The distance between people is smaller during the past two decades because of globalization and the development of information technology. Asian people can purchase the products from America, European countries and India or vice versa. There is not just distribution of goods but also doing business with people around the world. Enterprises enter foreign markets in order to expand the market or look for resources or reduce cost etc. However, Multinational Enterprises (MNEs) not only need to know the political, legal and regulatory environment in host country but also the culture difference which is very important to lessen the cultural problems and know how to solve it wisely. Companies may be abandoned by customers or spend a lot of money
30) if they do not manage cultural difference appropriately. One example is Colgate’s joint venture with Hawley and Hazel a chemical products company based in Hong Kong in 1985. Colgate did not consider carefully the issue of racial discrimination regard the logo and brand name of toothpaste. The related associations were angry about Colgate’s refuse of removing logo and the situation became sever and bigger, finally Colgate agreed to change. The process was about three years and paid the expense for the entire change process (Mosley cited in Luthans & Doh 2012).
Harries and Moran (cited in McLean & Lewis 2010) point out that if companies and executives have little efficiently raise sensitive to and organization-wide empathy with cross-cultural issues, it may possibly have a negative influence on people’s capability to communicate with each other and eventually the reputation and success of the companies both at home and internationally. McLean & Lewis (2010) mention that people from different cultures may feel others’ behavior are strange and unusual, or even completely opposite to them according to their own belief systems, values and norms. Cultural diversity makes managers to develop their own working knowledge in addition to others’ basic cultural features. This kind of program would reduce or avoid the happenings, for instance, culture shock, especially when expatriates undertake international task in countries which they are not