add a fifth dimension, long-term orientation, to cover
aspects of values not discussed in the original paradigm. In 2010, Hofstede added a sixth
dimension, indulgence versus self-restraint.

Hofstede's work established a major research tradition in cross-cultural psychology and has also
been drawn upon by researchers and consultants in many fields relating to international business
and communication. The theory has been widely used in several fields as a paradigm for
research, particularly in cross-cultural psychology, international management, and cross-cultural
communication. It continues to be a major resource in cross-cultural fields. It has inspired a
number of other major cross-cultural studies of values, as well as research on other aspects of
culture, such as social beliefs.

Cultural determinants”

Cultural determinants represent features by which basic differentiation of cultures is possible.

Cultural determinants include ethnicity, race, country of origin, language, non-verbal
communication, acculturation, gender, age, sexual orientation, values, behavior norms, rules,
manners, social grouping and relationships, religious and spiritual beliefs, socioeconomic class
and education

Malaysia has already various cultures people. And Malaysian culture is the combination of multi
culture. So I would like expand my business Malaysia I have to think about the international
customers demand. Because if we produce product based on international standard I think I can
expand business in Malaysia wit in a short time. Although, cultural dimensions and cultural
determinants factors are theoretical bookish knowledge but these knowledge helps a lot to
understand any new countries overall situation. This helps me a lot when I decided to start up
business in Malaysia.

4.Since it is a new market, describe the pros and cons of globalization and how the different economic
systems can affect your business.

Pros and Cons Of globalization

People around the globe are more connected to each other than ever before. Information and
money flow more quickly than ever. Global Manufacturing Goods and services produced in one
part of the world are increasingly available in all parts of the world. International travel is more
frequent and international communication is commonplace. Globalization is an economic tidal
wave that is sweeping over the world. It can’t be stopped, and there will be winners and losers.
But before drawing any conclusions on how it affects the Malaysia. economy, consider some of
the general cons and pros of globalization.

The Disadvantages of Globalization

 Multinational corporations are accused of social injustice, unfair working conditions

(including slave labor wages and poor living and working conditions), as well as a lack of
concern for the environment, mismanagement of natural resources and ecological
damage.
 Multinational corporations, which were previously restricted to commercial activities, are
increasingly influencing political decisions. Many think there is a threat of corporations
ruling the world, because they are gaining power due to globalization.
 Opponents say globalization makes it easier for rich companies to act with less
accountability. They also claim that countries’ individual cultures are becoming
overpowered by Americanization.
 Anti-globalists also claim that globalization is not working for the majority of the world.
During the most recent period of rapid growth in global trade and investment, 1960 to
1998, inequality worsened both internationally and within countries. The UN
Development Program reports that the richest 20 percent of the world's population
consume 86 percent of the world's resources, while the poorest 80 percent consume just
14 percent.
 Some experts think that globalization is also leading to the incursion of communicable
diseases. Deadly diseases like HIV/AIDS are being spread by travelers to the remotest
corners of the globe.
 Globalization has led to the exploitation of labor. Prisoners and child workers are used to
work in inhumane conditions. Safety standards are ignored to produce cheap goods.
There is also an increase in human trafficking.
 Social welfare schemes or “safety nets” are under great pressure in developed countries
because of deficits and other economic ramifications of globalization.
The Positive Side of Globalization

Globalization has a positive side as well. Supporters of globalization argue that it has the
potential to make this world a better place to live and will solve some deep-seated problems like
unemployment and poverty. The marginal are getting a chance to exhibit in the world market.

Here are some other arguments for globalization:

 The proponents of global free trade say that it promotes global economic growth, creates
jobs, makes companies more competitive, and lowers prices for consumers. It also
provides poor countries, through infusions of foreign capital and technology, with the
chance to develop economically by spreading prosperity creates the conditions in which
democracy and respect for human rights may flourish.
 According to libertarians, globalization will help us to raise the global economy only
when the involved power blocks have mutual trust and respect for each other’s opinion.
Globalization and democracy should go hand-in-hand. It should be pure business with no
colonialist designs.
 Now there is a worldwide market for companies and consumers to access products from
different countries.
 There is a world power that is being created gradually, instead of compartmentalized
power sectors. Politics are merging and decisions that are being made are actually
beneficial for people all over the world.
 There is more influx of information between two countries.
 There is cultural intermingling. Each country is learning more about other cultures.
 Since we share financial interests, corporations and governments are trying to sort out
ecological problems for each other.
 Socially we have become more open and tolerant toward each other, and people who live
in the other part of the world are not considered aliens.
 Most people see speedy travel, mass communications and quick dissemination of
information through the Internet as benefits of globalization.
Globalization makes the world smaller. When I am decided to start up business in Malaysia I have to
generalize overall the economic factors so that I can take the right decision on right time. Because,
economic factors impact a lot in the business. And based on economic factors a business person needs
to decide should they start up their business or not. Malaysia economic growth rate is high
comparatively other country. The most important part of the Malaysia is that it is one of the tourist
zones and the inflation rate is low. So it is the safest zone for the international investors to invest on
Malaysia.
2. Based on your knowledge of the above suppose want to expand their business in Indonesia. State
how the various laws can affect to decision you expand?

Legal: If the legal system of a country is strong, then cost of doing business will be more. Indonesia in
famous for weaving and fashion industry to they are too much restricted to entry international brands.

Political risk: political risk tends to be higher in countries experiencing social unrest and disorder. Social
unrest is usually expressed through strikes, demonstrations, terrorism and violent conflict. All these
hamper business activities.

Economic risk: Economic mismanagement can adversely affect profit and other goals of business
(Inflation, Bankruptcy or business and government debt). Example: South East Asian crisis (Indonesia)

Legal risk: Legal risk means the likelihood that a trading partner will opportunistically break a contract or
expropriate property rights. Investors may hesitate to invest in joint ventures if legal risk is high.
Example: Malaysia boutique shop can’t be do business with acquisition because Malaysian Boutique
shop getting trust already from the customer’s (Local and international). If they merge in Indonesia any
local business, they might be lost their own identity which is not good sign for them.

There are lots of policies which impact directly an international business. Among them income
distribution, demographic influences, taxation policies, employment laws, industry regulations,
regulation and restrictions all the laws impact< Indonesia and Malaysia culture, economy even Govt. is
different. Malaysia is the combination of varieties of people combination of many cultures Where
Indonesia most of the people are Muslim. So, most of the time they prefer something religious basis.
And Indonesian Govt. is restricted to the international investor’s basically clothing industry. Because
they think that they are quite famous for handloom industry. And they have abundance of suppliers and
also enrichment in fashion and clothing industry. So they are highly restricted to the international
investors on clothing/fashion industry. If someone still expands business they must need to provide high
tariffs and tax. So, it is not a good idea for Malaysia to expand business into Indonesia.