Internationalization

Internationalization process could entail various stages and forms from simple export or import through to franchising, licensing, turnkey projects, to establishment of joint ventures and wholly-owned subsidiaries. The extent to which a company decides to internationalize depends, among other things, on the size and nature of their domestic market, their production capacity and capability, and the financial and other resources like the expansion into foreign markets requires.

The relevance of other peoples' cultures become greater for a firm as it spreads its activities and products beyond its national boundaries to reach foreigners with different value systems and tastes. The farther internationalization goes, the more company's involvement with foreigners will be, and the more sophisticated the device would have be to respond to their demands and expectations.

Major aspects of organization

There are three broad areas of activities in which virtually all companies engage:

• those concerned with the strategic and planning aspects of their business;
• those related to their internal organization (notably human resource management);
• and those concern the interface (e.g. marketing and negotiation) between internal and external aspects of their activities.

The extent to which national culture influences organizations' activities, even in the case of fully globalized ones, depends on the types of activities performed.

For international joint ventures this relevance of culture is most pronounced at the initial stages of negotiations between the would-be alliance partners, and then later at the core values and strategic policies that they would develop jointly and the processes leading to their agreements on their characteristics. These stages of cross-border cooperation require sensitivity to the cultural backgrounds of the negotiators and of the employees who later staff the venture. Cultural insensitivity here is a prescription of failure (Konieczny, 1994).