The Cultural Challenges of Business AbroadSteve Kafka, a Czech American and franchisor of Chicago Style Pizza, decided to expand his business and open a franchise in Prague, Czech Republic. Before entering the global business sector, Steve must conduct a thorough analysis to familiarize himself with the Czech culture. This analysis will present the opportunities and risks that Steve will need to achieve and overcome so that his end goal of growing his Chicago Style Pizza business can be realized. This article will study and discuss the main cultural differences and incompatibilities between the United States and the Czech Republic, defining the apparent risks and how to mitigate the risks that may arise from these differences. The discussion will then focus on comparative advantages within Czech culture, how using Hofstede's four main business decisions will help Steve assess the business environment, the impact of trade barriers on business, to analyze the demand for pizza and evaluate its cost structure. and economic overview Czech Republic Cultural differences between the United States and the Czech Republic arise from their unique historical development over the centuries, their geographic position, their specific traditions, surrounding peoples and cultures, population structure and traditional and economic ties with other countries. Over the past 15 years, the Czech Republic has transformed from a centralist socialist economy to a democratic capitalist economy. In May 2004, the Czech Republic joined the European Union, which allowed the Czech economy to obtain a greater market share, which translated into greater monetary prosperity. A free market economy helped the Czech Republic become one of the most prosperous countries to emerge from socialist rule (CountryWatch, 2008). Situation Analysis Differences and Incompatibilities Between American and Czech Cultures The major challenge Steve faces is learning to adapt to Czech culture effectively. Adapting to different cultures requires an understanding of cultural diversity, perceptions, stereotypes, and values ​​(Hodgetts, Luthans, & Doh, 2006). The culture of the Czech Republic emphasizes conformity and cooperation, while the United States values ​​freedom and independence as individuals and as a nation. In the Czech Republic, as a sign of respect, people shake hands firmly and indicate the person's last name. Czechs are persistent when expressing their opinions; They are very obedient and cooperative, value traditions and are not respected if eye contact is not kept constant when spoken to. Americans generally use a firm grip and smile when shaking hands..