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International
Business
Environments & Operations
14e
Daniels
●
Radebaugh
●
Copyright © 2013 Pearson Education, Inc.
publishing as Prentice Hall
Sullivan
2-1
Chapter 2
The Cultural
Environments
Facing Business
Copyright © 2013 Pearson Education, Inc.
publishing as Prentice Hall
2-2
Learning Objectives
To understand methods for learning about
cultural environments
 To analyze the major causes of cultural
difference and change
 To discuss behavioral factors influencing
countries’ business practices
 To understand guidelines for cultural
adjustment

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Introduction
Learning Objective 1:
To understand methods for learning about
cultural environments
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Introduction
Culture refers to the learned norms based
on values, attitudes, and beliefs of a group
of people
 Culture is an integral part of a nation’s
operating environment


every business function is subject to potential
cultural differences
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Introduction
Cultural Factors Affecting International Business Operations
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Introduction
Companies need to decide when to make
cultural adjustments
 Fostering cultural diversity can allow a
company to gain a global competitive
advantage by bringing together people of
diverse backgrounds and experience

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Introduction

But, cultural collision can occur when a
company implements practices that are
less effective or when employees
encounter distress because of difficulty in
accepting or adjusting to foreign behaviors
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Cultural Awareness

Problem areas that can hinder managers’
cultural awareness…



Subconscious reactions to circumstances
The assumption that all societal subgroups are
similar
Managers that educate themselves about
other cultures have a greater chance of
succeeding abroad
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Culture and the Nation-State

The nation is a useful definition of society
because similarity among people is a
cause and an effect of national boundaries



laws apply primarily along national lines
language and values are shared within borders
rites and symbols are shared along national
lines
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Culture and the Nation-State

Country-by-country analysis can be
difficult because



subcultures exist within nations
similarities link groups from different countries
Need to focus on relevant groups
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How Cultures Form and Change
Learning Objective 2:
To analyze the major causes of cultural
difference and change
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How Cultures Form and Change

Cultural value systems are established
early in life but may change through


choice or imposition
 cultural imperialism
contact with other cultures
 cultural diffusion
 creolization
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Language:
Cultural Diffuser and Stabilizer
A common language within a country is a
unifying force
 A shared language between nations
facilitates international business



Native English speaking countries account for a
third of the world’s production
English is the international language of
business
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Language:
Cultural Diffuser and Stabilizer
Distribution Of The World’s Major Languages
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Language:
Cultural Diffuser and Stabilizer
Major Language Groups: Population and Output
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Religion: Cultural Stabilizer
Religion impacts almost every business
function
 Centuries of profound religious influence
continue to play a major role in shaping
cultural values and behavior


many strong values are the result of a
dominant religion
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Religion: Cultural Stabilizer
Distribution Of The World’s Major Religions
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Behavioral Practices
Affecting Business
Learning Objective 3:
To discuss behavioral factors influencing
countries’ business practices
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Social Stratification

Social ranking is determined by
 an individual’s achievements and
qualifications
 an individual’s affiliation with, or
membership in, certain groups
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Social Stratification

Group affiliations can be



Ascribed group memberships
 based on gender, family, age, caste, and
ethnic, racial, or national origin
Acquired group memberships
 based on religion, political affiliation,
professional association
Two other factors that are important

education and social connections
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Work Motivation
The motivation to work differs across
cultures
 Studies show


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the desire for material wealth is a prime
motivation to work
 promotes economic development
people are more eager to work when the
rewards for success are high
masculinity-femininity index
 high masculinity score prefers “to live to
work” than “to work to live”
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Work Motivation

Hierarchy of needs theory


fill lower-level needs before moving to higher
level needs
The ranking of needs differs among
cultures
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Work Motivation
The Hierarchy of Needs and Need-Hierarchy Comparisons
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Relationship Preferences
Relationship preferences differ by culture
 Power distance

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high power distance implies little superiorsubordinate interaction
 autocratic or paternalistic management style
low power distance implies consultative style
Individualism versus collectivism


high individualism – welcome challenges
high collectivism – prefer safe work
environment
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Risk Taking Behavior

Risk taking behavior differs across
cultures
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Uncertainty avoidance
 handling uncertainty
Trust
 degree of trust among people
Future orientation
 delaying gratification
Fatalism
 attitudes of self-determination
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Information and
Task Processing

Cultures handle information in different
ways


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Perception of cues
Obtaining information
 low context versus high context cultures
Information processing
Monochronic versus polychronic cultures
Idealism versus pragmatism
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Communications
Cross border communications do not
always translate as intended
 Spoken and written language
 Silent language

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Color
Distance
Time and punctuality
Body language
Prestige
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Communications
Body Language Is Not A Universal Language
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Dealing with
Cultural Differences
Learning Objective 4:
To understand guidelines for cultural
adjustment
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Dealing with
Cultural Differences
Do managers have to alter their
customary practices to succeed in
countries with different cultures?
 Must consider

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Host society acceptance
Degree of cultural differences
 cultural distance
Ability to adjust
 culture shock and reverse culture shock
Company and management orientation
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Dealing with
Cultural Differences

Three company and management
orientations
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Polycentrism
 business units abroad should act like local
companies
Ethnocentism
 home culture is superior to local culture
 overlook national differences
Geocentrism
 integrate home and host practices
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Strategies for Instituting Change
Value Systems
 Cost-Benefit Analysis of change
 Resistance to too much change
 Participation
 Reward Sharing
 Opinion Leadership
 Timing
 Learning Abroad

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The Future of National Cultures

Scenario 1:

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Scenario 2:
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
Outward expressions of national culture will continue to
become homogeneous while distinct values will remain
stable
Scenario 3:


New hybrid cultures will develop and personal horizons
will broaden
Nationalism will continue to reinforce cultural identity
Scenario 4:

Existing national borders will shift to accommodate
ethnic differences
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All rights reserved. No part of this publication may be reproduced, stored in
a retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
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