Slide1: Fourth Edition International Business


CHAPTER 3: CHAPTER 3 Differences in Culture


Chapter Focus: Chapter Focus We need to learn: Business success in different countries requires cross cultural literacy. People are ain’t what you see..


Chapter Focus: Chapter Focus We need to learn: Business success in different countries requires cross cultural literacy. People are ain’t what you see. Values are different.


Chapter Focus: Chapter Focus We need to learn: Business success in different countries requires cross cultural literacy. People are ain’t what you see. Can we follow the adage “when in Rome do as the Romans do”


Chapter Focus: Chapter Focus We need to learn: Business success in different countries requires cross cultural literacy. People are ain’t what you see. Can we follow the adage “when in Rome do as the Romans do” Some Cultural attributes cause cost of doing business to increase. What are they in the US?


Chapter Focus: Chapter Focus We need to learn: Business success in different countries requires cross cultural literacy. People are ain’t what you see. Can we follow the adage “when in Rome do as the Romans do” Some Cultural attributes cause cost of doing business to increase. What are they in the US? Cultures change.


What is Culture?: What is Culture? A system of norms and values shared among a group of people and, when taken together, constitute a design for living.


Norms: Norms Norms: Social rules and guidelines that prescribe appropriate behavior in particular situations. They stem from:


Norms: Norms Norms: Social rules and guidelines that prescribe appropriate behavior in particular situations. They stem from Folkways: Routine conventions of everyday life.


Norms: Norms Norms: Social rules and guidelines that prescribe appropriate behavior in particular situations. They stem from Folkways: Routine conventions of everyday life. Violations of folkways does not constitute villainy or a character flaw.


Norms: Norms Norms: Social rules and guidelines that prescribe appropriate behavior in particular situations. They stem from Folkways: Routine conventions of everyday life. Mores (Essential accepted traditional customs that often become a part of the legal code): They are central to functioning of a society and its social life.


Values: Values Values are: The bedrocks of culture.


Values: Values Values are: The bedrocks of culture. Have emotional significance to individuals and the society


Values: Values Values are: The bedrocks of culture. Have emotional significance to individuals and the society These are abstract ideas about what a group believes to be good, right, and desirable.


Determinants of Culture: Determinants of Culture


Determinants of Culture: Determinants of Culture


Determinants of Culture: Determinants of Culture


Determinants of Culture: Determinants of Culture


Determinants of Culture: Determinants of Culture


Determinants of Culture: Determinants of Culture


Social Structure: Social Structure


Social Structure: Social Structure


Social Structure: Social Structure


Social Structure: Social Structure


Social Structure: Social Structure


Social Structure: Social Structure


Social Structure: Social Structure


Social Structure: Social Structure


Social Structure: Social Structure


Social Structure: Social Structure


Social Structure: Social Structure


Social Structure: Social Structure


Social Structure: Social Structure


Social Stratification: Social Stratification Typically is defined by family background, occupation, and income.


Social Stratification: Social Stratification Caste: Virtually no mobility


Social Stratification: Social Stratification Class: some social mobility


Religion: Religion Shared beliefs and rituals concerned with the realm of the sacred. Ethical Systems: Moral principles or values used to guide and shape behavior. Shapes attitudes toward work and entrepreneurship and can affect the cost of doing business.


World’s Religions: World’s Religions


Religion and Economic Implications: Religion and Economic Implications Christianity “”Protestant Work Ethic” and “The Spirit of Capitalism””. Islam Favors market-based systems. “The Spirit of Capitalism””. No payment or receipt of interest. Hinduism Asceticism may have an impact. Caste system plays a role. Buddhism Little emphasis on entrepreneurial behavior. Confucianism Loyalty, reciprocal obligations, and honesty in dealings.


Language: Language Allows people to communicate.


Language: Language Allows people to communicate. Structures the way the world is perceived.


Language: Language Allows people to communicate. Structures the way the world is perceived. Directs attention to certain features of the world rather than others.


Language: Language Allows people to communicate. Structures the way the world is perceived. Directs attention to certain features of the world rather than others. Helps define culture.


Language: Language Allows people to communicate. Structures the way the world is perceived. Directs attention to certain features of the world rather than others. Helps define culture. Creates separatist tendencies?


Spoken Language: Spoken Language


Nonspoken Language: Nonspoken Language Nonverbal cues: eyebrows fingers/thumbs hand gestures feet personal space body gestures


Education: Education


Education: Education


Education: Education


Education: Education


Education: Education


Education: Education


Education: Education


Hofstede: Hofstede Study (IBM) is a general way to look at differences between cultures.


Hofstede: Hofstede Study (IBM) is a general way to look at differences between cultures. 4 dimensions:


Hofstede: Hofstede Study (IBM) is a general way to look at differences between cultures. 4 dimensions: Power distance: How does the society deals with both physical and intellectual diversity of citizens.


Hofstede: Hofstede Study (IBM) is a general way to look at differences between cultures. 4 dimensions: Power distance: How does the society deals with both physical and intellectual diversity of citizens. High power distance: those that allow inequalities to grow over time into inequality of wealth and power.


Hofstede: Hofstede Study (IBM) is a general way to look at differences between cultures. 4 dimensions: Power distance: How does the society deals with both physical and intellectual diversity of citizens. High power distance: those that allow inequalities to grow over time into inequality of wealth and power. Low power distance: those that play down these inequalities


Hofstede: Hofstede Study (IBM) is a general way to look at differences between cultures. 4 dimensions: Power distance: Individualism versus collectivism.


Hofstede: Hofstede Study (IBM) is a general way to look at differences between cultures. 4 dimensions: Power distance: Individualism versus collectivism. Uncertainty avoidance: How much uncertainty and ambiguity is encouraged by the society.


Hofstede: Hofstede Study (IBM) is a general way to look at differences between cultures. 4 dimensions: Power distance: Individualism versus collectivism. Uncertainty avoidance: How much uncertainty and ambiguity is encouraged by the society. Masculinity versus femininity.


Hofstede: Hofstede Study (IBM) is a general way to look at differences between cultures. 4 dimensions: Power distance: Individualism versus collectivism. Uncertainty avoidance: How much uncertainty and ambiguity is encouraged by the society. Masculinity versus femininity. But: Assumption of one-to-one relationship between culture and nation-state.


Hofstede: Hofstede Study (IBM) is a general way to look at differences between cultures. 4 dimensions: Power distance: Individualism versus collectivism. Uncertainty avoidance: How much uncertainty and ambiguity is encouraged by the society. Masculinity versus femininity. But: Assumption of one-to-one relationship between culture and nation-state. Research may be culturally bound.


Hofstede: Hofstede Study (IBM) is a general way to look at differences between cultures. 4 dimensions: Power distance: Individualism versus collectivism. Uncertainty avoidance: How much uncertainty and ambiguity is encouraged by the society. Masculinity versus femininity. But: Assumption of one-to-one relationship between culture and nation-state. Research may be culturally bound. Respondents worked within a single company.


Hofstede: Hofstede Study (IBM) is a general way to look at differences between cultures. 4 dimensions: Power distance: Individualism versus collectivism. Uncertainty avoidance: How much uncertainty and ambiguity is encouraged by the society. Masculinity versus femininity. But: Assumption of one-to-one relationship between culture and nation-state. Research may be culturally bound. Respondents worked within a single company. Work is beginning to look dated (1967-1973).


Work Related Values for Selected Countries: Work Related Values for Selected Countries Table 3.1


Culture is Dynamic: Culture is Dynamic Cultural Change


Culture and Competitive Advantage: Culture and Competitive Advantage The connection suggests: Which countries are likely to be the most viable competitors. Which countries in which to locate production facilities and do business.


Culture and Ethics: Culture and Ethics Do the “right” thing. Thomas Donaldson’s Three Principles:


Culture and Ethics: Culture and Ethics Do the “right” thing. Thomas Donaldson’s Three Principles: Respect for core human values (human rights), which determine the absolute moral threshold for all business activities.


Culture and Ethics: Culture and Ethics Do the “right” thing. Thomas Donaldson’s Three Principles: Respect for core human values (human rights), which determine the absolute moral threshold for all business activities. Respect for local tradition.


Culture and Ethics: Culture and Ethics Do the “right” thing. Thomas Donaldson’s Three Principles: Respect for core human values (human rights), which determine the absolute moral threshold for all business activities. Respect for local tradition. Context matters when deciding what is right and what is wrong.