3. Introduction
Successful international managers need cross-cultural
literacy - an understanding of how cultural differences
across and within nations can affect the way in which
business is practiced
A relationship may exist between culture and the costs of
doing business in a country or region
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4. What Is Culture?
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
where
-values are abstract ideas about what a group believes to
be good, right, and desirable
-norms are the social rules and guidelines that prescribe
appropriate behavior in particular situations
Society refers to a group of people who share a common
set of values and norms
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5. Values And Norms
Values provide the context within which a society’s norms
are established and justified and form the bedrock of a
culture
Norms include folkways (the routine conventions of
everyday life) and mores (norms that are seen as central to
the functioning of a society and to its social life)
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6. Classroom Performance System
Abstract ideas about what a group believes to be good,
right, and desirable are called
a) norms
b) values
c) folkways
d) mores
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7. Culture, Society, And The Nation-state
There is not a strict one-to-one relationship between a
society and a nation state
Nation-states are political creations that can contain one
or more cultures
Similarly, a culture can embrace several nations
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8. The Determinants Of Culture
The values and norms of a culture are the evolutionary
product of a number of factors at work in a society including
religion, political and economic philosophies, education,
language, and social structure
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9. Social Structure
Social structure refers to a society’s basic social
organization
Two dimensions to consider:
the degree to which the basic unit of social organization
is the individual, as opposed to the group
the degree to which a society is stratified into classes or
castes
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10. Classroom Performance System
The basic social organization of a society is its
a) culture
b) social strata
c) social structure
d) caste system
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11. Individuals And Groups
A group is an association of two or more people who
have a shared sense of identity and who interact with each
other in structured ways on the basis of a common set of
expectations about each other’s behavior
Societies differ in terms of the degree to which the group
is viewed as the primary means of social organization
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12. Individuals And Groups
In many Western societies, there is a focus on the
individual, and individual achievement is common
This contributes to the dynamism of the US economy,
and high level of entrepreneurship
But, leads to a lack of company loyalty and failure to gain
company specific knowledge, competition between
individuals in a company instead of than team building, and
less ability to develop a strong network of contacts within a
firm
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13. Individuals And Groups
In many Asian societies, the group is the primary unit of
social organization
This may discourage job switching between firms,
encourage lifetime employment systems, and lead to
cooperation in solving business problems
But, might also suppress individual creativity and initiative
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14. Classroom Performance System
The group is the primary unit of social organization in
a) Japan
b) the United States
c) Switzerland
d) Mexico
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15. Classroom Performance System
Which of the following is not characteristic of individualism?
a) individual achievement
b) low managerial mobility
c) low company loyalty
d) entrepreneurial behavior
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16. Social Stratification
All societies are stratified on a hierarchical basis into
social categories, or social strata
While all societies are stratified to some extent, they differ
by:
the degree of mobility between social strata
the significance attached to social strata in business
contacts
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17. Social Stratification
Social mobility is the extent to which individuals can
move out of the strata into which they are born
A caste system is 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 is usually not
possible during an individual's lifetime
A class system is a form of open social stratification in
which the position a person has by birth can be changed
through his or her achievement or luck
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18. Social Stratification
The social stratification of a society is significant if it
affects the operation of business organizations
Class consciousness is a condition where people tend to
perceive themselves in terms of their class background,
and this shapes their relationships with others
In cultures where class consciousness is high, the way
individuals from different classes work together may be
very prescribed and strained
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19. Religious And Ethical Systems
Religion is a system of shared beliefs and rituals that are
concerned with the realm of the sacred
Ethical systems are a set of moral principles, or values,
that are used to guide and shape behavior
Religion and ethics are often closely intertwined
Four religions dominate society -Christianity, Islam,
Hinduism, and Buddhism
Confucianism is also important in influencing behavior
and culture in many parts of Asia
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21. Christianity
Christianity is the world’s largest religion and is found
throughout Europe, the Americas, and other countries
settled by Europeans
Perhaps the most important economic implication of
Christianity is the Protestant work ethic
In 1804, Max Weber suggested that it was this ethic and
its focus on hard work, wealth creation, and frugality, that
was the driving force of capitalism
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22. Islam
Islam, the world’s second largest religion, extends the underlying
roots of Christianity to an all-embracing way of life that governs one's
being
In the West, Islamic fundamentalism is associated in the media with
militants, terrorists, and violent upheavals, but in fact Islam teaches
peace, justice, and tolerance
Fundamentalists, who demand rigid commitment to religious beliefs
and rituals, have gained political power in many Muslim countries, and
blame the West for many social problems
The key economic implication of Islam is that under Islam, 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, so while Islam is
supportive of business, the way business is practiced is prescribed
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23. Hinduism
Hinduism, practiced primarily on the Indian sub-continent,
focuses on the importance of achieving spiritual growth and
development, which may require material and physical self-
denial
Since Hindus are valued by their spiritual rather than
material achievements, there is not the same work ethic or
focus on entrepreneurship found in some other religions
Promotion and adding new responsibilities may not be
the goal of an employee, or may be infeasible due to the
employee's caste
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24. Buddhism
Buddhism, which has about 350 millions followers,
stresses spiritual growth and the afterlife, rather than
achievement while in this world
Buddhism does emphasize wealth creation, and so
entrepreneurial behavior is not stressed
However, because Buddhism does not support the caste
system, individuals do have some mobility and can work
with individuals from different classes
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25. Confucianism
Confucianism, an ideology practiced mainly in China,
teaches the importance of attaining personal salvation
through right action
High morals, ethical conduct, and loyalty to others is
central in Confucianism
Three key teachings of Confucianism - loyalty, reciprocal
obligations, and honesty - may all lead to a lowering of the
cost of doing business in Confucian societies
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26. Classroom Performance System
Which religion promotes the notion that a moral force in
society requires the acceptance of certain responsibilities
called dharma?
a) Islam
b) Buddhism
c) Hinduism
d) Confucianism
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27. Language
Language refers to the spoken and unspoken means of
communication
Language is one of the defining characteristics of culture
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28. Spoken Language
Countries with more than one language often have more
than one culture
The most widely spoken language in the world, but
Chinese is the mother tongue of the largest number of
people
English is also becoming the language of international
business, but knowledge of the local language is beneficial,
and in some cases, critical for business success
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29. Unspoken Language
Unspoken language refers to nonverbal communication
such as facial expressions, personal space, and hand
gestures
Failing to understand the nonverbal cues of another
culture can lead to communication failure
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31. Education
Formal education is the medium through which
individuals learn many of the language, conceptual, and
mathematical skills that are indispensable in a modern
society
Education is important in determining a nation’s
competitive advantage
General education levels can also be a good index for the
kinds of products that might sell in a country
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32. Culture And The Workplace
It is important for companies to understand how a
society’s culture affects workplace values
Management processes and practices must be adapted
to culturally-determined work-related values
Geert Hofstede identified four dimensions of culture:
power distance, uncertainty avoidance, individualism
versus collectivism, and masculinity versus femininity
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33. Culture And The Workplace
Power distance focuses on how a society deals with the
fact that people are unequal in physical and intellectual
capabilities
Individualism versus collectivism focuses on the
relationship between the individual and his or her fellows
Uncertainty avoidance measures the extent to which
different cultures socialize their members into accepting
ambiguous situations and tolerating ambiguity
Masculinity versus femininity looks at the relationship
between gender and work roles
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34. Culture And The Workplace
Table 3.1: Work-Related Values for 20 Selected Countries
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35. Culture And The Workplace
Hofstede later expanded his study to include a fifth
dimension called Confucian dynamism which captures
attitudes toward time, persistence, ordering by status,
protection of face, respect for tradition, and reciprocation of
gifts and favors
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36. Classroom Performance System
_______ focuses on how society deals with the fact that
people are unequal in physical and intellectual capabilities.
a) power distance
b) individualism versus collectivism
c) uncertainty avoidance
d) masculinity versus femininity
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37. Cultural Change
Culture evolves over time, although changes in value
systems can be slow and painful for a society
Social turmoil is an inevitable outcome of cultural change
As countries become economically stronger, cultural
change is particularly common
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38. Implications For Managers
Societies differ because their cultures vary
Cultures vary because of profound differences in social
structure, religion, language, education, economic
philosophy, and political philosophy
There are three important implications that flow from these
differences:
1. There is a need 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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39. Cross-Cultural Literacy
Cross-cultural literacy is critical to the success of
international businesses
Companies that are ill informed about the practices of
another culture are unlikely to succeed in that culture
Managers must also beware of ethnocentric behavior, or
a belief in the superiority of one's own culture
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40. Culture And Competitive Advantage
The connection between culture and competitive advantage
is important because:
it suggests which countries are likely to produce the most
viable competitors
it has implications for the choice of countries in which to
locate production facilities and do business
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Notas do Editor
Managers must be sensitive to trends in the evolution of a culture in order to maintain their effectiveness in the workplace.
While culture is a characteristic of society as a whole, it shapes individual behavior by identifying appropriate and inappropriate forms of human interaction. In a sense culture is the collective programming of the mind which distinguishes the members of one human group from another.
Folkways are the routines conventions of everyday life, but generally have little moral significance. Examples would be dress, eating habits, and social graces. An outsider can easily be forgiven for being ignorant of a folkway. Timeliness is a good example. (One way to reinforce the understanding of this concept is to ask individuals in the class what time they would choose to arrive at a party if the party invitation specified that the party starts at 8pm. It is not uncommon for different individuals in the class to have widely varying positions on the “right” time to arrive for an 8pm party. ) Mores are serious standards of behavior. The term comes from the Latin mos (customs), and although mores are fewer in number than folkways, they are more coercive. Negative mores are taboos, usually supported by religious or philosophical sanctions. Whereas folkways guide human conduct in the more mundane areas of life, mores tend to control those aspects connected with sex, the family, or religion. Mores can vary greatly between countries: what in one country may be viewed as an innocent flirt in another may constitute a serious affront to someone's dignity or even harassment. While it is acceptable, and even expected, to consume alcohol with business associates in Japan, where evening business contacts often border on drunkenness, such actions would be disallowed in the United Arab Emirates.
The
While in earlier times the group was usually the family or the village, today the group may be a work team or business organization. In a social setting, Asian employees may often say they work for Sony, while a Western employee may say he/she is an electrical engineer. In Asia, the worth of an individual is more linked to the success of the group rather than individual achievement.
The class of a person may be very important in some hiring and promotion decisions, particularly in sales organizations where the person will be dealing with customers that may also come from a particular class.
Why is social stratification important? The social stratification of a society is significant if it affects the operation of business organizations In cultures where there is a great deal of consciousness over the class of others, the way individuals from different classes work together (i.e. management and labor) may be very prescribed and strained in some cultures (i.e. Britain), or have almost no significance in others (i.e. Japan) Class consciousness is a condition where people tend to perceive themselves in terms of their class background, and this shapes their relationships with others The mobility permitted by culture affects whether individuals can move up in strata, and can limit the types of jobs and education available. In the US individuals are very mobile ("anyone can become president"), in Britain there is less mobility, and the caste system in India used to limit mobility. Despite the laws against it, the effects of the caste system in India still exist today, and are especially prevalent certain rural areas.
Country Focus Islamic Capitalism in Turkey Summary This feature examines the business environment in Turkey. Turkey, a Muslim state, wants to join the European Union, a move many critics believe would not work. Discussion of the feature can revolve around the following questions: 1. Why are critics concerned about the possible entry of Turkey to the European Un ion? Do you agree? Why or why not? Discussion Points: Critics worry that Western-style capitalism and Islam do not mix. Supporters however, claim that this notion may be incorrect. They point out that Kayseri, a city in Central Turkey, is often referred to as the “Anatolian Tiger” to recognize the number of thriving multinational enterprises it has produced. Local business leaders feel that the success of the region is due in part to the entrepreneurial spirit that has emerged.
At the turn of the century Weber suggested that it was the Protestant work ethic (focus on hard work, wealth creation, and frugality) that was the driving force of capitalism. This is the most widely practiced religion in the world, approximately 20% of the world’s people identify themselves as Christians. Christianity grew out of Judaism and has monotheistic beliefs. Christianity can be subdivided into three separate organizations: The Orthodox church The Roman Catholic church Protestants which is an umbrella for several denominations Several sociologists have argued that protestants have made a significant economic impact Max Weber commented That business leaders and owners of capital, as well as the higher grades of skilled labor, and even more the higher technically and commercially trained personnel of modern enterprises, are overwhelmingly Protestant. That Protestant ethics emphasize the importance of hard work and wealth creation (for the glory of God) and frugality (abstinence from worldly pleasures). That the combination of hard work and the accumulation of capital, which could be used to finance investment and expansion, paved the way for the development of capitalism in Western Europe and subsequently in the United States.
The central principle of Islam is that there is but the one true omnipotent God. Islam requires unconditional acceptance of the uniqueness, power, and authority of God and the understanding that the objective of life is to fulfill the dictates of his will in the hope of admission to paradise According to Islam, worldly gain and temporal power are an illusion. Other major principles of Islam include: Honoring and respecting parents Respecting the rights of others Being generous but not a squanderer Avoiding killing except for justifiable causes Not committing adultery Dealing justly and equitably with others Being of pure heart and mind Safeguarding the possessions of orphans Being humble and unpretentious The Koran establishes some explicit economic principles, many of which are pro-free enterprise The Koran speaks approvingly of free enterprise and of earning legitimate profit through trade and commerce (the prophet Mohammed was once a trader) The protection of the right to private property is also embedded within Islam Islam is critical of those who earn profit through the exploitation of others Given the Islamic proclivity to favor market-based systems, Muslim countries are likely to be receptive to international businesses as long as those businesses behave in a manner that is consistent with Islamic ethics.
Management Focus: McDonald’s and Hindu Culture Summary This feature describes the unique challenges faced by McDonald’s in India. The cow is considered sacred in India’s Hindu culture prompting McDonald’s to alter its menu to offer mutton and chicken alternatives to its traditional beef burgers. However, the company recently made news when it was discovered that its French fries were cooked in oil that contained beef extract. Suggested Discussion Questions 1. How did McDonald’s change its product line to meet the needs of the Indian market? Does the Indian version of McDonald’s still maintain the company’s identity? Discussion Points: In response to the needs of the Indian market, McDonald’s changed its menu to include mutton and chicken products rather than the beef based products that are featured in its regular menu. Most students will probably suggest that even with the changes, the company remained true to its identity because it used names similar to traditional names to describe the new products, and built its restaurants following the traditional American style. 2. Did McDonald’s handle the revelation that its French fries contained beef extract well? What would you have done differently? Discussion Points: The lawsuit against McDonald’s over the presence of beef extract in its French fries caught the company off-guard. McDonald’s quickly acknowledged its mistake, and settled the lawsuit. The company also made a public apology and vowed to be more accurate in its food labeling in the future. However, many students will probably argue that the company failed to adequately reassure consumers in India, where angry Hindus protested in the streets. Students might suggest that the company should have responded not only to the Indians located in the United States who prompted the lawsuit, but also to the citizens of India, and other Hindu customers. Another Perspective: Students can learn more about McDonald’s India at the company’s website in India at { http://www.mcdonaldsindia.com/home.html }.
The close ties between Japanese auto companies and their suppliers, called keiretsus, have been an important ingredient in the Japanese success in the auto industry. They have facilitated loyalty, reciprocal obligations, and honesty. In countries where these relationships are more adversarial and not bound by these same values, the costs of doing business are probably higher.
The language of a society allows it to communicate but also directs the attention of people towards certain features of the world and human interactions. A good example is how the Inuit have 24 words for snow, but no word for the overall concept. Language helps describe how different people see the world differently.
EduThe knowledge base, training, and educational opportunities available to a country's citizens can also give it a competitive advantage in the market and make it a more or less attractive place for expanding business It is easier to start operations in a nation with a trained workforce, than in nation where time-consuming and costly training is necessary.
How does a society's culture impact on the values found in the workplace?
While Hofstede’s results are interesting, one should be careful about reading too much into them because: He assumes a one-to-one relationship between culture and nation-state. It seems clear that a nation can include multiple cultures. The reality of culture in the workplace is considerably more complex than Hofstede’s results would suggest. His research team was composed of Europeans and Americans. This shaped their questions as well their analysis of the answers could be shaped by their own biases. All of his respondents were from a single industry – the computer industry – and were employees of a single company, IBM!
For example, economic advancement is often accompanied by a shift away from collectivism towards individualism.
One of the biggest dangers for firms expanding abroad is being ill-informed. One way to bring more knowledge of the local culture into the firm is to hire local managers. Management Focus: Cross-Cultural Illiteracy Summary This feature describes the debacle resulting from the publication of a print ad depicting a helicopter hovering above a mosque with soldiers being lowered to the roof and a tag line stating “It descends from the heavens, ironically it unleashes hell…Consider it a gift from above.” The ad was commissioned by the aircraft makers, Boeing and Bell Helicopter, and was originally published in the Armed Forces Journal. The ad was seen as conveying the message that the war on terror was really a war on Islam. The two companies withdrew the ad immediately, but not before it was also printed in the National Journal. The two companies publicly apologized for the ad. Suggested Discussion Questions 1. What message was the ad trying to convey? How was the ad interpreted? Discussion Points: Students will probably agree that the ad was designed to promote the power of the helicopter, and its potential as a part of a military campaign. However, the ad backfired when people interpreted it as having religious connotations, and that it was a message that the war on terror was actually a war on Islam. 2. What lesson can companies learn from the Boeing and Bell Helicopter incident? How can companies prevent similar misunderstandings? Discussion Points: The Boeing and Bell Helicopter incident clearly demonstrates the need for companies to carefully review their promotional materials to ensure that they are not misinterpreted. To prevent mistakes like this one, companies can use techniques such as back translation. Some students may also recommend that given the fact that at least in this particular situation, the use of culturally diverse focus groups to prescreen materials could have been beneficial. Another Perspective: Students may want to explore the International Business and Etiquette web site at { http://www.international-business-etiquette.com /}. The site contains cultural information on a number of different countries.
