AOF Business in a Global Economy
Lesson 3
Cultural Factors
Student Resources
Resource
Description
Student Resource 3.1
Worksheet: Restaurant Menu Puzzle
Student Resource 3.2
Reading: The Elements of Culture
Student Resource 3.3
Reading: Intercultural Dimensions
Student Resource 3.4
Deduction: Guess the Country
Student Resource 3.5
Chart: Cultural Norms
Student Resource 3.6
Instructions: Culture Clash Skit
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
Student Resource 3.1
Worksheet: Restaurant Menu Puzzle
Student Name:_______________________________________________________ Date:___________
Directions: These menus come from different countries. Read each one and take your best guess which
country it is from. Write down any clues you used to make your guesses. Be ready to share your answers
and why you arrived at them.
MENU 1:
Country Guess:
Main Course: Ebi (shrimp) Burger
Side Order: French Fries with Seaweed Flavoring
Clues:
Beverage: Green Tea Flavored Milkshake
MENU 2:
Country Guess:
Main Course: Toasted Ham and Cheese Sandwich
Side Order: French Fries with Mayonnaise Topping
Clues:
Beverage: Beer
MENU 3:
Country Guess:
Main Course: Maharaja (Chicken) Burger
Side Order: Naan Bread
Clues:
Beverage: Mango Lassi
MENU 4:
Country Guess:
Main Course: Barbequed Kebab in Pita Bread
Side Order: Hummus
Beverage: Tea
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
Clues:
AOF Business in a Global Economy
Lesson 3 Cultural Factors
Student Resource 3.2
Reading: The Elements of Culture
This presentation provides an overview of culture and its elements: linguistic, organizational, and social.
To be successful in global business, firms must understand at least the basics of how the cultures with
which they do business communicate and function. While cultural learning takes time, it is an essential
investment that companies doing international business must make.
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
Culture is the combination of learning and experiences that people in the same countries or regions
share. Passed from generation to generation, culture provides the rules and identity of society.
Culture can be broken down into three elements: linguistic, or the spoken and unspoken language of a
culture; organizational, or the way society is set up; and social, or the way people act and feel. Each of
the many world cultures has its own linguistic, organizational, and social rules, which are called norms.
In international business, it is essential to understand cultural elements because they affect when, where,
why, how, and with whom firms make deals; and how what’s then agreed upon gets put into practice.
Many large corporations have departments for the sole purpose of introducing, or acculturating, their
international employees.
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
The word fluency means the ability to speak or write a language smoothly, easily, or readily. It is a great
benefit to a firm when their businesspeople are fluent in the language of the country in which they are
doing business. (Sometimes business in a country is done in more than one language, and firms have to
take that into account as well.) Not only does the ability to speak and understand the local language (or
languages) help in information-gathering and interpretation—it is also a sign of respect and shows a
desire to understand the unique needs of the local population.
Fluent speakers are able to understand local programs and advertising, which benefits business by
providing informal and practical insights into local daily life and market conditions. For example, a
businessperson in another country who is fluent in its language may notice many ads for dentists who
give silver fillings for cavities and could decide to market enamel fillings there as an alternative that
consumers may prefer. Only by understanding the language, and reading the ads, could a
businessperson see this opportunity.
Firms engaged in global marketing need workers fluent in the local language because incorrect
translation (for written material) or interpretations (for the spoken word) can spell disaster for certain
products. Translations can be tricky, and having a person who understands both languages is the way to
avoid potentially damaging mistakes. Literal interpretations are sometimes disastrous, as Coca-Cola
found out with its campaign slogan “Coke adds life.” In China, this slogan translates literally into “Coke
brings your ancestors back from the dead.” And Chevrolet Nova sales were poor in Central America,
perhaps because in Spanish “no va” means “doesn’t go.” GM had to market the car under a different
name in Spanish-speaking countries.
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
We don’t just communicate with words—we also use our bodies to express what we mean. This is called
nonverbal communication, and it can tell you as much as, or even sometimes more than, verbal
communication. The meaning of nonverbal communication such as gestures, proximity, and eye contact
vary from culture to culture. Body language in one country can mean something very different in another,
so it’s important to research acceptable and customary body language before doing business abroad. For
instance, the meaning of the hand gesture in which the thumb and index finger form a circle with the other
three fingers raised varies culturally from “okay” to obscene. In Japan it means money, so giving the
gesture could be misconstrued as a bribe! And in Turkey the gesture is deeply insulting—an American
who doesn’t know this could doom a deal with the wave of a hand.
Many cultures have a different idea about appropriate proximity, or “personal space,” than Americans,
such as in the United Arab Emirates, where people stand much closer together. This difference in
proximity can be intimidating to Americans, who have been acculturated to expect more space.
Eye contact is another form of nonverbal communication that varies from country to country. In the U.S.,
we feel eye contact shows sincerity and forthrightness in business dealings. But in Japan, direct eye
contact makes many people uncomfortable. In Afghanistan, men only give eye contact to other men and
never to women. Afghanis feel it is disrespectful for men to make eye contact with women.
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
Various technological advances have been influenced by culture. Mobile phones, for example, meet the
needs of various cultures in different ways. Muslim consumers have cell phones that remind them when it
is time to pray. American businesspeople use phones to be available all the time. And the Internet has
helped spread culture by enabling people all over the world to sell their goods in the global marketplace.
Culture influences attitudes toward energy. Before the 1970s in the U.S., oil was associated with wealth
and social mobility. Today it is more about political power. In China, the automobile industry is booming,
and energy consumption is soaring there. Oil is seen as a means of progress, and energy conservation
has had less priority there than in some other countries, though this may be changing. Cultures that
control large amounts of natural resources often tend to see them differently from cultures who must buy
resources from elsewhere.
Banking and research and development (R&D) are also influenced by culture. Islamic Banking, which is
prevalent in many Muslim countries, disallows charging interest to borrow money. Institutions doing
business with Muslim (or predominantly Muslim) countries must understand Islamic practices and how
they can affect the market, even though not everyone in those countries follows Islamic restrictions
strictly.
Lastly, attitudes toward R&D are determined by culture to a certain degree due to differing beliefs about
science and the role of humans in it. Stem cell research is one example of a business undertaking that is
affected by cultural beliefs.
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
As societies have become more complex, their economic bases have tended to shift from kinship ties to
institutions, relying more on formal contracts and less on trust among people who know each other well
(though that is often still important). Such changes have come about in many parts of the United States.
Many other countries, however, particularly emergent ones, still rely primarily on family ties and social
trust as the basis for business dealings.
Although it might not seem so on the surface, the religion of a country often contributes greatly to a
country’s approach to doing business. In Muslim countries, businesspeople must show respect to the
culture by knowing that the faithful stop to pray five times a day whether there’s a meeting in progress or
not. In India, residents celebrate the coming of spring by pelting each other with brightly colored
powders—not a good day to wear a business suit.
The importance cultures place on family life and their educational traditions and systems often influence
how they approach business dealings. India is a country that has been able to take advantage of
globalization because it has a highly educated workforce, many of whom speak English. An educated
workforce creates opportunities for a country. The role of family also affects business. In Egypt, the family
is the most important social unit, and nepotism—the practice of giving a family member instead of a
stranger a job or promotion—is viewed as a positive since it promotes the family.
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
Attitudes toward time, aesthetics, and gender roles vary by culture. In many regions—northern Italy, for
example—punctuality is important and lateness for a meeting is considered a serious breach of manners
and efficient business practice, while in southern Italy it’s common for attendees to arrive an hour late or
more. Knowing about a culture’s perception of time and punctuality will help firms avoid confusion and
giving offense.
Aesthetics, or perceptions of beauty, are a cultural factor that can impact business dealings. For instance,
the associations different cultures make with color vary, and not knowing what certain colors symbolize in
different areas can affect business dealings. For instance, while gold ink is seen as the most prosperous
color to print a business card in China; other cultures may find gold flashy. In some countries, everyone
must use the right hand because the left hand’s purpose is for removal of bodily waste. Left-handed
business people unaware of this aesthetic fact of culture risk offending colleagues, or even causing
business deals to collapse.
Attitudes toward women in the workforce vary by culture. Saudi Arabian women, for example, are not
allowed to drive cars, and there are restrictions on women traveling without the permission of a close
male relative. Until recently, foreign women could not stay in a Saudi hotel without a male escort. While a
Westerner may see this cultural norm as gender bias, some traditionally minded Saudis may see it as a
form of respect. Either way, this cultural norm presents a quandary to American companies. Should
managers send a female employee to Saudi Arabia to do her job? Or should they send a male employee
in her place? How will the decision affect the business relationship? The female employee?
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
Social stratification occurs when a society thinks of its members as falling into rigidly defined social
classes that are difficult to change. India’s “caste” (or class) system has recently been abolished, in the
sense that the law no longer permits discriminatory practices (for example in employment or education)
based on a person’s caste. Globalization may well have accelerated the change through greatly
increased international travel, communication, and trade. Now educational opportunities, the influx of
foreign companies, and modern practices by domestic Indian companies (and the growing number of
India-based multinational corporations) enable members of “lower” castes to earn salaries that would
have been well out of reach a generation ago. The habits of the traditional caste-based prejudices can be
hard to change, however. One manager at a US laboratory reports that he assigns his Indian scientists to
different teams because one scientist, who is in a “higher” caste than the others, treats his “lower-caste”
colleagues as subordinates, although in the work environment they are equals.
The manners and customs of most societies are often derived from concepts, beliefs, habits and rituals
that develop in a culture over long periods of time. These manners and customs in the workplace vary
from country to country, and in some cultures can be very subtle or elaborate. In Japan, for example, the
bow is very important and highly ritualized. Who bows first and how deeply depends on a combination of
respect, age, hierarchy, relationship, and other complex factors. Businesspeople working in Japan would
put themselves at a serious disadvantage by not learning about this custom.
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
When a business considers expansion into the international business arena, it must conduct cultural
research to give itself the best possible chance of success. Learning about the market in which it wants to
do business ensures an understanding of, and respect for, the people of the region. Culture defines who
people are and what is important to them, and it varies widely across the globe. These differences make
the world, and the world of international business, an exciting one, but one fraught with potential for
cultural misunderstandings.
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
Student Resource 3.3
Reading: Intercultural Dimensions
Since the members of every culture act and react differently in different situations, international
businesspeople need guidelines about how to deal successfully with all the people who they do business
with. To help everyone understand the basic attributes, or dimensions, of other cultures, Geert Hofstede
created a model that breaks the main cultural differences that affect business into four areas. These
areas are power distance, individualism/collectivism, masculinity/femininity, and uncertainty avoidance.
To rate cultures in the four dimensions, Hofstede analyzed television commercials, print advertisements,
consumer spending, attitudes, and behavior typical in 75 different countries. The rating scale is from 0 to
100 and works on a continuum. For instance, to rate the individual/collectivism dimension, a score of 0
would mean that members of the culture were completely collectivist; 100 would mean they were
completely individualistic.
Read on to learn more about the four dimensions and how understanding them can foster success in
international business dealings. Think about the questions after each section.
Power Distance
Power distance refers to how much the members of a society accept and expect social inequality. This
inequality could be financial, social, and/or intellectual. In cultures with high power distance scores,
people do not expect their place in the cultural hierarchy to change. Panama scores 95 in this dimension
because Panamanians see their social status as unchangeable.
In cultures with low power distance scores, people try to “level the playing field” among all members.
Therefore, these cultures emphasize opportunity and independence. Israel gets a score of 13 in this
dimension. It is a country in which all members of society, no matter their wealth, social status, or gender,
must serve in the armed forces.
Would the power distance rating be high or low in a country where corporate executives earn 100
times what typical workers do? Why?
Individualism/Collectivism
This dimension contrasts people who focus mainly on looking after themselves and their immediate
families with people who belong to wider in-groups based on ethnicity, class, work relationships, and
other factors, and where members of the group are looked after in exchange for loyalty. People in
individualistic cultures feel responsible for the people closest to them, often their nuclear family only. In
collectivistic cultures, people feel a strong connection with many people beyond their families and feel
close to many groups.
Cultures that rate high in the individualism dimension value time, and the saying “time is money” is
associated with individualistic cultures. In business relationships, the goal is to get to the point fast. The
United States is a highly individualistic culture, and received a score of 91 in this dimension.
In collectivist cultures, people give priority to relationships with others. Business relationships are based
on established trust between parties. Social relationships are wide-reaching and very important.
Indonesia, which scored 14 in this dimension, is highly collectivist, and people view themselves as
members of many different communities.
Why do many members of collectivist cultures often stay at the same company for their entire
working lives?
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
Masculinity/Femininity
This dimension measures how differentiated gender roles are in society, including the workplace.
Masculine cultures value competitiveness and the accumulation of wealth. These cultures tend to have
more defined gender roles as well. Japan, which scores 95 in this dimension, hierarchy is strictly adhered
to.
In cultures that have high femininity scores, people strive for consensus. Quality of life and reaching
consensus are generally considered more important than personal achievement. In these cultures,
gender roles are less specific, so men and women can choose the type of work they would like to do
without being limited by cultural pressure. Sweden scores 5 in this dimension because its culture
differentiates gender roles very little.
What about this dimension comes from stereotypes about the traditional roles of men and
women?
Uncertainty Avoidance
This dimension measures the extent to which people fear uncertainty and try to avoid situations that
produce it. People in high uncertainty avoidance cultures like to follow rules, while people in low
uncertainty cultures prefer to have as few rules as possible.
In cultures with high uncertainty avoidance, people want structure. People seek out truth and depend on
experts. Communication tends to be formal. Conflict and competition are seen as threatening. The rules
for becoming an expert are well defined and people are expected to follow the proper paths. In France, it
is considered rude to use first names in business; it scores 86 in this dimension.
In cultures with low uncertainty avoidance, people need fewer rules and are willing to take risks. Change
is not seen as threatening. Denmark scores 23 in uncertainty avoidance and is considered by the World
Bank Group to have the most flexible labor market in Europe.
How can low uncertainty avoidance foster product development?
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
Student Resource 3.4
Deduction: Guess the Country
Student Names:_______________________________________________________ Date:___________
Directions: Look at the scores each of these countries received for Geert Hofstede’s Intercultural
Dimensions. After reading the descriptions below, use the data in the chart to answer the questions
below. Compare your answers with a partner, and come to agreement. Be prepared to share your
answers with the class.
Power
distance
Individualism
Masculinity
Uncertainty
avoidance
Japan
54
46
95
92
US
40
91
62
46
China
80
20
50
46
Italy
43
71
65
70
India
77
48
56
40
Mexico
81
30
69
82
1. In which two countries is a businessperson required to research traditions to avoid offending
colleagues? Which dimension scores led you to your answer?
2. Which two countries require business partners to establish strong relationships of trust? What
dimension scores led you to choose these two countries?
3. In which three countries is it difficult to move from one social class to another? Which dimension
scores led you to your answer?
4. In which three countries are people somewhat comfortable with bending the rules? Which
dimension scores led you to your answer?
5. How can Hofstede’s Intercultural Dimensions ratings limit our understanding of other cultures?
Why do these dimensions include few countries in Africa? What else should international business
people keep in mind?
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
Student Resource 3.5
Chart: Cultural Norms
Student Name:_______________________________________________________ Date:___________
Directions: Research the cultural norms of the country you and your group have been assigned. Record
your findings on the chart. Use the last row, “Others,” for anything you uncover that doesn’t fit into the
other categories. Check these websites, or others you find, for information about the cultural norms in the
country you are researching:
www.kwintessential.co.uk/cultural-services/articles.html
https://www.cia.gov/library/publications/the-world-factbook/index.html
Cultural Norm
United States
Concept of Time

“Time is money”

Being late is considered rude

Meetings start right on time

There are no formal rituals
when exchanging business
cards

Handshakes with eye contact
are important during
introductions

First names are usually used

Meetings follow agendas and
are taken seriously

Participants have formal
roles

Informal business can be
conducted over meals

The host usually pays

Diners can refuse food
without offending the host
Greetings
Business Meetings
Dining Etiquette
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
Country_________________
AOF Business in a Global Economy
Lesson 3 Cultural Factors
Cultural Norm
United States
Others



Copyright © 2009–2012 National Academy Foundation. All rights reserved.
Country_________________
AOF Business in a Global Economy
Lesson 3 Cultural Factors
Student Resource 3.6
Instructions: Culture Clash Skit
Student Name:_______________________________________________________ Date:___________
Directions: Before you begin, read these instructions all the way through and make sure you understand
what to do. You and your group will be writing and performing a skit that shows a culture clash between
two businesses, one in the United States and one in the country you researched. Use the chart you filled
out (Student Resource 3.5) to help you. Once you’ve read the instructions, if there’s anything you don’t
understand, ask your teacher for clarification.
Skits are like mini-plays, written in dialogue form. The skit will have three parts.
1. Introduction: provides the setting and the characters
2. Conflict: shows the problem caused by the difference in cultural norms
3. Resolution: demonstrates how the problem is solved
All of the information the audience needs to know must be provided through the character’s dialogue and
actions. These tips will help you:

For the setting, choose something appropriate for business, such as a meeting, interview, work
dinner, or office party.

Characters: make sure each group member plays one and shows or tells his or her culture.

Dialog: write short lines for the characters; put stage directions (gestures and other nonverbal
communication) in italics. Each character should memorize (or write on note cards) his or her lines
and stage directions.
Sample Skit:
Mr. Lowe: Hello, Mr. Kwan. I am David Lowe, president of Bingo Toys. Thank you for coming from South
Korea for this meeting. [They shake hands.]
Mr. Kwan: Hello, Mr. Lowe.
Mr. Lowe: This is Ms. Allen, our vice president of Global Operations.
Ms. Allen: Hello, Mr. Kwan. [They shake hands.]
Mr. Kwan: Mr. Lowe and Ms. Allen, please take my business card. As you can see, it describes all my
business qualifications. [Mr. Lowe puts the card in his back pocket without looking at it and sits down. Ms.
Allen looks at it closely and places it on the table in front of her. Mr. Kwan frowns at Mr. Lowe.]
Ms. Allen: Thank you for your card. It is very descriptive. [Mr. Kwan smiles at her.]
Mr. Kwan: I would like to do business with Ms. Allen only, please.
Mr. Lowe: But why?
Ms. Allen: I think I understand, David. Would you excuse us for a minute Mr. Kwan?
Copyright © 2009–2012 National Academy Foundation. All rights reserved.
AOF Business in a Global Economy
Lesson 3 Cultural Factors
Mr. Kwan: Yes. [Mr. Lowe and Ms. Allen move out of Mr. Kwan’s earshot.]
Ms. Allen: Dave, I think you offended Mr. Kwan. I forgot to mention I learned that in South Korea,
business cards must be read carefully and complimented to show respect. Did I see you put it in your
pocket?
Mr. Lowe: Yes! I had no idea!
Ms. Allen: I’m sorry I forgot to mention it. Well, what should we do?
Mr. Lowe: I will apologize to Mr. Kwan after our meeting. For now, why don’t you take the lead.
Ms. Allen: Okay. Sounds like a plan.
Now begin to think about your skit. Jot down your initial ideas here:
Country:
Setting:
Norm that could cause clash:
Characters:
Dialogue ideas:
Now, working with your group, write your skit on a separate piece of paper.
Before performing your skit, check to make sure it meets or exceeds the following
assessment criteria:

Clearly shows the difference between the norms of the two cultures.

Culture clash is illustrated in a way that is accurate based on the norms of the two cultures.

Resolution is based on the norms of the two cultures.

Resolution shows an effective way to create a positive result in overcoming the differences in
cultural norms.

Professional language and wording for a business situation are used.
Copyright © 2009–2012 National Academy Foundation. All rights reserved.