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
Aesthetics
• Culture’s sense of beauty and good taste
– Art conveys meaning
• Colors, symbols, numbers--Nike air
• Architectural style differences
• feng shui
• Music and Folklore
– Musical tastes vary
– Folklore discloses way of life
• Cowboys in Chile or Argentina
• Mexican singing cricket
6-11
Attitudes and Beliefs
• Attitudes Toward Time
– Vary across cultures
– Difficult area for some
Americans
– Directness and drive
• Perceived to be rudeness
– Deadlines
• Liability abroad
6-12
Attitudes Toward Achievement and
Work
• Germans put leisure first and work
second
• The demonstration effect
– Result of having seen others with desirable
goods
• Job Prestige
– The distinction between blue-collar workers
and office employees
6-13
Religion
• Responsible for many of the attitudes
and beliefs affecting human behavior
– Work Ethic
• Protestant work ethic
– Duty to glorify God by hard work and the
practice of thrift
• Confucian work ethic
– Drive toward hard work and thrift; similar to
Protestant work ethic
6-14
Will this work?
6-15
Primary Asian Religions
Hinduism
– Caste system
• entire society is divided into four groups (plus the outcasts) and
each is assigned a certain class of work
• Buddhism
– Reform of Hinduism
• Jainism (Mahavira a contemporary of Buddha)
– Nonviolence a major principle
• Sikhism
– Bridge between Hinduism and Islam
6-16
Primary Asian Religions, cont’d.
• Confucianism
– Inseparable from Chinese culture
• Taoism
– Lao Tzu, contemporary of Confucius
• Shintoism
– Indigenous to Japan
6-17
Islam
• Five Pillars of Faith
• Youngest and second
largest faith
–
–
1.3 billion followers
Comparison: Christianity has 2 billion
adherents
• Muhammad is Founder
– Prophet of God and head of
state
• Holy Book Koran
–
–
–
–
–
Confession of faith
Five daily prayers
Charity
Ramadan fast
Pilgrimage to Mecca
• Jihad – holy war
• Sunni-Shia Conflict
– Conflict gives rise to violent
clashes
6-18
Religious Population of the World
Insert Figure 6.1
6-19
Animism
• Spirit worship, incl. magic, witchcraft
• Everything in nature has its own spirit or
divinity
6-20
Material Culture
• Material Culture
– All human-made objects
– concerned with how people make things
(technology) and
– who makes what and why (economics)
6-21
Technology
• Technology
– Mix of usable knowledge that society
applies and directs toward attainment of
cultural and economic objectives
6-22
Importance of Technology
– Enables a firm to be
competitive in world
markets.
– Can be sold or be
embodied in the
company’s products
– Can give a firm
confidence to enter a
foreign market
– Enables the firm to obtain
better than usual
conditions for a foreign
market investment
– Enables a company with
only a minority equity
position to control a joint
venture
– Can change the
international division of
labor
– Causes major firms to
form competitive alliances
6-23
Material Culture - Technology
• Cultural Aspects of
Technology
– Includes skills in marketing,
finance, and management
– People not always ready to
adapt to changes
technology brings
• Technological
Dualism
– The side-by-side presence
of technologically
advanced and
technologically primitive
production systems
• Appropriate
Technology
– The technology (advanced,
intermediate, or primitive) that
most closely fits the society
using it
• Boomerang Effect
– Situation in which technology
sold to companies in another
nation is used to produce
goods to compete with those
of the seller of the technology.
6-24
Information Technology
• Information Technology Era
– As early as 2000 the Internet economy
• had reached $850 billion
• exceeded the size of the life insurance and real
estate industries
6-25
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 do 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 do 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