Social-Cultural Influences on International Business CHAPTER 4 Wang Shen TFSU

Importance of Culture Markets and operations can no longer be regarded as international and domestic. Cultural risks exist. Therefore, cultural competence must be recognized as a key management skill. Examples: US: individual’s development; Japan: group interests Different time concepts: German vs. Mexican; Chinese vs. Japanese Different personal spaces: Arabs vs. American

Definition and Classification of Cultures Culture is an integrated system of learned behavior patterns that are characteristic of the members of any given society. The relationship among culture, society and country “Melting Pot” “a Mosaic of Subcultures”

Classification of Cultures High-context cultures, such as Japan and Saudi Arabia Low-context cultures, such as the US

Hong Kong TV Series

Korean TV Series

Cultural Convergence Acculturation is one of the keys to success in international business. Due to the international business activities, few cultures are homogeneous. The bringing about of different cultures with the introduction of products

Examples

The Elements of Culture The characteristics of different cultures are reflected in the different characteristics of the different elements or components, including: language; manners and customs; aesthetics; religions; material culture; value and attitudes; social structure and education.

Language The nature of a language structures the way people perceive the world. People speaking different languages usually care about different issues.

Language 4 distinct roles of language in international business: ① Language is important in information gathering and evaluation. ② Language provides access to local society. ③ Language capability is increasingly important in company communications. ④ Language provides more than the ability to communicate.

Misunderstandings and obstacles

Translation of brand names Examples: Pespi in Taiwan:“Come alive with Pespi Generation”was translated into“ 百事将让你的祖先死而复生” 。 飞鸽：Flying Pigeon 乐凯：Lucky 赛百味：Subway

Translation of brand names TOSHIBA（东芝） in Su Zhou Dialect is “都死吧” ，“切 诺基”（Cherokee） “切肉机” Nike: 耐克；Ikea：宜家；Mercedes Bens：奔驰； Brandy：白兰地；Whisky：威士忌； Goldenlion from “金狮”to“金利来”；Pizza Hut：必胜 客。 海信：Hisense；芳芳：Fang Fang；凤凰：Phoenix

Nonverbal Language 5 key topics of nonverbal language are: gesture time space material possessions friendship patterns

Manners and Customs Importance of manners and customs: Understanding manners and customs is especially important in negotiations, because interpretations based on one’s own frame of reference may lead to a totally incorrect conclusion.

Manners and Customs They are long cultivated and gradually formed habits of people living in certain environment. Various festivals and celebration rituals; Set behavior patterns and concepts; Taboos in different cultures

Manners and Customs Examples: Colors; Numbers; Gift-givings; Taboos

Aesthetics Each culture makes a clear statement concerning good taste, as expressed in the arts and in the particular symbolism of colors, form and music. What is and what is not acceptable may vary dramatically even in highly similar markets.

Aesthetics Styles of clothing, forms of architectures and decorations vary greatly in different cultures.

Styles of clothing

Styles of clothing

Styles of architectures

Styles of architectures

Religion Importance of religion: Religion has an impact on international business that is seen in a culture’s values and attitudes toward entrepreneurship, consumption, and social organization. The impact will vary depending on the strength of the dominant religious tenets.

Dominant religions of the world Christianity Example: Catholicism questions money, while the Protestant ethic emphasizes the importance of work and the accumulation of wealth for the glory of God.

Dominant religions of the world Islam There are 5 stated daily periods of prayer, fasting during the holy month of Ramadan, and the pilgrimage to Mecca, Islam’s holy city.

Dominant religions of the world Hinduism It is more a way of life predicated on the caste to which one is born. Individual effort is hampered because it is difficult to rise above one’s caste. The family is an important element of Hindu society, with extended families being a norm.

Dominant religions of the world Buddhism Life is seen as filled with suffering. The emphasis is on spiritual achievement rather than worldly goods. Confucianism It stresses loyalty and relationships. Loyalty to central authority and placing the good of a group before that of the individual may explain the economic success of Japan, South Korea, Singapore, and China.

Confucianism 三纲五常 the three cardinal guides (ruler guides subject, father guides son and husband guides wife) and the five constant virtues (benevolence, righteousness, propriety, wisdom and fidelity)三纲：指君为臣纲，父为子纲，夫为妻 纲；五常：指仁、义、礼、智、信。封建礼教提倡的人与人之 间的道德规范。

Material Elements Definition: Material culture refers to the results of technology and is directly related to how a society organizes its economic activity. Content: the availability and adequacy of the basic economic, social, financial, and marketing infrastructure for the international business in a market.

Material Elements The level of material culture can aid segmentation efforts if the degree of industrialization is used as a basis. Technological advances have been the major cause of cultural change in many countries. Material culture – mainly the degree to which it exists and how it is esteemed – has an impact on business decision.

Values and Attitudes Definitions Values are shared beliefs or group norms that have been internalized by individuals. Attitudes are evaluations of alternatives based on these values.

Social Institutions Definition: Social institutions affect the ways people relate to each other. Family unit The concept of kinship or blood relations between individuals Social stratification

Social Institutions Reference groups primary reference groups: family, coworkers, intimate acquaintances secondary groups: social organizations, such as professional associations, trade organization

Social Institutions Social organization also determines the roles of managers and subordinates and how they relate to one another. Although Western business has impersonal structures for channeling power and influence – primarily through reliance on laws and contracts – the Chinese emphasize personal relationships to obtain clout.

Education education and recruiting and training education and product sophistication

Cultural Analysis Hofstede's model Based on his IBM study in 72 different countries, Hofstede identifies five of these differences in mental programming, which he calls five dimensions:

five dimensions 1. Power distance 2. Collectivism versus Individualism 3. Femininity versus Masculinity 4. Uncertainty avoidance 5. Long-term versus Short-term orientation

China Vs. U.S.

Coping with Cultural Differences Factual information: communication with others; research; education. Experiential information: experience Three training methods: factual training; analytical training; experiential training

Rules of Thumb 1. Be Prepared 2. Slow Down 3. Establish Trust 4. Understand Importance of Language 5. Respect the Culture 6. Understand Components of Culture

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