Differences in
Culture
international business, 5th edition
chapter 3
Chapter Objectives 1
• What is culture and society
• Forces leading to differences in culture
• Identify the business and economic
implications of differences in culture
• Understand how differences in social
culture influence values in the workplace
• Understand the economic and business
implications of cultural change
4-2
McDonald's in India
Did you look at the case in page 86-87?
What is the ideas behind this case?
Cross-cultural communication?
World economic development 2010
http://hdr.undp.org/en/media/HDR_2010_A
R_Complete_reprint.pdf
4-3
Introduction
• McDonald’s customization
• What is
means?
cross-cultural
literacy
• You need to understand cultural
differences
• Play the culture rules and do as
Romans do but if you have to and
you are there.
4-4
Introduction
• MacDonald’s do not sell Bacon in
Muslim countries.
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Culture
4-6
•
http://www.youtube.com/watch?feature=endscreen&NR=1&v=ha
ohj1sVnyk
•
http://www.youtube.com/watch?v=loL97DgsvdE
•
http://www.youtube.com/watch?v=RVmFsGp9FV4&feature=relat
ed
•
http://www.youtube.com/watch?v=cB2qo9uAAjU&feature=relate
d
Culture
• Communication is a way to
understand other’s culture.
• Insha-Allah
• The culture of generosity.
• Gift might be misunderstood and
rejected in some cultures
4-7
Culture defined
• Stick to Namenwrith and Weber and
Hofestede:
• Culture is a system of values and
norms that are shared among a
group of people and that when
taken together constitute a design
for living.
4-8
Define it
• Values: abstract ideas about what a
group believes to be good, right,
and desirable.
• It is shared assumptions about how
things ought to be
4-9
Culture
• Norms: the social rules and
guidelines that prescribe
appropriate behaviours in particular
situations. Our guests are here you
should greet them this is our norm.
Part of our value of respect.
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Society
• Society is a group of people who
share a common set of values and
norms.
• Examples of values: freedom,
justice, honesty, integrity,
credibility....etc.
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Culture
• Norms: norms guide your actions.
• It is a norm here to say inshallah for
an appointment with another
person.
• It is a norm to come 5 to 10 minutes
late for that meeting.
4-12
Culture, society, and the
nation state
• Culture has sub-cultures.
• Society got multiple society.
• Muslim culture
• America culture
• Indian culture
• When you get closer you find many
cultures inside each one and many
societies as well
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What determines culture?
See figure 3.1 page 91
• Social structure
• Religion and ethical systems
• Language
• Education
• Economic and political philosophy
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Figure 4.1 Elements of Culture
Language
Social
structure
Education
Culture
Economical
And political
4-15 These
elements interact with each other
Religion
Social Structure
Individuals, families, and groups
Social stratification (class)
- Britain & India social structure
Social mobility (class)
4-16
• Societies differ in the role of
family,
individuals
and
relationship of individuals with
each other and with the group.
• In
some
societies
individualism is high and is
promoted.
international business, 5th edition
Social structure 2
•
Social stratification: It has to do with social
classes.
•
Factors used in stratification: occupation,
income, level of education, birth.
•
Some societies are highly stratified, whereas
others are less stratified.
•
In
highly
stratified
societies
social
mobility(moving from one stratum to another)
is not easy.
international business, 5th edition
Social structure 3
Individualism
• Individualism emphasizes individual
performance
• Individualism leads to
entrepreneurship
• Creating new products- the case of
Steve jobs.
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Individualism
• Individualism commitment is to the
self, the individual not to the
company.
• No lifetime career for managers in
the US.
• Theory Z by William Ouchi
•
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http://www.enotes.com/theory-z-reference/theory-z-176920
The group and the TEAM
• I versus WE
• Me versus US
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Social Stratification
• Hierarchy
• Social mobility: the extent to which
individuals can move out of the
strata into which they are born. You
can not marry her, she does not
belong to our strata or social class.
• In Japan- middle class
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Significance
• The stratification is significant if it affects
the operation of business.
• In the US social mobility and
individualism limit the impact of class
background on business operations.
• Social equality- low industrial disputeslow cost of production leading to high
global competitive advantage
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Language
• An important means by which a society’s members
communicate.
• 3000+ different languages10,000+ different dialects
(worldwide).
• Presence of more than one language reflects
diversity of the population. India is an example.
• Linguistic ties can facilitate trade. USA, Uk.,
Australia…etc. (competitive advantage).Colonial
relationships also have some impact.
• French language in North Africa!!!!!!!!!
• Un spoken means what?
4-24
international business, 5th edition
Language 2
•
English is the most popular language in IB.
why?
•
Knowledge of foreign languages is an added
advantage.
•
Translation can overcome linguistic differences.
Back-translation may be used. But we should be
careful. Word placement or misuse of
vocabulary could change the meaning.
•
Examples:
•
Leave your values at the desk
•
WE will execute customers in strict rotation
Map 4.1 World Languages
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Map 4.2 Africa’s Colonial Legacy
4-27
Religion
• Imposes constraints on roles of
individuals in society
• Religion shapes attitudes, working
days, consumption, the types of
products consumers may purchase.
• Varies from country to country
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Religion
Christianity
Islam
Judaism
Hinduism
Buddhism
Confucianism
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Map 4.3 Major World Religions
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Religion
More than Two
million Muslims
annually descend
on the Grand
Mosque in Mecca,
Saudi Arabia as
part of the Hajj.
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Economic implications of
Confucianism
The impact of
1.Loyalty
2.Reciprocal obligations
3.Honesty in dealing with others
The above lead to trust in
relationships
4-32
Education
• Education and individual
competencies (self fulfilment ...etc.)
• Education and national competitive
advantage
• Education and international
business.
4-33
Education
• In KSA and the Middle East
• In Japan and Korea
• what Porter says about education
in Japan after the wwII
• Japan’s only endowment (resource)
is its human capital.
4-34
Education
• Education and IB
• India is following and bypassing
Japan in this factor.
• Outsourcing and education- no one
is going to place production
operation in poor education country.
4-
• You can never market books to
illiterate nation or country.
Culture and the workplace
• IB, culture, and the workplace
• Management practices are affected
somehow by the national culture.
• So culture is related to values in the
workplace.
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Hofstede’s Four Dimensions
Research Method
• IBM
• 100,000 participants
• 1967- 1973
• 40 countries
4-37
Hofstede’s Four Dimensions
Power Distance
Uncertainty Orientation
Individualism Vs Collectivism
Masculinity Vs femininity
4-38
Social Orientation
Individualism
Collectivism
Relative importance of the
interests of the individual versus
interests of the group
4-39
• The extent to which less powerful
members of organizations accept the
unequal power distribution.
• People in high-power distance societies
are more likely to accept the authority of
superiors, respect authority, and position
in the hierarchy.
international business, 5th edition
Power Orientation : Power
distance
Power Orientation
Power Respect
Power Tolerance
Appropriateness of power/authority
within organizations
4-41
• Extent to which people feel threatened
by ambiguous situations.
• People
coming
from
uncertainty
avoidance cultures dislike ambiguity and
try to avoid whenever possible. On the
contrary, those coming from uncertainty
tolerant cultures perceive it as a chance
to grow and develop. Those are more
acceptable for flexible hierarchies, rules
and procedures. Risk taking is highly
valued.
international business, 5th edition
Uncertainty Avoidance
Uncertainty Orientation
Uncertainty
Acceptance
Uncertainty
Avoidance
Emotional response to uncertainty and change
4-43
Masculinity Vs Femininity
• Masculine culture: values such as
achievement, and the exercise of
power determined cultural ideals.
• In feminine cultures, sex roles were
less distinguished and little
differentiation between men and
women in the same job.
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Culture Change
• Culture evolves over time.
• What makes culture change
• Towards women
• Towards collectivism
• Loyalty- Japan- become like
Westerners
4-45
Cultural change
• Economy changes culture (rich)
• As you get rich you move away from
traditional values
• Moving to the city.
• Education, technology, and
globalization.
• Consumerism and civilization.
4-46
Chapter summary
• McDonald’s customization
• Page 88 what is cross cultural
literacy and its importance
• What is culture –page 89
• Define social structure
• Individual vs collective impact on
business and International business
4-47
Chapter summary
• Social strata and business and IB.
• Class system and social mobility
• Significance page 96
• Religious systems- just what might
enhance international relations and
effective IB.
4-48
Chapter summary
• Economic implications of Islampage 101
• Move from page 101 to 105 and
read the economic implications of
Confucianism. Three elements are
important there.
4-49
Chapter summary
• Move to page 108 and look at the
role of education. See also what
porter says about Japan and know
that the most important secret
behind nation’s development is
education and compare between
Egypt and south Korea.
4-50
Chapter summary
• Geert Hofstede Study
• Cultural change just page 111 and
112.
• Use the slides as a guide if you can.
• Study Wal-Mart case page 118.
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