BMA734

International Business Management

 General questions through MyLO, specific
questions to my email: (Hobart and Distance)
 Fan.Liang@utas.edu.au
 Short lecture
 Break/assignment groups
 Discussion
Lecture 2
 Tutorial allocation The Cultural Environments

1-1 1-2

Learning Objectives
 Understand methods for learning about cultural

Chapter 2 
environments
Grasp the major causes of cultural difference and
changes
The Cultural environments  Discuss behavioural factors influencing countries’
business practices
 Recognise the complexities of cross-cultural
communications
 Analyse guidelines for cultural adjustment

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Introduction Introduction
Learning Objective:  Culture refers to the learned norms based
Understand methods for learning about on values, attitudes, and beliefs of a group
cultural environments of people
 Culture is an integral part of a nation’s
operating environment
 Every business function is subject to potential
cultural differences

 How can culture impact on the business

activities?
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1
 Introduction Introduction
 Companies need to decide when to make  But, cultural collision occurs when
cultural adjustment business practices are less effective or
 Cultural diversity can lead to global when employees encounter distress
competitive advantages because of difficulties in accepting or
adjusting to foreign behaviours
 How can cultural diversity benefit the
organisation?

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Cultural Awareness How Cultures Form and Change

 Problem areas that can hinder managers’ Learning Objective:
cultural awareness… Grasp the major causes of cultural
 Subconscious reactions to circumstances – differences and changes
self-reference criterion
 The assumption that all societal subgroups are
similar
 Managers who educate themselves about
other cultures have a greater chance of
succeeding abroad

 How managers can educate themselves? 2-9 2-10

How Cultures Form and Change How Cultures Form and Change
 How are cultures different?  Culture is formed through learning
 Cultural values may change through
 Choice
 Imposition
 Cultural imperialism

 Contact with other cultures

 Cultural diffusion

 Creolisation

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2
 Language: Language:
Cultural Diffuser and Stabiliser Cultural Diffuser and Stabiliser
 A common language within a country is a Major Language Groups: Population and Output

unifying force
 A shared language between nations
facilitates international business
 Native English speaking countries account for a
third of the world’s production
 English is the international language of
business

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Religion: Cultural Stabiliser Religion: Cultural Stabiliser

 Religion impacts on almost every business Distribution Of The World’s Major Religions

function
 Religion shapes cultural values and
behaviour
 Many strong values are the result of a
dominant religion

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Behavioral Practices
Affecting Business Hofstede’s Cultural Dimensions
Learning Objective:  Individualism versus collectivism
 The perception towards the importance of the collective
Discuss behavioural factors influencing interests of groups
countries’ business practices  Power distance
 The tendency of people to differentiate themselves from
each other
 Uncertainty avoidance
 The extent to which people are willing to take risks
 Femininity versus masculinity
 The attitude towards the relationship between work and
the quality of life

 Long-term orientation
 The attitude towards time and the preference in thinking
2-17 about past, present and future 2-18

3
Hofstede’s Cultural Dimensions
 Problems in methodology  Work-
 One-to-one relation between countries and culture related
 Data were collected from only one company values
 The study was done between 1967-1973 for 20
selected
countries

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Behavioral Practices Behavioral Practices

Affecting Business Affecting Business
 How do the cultural dimensions of Learning Objective:
Hofstede impact on the behaviour of Recognise the complexities of cross-
individuals and businesses? cultural communications

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Information and
Task Processing High and Low Context Cultures
 Cultures handle information in different
ways
 Perception of cues
 Obtaining information
 Low context versus high context cultures

 Information processing
 Monochronic versus polychronic culture
 Idealism versus pragmatism

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4
 Communications Communications
 Cross border communications do not Body Language Is Not A Universal Language

always translate as intended

 Spoken and written language
 Silent language
 Colour
 Distance
 Time and punctuality
 Body language
 Prestige

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Dealing with Dealing with

Cultural Differences Cultural Differences
Learning Objective:  Do managers have to alter their
Analyse guidelines for cultural adjustment customary practices in order to succeed in
countries with different cultures?
 Must consider
 Host society acceptance
 Degree of cultural differences
 Cultural distance

 Ability to adjust
 Culture shock and reverse culture shock

 Company and management orientation

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Dealing with
Cultural Differences Strategies for Instituting Change
 Three orientations for companies and  How should managers do to adapt to
management different culture?
 Polycentrism
 Business units abroad should act like local
companies
 Ethnocentism
 Home culture is superior to local culture

 Overlook national differences

 Geocentrism
 Integrate home and host practices

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5
Strategies for Instituting Change
 Avoid upset deep-seated customs and values
 Cost-benefit analysis of change
 Avoid too much change to reduce resistance
 Participation in discussion with stakeholders
 Reward those who can be changed
 Gain support from opinion leaders
 Timing
 Capitalising on learning abroad
Tutorial Questions (for W02)
 How do cultural differences across
countries increase the costs of doing
international business?
 How would you do if you work with people
from different cultural background?

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Tutorial Questions
 Case study
 Tesco PLC: Leveraging global Knowledge (pp. 96-99)
 Questions for the case study
 2-3. The US and France are more culturally similar to
the UK than are Thailand and South Korea, yet Tesco
failed in the former two and has been highly successful
in the latter two. How might you explain the difference?
 2-4. What is the role of global teams in sharing best
practices across a firm’s global operations? What advice
would you give to make the teams more effective?
 2-5. Look at the Tesco PLC website (www.tescoplc.com).
What exactly are its businesses and what do you think
this tells us about its international strategy today?
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