Download The Cultural Environments Facing Business

International
Business
Environments & Operations
15e
Daniels
●
Radebaugh
●
Copyright © 2015 Pearson Education, Inc.
Sullivan
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Chapter 2
The Cultural
Environments
Facing Business
Copyright © 2015 Pearson Education, Inc.
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Learning Objectives
Understand methods for learning about
cultural environments
 Grasp the major causes of cultural
difference and change
 Discuss behavioral factors influencing
countries’ business practices
 Recognize the complexities of crosscultural information differences, especially
communications
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Introduction

What is Culture?
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“Sum total” of all learned activities, a way of life-- refers
to the learned norms based on values, attitudes, and
beliefs of a group of people living in a geographic area,
in a society or a nation
Why an international business manager should
study the culture of a country?
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Culture is an integral part of a nation’s business and
operating environment
Companies need to decide how and when to make
cultural adjustments
Fostering cultural diversity can offer global competitive
advantage
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Cultural Awareness

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We need a GLOBAL MINDSET to succeed-managers that educate themselves about other
cultures have a greater chance of success.
Problem areas that can hinder managers’ cultural
awareness…
 Subconscious reactions to circumstances (selfreference criterion)
 The assumption that all societal subgroups are
similar
Cultural collision can occur when a company
implements practices that are counters a
country’s cultural norms
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Understanding Culture
National cultures are dynamic, they evolve
over time, change occurs by choice or by
imposition. Three features are:
 The Nation or Nation-State as point of
reference (identity, symbolism, common
history)
 Language as both a diffuser and stabilizer
of culture (expression, sharing, bond)
 Religion as a cultural stabilizer (beliefs,
ethics, spiritualism)
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Culture and the Nation-State
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Historical understanding of a nation state. It 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
But then subcultures exist within a nation state
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How Cultures Form and Change

Cultural value systems are established
early in life but may change through
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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
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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
 It influences our consumption and
expenditure
 Centuries of profound religious influence
continue to play a major role in shaping
cultural values and behavior
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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
Social Stratification
 Work Motivation
 Relationship Preferences
 Risk-taking Behavior
 Information and Task Processing
 Communications
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Social Stratification
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Social ranking is determined by
 an individual’s achievements and qualifications
 an individual’s affiliation with, or membership in, certain
groups
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 affecting social stratification are:
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
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Individuals will 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
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high individualism – welcome challenges
high collectivism – prefer safe work
environment
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Risk Taking Behavior
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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
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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
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
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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

Change and resistance to 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
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Scenario 1: New hybrid cultures will develop and
personal horizons will broaden
Scenario 2: Outward expressions of national
culture will continue to become homogeneous
while distinct values will remain stable
Scenario 3: Nationalism will continue to reinforce
cultural identity
Scenario 4: Existing national borders will shift to
accommodate ethnic differences
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Hofstede’s Five Cultural Values
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Individualism/collective index (IDV): Refers to preference
of behavior that promotes one’s self interest. Higher score
(e.g., USA) means high on individualism.
Power distance index (PDI): Measures the tolerance of
social inequality, i.e., inequality between superiors and
subordinates within a social system. Higher score (e.g.,
Arab countries) means more hierarchical.
Uncertainty avoidance index (UAI): Refers to the
intolerance of ambiguity and uncertainty among members
of a society. Higher score (e.g., Greece) means less
tolerance for uncertainty.
Masculinity/feminity (MAS): Refers to one’s desire for
achievement and entrepreneurial tendencies. Higher score
(e.g., Latin culture) means more assertiveness and
masculinity.
Future orientation: Refers to the future or long-term
orientation of the society
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Chapter 2: Discussion
Questions
1.
2.
3.
4.
5.
Define culture? Why an international business manager
should study the culture of a country?
Explain how the dynamic interplay of nation, language and
religion shapes the culture of a country.
Explain the six behavioral practices that affect the business
in a country. I may ask you to explain any two or three of
them.
How can we deal with, adapt to, and influence foreign
cultures? Explain.
Explain the five cultural values of Hofstede. I may ask you
to explain any two or three of them also.
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