Fourth Edition
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Transcript of Fourth Edition
Fourth Edition
InternationalBusiness
CHAPTER 3
Differences in Culture
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Chapter Focus
We need to learn:Business success in different countries requires cross cultural literacy. People are ain’t what you see..
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Chapter Focus
We need to learn:Business success in different countries requires cross cultural literacy. People are ain’t what you see. Values are different.
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Chapter Focus
We need to learn:Business success in different countries requires cross cultural literacy. People are ain’t what you see. Can we follow the adage “when in Rome do as the Romans do”
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Chapter Focus
We need to learn:Business success in different countries requires cross cultural literacy. People are ain’t what you see. Can we follow the adage “when in Rome do as the Romans do”Some Cultural attributes cause cost of doing business to increase. What are they in the US?
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Chapter Focus
We need to learn:Business success in different countries requires cross cultural literacy. People are ain’t what you see. Can we follow the adage “when in Rome do as the Romans do”Some Cultural attributes cause cost of doing business to increase. What are they in the US? Cultures change.
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What is Culture?
A system of norms and values sharedamong a group ofpeople and, whentaken together,constitute a designfor living.
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Norms
Norms:Social rules and guidelines that prescribe appropriate behavior in particular situations. They stem from:
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Norms
Norms:Social rules and guidelines that prescribe appropriate behavior in particular situations. They stem fromFolkways: Routine conventions of everyday life.
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Norms
Norms:Social rules and guidelines that prescribe appropriate behavior in particular situations. They stem fromFolkways: Routine conventions of everyday life. Violations of folkways does not constitute villainy or a character flaw.
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Norms
Norms:Social rules and guidelines that prescribe appropriate behavior in particular situations. They stem fromFolkways: Routine conventions of everyday life.Mores (Essential accepted traditional customs that often become a part of the legal code): They are central to functioning of a society and its social life.
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Values
Values are:The bedrocks of culture.
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Values
Values are:The bedrocks of culture.Have emotional significance to individuals and the society
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Values
Values are:The bedrocks of culture.Have emotional significance to individuals and the society
These are abstract ideas about what a group believes to be good, right, and desirable.
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Determinants of Culture
Culture:Norms and
Value Systems
Economic Philosophy
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Determinants of Culture
Culture:Norms and
Value Systems
Economic Philosophy
PoliticalPhilosophy
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Determinants of Culture
Culture:Norms and
Value Systems
Economic Philosophy
PoliticalPhilosophy
SocialStructure
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Determinants of Culture
Culture:Norms and
Value Systems
Economic Philosophy
PoliticalPhilosophy
Religion
SocialStructure
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Determinants of Culture
Culture:Norms and
Value Systems
Economic Philosophy
PoliticalPhilosophy
Religion
Language SocialStructure
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Determinants of Culture
Culture:Norms and
Value Systems
Education
Economic Philosophy
PoliticalPhilosophy
Religion
Language SocialStructure
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Social StructureWestern Structure
Is based on:
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Social Structure Individualism
andWestern Structure
Is based on:
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Social Structure
Entrepreneurship
Individualism and
Western Structure
Is based on:
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Social Structure Hard toBuild
Teams
Entrepreneurship
Individualism and
Western Structure
Is based on:
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Social Structure
MobileManagers
Hard toBuild
Teams
Entrepreneurship
Individualism and
Western Structure
Is based on:
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Social Structure
MobileManagers
Hard toBuild
Teams
Lackof
Loyalty
Entrepreneurship
Individualism and
Western Structure
Is based on:
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Social Structure
Group is defined astwo or more individuals
with a shared sense of identity
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Social Structure
Group is
Group is defined astwo or more individuals
with a shared sense of identity
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Social Structure
Group
An Eastern
Approach to
Group is defined astwo or more individuals
with a shared sense of identity
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Social Structure
Identity. It leads to
Group is
An EasternApproach to
Group is defined astwo or more individuals
with a shared sense of identity
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Social Structure
Identity. It leads to
Group
Eastern
NonmobileManagers
Group is defined astwo or more individuals
with a shared sense of identity
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Social Structure
LifetimeEmployment
Identity
Group
Eastern
NonmobileManagers
Group is defined astwo or more individuals
with a shared sense of identity
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Social Structure
MobileManagers
Hard toBuild
Teams
Lackof
Loyalty
Entrepreneurship
Individual
Western
And therefore, lack ofEntrepreneurship
LifetimeEmployment
Identity
Group
Eastern
NonmobileManagers
Grouptwo or more individuals
with a shared sense of identity
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Social Stratification
Typically is defined by family background, occupation, and income.
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Social Stratification
Caste: Virtually no mobility
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Class Consciousness:May play a role ina firm’s operations
Social Stratification
Class: some social
mobility
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ReligionShared beliefs and rituals concerned with the realm of the sacred.Ethical Systems:
Moral principles or values used to guide and shape behavior.
Shapes attitudes toward work and entrepreneurship and can affect the cost of doing business.
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World’s Religions
4% 5%
20%
18%43%
10%
ChristianI slamHinduBuddhistConf ucianOther/ Nonreligious
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Religion and Economic ImplicationsChristianity
“”Protestant Work Ethic” and “The Spirit of Capitalism””.
Islam Favors market-based systems. “The Spirit of Capitalism””.No payment or receipt of interest.
Hinduism Asceticism may have an impact.Caste system plays a role.
BuddhismLittle emphasis on entrepreneurial behavior.
ConfucianismLoyalty, reciprocal obligations, and honesty in dealings.
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LanguageAllows people to communicate.
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LanguageAllows people to communicate.Structures the way the world is perceived.
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LanguageAllows people to communicate.Structures the way the world is perceived.Directs attention to certain features of the world rather than others.
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LanguageAllows people to communicate.Structures the way the world is perceived.Directs attention to certain features of the world rather than others.Helps define culture.
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LanguageAllows people to communicate.Structures the way the world is perceived.Directs attention to certain features of the world rather than others.Helps define culture.Creates separatist tendencies?
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Spoken Language
20%
6%5% 4% 3%
62%
OtherChineseEnglishHindiRussianSpanish
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Nonspoken Language
Nonverbal cues:eyebrowsfingers/thumbshand gesturesfeetpersonal spacebody gestures
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EducationFormal education
supplements family rolein teaching values
and norms
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EducationFormal education
supplements family rolein teaching values
and norms
Cultural norms such asrespect, obedience, honesty
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EducationFormal education
supplements family rolein teaching values
and norms
Cultural norms such asrespect, obedience, honesty
Value of personalachievement and
competition
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EducationFormal education
supplements family rolein teaching values
and norms
Obligations ofcitizenship
Cultural norms such asrespect, obedience, honesty
Value of personalachievement and
competition
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EducationFormal education
supplements family rolein teaching values
and norms
Focus on facts of socialand political nature
of society
Obligations ofcitizenship
Cultural norms such asrespect, obedience, honesty
Value of personalachievement and
competition
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EducationFormal education
supplements family rolein teaching values
and norms
Focus on facts of socialand political nature
of society
Obligations ofcitizenship
Cultural norms such asrespect, obedience, honesty
Medium to learnlanguage, conceptual,
and math skills
Value of personalachievement and
competition
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EducationFormal education
supplements family rolein teaching values
and norms
Focus on facts of socialand political nature
of society
Obligations ofcitizenship
Cultural norms such asrespect, obedience, honesty
For int’l business, it is adeterminant of nationalcompetitive advantage
Medium to learnlanguage, conceptual,
and math skills
Value of personalachievement and
competition
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HofstedeStudy (IBM) is a general way to look at differences between cultures.
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HofstedeStudy (IBM) is a general way to look at differences between cultures.4 dimensions:
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HofstedeStudy (IBM) is a general way to look at differences between cultures.4 dimensions:
Power distance: How does the society deals with both physical and intellectual diversity of citizens.
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HofstedeStudy (IBM) is a general way to look at differences between cultures.4 dimensions:
Power distance: How does the society deals with both physical and intellectual diversity of citizens.
High power distance: those that allow inequalities to grow over time into inequality of wealth and power.
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HofstedeStudy (IBM) is a general way to look at differences between cultures.4 dimensions:
Power distance: How does the society deals with both physical and intellectual diversity of citizens.
High power distance: those that allow inequalities to grow over time into inequality of wealth and power.Low power distance: those that play down these inequalities
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HofstedeStudy (IBM) is a general way to look at differences between cultures.4 dimensions:
Power distance: Individualism versus collectivism.
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HofstedeStudy (IBM) is a general way to look at differences between cultures.4 dimensions:
Power distance: Individualism versus collectivism.Uncertainty avoidance: How much uncertainty and ambiguity is encouraged by the society.
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HofstedeStudy (IBM) is a general way to look at differences between cultures.4 dimensions:
Power distance: Individualism versus collectivism.Uncertainty avoidance: How much uncertainty and ambiguity is encouraged by the society.Masculinity versus femininity.
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HofstedeStudy (IBM) is a general way to look at differences between cultures.4 dimensions:
Power distance: Individualism versus collectivism.Uncertainty avoidance: How much uncertainty and ambiguity is encouraged by the society.Masculinity versus femininity.
But:Assumption of one-to-one relationship between culture and nation-state.
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HofstedeStudy (IBM) is a general way to look at differences between cultures.4 dimensions:
Power distance: Individualism versus collectivism.Uncertainty avoidance: How much uncertainty and ambiguity is encouraged by the society.Masculinity versus femininity.
But:Assumption of one-to-one relationship between culture and nation-state.
Research may be culturally bound.
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HofstedeStudy (IBM) is a general way to look at differences between cultures.4 dimensions:
Power distance: Individualism versus collectivism.Uncertainty avoidance: How much uncertainty and ambiguity is encouraged by the society.Masculinity versus femininity.
But:Assumption of one-to-one relationship between culture and nation-state.Research may be culturally bound.
Respondents worked within a single company.
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HofstedeStudy (IBM) is a general way to look at differences between cultures.4 dimensions:
Power distance: Individualism versus collectivism.Uncertainty avoidance: How much uncertainty and ambiguity is encouraged by the society.Masculinity versus femininity.
But:Assumption of one-to-one relationship between culture and nation-state.Research may be culturally bound.Respondents worked within a single company.
Work is beginning to look dated (1967-1973).
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Work Related Values for Selected Countries Power
Distance Uncertainty Avoidance
I ndividualism Masculinity
Argentina 49 86 46 56
Brazil 69 76 38 49
France 68 86 71 43
I ndia 77 40 48 56
J apan 54 92 46 95
Mexico 81 82 30 69
Netherlands 38 53 80 14
U.S.A. 40 46 91 62
Table 3.1
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Culture is Dynamic
Cultural Change
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Culture and Competitive Advantage
The connection suggests:Which countries are likely to be the most viable competitors.Which countries in which to locate production facilities and do business.
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Culture and EthicsDo the “right” thing.Thomas Donaldson’s Three Principles:
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Culture and EthicsDo the “right” thing.Thomas Donaldson’s Three Principles:
Respect for core human values (human rights), which determine the absolute moral threshold for all business activities.
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Culture and EthicsDo the “right” thing.Thomas Donaldson’s Three Principles:
Respect for core human values (human rights), which determine the absolute moral threshold for all business activities.
Respect for local tradition.
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Culture and EthicsDo the “right” thing.Thomas Donaldson’s Three Principles:
Respect for core human values (human rights), which determine the absolute moral threshold for all business activities.Respect for local tradition.
Context matters when deciding what is right and what is wrong.