ch03 differences in culture

7/29/2019 Ch03 Differences in Culture

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IBM Fall, 2012

Frank C. Huang

Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Global Business Today7e

by Charles W.L. Hill

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Chapter 3Differences

in Culture

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Introduction

Cross-cultural literacy - an understanding of how

cultural differences across and within nations can affect

the way in which business is practiced

important to success in international business

There may be a relationship between culture and the

costs of doing business in a country or region

example: class divisions in IndiaCulture is not static

the actions of MNEs can contribute to cultural change

example: color conflict in U.S.

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What is Culture?

Question: What is culture?

Answer:

Culture is a system ofvalues (abstract ideas about

what a group believes to be good, right, and desirable)

and norms (the social rules and guidelines that

prescribe appropriate behavior in particular situations)that are shared among a group of people and that

when taken together constitute a design for living

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Values and Norms

Values - provide the context within which a societys

norms are established and justified

Norms - the social rules that govern the actions of

people toward one another and can be further

subdivided into

folkways - the routine conventions of everyday life

attitudes toward time

mores - norms that are seen as central to the

functioning of a society and to its social life

Alcohol

tattoo, piece, being naked

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Culture, Society, and the Nation-State

Society - a group of people who share a common set of

values and norms

There is not a strict one-to-one correspondence between

a society and a nation-state

nation- states are political creations that can contain a

single culture or several cultures

Canada, USA

some cultures embrace several nations

Islamic culture


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The Determinants of Culture

The values and norms of a culture are the evolutionaryproduct of a number of factors at work in a society

including

prevailing political and economic philosophies

a societys social structure

the dominant r eligion, language, and education

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The Determinants of Culture

Figure 3.1: The Determinants of Culture

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Social Structure

A society's social structure is its basic socialorganization

Two dimensions to consider:

the degree to which the basic unit of social organizationis the individual , as opposed to the group

the degree to which a society is stratified into classes or

castes

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Individuals and Groups

Group - an association of two or more individuals whohave a shared sense of identity and who interact witheach other in structured ways on the basis of a commonset of expectations about each others behavior

groups are common in many Asian societies

many Western countr ies emphasize the individual

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Individuals and Groups

In societies where the individual is emphasized

individual achievement and entrepreneurship arepromoted. Innovative

but, this can encouragejob switch ing , competitionbetween individuals in a company rather than teambuilding, and a lack of loyalty to the firm

In societies where the group is emphasized

cooperation and team work are encouraged andlife time employment is common

but, individual initiative and creativity may besuppressed

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Social Stratification

All societies are stratified on a hierarchical basis into

social categories, orsocial strata

usually defined by characteristics such as family

background, occupation, and income

Black Five (Right-wing activists, landlords, kulaks,

Counterrevolutionary, and Recruiters) during

Cultural Revolution

Societies differ in terms of

the degree ofmobility between social strata

the significance attached to social strata in a business

context


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Frank C. Huang

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Social mobility- the extent to which individuals canmove out of the strata into which they are born

The most rigid system is the caste system - a closed

system of stratification in which social position is

determined by the family into which a person is born,

and change in that position are unlikely

A less rigid system is the class system - a form of open

social stratification in which the position a person has by

birth can be changed through achievement or luck

E.g., upper, middle, and working class in British

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Question: What is the significance of social stratificationfor business?

Answer: In cultures where class consciousness (a condition

where people tend to perceive themselves in terms oftheir class background, and this shapes theirrelationships with others) is high, the way individualsfrom different classes work together (e.g., managementand labor) may be prescribed

antagonism between labor and management canraise the costs of doing business

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Religious and Ethical Systems

Religion - a system of shared beliefs and rituals that are

concerned with the realm of the sacred

Religions with the greatest following are

Christianity (1.7 billion adherents)

Islam (1 billion adherents)

Hinduism (750 million adherents)

Buddhism (350 million adherents)Confucianism also influences behavior and shapes

culture in many parts of Asia

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Map 3.1: Dominant Religions

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Ethical systems - a set of moral principles, or values,

that are used to guide and shape behavior

the ethical practices of individuals within a culture

are often closely intertwined with theirreligion

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Christianity

Christianity is the most widely practiced religion

common throughout Europe, the Americas, and othercountries settled by Europeans

Question: What are the economic implications ofChristianity?

Answer:

In 1904, Max Weber suggested that it was the Protestantwork ethic (focus on hard work, wealth creation, andfrugality) that was the driving force of capitalism


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Islam

Islam is an all-embracing way of life that governs one'sbeing

Muslims believe that there is one true omnipotentGod

Question: What is Islamic fundamentalism?

Answer:

Islamic fundamentalism is associated in the Westernmedia with militants, terrorists, and violent upheavals,

the vast majority of Muslims claim that Islam teachespeace, justice, and tolerance

fundamentalists have gained political power in manyMuslim countries, and have tried to make Islamic lawthe law of the land

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Islam

Question: What are the economic implications of Islam?

Answer:

Under Islam, people do not own property, but only actas stewards for God and thus must take care of thatwhich they have been entrusted with

Islam is supportive of business, but the way businessis practiced is prescribed

businesses that are perceived to be making a profitthrough the exploitation of others, by deception, or bybreaking contractual obligations are unwelcome

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Hinduism

Hinduism - focuses on the impor tance of achievingspirit ual growth and development, which may requirematerial and physical self-denial

practiced primarily on the Indian sub-continent

Question: What are the economic implications ofHinduism?

Answer:

Hindus are valued by their spi ritual rather thanmaterial achievements

Promotion and adding new responsibi lities may notbe the goal of an employee, or may be infeasible dueto the employee's caste

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Buddhism

Buddhists - stress spiritual growth and the afterlife(incarnation), rather than achievement while in thisworld

found mainly in Central and Southeast Asia, China,Korea, and Japan

Question: What are the economic implications ofBuddhism?

Answer:Buddhism does not support the caste system, so

individuals do have some mobility and can work withindividuals from different classes

entrepreneurial activity is acceptable

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Confucianism

Confucianism - teaches the importance ofattainingpersonal salvation through right actionthe need for high moral and ethical conduct and

loyalty to others is central

practiced mainly in China

Question: What are the economic implications ofConfucianism?

Answer:

Three key teachings of Confucianism - loyalty,reciprocal obligations, and honesty - may all lead to alowering of the cost of doing business in Confuciansocieties

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Language

Countries differ in terms of language or means ofcommunication

There are two forms language

spoken

unspoken

Language is one of the defining characteristics of culture


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Spoken Language

Countries with more than one spoken language oftenhave more than one culture

Chinese is the mother tongue of the largest numberof people in the world

English is the most widely spoken language in theworld, and is becoming the language of internationalbusiness

However, knowledge of the l ocal language isbeneficial, and in some cases, critical for businesssuccess

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Unspoken Language

Unspoken language - nonverbal cuesexamples include facial expressions and hand

gestures

can be important for communication

Many nonverbal cues are culturally bound and because

they may be interpreted differently, can result in

misunderstandings

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Education

Formal education is the medium through whichindividuals learn many of the language, conceptual, andmathematical skills that are indispensable in a modernsociety

The knowledge base, training, and educationalopportunities available to a country's citizens can alsogive it a competitive advantage in the market and make ita more or less attractive place for expanding business

The general education level of a country is a goodindicator of the types of products that might sell inthat location or t he type of promotional materials thatmight be successful

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Culture and the Workplace

Question: How does a society's culture impact on thevalues found in the workplace?

Answer:

Geert Hofstede isolated four dimensions thatsummarized different cultures

1. Power distance

2. Individualism versus collectivism3. Uncertainty avoidance

4. Masculinity versus femininity

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Culture and the Workplace

1. Power distance - how a society deals with the fact thatpeople are unequal in physical and intellectualcapabilities

2. Individualism versus collectivism - the relationshipbetween the individual and his or her fellows

3. Uncertainty avoidance - the extent to which differentcultures socialize their members into acceptingambiguous situations and tolerating ambiguity

4. Masculinity versus femininity - the relationship betweengender and work roles

Hofstede later added a fifth dimension, Confuciandynamism - captures attitudes towards time, persistence,ordering by status, protection of face, respect fortradition, and reciprocation of gifts and favors

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Culture and the WorkplaceTable 3.1: Hofstedes Four Dimensions


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Cultural Change

Culture evolves over time, although changes in valuesystems can be slow and painful for a society

social turmoil is an inevitable outcome of cultural

change

Cultural invasion, ex: S. Korea, Japan in Asia

Ameri can-Style: jeans , bur gers , Hol lywood ,

Starbucks

cultural change is particularly common as countries

become economically stronger

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Implications for Managers

Differences in culture imply that1. there is a need for managers to develop cross-cultural

literacy

2. there is a connection between culture and national

competitive advantage

3. there is a connection between culture and ethics in

decision making

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Cross-Cultural Literacy

Individuals and firms must develop cross-cultural literacy

firms that are ill informed about the practices ofanother culture are unlikely to succeed in that culture

Individuals must also beware ofethnocentric behavior(a belief in the superiority of one's own culture)

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Culture and Competitive Advantage

The connection between culture and competitiveadvantage is important because

the connection suggests which countries are likely toproduce the most viable competitors

the connection has implications for the choice ofcountries in which to locate production facilities anddo business

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Classroom Performance System

Abstract ideas about what a society believes to be good

right and desirable are called

a)Attitudes

b) Norms

c) Values

d) Mores

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The extent to which an individual can move out of the

social strata into which they are born is called

a) Social stratification

b) Class mobility

c) Social mobility

d) Caste system


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The religion with the largest following in the world isa) Christianity

b) Islam

c) Hinduism

d) Buddhism

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Which of Hofstedes dimensions measures the extent towhich different cultures socialize their members into

accepting ambiguous situations and tolerating uncertainty?

a) Individualism versus collectivism

b) Uncertainty avoidance

c) Masculinity versus femininity

d) Power distance

ch03 differences in culture

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