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International BusinessCompeting in the Global Marketplace
8e
By Charles W.L. Hill
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Chapter 3
Differences
in Culture
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What Is Cross-Cultural Literacy?
Cross-cultural literacy is an understanding of
how cultural differences across and within
nations can affect the way in which business is
practicedIt is important for foreign businesses to gain an
understanding of the prevailing culture of its
host country, and that success requires a
foreign firm to adapt to the culture
Beware ofethnocentric behavior, or a belief in
the superiority of ones own culture
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What Is Culture?
Culture is a system ofvalues and norms that are
shared among a group of people and that when
taken together constitute a design for living
values are abstract ideas about what a groupbelieves to be good, right, and desirable
norms are the social rules and guidelines that
prescribe appropriate behavior in particular
situationsSociety refers to a group of people who share a
common set of values and norms
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What Are Values and Norms?
Values provide the context within which
a societys norms are established and
justified and form the bedrock of a
culture
Norms include
folkways - the routine conventions of
everyday life
mores - norms that are seen as central to the
functioning of a society and to its social life
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How Are Culture, Society, andThe Nation-State Related?
The relationship between a society and a
nation state is not strictly one-to-one
A society is defined as a group of people that
share a common set of values and norms
people who are bound together by a common
culture
Nation-states are political creations
can contain one or more cultures
A culture can embrace several nations
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What determines Culture?
The values and norms of a culture evolveover time
Determinants of culture (Figure 3.1)
includereligion
political and economic philosophies
educationlanguage
social structure
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What Is a Social Structure?
Social structurerefers to a societys basic
social organization
Consider two dimensions:the degree to which the basic unit of social
organization is the individual, as opposed to
the group
the degree to which a society is stratified into
classes or castes
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Copyright 2011 McGraw-Hill/Irwin 3-9
How Are Individuals andGroups Different?
In Western societies, there is a focus on theindividual, benefits include
common individual achievement
dynamism of the U.S. economy
high level of entrepreneurship
But, individualism creates a lack of company loyaltyand failure to gain company specific knowledge
competition between individuals instead of teambuilding
less ability to develop a strong network of contactswithin a firm
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How Are Individuals andGroups Different?
In many Asian societies, the group is the
primary unit of social organization
discourages job switching between firms
encourages lifetime employment systems
leads to cooperation in solving business
problems
But, the primacy of the value of groupmight also suppress individual creativity
and initiative
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What Is Social Stratification?
Societies are stratified in two related ways1. The degree ofsocial mobility - the extent to which
individuals can move out of the strata into which theyare born
caste system - closed system of stratification in whichsocial position is determined by the family into which aperson is born
class system - open stratification; social position canbe changed through achievement or luck
2. The significance attached to social strata in businesscontexts Class consciousness is a condition where people tend to
perceive themselves in terms of their class background
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How Do Religious andEthical Systems Differ?
Religion is a system of shared beliefs and ritualsthat are concerned with the realm of the sacred;Ethical systems are a set of moral principles, orvalues, that are used to guide and shape behavior
Religion and ethics are often closely intertwinedFour religions dominate society
1. Christianity
2. Islam
3. Hinduism4. Buddhism
Confucianism is not a religion, but influencesbehavior and shapes culture in many parts of Asia
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World Religions
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What Is Christianity?
The largest religion in the world
20% of the worlds people identified as Christians
Found throughout Europe, the Americas, and
other countries settled by Europeans
The three main branches of Christianity:
Catholic, Orthodox, and Protestant the latter
has the most important economic implications
the Protestant work ethic (Max Weber, 1804)
hard work, wealth creation, and frugality is the
driving force of capitalism
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What Is Islam?
The worlds second largest religion, with about 1billion adherents
The central principle of Islam is that there is but onetrue omnipotent of God; people do not own property,
but only act as stewards for GodTeaching peace, justice, and tolerance
supportive of business, but the way business ispracticed is prescribed
Islamic fundamentalists have gained political power inmany Muslim countries and blame the West for manysocial problems; they are associated in the Westernmedia with militants, terrorists, and violent upheavals
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Copyright 2011 McGraw-Hill/Irwin 3-16
What Is Hinduism?
Hinduismpracticed primarily on the Indian sub-continent
focuses on the importance of achieving spiritualgrowth and development and believes that a
moral force requires the acceptance of certainresponsibilities, called dharma
Hindus are valued by their spiritual rather thanmaterial achievements
Hindu cultures reverence for the cow
promotion and adding new responsibilities maynot be important, or may be infeasible due to theemployee's caste
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What Is Buddhism?
Buddhism
has about 350 millions followers
stresses spiritual growth and the afterlife,
rather than achievement while in this worlddoes not emphasize wealth creation
entrepreneurial behavior is not stressed
does not support the caste system, individualsdo have some mobility and can work with
individuals from different classes
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What Is Confucianism?
Confucianismideology practiced mainly in China, Korea, and
Japan
teaches the importance of attaining personalsalvation through right action
high morals, ethical conduct, and loyalty toothers are stressed
three key teachings of Confucianism - loyalty,reciprocal obligations, and honesty - may all leadto a lowering of the cost of doing business inConfucian societies
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What Is the Role ofLanguage in Culture?
Language includes both the spoken and unspoken(nonverbal communication such as facialexpressions, personal space, and hand gestures)means of communicationcountries with more than one language often have
more than one cultureEnglish is the worlds most widely spoken language
and is also becoming the language of IB
Chinese is the mother tongue of the largest number of
people, followed by English and Hindiknowledge of the local language is still beneficial
failing to understand the nonverbal cues of anotherculture can lead to communication failure
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What Is The Role ofEducation In Culture?
Formal education is the medium throughwhich individuals learn many of the language,conceptual, and mathematical skills that areindispensable in a modern society
important in determining a nations competitiveadvantage
Japans excellent education system is an
important factor underlying its economic successgeneral education levels can be a good index for
the kinds of products that might sell in a country
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How Does CultureImpact the Workplace?
Probably the most famous study of how culturerelates to value in the workplace was conductedby Geert Hofstede, who identified four dimensionsof culture
1. Power distance how a society deals with the factthat people are unequal in physical and intellectualcapabilities
2. Uncertainty avoidance the extent to whichdifferent cultures socialize their members into
accepting ambiguous situations and toleratingambiguity3. Individualism vs. collectivism4. Masculinity vs. femininity the relationship
between gender and work roles
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Work-Related Values for 20 Countries
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Was Geert Hofstede Right?Hofstede later added a fifth dimension called
Confucian dynamism , also long-term orientationcaptures attitudes toward time, persistence, ordering
by status, protection of face, respect for tradition,and reciprocation of gifts and favors
Hofstedes work has been criticized becausethe assumption of one-to-one relationship between
culture and the nation-state
study may have been culturally bound
used IBM as sole source of informationculture is not static it evolves
But, important to understand how cultures differ, andthe implications of those differences for managers
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Does Culture Change?
Culture evolves over time
changes in value systems can be slow and
painful for a society
Social turmoil - an inevitable outcome ofcultural change
as countries become economically stronger,
cultural change is particularly commone.g., Japan has been moving toward greater
individualism
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What Do Cultural DifferencesMean For Managers?
1. It is important to develop cross-culturalliteracy companies that are ill informed about the practices
of another culture are unlikely to succeed in that
culturemanagers must beware of ethnocentric behavior, or
a belief in the superiority of one's own culture
2. There is a connection between culture andnational competitive advantage suggests which countries are likely to produce the
most viable competitors
has implications for the choice of countries in whichto locate production facilities and do business
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Review Questions
1. Abstract ideas about what a group believesto be good, right, and desirable are called
___________.
2. The basic social organization of a society isits ___________.
3. The group is the primary unit of social
organization in ___________.
a) Japan b) the United States
c) Switzerland d) Mexico
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Review Questions
4. Which of the following is not characteristicof individualism?
a) individual achievement
b) low managerial mobility
c) low company loyalty
d) entrepreneurial behavior
5. Which religion promotes the notion that amoral force in society requires theacceptance of certain responsibilities calleddharma?
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Review Questions
6. The most widely spoken language in the
world is ___________.
7. _________ focuses on how society deals with
the fact that people are unequal in physicaland intellectual capabilities.
8. Which refers to nonverbal communication
such as facial expressions, personal space,and hand gestures?