International Business Part Two Comparative Environmental Frameworks Chapter Two The Cultural Environments Facing Business

Chapter Objectives To understand methods for learning about cultural environments To analyze the major causes of cultural difference and change To discuss behavioral factors influencing countries’ business practices To understand cultural guidelines for companies that operate internationally

Cultural Factors affecting International Business Operations

The People Factor Culture refers to learned norms based on the values, attitudes, and beliefs of a group of people Cultural diversity Cultural collision Sensitivity and Adjustment

Cultural Awareness There is no foolproof way to build your awareness of culture Hard to isolate culture from economic and political conditions Education about a culture helps Studies of cultures have shortcomings

The Nation as a Point of Reference National boundaries act as proxy for culture Not everyone in a country shares the same culture Certain cultural attributes may link groups from different nations more closely than certain groups within nations

How Cultures Form and Change Cultural values set early in life Changes occur from: Choice Imposition

Language as a Cultural Stabilizer When people from different areas speak the same language, culture spreads more easily Among nations that share a same language, commerce is easier Isolation from other groups, especially because of language, tends to stabilize cultures. Some countries see language as being so important that they regulate the inclusion of foreign words and/or mandate the use of the country’s official language for business purposes.

Major Language Groups: Population and Output

Religion as a Cultural Stabilizer Centuries of profound religious influence continue to play a major role in shaping cultural values Many religions influence specific beliefs that may affect business

Issues in Social Stratification Ascribed group memberships are determined at birth Acquired group memberships are based on one’s choice of affiliation Performance orientation of the society Open vs. Closed society Attitude towards gender Attitude towards age Importance of family group Prestige of occupation

Issues in Work Motivation Materialism and Motivation Expectation of Success and Reward Assertiveness: The Masculinity–Femininity Index Hierarchies of Needs

The Hierarchy of Needs vs. The Need Hierarchy

Factors Affecting Relationship Preferences Power distance: general relationship between superiors and subordinates. Individualism vs. collectivism: degree of dependence on organization

Factors Affecting Risk-taking Behavior Uncertainty avoidance Trust Future orientation Fatalism

Factors Affecting Information and Task Processing Perception of cues Obtaining Information: Low-Context versus High-Context Cultures Information Processing

Factors Affecting the Communication Process Spoken and Written language Silent language: color associations conversational distance perception of time and punctuality body language and gestures prestige

Dealing with Cultural Differences Accommodation Cultural distance Culture shock Company and Management orientations polycentric ethnocentric geocentric

Factors Affecting Strategies for Instituting Cultural Change Value systems Cost/benefits of change Resistance to too much change Participation Reward sharing Opinion leadership Timing Learning abroad