chapter six Sociocultural Forces McGraw-Hill/Irwin International Business, 11/e Copyright © 2008 The McGraw-Hill Companies, Inc All rights reserved 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 6-3 Learning Objectives Explain the importance of the ability to speak the local language Discuss the importance of unspoken language in international business Discuss the two classes of relationships within a society Discuss Hofstede’s four cultural value dimensions 6-4 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 6-5 What is Culture • The sum total of beliefs, rules, techniques, institutions, and artifacts that characterize human populations – – – – Learned Interrelated Shared Defines the boundaries 6-6 Ethnocentricity • Ethnocentricity – Belief in the superiority of one’s own ethnic group 6-7 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 6-8 Culture Affects All Business Functions • Marketing – Variation in attitudes and values requires firms to use different marketing mixes • P&G Japanese Camay commercials • Disneyland Paris • Human Resource Management – Evaluation of managers • Production and Finance – Attitudes toward authority – Attitudes toward change 6-9 Sociocultural Components • Culture is: – Aesthetics – Attitudes and beliefs – Religion – Material Culture – Language – Societal organization – Legal characteristics – Political structures 6-10 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 6-26 Language • 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.” 6-27 Language Issues • Technical words not exist in all languages – Usually use English • Many cultures avoid saying anything disagreeable 6-28 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 6-29 2003 Corruption Index Scores and Ranking 6-30 Societal Organization • Kinship – Extended Family • includes blood and marriage relatives – Member’s responsibility • Although the extended family is large, each member’s feeling of responsibility to it is strong • Associations – Social units based on age, gender, or common interest, not on kinship 6-31 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 6-32 Understanding National Cultures • Hofstede’s Dimensions of Culture • Individualism versus Collectivism • Large versus Small Power Distance • Strong versus Weak Uncertainty Avoidance • Masculinity versus Femininity 6-33 Scores for Hofstede’s Value Dimensions 6-34 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 6-35 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 not take any initiative in making non-routine decisions 6-36 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 6-37 Plot of Nations: Power distance and Uncertainty Avoidance 6-38 Plot of Nations: Individualism and Power Distance 6-39 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 6-40 ... technology Discuss the pervasiveness of the Information Technology Era 6-3 Learning Objectives Explain the importance of the ability to speak the local language Discuss the importance of unspoken... 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... down • Establish trust • Understand the importance of language • Respect the culture • Understand the components of culture 6-5 What is Culture • The sum total of beliefs, rules, techniques, institutions,