Chapter 4: Differences in Culture What is Culture? Culture 文化：is a system of values and norms that are shared among a group of people Society 社會：a group of people sharing a common set of values and norms Values 價值：provide the context within which a society’s norms are established and justified Norms 規範：the social rules that govern the actions of people toward one another Cross-cultural literacy an understanding of how cultural differences across and within nations can affect the way in which business is practiced The Determinants of Culture - The values and norms of a culture evolve based on: 1.Prevailing political and economic philosophies 2.A society’s social structure 3.The dominant religion, language, and education The Determinants of Culture Social Structure 社會結構 Two dimensions： - the individual .vs.the group - classes system .vs. castes system • The Individual Western countries Individual achievement and entrepreneurship are promoted lack of loyalty to the firm • The Group non-Westernized countries Cooperation and team work are encouraged - Social Stratification • Caste system 種姓制度 social position is determined by the family into which a person is born • Class system 階級制度 the position a person has by birth can be changed through achievement or luck ex uk Religious and Ethical Systems • Religion - a system of shared beliefs and rituals that are concerned with the realm of the sacred • Ethical system – a set of moral principles, or values, that are used to guide and shape behavior - Christianity 基督 Most widely practiced religion - Islam 回教 second largest religion Economic Implications of Islam:Koran people do not own property, but only act as stewards for God and thus must take care of that which they have been entrusted with - Hinduism 印度教 World’s oldest religion - Buddhism 佛教 - Confucianism 儒家 Language Spoken:Countries with more than one spoken language often have more than one culture Unspoken: Many nonverbal cues are culturally bound and because they may be interpreted differently, can result in misunderstandings Education • indispensable • technical skills • competitive advantage • excellent education system is an important factor economic success of a country Culture and Business • Power distance • Individualism versus collectivism • Uncertainty avoidance • Masculinity versus femininity • Long-term versus short-term orientation Cultural Change Culture evolves over time, although changes in value systems can be slow and painful for a society • “traditional values” to “secular rational” • “survival values” to “well-being values” Chapter 3: National Differences in Economic Development 3-1Explain what determines the level of economic development Differences in Economic Development A country’s level of economic development affects its attractiveness as a possible market or production location for firms • GNI :gross national income • PPP :purchasing power parity Broader Conceptions of Development Political Economy and Economic Progress 1.Innovation and Entrepreneurship are the Engines of Growth 2.Innovation and Entrepreneurship require a Market Economy Market Economy:§Free market to develop innovation 3.Innovation and Entrepreneurship require Strong Property Rights 4.The Required Political System • Democracy 民主 • Dictatorship 獨裁 5.Economic Progress Begets Democracy Democracy is often a consequence of economic growth 6.Geography, Education, and Economic Development 3-2Identify the macropolitical and macroeconomic changes occurring worldwide States in Transition Since the late 1980s, a wave of democratic revolutions has swept the world, and many of the previous totalitarian regimes collapsed • Totalitarian governments to Democratically elected governments • Centrally planned and Mixed economies to Free markets The Spread of Democracy • Many totalitarian regimes failed to deliver economic progress to the majority of their population • New information and communication technologies have broken down the ability of the state to control access to uncensored information • Economic advances of the last quarter century have led to the emergence of increasingly prosperous middle and working classes who have pushed for democratic reforms The New World Order and Global Terrorism The end of the Cold War and the “new world order” that followed the collapse of communism, taken together with the collapse of many authoritarian regimes in Latin America, have given rise to intense speculation about the future shape of global geopolitics 3-3Describe how transition economies are moving toward market-based systems Economic Transformation • - Deregulation 放鬆管制 Removing legal restrictions to the free play of markets Establishment of private enterprises Removing price controls • Privatisation 私有化 - Transfers ownership of state property into the hands of private individuals. • Legal Systems 法律系統 - Laws protecting private property rights and providing mechanisms for contract enforcement - Without a legal system in place, little incentive to engage in economic activity. 3-4Explain the implications for management Practice of national differences in political economy. Focus on Managerial Implications • Benefits Function of market size, and current and future consumer purchasing power • Costs 1.Political costs 2.Economic costs 3.Legal costs • Risks 1.Political risk 2.Economic risk 3.Legal risk • Overall Attractiveness The overall attractiveness of a country as a potential market and/or investment site for an international business depends on balancing the benefits, costs, and risks associated with doing business in that country • Country CH3: For the Attractiveness economic development, it’s not only means the process of economic but also the process of political , and we can see that Countries that are dictatorships often fail to achieve respectable economic growth , and for a country to sustain long term economic growth, the business environment needs to be conducive to innovation and entrepreneurial activity, for example : the Usa,their growth of economic often come from the entrepreneurial activity. Innovation and entrepreneurship require strong property rights developing ,world will not benefit from capitalism until property rights are better defined and protected, just like the case that we mention ,about china’s new property law . Factors that influence a country’s rate of economic development not only include-the political but also include Geography and Education levels . CH4: Nowadays more businesses are entering the global market. It is vital for businesses to understand that cultural differences can affect how they perform in the local markets they are targeting. and in this chapter we know that their are some key determinants of culture: like social structure ,religion, language, and education, for example Islamic banks function differently than conventional banks in the world, as the Islamic banks cannot pay or charge interest. And buring the class we use the website :hofstede insights ,to compare the culture by 6 dimensions ,Power Distance,Individualism,Uncertainty Avoidance,Masculinity,Long-term or Short-term Orientation,i indulgence, and we found that the rate had a huge difference between each country, so I think that if you want to do the business with other country ,first of al you really have to look into their culture first .