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Chapter
Differences in Culture
3
McGraw-Hill/IrwinInternational Business, 5/e
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
3-2
Guanxi-strength of relationship
U.S. Business transactions are
conducted within the framework of contract law and mechanisms for dispute resolution are in place
Reciprocal networks are becoming more important but have to operate within the confines of the law
Gifts may be frowned upon as bribery (Foreign Corrupt Practices Act)
China Personal power and
relationships or connections rather than rule of law are important in China
Reciprocal relationship networks can often mean doing favors or offering bribes
Establish relationships with gifts
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3-3
What is culture?
“A system of values and norms that are shared among a group of people and that when taken together constitute a design for living.”
Hofstede, Namenwirth and Weber
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3-4
Different components of culture
Values and Norms
Folkways and mores
McGraw-Hill/IrwinInternational Business, 5/e
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3-5
Values and norms
Values: Abstract ideas/assumptions about what a group believes to be good, right and desirable
Norms: social rules and guidelines that prescribe appropriate behavior in particular situations
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3-6
Folkways and mores
Folkways: Routine conventions of everyday life. Little moral significance Generally, social conventions such as dress
codes, social manners, and neighborly behavior Mores: Norms central to the functioning of society
and its social life Greater significance than folkways Violation can bring serious retribution
Theft, adultery, incest and cannibalism
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3-7
Culture, society and nation states
Society is a group of people who share a common culture
No one to one correspondence between society and a nation state Nation states are political creations Many cultures can co-exist within a nation state
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3-8
Determinants of culture
Social structure Religion Language Education Economic philosophy Political philosophy
Fig: 3.1
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3-9
Social structure
Two dimensions The extent to which society is group or
individually oriented Degree of stratification into castes or classes
Social mobilitySignificance to business
Other influences Political philosophy Economic philosophy
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3-10
Religious and ethical systems
Christianity Economic implications
Hinduism Economic implications
Islam Economic implications
Buddhism Economic implications
Confucianism Economic implications
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3-11
World religions
Map 3.1
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3-12
Language
Spoken Verbal cues Language structures
perception of world
Unspoken Body language Personal space
Fig: 3.2
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3-13
Education
Education can be a source of competitive advantage Example
IndiaMalaysiaSingapore
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3-14
Percentage of GNP spent on education
Map 3.2
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3-15
Adult literacy rates
Map 3.3
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3-16
Culture and the workplace
Study on the relationship between culture and the workplace by Geert Hofstede 1967-73
40 countries 100,000 individuals
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3-17
Hofstede’s cultural dimensions
Four dimensions of culture Power distance Individualism versus collectivism Uncertainty avoidance Masculinity versus femininity
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3-18
Power distance
Cultures are ranked high or low on this dimensions based on the particular society’s ability to deal with inequalities
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Individualism versus collectivism
This dimension focuses on the relationship between the individual and his/her fellows within a culture Individualistic societies:
loose ties individual achievement and freedom highly
valued Collectivist societies-
tight ties tend to be more relationship oriented
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3-20
Uncertainty avoidance
This dimension measures the extent to which a culture socializes its members into accepting ambiguous situations and tolerating uncertainty
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Masculinity versus femininity
This dimension looks at the relationship between gender and work roles
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3-22
Work related values for twenty countries
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3-23
Problems with Hofstede’s findings
Assumes one-to-one relationship between culture and the nation-state
His research may have been culturally bound. Survey respondents were from a single
industry (computer) and a single company (IBM)
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3-24
Cultural change
Culture is not a constant; it evolves over time
Since 1960s American values toward the role of women are changing.
Japan moves toward greater individualism in the workplace
Effects of globalization
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3-25
Changing values
Fig: 3.3
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3-26
Managerial implications
Cross cultural literacy Culture and competitive advantage Culture and business ethics