International bussiness the challenge of global competition 11e chapter 06

Learning Objectives Explain the significance of culture for international business  Identify the sociocultural components of culture  Discuss the significance of religion to business

Sociocultural Forces

chapter six

Learning Objectives

 Explain the significance of culture for international

business

 Identify the sociocultural components of culture

 Discuss the significance of religion to businesspeople

 Explain the cultural aspects of technology

 Discuss the pervasiveness of the Information Technology

Era

Rules of Thumb for Cross Culture Business

• Be prepared

• Slow down

• Establish trust

• Understand the importance of language

• Respect the culture

• Understand the components of culture

What is Culture

• The sum total of beliefs, rules,

techniques, institutions, and

artifacts that characterize human

• Ethnocentricity

ethnic group

Living with Other Cultures

• Realize that there are many different cultures

• Learn the characteristics of those cultures

– Spend a lifetime in a country

– Do training program

Culture Affects All Business Functions

• Marketing

– Variation in attitudes

and values requires

firms to use different

• Culture’s sense of beauty and good taste

– Art conveys meaning

• Colors, symbols, numbers Nike air

• Architectural style differences

• feng shui

• Music and Folklore

– Musical tastes vary

– Folklore discloses way of life

• Cowboys in Chile or Argentina

• Mexican singing cricket

Attitudes and Beliefs

• Attitudes Toward Time

– Vary across cultures

– Difficult area for some

Attitudes Toward Achievement and

Work

• Germans put leisure first and work second

• The demonstration effect

– Result of having seen others with desirable goods

• Job Prestige

– The distinction between blue-collar workers and

office employees

• Responsible for many of the attitudes and beliefs

affecting human behavior

– Work Ethic

• Protestant work ethic

– Duty to glorify God by hard work and the

practice of thrift

• Confucian work ethic

– Drive toward hard work and thrift; similar to

Protestant work ethic

Will this work?

Primary Asian Religions

• Jainism (Mahavira a contemporary of Buddha)

– Nonviolence a major principle

• Sikhism

Primary Asian Religions, cont’d.

• Holy Book Koran

• Five Pillars of Faith

– Confession of faith– Five daily prayers

Religious Population of the World

Insert Figure 6.1

• Spirit worship, incl magic, witchcraft

• Everything in nature has its own spirit or divinity

Material Culture

• Material Culture

– All human-made objects

– concerned with how people make things

(technology) and

– who makes what and why (economics)

• Technology

– Mix of usable knowledge that society applies and

directs toward attainment of cultural and economic

objectives

– Enables the firm to obtain

better than usual

conditions for a foreign

market investment

– Enables a company with only a minority equity position to control a joint venture

– Can change the international division of labor

– Causes major firms to

form competitive alliances

Material Culture - Technology

• Cultural Aspects

of Technology

– Includes skills in marketing,

finance, and management

– People not always ready to

– The technology (advanced,

intermediate, or primitive) that most closely fits the society using it

• Boomerang Effect

– Situation in which technology

sold to companies in another nation is used to produce goods to compete with those

of the seller of the technology.

Information Technology

• Information Technology Era

– As early as 2000 the Internet economy

• had reached $850 billion

• exceeded the size of the life insurance and real

estate industries

Spoken Language

• Most apparent cultural distinction

• Spoken languages demarcate cultures

– Switzerland: four separate cultures

• Many languages can exist in a single country, but

one usually serves as communication vehicle

– Lingua franca or link language

– English primary language of business

• Translation

– The ability to speak the language well does not

eliminate the need for translator

• Back Translation

– To avoid translation problems

• Japanese hotel: “You are invited to take

advantage of the chambermaid.”

• Bangkok dry cleaner: “Drop your trousers here

for best results.”

Language Issues

• Technical words do not exist in all languages

– Usually use English

• Many cultures avoid saying anything disagreeable

Unspoken Language

• Nonverbal communication

– Gestures vary tremendously from one region to

another

– Closed doors convey different meanings

– Office size has difference meanings in various

cultures

– Conversational distance small in East

– Gift giving has specific etiquette in each culture

• Gift or bribe?

• Questionable Payments

2003 Corruption Index Scores and

Ranking

Societal Organization

• Associations

– Age is important market segment criterion

– Gender

• As nations industrialize, more women enter the

job market and assume greater importance in the economy

– Free association

• people joined together by a common bond:

political, occupational, religious or recreational

Understanding National Cultures

• Hofstede’s Dimensions of Culture

• Individualism versus Collectivism

• Large versus Small Power Distance

• Strong versus Weak Uncertainty Avoidance

• Masculinity versus Femininity

Scores for Hofstede’s Value

Dimensions

Individualism versus Collectivism

• Collectivistic cultures

– people belong to groups that are supposed to look

after them in exchange for loyalty

• Individualistic cultures

– People look after only themselves and the

immediate family

Large versus Small Power Distance

• Power distance

– the extent to which members of a society accept

the unequal distribution of power among individuals

• In large-power-distance societies

– employees believe their supervisors are

right; employees do not take any initiative in making non-routine decisions

Strong versus Weak Uncertainty

Avoidance

• Uncertainty avoidance

– Degree to which members of a society feel

threatened by ambiguity and are rule-oriented

– Employees in high uncertainty-avoidance cultures

tend to stay with their organizations

• Japan, Greece, and Portugal– Those from low uncertainty-avoidance nations are

more mobile

• United States, Singapore, and Denmark

Plot of Nations: Power distance and

Uncertainty Avoidance

Plot of Nations: Individualism and

Power Distance

Masculinity versus Femininity

• the degree to which the dominant values in a

society emphasize assertiveness, acquisition of

money and status

– Masculinity

• achievement of visible and symbolic

organizational rewards

– Femininity

• emphasize relationships, concern for others,

and the overall quality of life