Chapter 16: Culture and Diversity in Business Introduction to Business Unit 5: Human Resources

Section 16.1 Culture in Business

Culture in a Global Economy Culture: the beliefs, customs, and attitudes of a distinct group of people dress, food, language, art history, geography, and religion Culture may refer to an entire country, ethnic group, social group, or institution. As companies trade worldwide, they must be aware of different cultural and business practices (e.g. etiquette, business customs, rules for personal interactions)

Culture and Business In business, culture has two important meanings. In the broad sense, it refers to the customs of other countries with which companies do business. Business culture refers to the standards of a particular company.

Consider This . . . Why is it important to understand other cultures when doing business in a global marketplace? What are some things that you would do when planning to conduct business in another country?

Marketing Abroad To market products successfully in another country, companies must research the country’s languages, customs, and tastes.

Doing Business Abroad Companies doing business in other countries must be aware of cultural differences that affect the workplace. Problems for EuroDisney Fear of cultural imperialism Resistance to strict dress codes Mandatory use of English in meetings

Business Etiquette Business etiquette: conduct that is considered socially acceptable in business; differs from country to country Strategies to avoid cultural problems Hire local managers (e.g. hire a Swedish person to manage office in Sweden) Train American employees to live and work in other countries As more countries trade globally, there is an increased demand for people who have studied other languages and cultures. Study high-demand language/culture (Spanish, Mandarin/Chinese, Arabic, etc.) Spend a semester or two of college studying abroad Teach English in a foreign country

Corporate Culture Corporate culture: a company’s shared values, beliefs, and goals Culture may be defined Formally, through a company code of ethics, a written manual, and the orientation process Informally, through dress codes, work habits, and social activities Factors influencing cultures may include Company’s founder Industry (banking vs. technology) Geographic location (NYC vs. Silicon Valley) Consider This Why is it important to know something about a firm’s corporate culture before accepting a job there?

Corporate Culture continued . . . Formal Culture Informal Culture Employees encouraged to make decisions on their own; may have decentralized organization Dress code is more casual Work hours are more flexible; may also work from home Job titles are not as important May value innovation over tradition May have a strict hierarchy, or chain of command May have one top decision maker with several layers of management below (bureaucracy) Making changes or passing down decisions may be complicated Job titles indicate power/status Dress codes and work hours strictly enforced Note: There may be different cultures within one company.

Considering Corporate Culture Form groups of two to four people. Appoint a timekeeper and recorder. Discuss the following questions. Your recorder should write your answers on a separate sheet of paper (to hand in at end of class). Review the descriptions of formal and informal culture. What are some drawbacks and benefits of each? Describe the classroom culture of your favorite class(es). What classroom rules, work habits, and activities help shape how you work, act, and deal with problems? How does this culture influence your work as students? Try to connect your discussion of classroom culture to the notes on corporate culture.