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.

International Business 9e By Charles W.L Hill McGraw­Hill/Irwin         Copyright © 2013 by The McGraw­Hill Companies, Inc. All rights reserved Chapter 4 Differences in Culture How Do Cultural Differences  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 4­3 What Is Culture?  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  Society - a group of people who share a common set of values and norms 4­4 How Are Culture, Society,  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 4­5 What Determines Culture? Determinants of Culture 4­6 What Is A Social Structure?  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 4­7 What Is Social Stratification?  All societies are stratified on a hierarchical basis into social categories, or social strata Social mobility - the extent to which individuals can move out of the strata into which they are born  caste system  class system The significance attached to social strata in business contacts  class consciousness 4­8 How Do Religious And Ethical Systems Differ?  Religion - shared beliefs and rituals that are concerned with the realm of the sacred Christianity Islam Hinduism Buddhism Confucianism influences behavior and culture  Ethical systems - a set of moral principles, or values, that are used to guide and shape behavior 4­9 How Do Religious And  Ethical Systems Differ? World Religions 4­10 What Is The Role  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 culture can lead to communication failure 4­11 What Is The Role  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 4­12 How Does Culture  Impact The Workplace?  Hofstede’s dimensions of culture: Power distance - how a society deals with the fact that people are unequal in physical and intellectual capabilities Uncertainty avoidance - the relationship between the individual and his fellows Individualism versus collectivism - the extent to which different cultures socialize their members into accepting ambiguous situations and tolerating ambiguity Masculinity versus femininity -the relationship between gender and work roles 4­13 How Does Culture  Impact The Workplace? Work-Related Values for 20 Countries 4­14 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 the U.S and Canada scored low 4­15 Does Culture Change?  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 4­16 What Do Cultural Differences  Mean For Managers? 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 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 to locate production facilities and business 4­17 .. .Chapter 4 Differences in Culture How Do Cultural Differences  Affect International Business?    Understanding and adapting to the local cultural is important international companies  cross-cultural... Masculinity versus femininity -the relationship between gender and work roles 4 13 How Does Culture  Impact The Workplace? Work-Related Values for 20 Countries 4 14 How Does Culture  Impact The Workplace?... 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 4 5 What Determines Culture?