HOW DIFFERENCES IN

CULTURE CAN AFFECT

INTERNATIONAL BUSINESS?
Frida Chagoya Hernndez
8201587

What is culture?
Culture is defined by Geert Hofstede

as the collective programming of the

mind
which
distinguishes
the
members of one human group from
another. Culture includes systems of
values
Values: abstract ideas about what a

group believes to be good or right.

Norms: Social rules and guidelines.
Society: A group of people who

share a common set of values and

norms.

The importance of values

Values provide the context within which societys norms

are established and justified.

Values include societys attitudes toward concepts as:

individual freedom, truth, justice, etc. And such attitudes

have a great emotional singificance.
Norms are the social rules that govern peoples actions,

they are divided in folkways and mores.

The determinats of culture

The values and norms of a culture are the evolutionary
product of a number of factors including:
Political and economic philosophy
The social structure of society
Religion
Languague
Education

Importat concepts related to culture

Individuals vs groups

Individual is the way people percieve themselfs and relate

to each other in social and business in contrast to a group
that is the primary unit of social organization and is the
importance attached to group membership or identification.

 Social stratification

The way how societies are

stratified on hierarchical basis
into social categories (family
background, occupation and
income).
Social mobility the extent to
which individuals can move out
of the strata into they are born
Caste system vs class system

Religion
There are 4 dominate

religions in the world:

Christianity, Islam,
Hinduism and Buddhism
Religions shape attitudes
toward work and
entreprenurship and they
can affect the costs of doing
business.

Christianity
The most widely practiced

religion in the world.

Monotheistic
Two major organizations:The
Roman Catholic Church and
Ortodox Church
Economic implications:
Conection between protestant
ethics and capitalism.
Values: Hard work and wealth
creation, religious freedom,
individualism as an economic
and political philosophy.

Islam
The 2 largest religion of the

world.
Majority in more than 35
countries. (coast of Africa,
middle East, China, Malaysia).
Values: no distinction between
church and state, islam is a
lifestyle.
Economic implications: profree enterprise, earning
legitimate profit through trade
and commerce, protection of
the right of free property,
interest are forbbiden.

Hinduism
Practiced on the Indian

subcontinet.
There is not an official sacred
book.
Values: acceptance of
responsabilities called dharma,
reicarnation, karma, spiritual
progression, scetic lifestyle of
material and physical self-denial,
caste system.
Economic implications: Hindus
believe that the pursuit of material
affects their spititual needs
despite of that Indias economy is
growing rapidly.

Buddism
Founded in India.
250 followers
Values: life is comprised

of suffering, Buddism
lack of support of caste
system , afterlife,
extreme ascetic behavior.
Impact in business: fertile
ground of
entrepreneurship activity.

Confucianism
Confucianism was the official

ethical system of China.

Values: Importance of attaining
personal salvation throught right
action, ethical code that sets
down guidelines for relationships
with others.
Economic Implications: three
values of confusionism are good
for business: loyality to ones
superiors as a sacred duty ,
reciprocal obligations >guanxi<
and honesty. Companies can
trust each other.

Language
Enable people to comunicate each other and helps define

culture.
Although english the language of international business it
is important to leatn the local language to avoid blunders
thruoght improper translation.
Unspoken language is important.

Education
Formal education is the medium thought which individuals

learn many of the languague, conceptual and

mathematical skills that are indispensable in a modern
society.
The availability of pool of skilled and educated workers

seems to be a major determinant of the economic

success in a country.

Culture: implications for business

Cross-cultural literacy: the danger of being ill-informed.

Adaptations of all aspects of an internationals firms

operations in a foreing country.
The conection between culture and competitive
advantage.
Culture and business ethic: customs vary from country to
country. Managers are required to use their own moral
judgment to solve ethical dilemmas.