ASSIGNMENT/ TUGASAN

_________________________________________________________________________
BBNG3103
INTERNATIONAL BUSINESS
PERNIAGAAN ANTARABANGSA
SEPTEMBER 2021 SEMESTER

NAME: MAS NUR MAWARNI BINTI ABD JALIL

NRIC:941216045166
MATRIX NUMBER:941216045166001
BRANCH: OUM MELAKA LEARNING CENTRE

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TABLE OF CONTENT
Page

Introduction to nestle 3

Discussion on the common features of culture in international business 4-5

perspective

Analysis of the basic elements of culture that is important in international 6-7

business

Suggestions to overcome challenges in culture differences 8–9

Discussion on the implications of the situation in malaysia on the 10 - 11

business of international companies within and outside malaysia

Conclusion 12

References 13 - 14

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Introduction to Nestle

Global absorption has accelerated significantly in recent years. Rapidly improving

communications, technology, and transportation have injected new life into the process, making
the world more interdependent than ever before. Since 1912, Nestlé has provided outstanding
brands and goods to Malaysians while maintaining our Halal quality and integrity. This is in line
with their aim to use food's power to enhance people's lives now and in the future. Nestle's
commitment to providing high-quality products to Malaysians dates back over a century. Nestlé
began operations in Malaysia in 1912 as the Anglo-Swiss Condensed Milk Company in Penang,
before expanding to Kuala Lumpur in 1939.

Nestlé Malaysia presently employs over 5,000 people across the country and produces more than
500 Halal-certified products. Many of Nestle's major products, especially Malaysian favourites
such as Milo, Maggi, Nescafé, and Kit Kat, have long been a part of Malaysian families. Nestle
has been present in Malaysia and in the hearts of Malaysians for over a century and is committed
to providing the absolute best in quality, nutrition, and flavour. Nestlé Malaysia manufactures
around 500 Halal products and is the company's largest Halal manufacturer, having pioneered
Halal in Malaysia's food and beverage industry since the 1980s. Nestlé Malaysia is the Nestlé
Group's global Halal Centre of Excellence, adhering to and implementing Halal standards across
the value chain in more than 180 markets around the world.

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DISCUSSION ON THE COMMON FEATURES OF CULTURE IN INTERNATIONAL
BUSINESS PERSPECTIVE

As a result of globalization, there has also been a surge in cross-cultural collaboration between
businesses. Culture has a considerable impact on international business, as according Spencer
and Franklin (2012), showing itself in behavioral customs, underlying assumptions, and human
nature, each occurring at a distinct degree of complexity. In this case, we need look at exotic
cultures and how they will impact the way people trade in order to successfully bargain and
communicate with international partners, as well as successfully enter new markets. Culture
includes language, religion, social structures, political systems and philosophy, economic
systems, education, and symbols. These variables should be examined while analyzing the
effects of culture on international business, notably the effects of language, history, religion, and
social structures, which may represent societal habits, opinions, and beliefs.

Effective communication, as according to Tian and Borges (2011), might mean the difference
between winning and losing in a new market for an international company. Because
communications may be lost in translation, effective communication is especially important for
international companies. There are several things to consider when assessing the success of your
company's international communication. The first thing to consider when it comes to
communication is any language barriers that may block communication for both you and your
new market. But it's not just about the language used to communicate; it's also about how the
words are conveyed.

Culture refers to the sorts of appropriate conduct that are usual and accepted in one region versus
another in a corporate setting. What is considered an appropriate business behaviour in one
country might varied dramatically from how enterprises in other countries conduct themselves
(Dikova, Shahib and Van, 2010). As a response, recognizing how culture impacts international
business is critical in order to avoid miscommunication between clients and colleagues and to
ensuring that businesses present themselves in the best light possible to the growing market.

Another item to consider are the basic customs, mannerisms, and movements that are common in
that culture. In one culture, typical behaviour toward a client or employee may be odd or even
disrespectful in another. For instance, according to Halls et al. (2017), a corporate handshake is
common in European and American cultures and not in other Middle Eastern cultures.

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Handshakes should only be done with the right hand in some cultures since the left is considered
unhygienic. For firms looking to develop internationally, language barriers, tone, and body
language are all key factors to consider. Cross-cultural communication could be challenging, but
approaching cultural differences with compassion, flexibility, and inquiry can help you succeed
in international business.

The politeness of address is another key consideration when dealing with coworkers and clients
from other cultures. Do they like to be referred to with their first names or by titles and
surnames? Though Asian countries, such as China, seem to favour the latter, Americans are more
inclined to use their first names. Factors like formalism of address may not appear to be
important, but if you make a mistake with a potential international client, you may lose the
chance to deal with them ever again. As a response, businesses must be mindful that their
formalities will change based on the culture of the person with who they will be communicating.
As a result of workplace manners, several cultural differences effect approaches to workplace
interactions, norms and rules, and working hours (Scarborough, 2000). Long hours may be
considered a sign of devotion and performance by some, but they may also be viewed as a sign
of inefficiency or a failure to prioritise family or personal time by others.

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ANALYSIS OF THE BASIC ELEMENTS OF CULTURE THAT IS IMPORTANT IN
INTERNATIONAL BUSINESS

The norms, practices, and rituals of a country or group are typically associated with culture. In
the current of business and global marketplaces, values and concerns for the culture of a
particular community and the country must be addressed. Holding companies must be aware of
this issue since it is crucial to the continuity of business flows required to flourish both
internationally and domestically. In conformity with local standards, cultural values must be
applied in a timely and consistent manner. Adaptation should happen during the planning or
negotiation stages of a deal. There are four main cultural factors that are crucial for international
business. They are as follows:

i. Social cultures

Malaysians come from a variety of ethnic groups. Each ethnic group has been able to preserve its
own distinct culture over time, and they all live in Malaysia's multicultural society. While
Malaysians vary in many ways, they have deep-seated Asian values such as "respect for their
elders, collectivistic orientation, maintain a positive relationship, a desire for face preservation,
and religious affiliation." They speak with members of respective ethnic groups through an
"intracultural" communication style. At the intercultural level, they want to build rapport and
cooperation between their ethnic group and other ethnic groups in Malaysia. At the "cross-
cultural level," they learn how to engage with foreigners.

ii. Religion

Religious beliefs add a level of complexity to marketing messages that must be handled with
considerable sensitivity. Because Malaysia is a melting pot of ethnic groups and religions, an
international marketer should pay particular attention to the company's target market when it
comes to this cultural component. Malaysian corporate marketing is influenced by Islam, the
country's dominant religion and official religion. Two of the main factors to consider in this
regard are any need for Halal food, which implies that it has been allowed by Islamic law, and
the necessity to be attentive to religious views in marketing, including the use of colours or terms
(Khalili, 2014). It's also worth mentioning that gambling and drinking are also prohibited in
Islam. Even though Nestle Malaysia employs people of all religions, they show respect for

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members of other faiths by respecting their fasting times, celebrating their eve together, and so
on. Nestle is also conscious that alcoholic products can be quite sensitive, hence they do not
manufacture any alcoholic products in Malaysia to encourage religious sensitivity.

iii. Attitudes

As members of such a multicultural society, Malaysians are generally quite cognizant of how
they interact politely with people of other origins. Cultural norms and taboos influence what
people consider to be appropriate and unsuitable behaviour. This is comparable to the Malay
concept of 'budi,' which emphasises the value of civility and respect in interpersonal interactions.
Although there is no apparent English counterpart, the word can be used to express attributes
such as wisdom, virtue, politeness, and morality, according to Cultural Atlas (n,d). In this way, it
is apparent that Malaysian politeness and civility are based on sound ethical principles. When it
comes to observing people, Nestle Malaysia speaks the same language. It is crucial for
Malaysians to observe their body language and facial expressions because this will decide
whether or not the business product is appropriate for them.

iv. Language

Language refers to the nature and values of a culture in which there are a variety of sub-cultural
languages and dialects. This has resulted in a great country in which businesses can produce a
wide range of items that are fit for their needs. Malay, or Bahasa Malaysia, is the official and
national language of Malaysia, and it serves as the country's cornerstone for integration. From
the other side, the Malaysian government recognized the significance of English as an
international language and pledged to take measures to ensure that English is offered as a strong
second language. The government promotes two types of primary education in attempt to uphold
the languages of all the other two major ethnic groups: "national schools" where Malay is the
mode of communication, and "nationwide" schools where Chinese or Tamil is the medium of
communication (Kamila, n.d). Nestle values and celebrates the diversity of language, but uses
English as the primary means of communication to avoid misunderstandings among staff.

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SUGGESTIONS TO OVERCOME CHALLENGES IN CULTURE DIFFERENCES

Employees will be able to work together as a single unit to achieve a same goal if the business
can help them overcome cultural obstacles. But how should organizations go about
accomplishing this? The solution is to increase workplace cultural awareness and develop
cultural literacy among employees. This is especially important in today's mixed world. By
preventing cultural difficulties, it can help your employees cope more effectively with foreign
customers and coworkers.

i. Global citizenship training

To begin, the company should raise cultural awareness among its staff. Human resources may set
up training program to teach them about other cultural norms. These seminars should be
designed so that your employees may learn how to work in an increasingly diverse global
business and cultural environment. If your company does a lot of business in China, for instance,
get some formal training from someone who has worked there. In a company setting, formal
training will include the things that employees need to know about business. All aspects of
communication, business etiquette, negotiating, and marketing will be discussed.

ii. Celebrating traditional holiday festivals

Celebrating diversity can help with cultural literacy, knowledge, and acceptance. Begin by
noting other ethnicities' holidays and festivals in the company's email or news broadcast, and
then honor them as needed at work. This will show employees that the company understands and
respects their cultures. Employees may also be asked to contribute a traditional dish from their
home country to a work dinner or an international culinary day with the topic of cultural
awareness. By exposing employees to a variety of cultures, companies like Nestle can increase
their sensitivity to cultural differences.

iii. Use great communication skills to bridge the cultural divide.

Good communication skills are vital when communicating with people from other cultures. A
contract's capacity to communicate with others, both verbally and nonverbally, can make or
break it (DeakinCo, 2017). Although it is desirable if the employees know the language of the
country with which their company does business, they can still communicate effectively if they

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have a thorough awareness of the local culture and work with a trained translator. If your
company has international customers and staff who don't speak English well, tell your other
employees to keep things simple, use short words, and avoid using humor or colloquial language.
Organizations may also have English-speaking personnel ask foreigners to describe whatever
they're informing them or asking for, whether via email, phone, webcam, or face-to-face. This
will eliminate any misunderstandings or blunders.

iv. Employee cultural diversity is something to be aware of.

An organization must be mindful of employee cultural differences, as people are not always
welcoming of others, especially when they are from a foreign nation. A person from a different
country may have a more imaginative and creative mindset. Above all, facilities that would be
extremely beneficial to employees are those that organizations recognize and provide in order to
respect other people's differences. For instance, throughout Ramadhan, Muslims' working hours
differ from those of other religions, as they return one hour earlier to prepare for iftar. This
distinction would imply a more sense of respect among employees in the office.

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DISCUSSION ON THE IMPLICATIONS OF THE SITUATION IN MALAYSIA ON
THE BUSINESS OF INTERNATIONAL COMPANIES WITHIN AND OUTSIDE
MALAYSIA

COVID-19 has had a huge impact on the corporate world. Poor economic and financial
consequences, demand cutbacks, supply disruptions, and the spillover impacts of volatile
industries on employment are causing problems in most economies, including Malaysia's.

i. Expand the e-commerce platform for multinational businesses.

Around 65 percent of companies around the world expect COVID-19 to have a negative impact
on revenues in 2020. The majority of enterprises (about 40%) estimate a revenue decrease of less
than 20%, while one out of every four anticipates a revenue decrease of more than 20%.
(Malaysia Kini, 2020). Many people are suffering as a result of the surge in Covid-19 cases, and
they are unable to go outside and engage in their normal daily activities. Nestle, for example, is
taking use of the availability of e-commerce platforms by using them to allow customers to
purchase products online through a variety of platforms such as Lazada, Shoppe, and others.

ii. Technological use of international companies

To stay competitive in this new commercial and economic environment, you must adapt your
strategies and techniques. According to McKinsey's research, the majority of respondents see
technology as a strategic component of the organisation, not only a source of cost savings.
Respondents from firms that successfully responded to the crisis claim a variety of technical
competencies that others lack, such as bridging technological talent shortages during the crisis,
adopting more contemporary technologies, and fast experimenting and developing. People have
become more aware of technology as a result of the Covid-19, which has had a significant
impact on the country. They have begun to use it more. Enterprises have also changed their
marketing strategies to include more technical products in their efforts to retain their businesses,
such as social media, YouTube, and others.

iii. Changing tactics of marketing

During the epidemic, consumers migrated significantly to online platforms, and businesses and
sectors followed suit. The results of the poll back up the rapidly rising trend of connecting with

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clients using digital channels. They also show that adoption rates in established Asia are
significantly higher than in other regions, and that adoption levels in developed Asia are decades
ahead of where they were in previous surveys. Respondents are three times more likely than
before the crisis to state that at least 80% of their consumer transactions are now digital
(McKinsey & Company, 2020).

iv. B2B interaction

During the epidemic, consumers migrated significantly to online platforms, and businesses and
sectors followed suit. The results of the poll back up the rapidly rising trend of connecting with
clients using digital channels. They also show that adoption rates in established Asia are
significantly higher than in other regions, and that adoption levels in developed Asia are decades
ahead of where they were in previous surveys. Respondents are three times more likely than
before the crisis to state that at least 80% of their consumer transactions are now digital
(McKinsey & Company, 2020). The majority of Malaysians stated that social media contributes
to their pleasure, regardless of channel, and that leaving social media would be tough.

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CONCLUSION

Once a company has grown large enough to compete in the international market, one of the most
crucial factors to consider is culture. It is critical for them to consider because it will have an
impact on their business if things do not run well, as well as bridge the sensitivity of the
country's culture. For example, Malaysia, a country that places a high value on Halal
certification, would welcome the opportunity to support Halal-certified products. Nestle
Malaysia, which celebrates the diversity of Malaysian culture, has been cautious in deciding
which products to launch in order to ensure that the company's revenue continues to grow rather
than decline. As a result, it is possible to infer that Nestle Malaysia has incorporated cultural
aspects into their business and ensured that no cultural sensitivity is breached.

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REFERENCE
Cultural Atlas. (n,d). Malaysian culture. Cultural Atlas. Retrieved from:
https://culturalatlas.sbs.com.au/malaysian-culture/malaysian-culture-core-concepts

DeakinCo. (2017). Seven practices you can implement to increase cultural awareness in the
workplace. DeakinCo. Retrieved from: https://www.deakinco.com/resource/seven-
practices-you-can-implement-to-increase-cultural-awareness-in-the-workplace/

Dikova, D., Sahib, P. R., & Van Witteloostuijn, A. (2010). Cross-border acquisition
abandonment and completion: The effect of institutional differences and organizational
learning in the international business service industry, 1981–2001. Journal of
International Business Studies, 41(2), 223-245.

Hall, B. J., Covarrubias, P. O., & Kirschbaum, K. A. (2017). Among cultures: The challenge of
communication. Routledge.

Kamila, G. (n,d). National identity and minority languages. United Nations. Retrieved from:
https://www.un.org/en/chronicle/article/national-identity-and-minority-languages

Khalili, S. (2014). Going global, acting local: Effects of cultural dimensions on glocal marketing
in Malaysia. The International Technology Management Review, 4(3), 142-157.

McKinsey & Co. (2020). How Covid-19 has pushed companies over the technology tipping
point and transformed business forever. McKinsey & Co. Retrieved from:
https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-
insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-
transformed-business-forever

Malaysia Kini. (2020). Malaysian businesses geared up for recovery. Malaysia Kini. Retrieved
from: https://www.malaysiakini.com/announcement/534507

Nestle Malaysia. (n,d). Our Halal Promise. Nestle Malaysia. Retrieved from:
https://www.nestle.com.my/aboutus/nestle-my

Statista. (2021). Social media users as a percentage of the total population Malaysia 2021.
Statista. Retrieved from: https://www.statista.com/statistics/883712/malaysia-social-
media-penetration/
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Tian, K., & Borges, L. (2011). Cross-cultural issues in marketing communications: An
anthropological perspective of international business. International Journal of China
Marketing, 2(1), 110-126.

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