Lecture International business (9e): Chapter 4 - Charles W.L. Hill

Chapter 4 - Differences in culture. In this chapter, you will learn to: Explain what is meant by the culture of a society, identify the forces that lead to differences in social culture, identify the business and economic implications of differences in culture, recognize how differences in social culture influence values in the workplace, demonstrate an appreciation for the economic and business implications of cultural change.

9e

By Charles W.L Hill

Differences

in Culture

Affect International Business?  

 Understanding and adapting to the local cultural

is important international companies

 cross-cultural literacy - an understanding of how

cultural differences across and within nations can

affect the way in which business is practiced

 A relationship may exist between culture and the costs of doing business in a country or region

 MNEs can be agents of cultural change

 Culture - a system of values and norms that are

shared among a group of people and that when

taken together constitute a design for living

where

 values are abstract ideas about what a group believes

to be good, right, and desirable

 norms are the social rules and guidelines that

prescribe appropriate behavior in particular situations

common set of values and norms

And The Nation­State Related?

 The relationship between a society and a

nation state is not strictly one-to-one

 Nation-states are political creations

can contain one or more cultures

 A culture can embrace several nations

the values and norms of a culture evolve over time

Determinants of Culture

 Social structure - a society’s basic social

organization

 A group is an association of two or more people who have a shared sense of identity and who

interact with each other in structured ways on

the basis of a common set of expectations about each other’s behavior

 individuals are involved in families, work groups,

social groups, recreational groups, etc.

 All societies are stratified on a hierarchical

basis into social categories, or social strata

1 Social mobility - the extent to which individuals can

move out of the strata into which they are born

 caste system

 class system

2 The significance attached to social strata in business

contacts

 class consciousness

How Do Religious And Ethical Systems Differ?

 Religion - shared beliefs and rituals that are

concerned with the realm of the sacred

1 Christianity

2 Islam

3 Hinduism

4 Buddhism

5 Confucianism influences behavior and culture

 Ethical systems - a set of moral principles, or

values, that are used to guide and shape

 Ethical Systems Differ?

World Religions

Of Language In Culture?  

 Language - the spoken and unspoken

(nonverbal communication such as facial

expressions, personal space, and hand

gestures) means of communication

 Chinese is the mother tongue of the largest number of people

 English is the most widely spoken language in the

world and is also becoming the language of

international business

 but, knowledge of the local language is still beneficial, and in some cases, critical for business success

 failing to understand the nonverbal cues of another

Of Education In Culture?

 Formal education is the medium through which

individuals learn many of the language,

conceptual, and mathematical skills that are

indispensable in a modern society

 important in determining a nation’s competitive

advantage

 Japan’s postwar success can be linked to its excellent education system

 general education levels can be a good index for the

kinds of products that might sell in a country

 ex impact of literacy rates

How Does Culture  Impact The Workplace?

 Hofstede’s dimensions of culture:

fact that people are unequal in physical and

intellectual capabilities

between the individual and his fellows

3 Individualism versus collectivism - the extent to

which different cultures socialize their

members into accepting ambiguous situations

and tolerating ambiguity

Impact The Workplace?

Work-Related Values for 20 Countries

How Does Culture  Impact The Workplace?

 Hofstede later expanded added a fifth

dimension called Confucian dynamism or

long-term orientation

captures attitudes toward time, persistence,

ordering by status, protection of face, respect for tradition, and reciprocation of gifts and

favors

 Japan, Hong Kong, and Thailand scored high on this dimension

 Culture evolves over time

changes in value systems can be slow and

painful for a society

 Social turmoil - an inevitable outcome of

cultural change

as countries become economically stronger,

cultural change is particularly common

 economic progress encourages a shift from collectivism to individualism

globalization also brings cultural change

Mean For Managers?

1 It is important to develop cross-cultural literacy

 companies that are ill informed about the practices

of another culture are unlikely to succeed in that culture

2 There is a connection between culture and

national competitive advantage

 suggests which countries are likely to produce the

most viable competitors

 has implications for the choice of countries in which