Chapter 11

Understanding Culture: A Critical Issue

11.1 Definition of Culture
Culture is the sum total of beliefs, values, customs, and attitudes that distinguish one society from
another. Culture has significant influence on behavior.

According to Philip Kotler, "Culture is the set of basic values, perceptions wants, behaviors learned by a
member of society from family and other important institutions".

According to Warren J. Keegan, "Culture includes both conscious and unconscious values, ideas,
attitudes and symbols that shape human behavior and that are transmitted from one generation to the
next".

Culture is the human made part of human environment and is the sum of total knowledge beliefs, art,
morals, laws, customs, and other capabilities and habits acquired by humans as members of society.

11.2 Characteristics of Culture

To be successful in a particular culture, it is imperative for a businessman to understand the
characteristics of culture. Culture has the following characteristics.

1. Culture is learned: Culture is a learned behavior that is transmitted from one member of society to
another. As an individual grows in a particular environment he learns about different aspects of culture
through his interaction with other members of the society.

2. Culture is interrelated: The elements of culture are interrelated. Because culture is learned from the
family, educational institutions and social institutions that are interrelated.

3. Culture is adaptive: Culture is adaptive because culture is a learned behavior. As any businessman
stays in a particular region/ country he or she absorbs himself/herself in that culture.

4. Culture is shared: Members of a particular society share culture. Cultural values, beliefs, norms, etc.

are shared by the majority of the members of a given society.

5. Culture is introduced: Culture introduces new elements of outside culture. For example, drinking tea
is a part of British culture but it has been introduced in our culture.

6. Culture is a symbol: Culture is a kind of sign or symbol. By observing the pattern of culture of people
we can easily understand the region or country from which they come.
7. Culture is dynamic: No culture is static. Cultural swings take place. As the environment is changing
culture has to be changed in order to survive.

So, culture is the set of basic values, perceptions, behaviors, beliefs, norms, motives, drives, customs,
manners, and habits that are learned from the family, society, organization, either informal informal
ways.

11.3 Elements of Culture

1. Material Culture

 Technology: Technology refers to the techniques or methods of making and using things. It
includes the techniques used in the creation of material goods. It is the technical know-how
possessed by the people of a society.
 Economics: Economics is the manner in which people employ their capabilities and reap the
resulting benefits. Included in the subject of economics are the production of goods and
services, their distribution, consumption and means of exchange and the income derived from
the creation of utilities.

2. Social institution:

Social institutions including family, educational institutions, political structure, and the media that affect
the ways in which people relate to one another, organize their activities to live in harmony with one
another, teach acceptable behavior to succeeding generations and govern themselves.

 Family: Family is one of the most important social institutions. The concept of family differs
from country to country. For example: travel advertising in culturally divided Canada has
pictured a wife alone for the English audience but a man and wife together for the French
segments of the population because the France are traditionally more closely bound by family
ties.
 Educational institutions: They help the process of transmitting skills, ideas, attitudes as well as
training in particular disciplines.
 Political structure: The political structure may stress single person rule, government by a few or
government through single or multiple party systems.
 Media: Culture has been greatly influenced by the media. In the perspective of our country
newly introduced various private satellite channels have brought significant changes in our
culture.

3. Humans and the Universe:

 Religions: Religion is one of the most sensitive elements of a culture. It is the guiding force
defining human kind's relationship with super natural forces and in determining a culture's
values and attitudes. Religion affects people's habits, their outlook on life, the products they
buy, the way they buy them, and even the newspapers they read.

 Belief System: Belief system differs from culture to culture. Too often, one person's beliefs are
another person's funny story. It is a mistake to discount the importance of myths, beliefs, and
superstitions or other cultural beliefs.
4. Aesthetic:

Aesthetics refer to the ideas in a culture concerning beauty and good taste, as expressed in the arts-
music, art, drama and dance and the appreciation of color and form. Aesthetics are of particular interest
to the businessmen because of their role in interpreting the symbolic meanings of various methods of
artistic expression, color, and standards of beauty in each culture.

5. Language:

The importance of understanding the language of a country cannot be overestimated. The successful
businessmen must achieve expert communication, which requires a through understanding of the
language as well as the ability to speak it. Language differs from one culture to another culture. For
example: Tambo means a roadside shop in Bolivia, Colombia, Ecuador and Peru; a diary firm in
Argentina and Uruguay and a brothel in Chile.

11.4 Understanding Cultural Knowledge-Sensitivity and Tolerance of Businessmen

Factual versus Interpretive knowledge: Factual knowledge has meaning as a straightforward fact about
a culture but assumes additional significance when interpreted within the context of the culture.

On the other hand, interpretive knowledge requires a degree of insight that may best be described as a
feeling. It is the kind of knowledge most dependent on past experience for interpretation and most
frequently prone to misinterpretation if one's home crusty frame of reference is used.

For example: Bangladesh, Iran, Pakistan are primarily Muslim countries. It is the factual knowledge. But
Iranian people are most conservative and Bangladeshi people are most flexible. It must be measured by
interpretive knowledge.

Cultural Sensitivity and Tolerance: Cultural sensitivity or cultural empathy must be carefully cultivated.
Perhaps, the most important step is the recognition that cultures are not right or wrong, better or
worse. For every amusing, annoyed, peculiar or repulsive cultural trait we find in a country, there is a
similarly amusing, annoying or repulsive trait others see in our culture. For example: The Chinese eat
dog but we treat dog as a pet animal. We cannot say Chinese culture is right or wrong for this reason

Businessmen must understand how their own culture influences their assumptions about another
culture. The more exotic the solution, the more sensitive, tolerant and flexible one needs to be. Being
culturally sensitive will reduce conflict and improve communications, and thereby increase success in
collaborative relationships.

11.5 Organizational Culture and National Culture

Organizational Culture: When culture varies from organization to organization within a country it is
known as organizational culture. Organizational culture includes values, beliefs, attitudes, and
perceptions among the employees of the organization. Organizational culture is a part of national
culture. For example- The culture of Dhaka bank or BUBT are shaped by the culture of Bangladesh.
 National Culture: Any country's culture is the national culture, National culture differs from country to
country. Bangladeshi culture differs from American culture.

11.6 Hofstede Model of National culture

The most influential studies analyzing cultural differences was done by greet.Hofstede.He was a dutch
researcher who studied 116000 people working in dozens of different countries. Hofstede identified five
important dimensions of national culture that is differing from culture to culture, country to country.
These five dimensions are:

Social Orientation: The first dimension identified by Hofstede is social orientation. Social orientation is a
person's beliefs about the relative importance of the individual and the groups to which that person
belongs. The two extremes of social orientation are individualism and collectivism. Individualism is the
cultural belief that the person comes first. Key values of individualistic people include a high degree of
self-respect and independence. These people often put their own career interests before the good of
their organizations. Collectivism, the opposite of individualism, is the belief that the group comes first.
Well-defined social networks usually characterize societies that tend to be collectivistic, including
extended families, tribes, and co-workers. People are expected to put the good of the group ahead of
their own personal welfare, interests, or success.

Power Orientation: The second dimension of Hofstede proposal is power orientation. Power orientation
refers to the beliefs that people in a culture hold about appropriateness of power and authority
differences in hierarchies such as business organizations. The extreme of power orientation are power
respect and power tolerance. Power respect indicates that people in a culture tend to accept the power
and authority of their superiors simply on the basis of the superiors' positions in the hierarchy. In
contrast, people in cultures characterized by power tolerance attach much less significance to a person's
position in the hierarchy. These people are more willing to question a decision or mandate from
someone at a higher level or perhaps even refuse to accept it.

Uncertainty Orientation: Uncertainty orientation is the feeling people have regarding uncertain and
ambiguous situations. People in cultures characterized by uncertainty acceptance are stimulated by
change and thrive on new opportunities. Ambiguity is seen as a context within which an individual can
grow, develop, and carve out new opportunities. In these cultures certainty carries with it a sense of
monotony, routineness, and overbearing structure. Hofstede suggested that many people from the
United States, Denmark, Sweden.

Canada, Singapore, Hong Kong, and Australia are uncertainty accepting. In contrast, people In cultures
characterized by uncertainty avoidance dislike ambiguity andwill avoid it whenever possible. Ambiguity
and change are seen as undesirable. These people tend to prefer a structured and routine, even

bureaucratic, way of doing things. Hofstede found that many people in Israel, Austria, Japan, Italy,
Colombia, France, and Germany tend to avoid Uncertainty whenever possible. Uncertainty orientation
affects many aspects of managing international firms. Those operating in uncertainty avoiding countries,
for example, tend to adopt more rigid hierarchies and more elaborate rules and procedures for doing
business. Conversely, uncertainty accepting cultures are more tolerant of flexible hierarchies, rules and
procedures. Risk taking ("nothing ventured, nothing gained") is highly valued in uncertainty accepting
countries such as the United States and Hong Kong, whereas preserving the status and prestige of the
firm through conservative, low risk strategies is more important in uncertainty-avoiding countries such
as Spain, Belgium, and Argentina. As the opening case indicated, uncertainty-accepting cultures may be
more attuned to the needs of the new e- commerce economy.

Goal Orientation: Goal oriented, is the manner in which people are motivated to work toward different
kinds of goals. On the extreme of goal orientation continuum is aggressive goal behavior. People who
exhibit aggressive goal behavior tend to place a high premium on material possessions, money, and
assertiveness. At the other extreme, people who adopt passive goal behavior place a higher value on
social relationships, quality of life, and concern for others. According to Hofstede, cultures that value
aggressive goal behavior also tend to define gender-based roles somewhat rigidly, whereas culture that
emphasize passive goal behavior do not. For example, in cultures characterized by extremely aggressive
goal behavior, men are expected to work and to focus their careers in traditionally male occupations:
women are generally expected not to work outside the home and to focus on their families. If they do
work outside the home, they are usually expected to pursue work in areas traditionally dominated by
women. According to Hofstede's research, many people in Japan tend to exhibit relatively aggressive
goal behavior. Men and women in passive goal behavior cultures are more likely both to pursue diverse
careers and to be well represented within any given occupation. People from the Netherlands, Norway,
Sweden, Denmark, and Finland tend to exhibit relatively passive goal behavior.

Time Orientation: Time orientation is the extent to which members of a culture adopt long-term versus
a short-term outlook on work, life, and other aspects of society. Some cultures, such as those of Japan,
Hong Kong ,Taiwan and South Korea, have a long-term. Future orientation that values dedication, hard
work, perseverance, and thrift. Other cultures,

including those of Pakistan and West Africa, tend to focus on the past and present. emphasizing respect
for traditions and fulfillment of social obligations. Hofstede's work Suggests that the United States and
Germany tend to have an intermediate time orientation.
 Chapter 12
International Business
Chapter Outline:

Definition of International Business, Reasons for International Business, Characteristics of

International Business, Advantages of International Business, Disadvantages of International
Business, Forms of Internal Business, Basic Concepts of International Business, Barriers of
International Trade, Definition of Globalization, Impact Of Globalization, Questions to Answer,
Multiple Choice Questions, Ture or False & References.

12.1 Definition International Business

International business involves commercial activities that cross national frontiers. It concerns
the international movement of goods, capital, services, employees and technology: importing and
exporting; cross border transactions in intellectual property (patents, trademark, know-how,
copyrights etc.) via licensing and franchising; investments in physical and financial assets in
foreign countries, contract manufacture or assembly of goods abroad for local sale or for export
to other nations; buying and selling in foreign countries, the establishment of foreign
warehousing and distribution systems; and the import to one foreign country of goods from a
second home country for subsequent local sale. International business is all commercial
transactions both private and governmental between two or more countries. Private companies
undertake such transactions for profit, government may or may not do the same in their
transactions. These transactions include sales, investments, and transportation. International
business means the performance of business activities across the national boundaries. In the other
way, when an organization is producing goods in excess of the country' need then the
organization export goods and import those goods which the country is in need of. In this way
international business occurs.
12.2 Reasons for International Business
 No nation in the world can produce all of the products that its people need and want.
 Some nations have an abundance of natural resources and lack of technological know
how, like Soudi Arabi and some other countries have sufficient technology but few
natural resources, like Japan.
 If a country becomes self Sufficient then other nations would like to trade with that
Country in order to meet their people's want.
Other two main reasons for international business are:
 Absolute advantage
 Comparative advantage
Absolute advantage: When a country has a monopoly in producing specific products or when
the country produces a product more cheaply than all other nations of the world it is called
absolute advantage. Absolute products are mainly given by the nature. For example- South
Africa produces diamond, Soudi Arabia and some Middle Eastern countries
produce oil, gold etc.
Comparative advantage: A country should produce and sell those types of goods and services
in which it enjoys more advantages than any other country and exchanged the surplus with that
country. For example: USA produces aircraft, computer and exchanges their surplus with
Bangladesh.
12.3 Characteristics of International Business
The important features of international business may be summarised
1. Separation of producers from buyers: In case of inland trade, buyers and prod are in close
contact with each other, as they belong to the same son but in the case se international business,
producers and buyers are separated from each other, as they being different nations
2. Payment in foreign currency: In international business, payment is currency. Here, different
currencies of different countries are involved.
3. Idea about international rules: People in international business should have a clear idea of
international rules and the mechanism to exchange one currency for another
4. Large number of middlemen: The procedures for export and import are too complicated and
involve a large number of middlemen. They render their services for the easy development and
expansion of international business.
5. Intense competition: In the case of international business, the competition is in Producers
from many countries competing with one another to sell their products. Here the quality, design,
packing, price, advertisement, etc., all play a very important role in decision making.
6. Involving greater risk: A greater risk is involved in international business as commodities
have to be carried long distances and even to cross the oceans.
7. Law of comparative cost: A country specializes in the production of those goods for which
the country has maximum advantages. It exports such goods to other countries imports those
goods which it cannot produce or for which it has no specific advantage.
8. Territorial specialization: International business arises for regional specialization India has a
specific advantage for the production of jute and tea. Therefore, India exon these commodities.
The U.K. has a specific advantage for production of quality steel at a low cost, which India
cannot. So, India imports steel from U.K. and exports jute and tea to U.K.
9. Reciprocal assistance: Developed countries (like the U.S.A., U.K., Germany, etc. help India
for its industrial development by exporting technical know-how, capital, etc., India. Similarly,
India assists underdeveloped countries (like Bangladesh, Vietnam, etc. towards their industrial
development
10. Conversant with different laws of the country: Traders engaged in international large SC
business must be conversant with the different laws of the countries concerning trade activities.
Traders should also be aware of trade restrictions imposed by foreign countries for the national
interest

11. Domination and control of the government: Each Government of a country dominates and
controls international business in matters of:
(a) Determination of exchange rates,
(b) Permission to import or export, etc.
12. Multiplicity of documents: A good number of documents are required in international
business, right from the stage when the exporter receives an order to the stage: when goods are
finally delivered.

12.4 Advantages (or merits) of International Business

The following are the advantages of international business:

 Earning valuable foreign currency: A country is able to earn valuable foreign

currency by exporting its goods to other countries.
 Division of labor: International business leads to specialization in the production of
goods. Thus, quality goods are available in the international market at a very reasonable
rate.
 Optimum utilization of available resources: International business reduces waste of
national resources. It helps each country to make optimum use of its natural resources.
Every country produces those goods for which it has maximum advantage.
 Increase in the standard of living of people: Sale of surplus production of one
country to another country leads to increase in the incomes and savings of the people of
the former country. This raises the standard of living of the people of the exporting
country.
 Benefits to consumers: Consumers are also benefited from international business. A
variety of goods of better quality is available to them at reasonable prices. Hence,
consunters of importing countries are benefited as they have a good scope of choice of
products.
 Encouragement to industrialization: Exchange of technological know-how enables
underdeveloped and developing countries to establish new industries with the
assistance of foreign aid. Thus, international business helps in the development of
industry.
 International peace and harmony: International business removes rivalry between
different countries and promotes international peace and harmony. It creates
dependence on each other, improves mutual confidence and good faith.
 
Cultural development: International business fosters exchange of culture and ideas
between countries having greater diversities. A better way of life, dress, food, etc. can
be adopted from other countries.
 Economies of large-scale production: International business leads to production on a
large scale because of extensive demand. All the countries of the world can obtain the
advantages of large-scale production.
 Stability in prices of products: International business irons out wide fluctuations in
the prices of products. It leads to stabilization of prices of products
throughout the world.
 Widening the market for products: International business widens the market for
products all over the world. With the increase in the scale of operation, the profit of the
business increases.
 Advantageous in emergencies: International business enables us to face emergencies.
In case of natural calamity, goods can be imported to meet necessaries.
 Creating employment opportunities: International business boosts employment
opportunities in an export-oriented market. It raises the standard of living of the
countries dealing in international business.
 Increase in Government revenue: The Government imposes import and export duties
for this trade. Thus, Government is able to earn a great deal of revenue from
international business.
 business education
 Improvement in production systems
 Elimination of Other advantages:
 Effective monopolies, etc.

12.5 Disadvantages (or limitations) of International Business

International business suffers from the following limitations:
 Adverse effects on economy: One country affects the economy of another country
through international business. Moreover, large-scale exports discourage the industrial
development of importing country. Consequently, the economy of the importing country
suffers.
 Competition with developed countries: Developing countries are unable to compete
with developed countries. It hampers the growth and development of developing
countries, unless international business is controlled.
 Rivalry among nations: Intense competition and eagerness to export more
commodities may lead to rivalry among nations. As a consequence, international peace
may be hampered.
 Colonialisation: Sometimes, the importing country is reduced to a colony due to
economic and political dependence and industrial backwardness.
  Exploitation: International business leads to exploitation of developing countries by the
developed countries. The prosperous and dominant countries regulate the economy of
poor nations.
 Legal problems: Varied laws, regulations and customs formalities followed by different
countries, have a direct bearing on their export and import trade.
 Publicity of undesirable fashions: Cultural values and heritages are not identical in all
the countries. There are many aspects, which may not be suitable for our atmosphere,
culture, tradition, etc. This, indecency is often found to be created in the name of cultural
exchange.
 Language problems: Different languages in different countries create barriers to
establish trade relations between various countries.
 Dumping policy: Developed countries often sell their products to developing countries
below the cost of production. As a result, industries in developing countries often close
down.
 Complicated technical procedure : International business is highly technical, and it
has a complicated procedure. It involves various uses of important documents. It requires
expert services to cope with complicated procedures at different Shortage
 Stortage of goods in the exporting country: Sometimes, traders prefer sell their goods
to other countries instate of in their own country in order to earn more profits. This
results in the shortage of goods within the home country.
 Adverse effects on home industry: International business poses a threat to the survival
of infant and nascent industries. Due to foreign competition and unrestricted imports
upcoming industries in the home country may collapse.

12.6 forms of International Business

1. Exporting: Exporting means producing/ procuring in the home market and selling in the
foreign market. Exporting is not an activity just for large multinational enterprises; small firms
can also make money by exporting. In recent days, exporting has become easier though it
remains a challenge for many firms.
2. Licensing: A licensing is an agreement whereby a licensor grants the rights to intangible
property (patents, intentions, formulas, processes, designs, copyrights and trademarks) to
another entity (licensee) for a specified period and in return the licensor receives a royalty /fee
from the licensee.
3. Franchising: In many respects, franchising is similar to licensing, although franchising tends
to involve longer-term commitments than licensing. Franchising is basically a specialized form
of licensing in which the franchiser not only sells intangible property to the franchisee but also
insists that the franchisee agrees to abide by strict rules as to how it does business.
4. Joint venture: A joint venture entails establishing a firm that is jointly owned by two or
more independent firms.
5. Management Contracts: A firm in one country agrees to operate facilities or provide other
management services to a firm in another country for an agreed upon fees
6. Turnkey projects: In a turnkey project, the contractor agrees to handle every details of of the
contract the foreign client handles the 'key' of a plant that is ready for full operation.
7. Strategic international alliances: A strategic international alliance is a business relationship
established by two or more companies to cooperate out of mutual need and to share risk in
achieving a common objective.
8. Direct foreign investment: Direct foreign investment is another important form of
international business. Companies may manufacture locally to capitalize on low cost labor, to
avoid high import taxes, to reduce the high cost of transportation to market, to gain access to
raw materials or gaining market entry.

12.7 Basic Concepts of International Business:

Several basic concepts are important for understanding international trade and these are
discussed below:
1. Exporting and Importing: Exporting is concerned with the selling of domestic goods in
another country. Importing is concerned with purchasing goods made in another country.
2. Balance of Trade: The Balance of trade represents the difference between the visible export
and import. It may be shown in the following way.
Balance of Trade = Visible export - Visible import Favorable balance of trade: Favorable balance
of trade indicates that a country's export is higher than its import.
Unfavorabl balance of trade: When a country's imports are higher than its exports, then it is
called unfavorable balance of trade.
3. Balance of Payment: A Balance of payment represents the difference between visible plus
invisible export and visible plus invisible import. It may be shown in the following equation.
Balance of payment (Visible export + invisible export) - (Visible import +invisible import).
Favorable balance of payment: If more money is flowing in the country than flowing out of the
country.
Unfavorable balance of payment: An unfavorable balance of payment exists when more money
is flowing out of the country than flowing in.
4. Exchange Rate: It is the rate at which one country can exchange its currency with other
country's currency. Exchange rate is of four types:
Devaluation: Reducing the value of nation's currency in relation to currencies of other nations.
 Revaluation : Revaluation increases the value of a country's currency in relation to that of other
countries.
Fixed exchange rate: It is an unvarying exchange rate, which is set by the government.
Floating exchange rate: An exchange rate that fluctuates with market conditions.
12.8 Barriers of International Trade:
For desiring to enter into international trade, we face some obstacles and those are discussed
below:
1. Cultural and social barriers: A nation's cultural and social forces can restrict international
business. Culture consists of a country's general concept and values and tangible items such as
food, clothing, building etc. Social forces include family, education, religion and custom. Selling
products from one country to another country is sometimes difficult when the culture of two
countries differ significantly.
2. Political barriers: The political climate of a country plays a major impact on international
trade. Political violence may change the attitudes towards the foreign firms at any time. And this
impact can create an unfavorable atmosphere for international business.
3. Tariffs and trade restrictions: Tariffs and trade restrictions are also the barriers of
international trade. They are discussed below:
Tariffs: A duty or tax, levied against goods brought into a country. Tariffs can be used to
discourage foreign competitors from entering a domestic market. Import tariffs are of two types-
protective tariffs and revenue Tariffs.
Quotas and Embargoes:
Quotas: A limit on the amount of a product that can leave or enter a country.
Embargoes: A total ban on certain imports or exports.
4. Boycotts: A government boycott is an absolute prohibition on the purchase and importation of
certain goods from other countries. A public boycott can be either formal or informal and may be
government sponsored. For example: Nestle products were boycotted by a certain group that
considered the way nestle promoted baby milk formula to be misleading to mothers and harmful
to their babies in less developed countries.
5. Standards: Non-tariff barriers of this category include standards to protect health, safety and
product quality. The standards are sometimes used in an unduly stringent or discriminating way
to restrict trade.
6. Antidumping Penalties: It is one kind of practice whereby a producer intentionally sells its
products for less than the cost of product in order to undermine the competition and take control
of the market.
7. Monetary Barriers : There are three such barriers to consider:
 Blocked currency: Blocked currency is used as a political weapon in response to difficult
balance of payments situation. Blockage is accomplished by refusing to allow importers to
exchange their national currency for the seller's currency.
Differential exchange rate: The differential exchange rate is a particularly ingenious method of
controlling imports. It encourages the importation of goods the government deems desirable and
discourage importation of goods the government does not want.
essential mechanis requires the importer to pay varying amount of domestic c foreign currency
with which to purchase products in different categories. Such a and less desirable products.
Government approval for securing foreign exchange: Countries experiencing severe shortages of
forign exchange often use it .At one time or another ,most Latin American and East European
countries have required all foreign exchange transactions to be approved by central bank. Thus
importers who want to buy foreign goods must apply for an exchange permit that is permission
to exchange an amount of local currency for foreign currency.

12.9 Impacts of Globalization on Industries, Specially Construction Industry

Globalization has a great impact on industries. Because of free flow of technology, culture,
capital and code of conduct, one nation is automatically affe others. Industry is largely affected
by globalization today. Globalization has bro blessing to the people. But it has also negative
impact on industry. Positive and impact of globalization on industries is noted below:
Positive Impacts:
1. Transfer of technology: Industrialists always seek improved technology efficiently and
effectively. Technology plays an important role to have done this. Mo and latest technology
ensures more efficiency. Globalization helps to achieve efficie example- through internet
developers come to know details about modern machine equipments. So, immediately they
collect them and upgrade the industry.
2. Aesthetics: For different purposes when people travel form one county to ano gather
experience about culture, choice, fashion and aesthetics. As a result, people changes and they
want to have more fashionable office, residence or any other Through the transfer of information,
people came to know about unknown de facilities. Globalization has made this possible.
3. Demand: Globalization has increased the demand for land development, co of multi-storied/
high-rise residential and commercial buildings, etc. For example, or European, African people
come to Bangladesh for business, political, social or purposes. Bangladeshi managers have to
consider their choices and standards. In they are considering the demand of different people.
4. Development related industry: As the number of developers are increasi industries also
increase. such as, ship breaking mills, re-rolling mills, electrical and industry, etc.
5. Agricultural development: Globalization is affecting the industries direc other hand,
necessary agricultural materials needed are also being developed.
6. Standard of living: The standard of living is increasing for urbanizatio electronic media,
people are watching and gathering knowledge about better living environment. Therefore, people
are becoming interested to live in modern residence and enjoy new products. Globalization helps
to do this.
7. Knowledge creation: Government now becomes liberal to give permission to develop multi
storied buildings. It is because, the government has learnt from other countries construction
activities through exchanging engineers, technician, equipment and machineries that high-rise
buildings are convenient for over populated and commercial areas.
8. Increased Investment: Globalization puts construction industry in motion. As a result more
capital is utilized in construction sector.
9. Conducive environment: Government regulations relating to construction industry being
favorable, unfair practices in all sections are being checked. Because in construction industry,
there are some standard code of conduct which are being adopted by Bangladesh construction
firms. It is also happening as a gift of globalization.
Negative Impacts:
1. Obsolete Technology: Globalization makes the existing technology obsole overnight.
Through free exchange of ideas, information and innovation, today's technolo ecomes obsolete
tomorrow. As a result a huge amount of losses occur.
2. Unplanned Urbanization: Developers are becoming aggressive in construction.To compete
with others, developers are occupying rural areas for commercial purpose. A result unplanned
urbanization occurs. This is a negative impact of globalization which encourages developers to
go for more construction, though not in unplanned way.
3. Artificial crisis: Globalization increases the demand for new technology and others
materials. For this demand some suppliers create artificial crisis of raw materials, which have
negative impact on economic condition.
Therefore, we see globalization has both positive and negative impacts on construction industry
directly or indirectly. Positive impacts should be congratulated but the negative impacts are to be
checked by taking appropriate steps.