Asymmetric Information Occurs When One Essay

com, 2009). Lower-level employees are less likely to make decisions, saving all decisions for top executives. This can cause frustration with American firms, who can be comfortable allowing mid-level managers to make important decisions. This can impact the pace at which negotiations move and there may be offense taken on the part of senior executives of Asian companies if they are not meeting with their equal in the American company. The U.S. company in this situation would need to be more patient in the early stages of negotiation and take time to understand the differences in the decision-making process when dealing with Asian companies.

3.2. One cultural difference that can cause significant problems for American companies could be the status of women in Arab nations. Women are not accepted in business in that part of the world, which could prove difficult for U.S. companies with female senior executives, performing their usual role for the company in meetings or negotiations. The American company may be forced to either send a male to meet with the Arab company, or may have to make a decision with respect to doing business in that part of the world.The American company may also choose to change nothing about its approach and let the chips fall where they may. This represents a significant ethical issue, because one party or the other is going to have to work outside its normal cultural or religious custom, and the American company would be right to assume that it need not always be them to make the adjustment. Deals in such countries could prove challenging in their implementation as well, when the American firm wants to use female workers or managers to work on the project.

Works Cited:

Investopedia.com (2011). Asymmetric information. Investopedia. Retrieved April 8, 2011 from http://www.investopedia.com/terms/a/asymmetricinformation.asp

Geert-Hofstede.com (2009). Geert Hofstede cultural dimensions. Geert-Hofstede.com. Retrieved April 8, 2011 from http://www.geert-hofstede.com/hofstede_japan.shtml.....