International Business Culture Dr Susan Bridgewater

International Business Environment Strategy Structure

Culture Objectives To identify and understand frameworks for analysing national culture To understand the concepts of psychic and cultural distance To evaluate the measures of psychic and cultural distance

Theoretical Cultural Classification Hall's Silent Language of Overseas Business Hofstede's Work Related Values Trompenaars Farnham Castle Culture Model P

Hall's High and Low Context Cultures More reliance on "how" business is done i.e: non verbal elements Chinese Korean Japanese Vietnamese Arab Greek Spanish Italian English North American Scandinavian Swiss German High Context More reliance on "what" is said and done i.e verbal elements: Low Context Source: Edward T Hall 1964; 1976 P

Symbolic Meanings "Green, America's favourite colour for freshness and good health is often associated with disease in countries with dense green jungles. Black is not a universal colour for mourning; inmany Asian Countries it is white; in Brazil it is purple, yellow in Mexico and dark red in the Ivory Coast. Red suggests god fortune in China but death in Turkey... in every culture, things, numbers and even smells have meanings. Lemon scent in the United States means freshness. in the Philippines lemon scent is associated with illness. In Japan the number 4 is like our 13; and 7 is unlucky in Ghana, but lucky in Kenya and Singapore." Source: Copeland and Griggs 1986 P

Farnham Castle Cultural Briefings Social Organ isation Religion Language Values Education Culture Law and Politics Tech- nology Ethnic Mix P

Trompenaars Model of Culture Explicit Culture Artefacts and Products Norms and Values Basic Assumptions Implicit Culture

Trompenaars Outer layer: Artefacts and Products = what people principally associate with that country e.g: clothes, food, language, housing Middle layer: Norms and Values = what does the community consider right and wrong? Inner layer: basic assumptions = the set of rules and methods a society has evolved to deal with the problems it faces. So frequent they have become unspoken assumptions

Universalism versus particularism Universalists - inclined to follow the rules even informally and among friends. Assume these standards are the “right” ones. Particularists - particular circumstances considered more important than general rules

Examples of Universalists and Particularists Predominantly protestant High = Canada (93%), USA, Scandinavian countries (Nor = 97%) Mid-level = France (72%) and Japan (68%) Particularists Predominantly catholic or taoist Low = South Korea (25%), China (48%)

Trompenaars’ advice on reconciling cultural differences “International management is not a process of replacing one orientation by another but understanding one in the context of the other.”

Hoftede's Work Related Values Power Distance Measures of inequalities in organisations e.g: managers' decision-making style, employees fear of manager Low Power Distance - respect for individual High Power Distance - privileges with influence Uncertainty Avoidance Anxiety felt in a situation with conflicting values Low uncertainty cultures have fewer rules and accept diversity High Uncertainty have greater resistance to change Individualism Degree to which people are part of group or alone Low Individualism = collectivism High Individualism values autonomy Masculinity versus Femininity How roles are distributed between the sexes Masculine = aggressive, competitive Feminine = intuitive, emotional P

Culture Dimensions for 10 Countries PD ID MA UA USA 40L 91H 62H 46L Germany 35L 67H 66H 65M Japan 54M 46M 95H 92H France 68H 71H 43M 86H Netherlands 38L 80H 14L 53M Hong Kong 68H 25L 57H 29L Indonesia 78H 14L 46M 48L West Africa 77H 20L 46M 54M Russia 95H* 50*M 40*L 90*H China 80*H 20*L 50*M 60*M PD=Power Distance; ID=Individualism; UA = Uncertainty Avoidance; MA =Masculinity H = Top Third; M = Medium; L=Bottom Third of 53 countries. *=estimated P

Psychic and Cultural Distance "Psychic Distance: "Factors which hinder the flow of information between two countries." Beckermann 1956 Cultural Distance: "An Aggregate Score base on Hofstede's Work related values. Tends to use the Kogut and Singh 1988 method. P

Operationalising Psychic Distance Complex as it combines geographic, technological and cultural dimensions Only operationalised once, using statistical data of various sorts by Swedish researchers Difficult to replicate Based on individual perceptions. May differ depending on...

Influences on Psychic Distance Previous international experience Ethnic origin Education Speaking other languages Frequent international travel Personal characteristics e.g: open-minded, friendly, risk-taker

Measuring Cultural Distances

Conclusions Insights can be gained into different cultures using analytical frameworks proposed to classify these on the basis of different dimensions. The real issue for international managers is to understand the distances that can exist as a result of cultural differences. These distances have also been measured and may offer some insights. International managers are best advised to understand the underlying “basic assumptions” that may explain these differences.