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Transcript of © 2013 Cengage Learning. All rights reserved. CHAPTER 3 GLOBAL2 PENG © David Lomax/Robert...
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© 2013 Cengage Learning. All rights reserved.
CHAPTER 3
GLOBAL2 PENG
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© 2013 Cengage Learning. All rights reserved.
CHAPTER 3 LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. Define culture and articulate its two main manifestations.2. Articulate three ways to understand cultural differences. 3. Explain why understanding cultural differences is crucial for
global business. 4. Explain why ethics is important. 5. Identify ways to combat corruption. 6. Identify norms associated with strategic responses when
firms deal with ethical challenges. 7. Explain how you can acquire cross-cultural literacy.
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© 2013 Cengage Learning. All rights reserved.
ETHNOCENTRISM
Ethnocentrism:A self-centered mentality held by a group of people who perceive their own culture, ethics, and norms as natural, rational, and
morally right
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© 2013 Cengage Learning. All rights reserved.
CULTURE
“the collective programming of the mind which distinguishes the members of one group or
category of people from another.”
Geert Hofstede
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TWO COMPONENTS OF CULTURE
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Culture
Language Religion
Lingua franca – a global business language. (ENGLISH)
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RELIGIONReligion is another major manifestation of cultureKnowledge about religions is crucial even for nonreligious managers
Largest religions:Christianity - 1.7 billionIslam - 1 billionHinduism - 750 millionBuddhism - 350 million
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CULTURAL DIFFERENCES:THE CONTEXT APPROACH
ContextThe underlying background upon which social interaction takes place
Low-context culturesCommunication is usually taken at face value withoutmuch reliance on unspoken context
High-context culturesCommunication relies a lot on the underlying unspokencontext, which is as important as the words used
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© 2013 Cengage Learning. All rights reserved.
CONTEXT APPROACH
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CLUSTER APPROACH
Groups countries that share similar cultures into a cluster.
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DIMENSION APPROACH:5 Dimensions1. Power distanceExtent to which less powerful members within a
country expect and accept that power is distributed unequally
2. Individualism/Collectivism IndividualismIdea that an individual’s identity is fundamentally
his or her own CollectivismIdea that an individual’s identity is fundamentally
tied to the identity of his or her collective group
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DIMENSION APPROACH3. Masculinity/FemininityDimension of sex role differentiation
4. Uncertainty avoidanceExtent to which members in a culture accept or
avoid ambiguous situations and uncertainty
5. Long-term orientationHow much emphasis is placed on perseverance
and savings for future betterment
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DIMENSION APPROACH
Focuses on multiple
dimensions of cultural
differences both within and
across cultures.
Sources: G. Hofstede, “Cultural constraints in management theories,” Academy of Management Executive 7, no. 1 (1993): 81–94 and G. Hosftede, Cultures and Organizations: Software of the Mind (New York: McGraw-Hill, 1997) 25, 26, 53, 84, 113, 166. For newest update, see http://www.geerthofstede.com.
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© 2013 Cengage Learning. All rights reserved.
CULTURAL DIFFERENCES AND GLOBAL BUSINESS
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EthicsEthicsThe principles, standards, and norms of conduct that govern Individual and firm behavior
Code of conductA set of guidelines for making ethical decision
Ethical relativismFollows the cliché, “When in Rome, do as the Romans.”
• There is overlap between what is ethical and legal. But in some cases, what is legal may be unethical.
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MANAGING ETHICS OVERSEAS
Three Core Principles
Respect for human dignity and basic rights
Respect for local traditions
Respect for institutional context
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Sources: T. Donaldson, “Values in tension: Ethics away from home,” Harvard Business Review (September-October 1996): 4–11 and J. Weiss, Business Ethics, 4th ed. (Cincinnati: South-Western Thomson, 2006).
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CORRUPTION
The abuse of public power for private
benefits usually in the form of bribery, in cash
or in kind.
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COMBATING CORRUPTION
Foreign Corrupt Practices Act (FCPA)A US law enacted in 1977 that bans bribery of foreign officials
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STRATEGIC RESPONSES TO ETHICAL CHALLENGES
NORMS: prevailing practices of relevant players
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CULTURAL INTELLIGENCE
Managers should enhance their cultural intelligence – an individual’s ability to understand and adjust to new cultures.
Managers should be aware of the prevailing norms and their transitions globally.
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CULTURAL INTELLIGENCE
© 2013 Cengage Learning. All rights reserved. 22