International Business 10e Daniels/Radebaugh/Sullivan

International Business
Chapter Two
The Cultural Environments
Facing Business

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 Chapter Objectives
 Understand cultural environments
 Explain major causes of cultural
difference and change
 Examine behavioral factors
influencing countries business
practices
 Examine cultural guidelines for
companies that operate
internationally
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 Major Cultural Issues
 Problems arise in international business
when:
• Employees have subconscious reactions
• Employees assume all societal groups are
similar
• A company implements practices of work less
well than intended
• Employees encounter distress because of an
inability to accept or adjust to foreign cultural
behaviors
• Companies/employees are insensitive to
foreign consumer preferences
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 Cultural Factors at Play
 Cultural awareness
• Attire
• Religion
• Language
 Identification and dynamics of
cultures
 Behavior practices affecting
business
• Timeliness
• Ethics
 Strategies for dealing with
cultural differences
• Education
• Research
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 Identification of Cultures
 Cultures are derived with people with
shared attitudes, values, and beliefs
 People also belong to national, ethnic,
professional, and organizational cultures
 Points of reference:
• National
• Geographic
• Language
• Religion
 International business often changes
cultures
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World Output by Language Group

LANGUAGE % OF WORLD OUTPUT

English 33%
Mandarin 10%
Spanish 7%
German 7%
French 5%
Arabic 3%
Hindi 2%
Other 33% 2-6
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 Major Religions of the World
RELIGION NUMBER OF ADHERENTS
(in millions)
Christian 2,000,000
Muslim 1,188,000
Hindu 811,000
Chinese folk 384,000
Buddhist 360,000
Sikh 23
Judaic 14
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 Behavioral Practices
 Social Stratification Systems
• Individuals status with the culture
 Managerial groups may be highly valued
 Employees may be valued less

• Ascribed group memberships

 Gender, family, age, caste, and ethnic,
racial or national origin
• Acquired group memberships
 Religion, political affiliations, and
professional and other associations

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 United States “Values”
 COMPETENCE!
 Intolerance for discrimination based upon:
• Gender
• Race
• Age
• Religion
 Although equality is not applied perfectly, in
many other cultures, this competence is of
secondary importance
 Since our values may seem radical to foreigners
it is of extreme importance that international
businesses spend the resources to determine
what foreign cultures they can ethically and
effectively conduct business in
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 Characteristic-Based Groups
 Gender-based groups
• China
• India
• Afghanistan
• Saudi Arabia
 Age-based groups (United States)
 Family-based groups
 Occupation (United Kingdom)
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 Motivation
 Cultural difference in:
• Work ethic
• Materialism
• Leisure
 Japan vs. United States
 Europe vs. United States
• Protestant work ethic
• Expectation of success and
reward
• Assertiveness and
Masculinity index
 Japan vs. Sweden
• Need Hierarchy
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 Relationship Preferences
 Power distance: relationship
between superiors and
subordinates
 Individualism vs. collectivism
• United States is clearly different
from Japan
• China is clearly different from
Mexico
 Risk-taking behavior
• Uncertainty avoidance
• Trust
• Future orientation
• Fatalism

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Differences in Information and Task
Processing
 We perceive and reach conclusions
differently
• Perception of cues; Arabic has more than
6,000 words for camels…
• Obtaining information
 Low-context cultures (United States)
 High-context cultures (Saudi Arabia)
• Information Processing
 Sequentially or simultaneously
 Focused or broad
 Handling principles or small issues first

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 Dealing With Cultural Differences
 Be tolerant of differing perceptions of time
 Understand the message sent by body
language
 Be sensitive to accurate translations
• Spoken
• Written
 France: “Please leave your values at the desk”
 Mexico: “The manager has personally passed all the
water served here”
 Norway: “Ladies are requested not to have children
in the bar”
 Greece: “We will execute customers in strict rotation”
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 Cultural Influences

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 Language Strategies
 Get references for translators
 Ensure the translator is familiar with
technical vocabulary for the business
 Do a back translation
 Use simple words
 Avoid slang
 Repeat words and ask questions
 Expect the extra time communication will
take
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 Language Groups

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 Cultural Orientations
 International businesses adopt an attitude
towards foreign cultures
• Polycentrism: control is decentralized so
regional managers can conduct business in a
local manner
• Ethnocentrism: belief that ones own culture is
superior and ignores important factors
• Geocentrism: a hybrid of polycentrism and
ethnocentrism, the middle ground
 Companies MUST evaluate their practices
to ensure they account for national
cultural norms

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 Hierarchy Comparisons

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 Chapter Review
 Understand cultural environments
 Explain major causes of cultural
difference and change
 Examine behavioral factors
influencing countries business
practices
 Examine cultural guidelines for
companies that operate
internationally
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