KEY POINTS Culture is the acquired knowledge that people use to interpret experience and to generate social behavior. There are two major problems that culture creates for those doing business internationally: understanding the cultures of these other countries and learning how to adapt to these cultures.

There are a number of key elements of culture There are a number of key elements of culture. These elements, working in cycle, can create a complex, multidimensional environment in which outsiders have a great deal of trouble understanding how and why the local people act as they do.

Cultural Matrix Narrowly Shared, Deeply Held: Violations in this cell usually result in informal but sometimes significant punishments. Widely Shared, Deeply Held: Violation in this cell usually result in formal and significant punishments. Narrowly Shared, Shallowly Held: Violation in this cell usually do not result in uniform reactions but instead are more idiosyncratic. Widely shared, Shallowly Held: Violation in this cell usually result in minor punishments or sometimes second chances

Cultural Dimensions While the elements of culture help to explain behavioral differences between people, in recent years researchers have attempted to develop a composite picture of culture by clustering or grouping nations based on these differences. One way in which this clustering has been done is through the use of cultural dimensions: power distance, uncertainty avoidance, individualism, and masculinity.

In addition to the cultural dimensions that were uncovered by Hofstede’s research among IBM employees in the 1980s, more recent work by Trompenaars has provided additional insights into ways of examining the impact of culture on behaviour. In particular, this includes consideration of whether the culture subscribes more to a belief in universalism or particularism, is a neutral or emotional culture, and the importance of achievement and ascription in the accordance of status.

MNEs must be particularly concerned with the ways in which local cultures can impact on their operations. For example the iceberg of culture: Assumptions, Values and Artifacts. Those assumptions, values/rules of the culture that are widely shared and deeply held should be honored by the MNEs Examples of each were discussed in the class. Some of other primary considerations include management styles, work attitudes, achievement motivation, the importance of time, and the impact of ethics.