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Chapter 2The Cultural Environments Facing Business Chapter 2: The Cultural Environment
Facing Business
Learning Objectives
Understand methods for learning about cultural environments
Grasp the major causes of cultural difference and change
Discuss behavioral factors influencing countries’ business practices
Recognize the complexities of cross-cultural information differences, especially
communications
Introduction
What is Culture?
“Sum total” of all learned activities, a way of life-- refers to the learned norms based on values,
attitudes, and beliefs of a group of people living in a geographic area, in a society or a nation
Why an international business manager should study the culture of a country?
Culture is an integral part of a nation’s business and operating environment
Companies need to decide how and when to make cultural adjustments
Fostering cultural diversity can offer global competitive advantage
Cultural Awareness
We need a GLOBAL MINDSET to succeed--managers that educate themselves about other
cultures have a greater chance of success. Problem areas that can hinder managers’ cultural
awareness…
Subconscious reactions to circumstances (self-reference criterion)
The assumption that all societal subgroups are similar
Cultural collision can occur when a company implements practices that are counters a country’s
cultural norms
Understanding Culture
National cultures are dynamic, they evolve over time, change occurs by choice or by imposition.
Three features are:
The Nation or Nation-State as point of reference (identity, symbolism, common history)
Language as both a diffuser and stabilizer of culture (expression, sharing, bond)
Religion as a cultural stabilizer (beliefs, ethics, spiritualism)
Culture and the Nation-State
Historical understanding of a nation state. It is a useful definition of society because similarity
among people is a cause and an effect of national boundaries
laws apply primarily along national lines
language and values are shared within borders
rites and symbols are shared along national lines
But then subcultures exist within a nation state
How Cultures Form and Change
Cultural value systems are established early in life but may change through
choice or imposition
cultural imperialism
contact with other cultures
cultural diffusion
creolization
Language: Cultural Diffuser and Stabilizer
A common language within a country is a 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
Language: Cultural Diffuser and Stabilizer
Distribution Of The World’s Major LanguagesThis Map shows the distribution of the world’s
major languages. Notice the large number of English speaking, French speaking, and Spanish
speaking countries.
Language: Cultural Diffuser and Stabilizer
Major Language Groups: Population and Output
This Figure shows the relationship between major language groups and world output. Notice the
importance of English as a language of international business.
Religion: Cultural Stabilizer
Religion impacts almost every business function
It influences our consumption and expenditure
Centuries of profound religious influence continue to play a major role in shaping cultural values
and behavior
many strong values are the result of a dominant religion
Religion: Cultural Stabilizer
Distribution Of The World’s Major Religions This Map shows the distribution of major religions
around the world.
Behavioral Practices Affecting Business
Social Stratification
Work Motivation
Relationship Preferences
Risk-taking Behavior
Information and Task Processing
Communications
Social Stratification
Social ranking is determined by
an individual’s achievements and qualifications
an individual’s affiliation with, or membership in, certain groups
Group affiliations can be
Ascribed group memberships
based on gender, family, age, caste, and ethnic, racial, or national origin
Acquired group memberships
based on religion, political affiliation, professional association
Two other factors affecting social stratification are: education and social connections
Work Motivation
The motivation to work differs across cultures
Studies show
the desire for material wealth is a prime motivation to work
promotes economic development
people are more eager to work when the rewards for success are high
masculinity-femininity index
high masculinity score prefers “to live to work” than “to work to live”
Work Motivation
Hierarchy of needs theory
Individuals will fill lower-level needs before moving to higher level needs
The ranking of needs differs among cultures
Work Motivation The Hierarchy of Needs and Need-Hierarchy Comparisons
This Figure shows the hierarchy of needs and need-hierarchy combinations. Note that needs are
broken down into physiological needs, security needs, affiliation needs, esteem needs, and self-
actualization needs. The way in which these needs are ranked differs among countries.
Relationship Preferences
Relationship preferences differ by culture
Power distance
high power distance implies little superior-subordinate interaction
autocratic or paternalistic management style
low power distance implies consultative style
Individualism versus collectivism
high individualism – welcome challenges
high collectivism – prefer safe work environment
Risk Taking Behavior
Risk taking behavior differs across cultures
Uncertainty avoidance
handling uncertainty
Trust
degree of trust among people
Future orientation
delaying gratification
Fatalism
attitudes of self-determination
Information and Task Processing
Cultures handle information in different ways
Perception of cues
Obtaining information
low context versus high context cultures
Information processing
Monochronic versus polychronic cultures
Idealism versus pragmatism
Communications
Cross border communications do not always translate as intended
Spoken and written language
Silent language
Color
Distance
Time and punctuality
Body language
Prestige
Communications Body Language Is Not A Universal Language
These images show how a simple gesture is interpreted quite differently around the world.