University Of Finance & Administration INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

Lecture content  CULTURE in the business 6. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

CULTURE DIFFERENCES = impact of culture on relationship, employees approach to work, business management and negotiations -> this impact is much > than differences coming out from: o RACE o SEX o specialization [PROFESSION] o POSITION 7. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

CULTURE and it’s elements CULTURE = characteristic way of living = based on ACQUIRED models of behaviour (i.e. learnt, not inborn) Culture ELEMENTS  ABSTRACT (values, approaches, opinions, religion - from generation to generation)  MATERIAL (stage of development and types of: technology, structure of consumption in a country / society ) 8. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

Basic elements of Culture Language Social structure Values & Attitudes CULTURE Communi -cation Religion 9. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

SOCIAL structure = determines the roles of individuals within the society, indiv.mobility within society, stratification of the society  Individuals, Families, Groups Social attitudes influence / Business : US descourage nepotism Arab countries: family ties crucial Importance of INDIVIDUAL to the group: Europe culture promotes individualism (PAY = merit based) group focused societies = the IND role is to SERVE the group (PAY = seniority-oriented, group success) Social STRATIFICATION Social MOBILITY ability of IND to MOVE within stratums of society 10. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

LANGUAGE = identified > languages worldwide Business language Form of language Competitive weapon Translations Meaning YES / NO 11. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

COMMUNICATION = VERBAL x NON-VERBAL Contact zone Gestures & their impact on business Role of silence Role of eyes Gift giving & hospitality Business practice Role of education in a society 12. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

RELIGION Christianity European traditions Hinduismus way of living (life style): castes (privileged groups of society), common household of a few families, worship (cult) of cow Islam men preference in business 13. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

VALUES & ATTITUDES MASCULINITY x FEMININITY (Hofstede’s 1 of 5 dimensions): = is manner in which people are motivated to work toward different kinds of goals Masculinity People tend to place a high premium on material possessions, money & assertiveness The cultures that are more masculine, such as Japan, value competitiveness, assertiveness, ambition, and the accumulation of wealth. Femininity People place a higher value on social relationships, quality of life and concern for others On the other hand, feminine cultures, such as Sweden, place more emphasis on relationships, compassion, and the general quality of life. 14. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

Other culture aspects Time perception Timing accuracy Politeness cca 80 cm in Contact zone Role of eyes Europe cca 30 cm in e.g. Arabic countries Importance in Europe X could be perceived as a sign of agression in other parts of world (Asia, Japan) 15. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

Characteristics of Culture [relevant to IB] Culture = collection of values, beliefs, behaviors, customs and attitudes that distinguish one society from another  society culture determines how firms operates in the society Culture reflects LEARNED behavior Transmission from one member of society to another Elements of culture are INTERRELATED e.g.: hierarchical society => stress on loyalty & harmony => results in life-time employment & minimal job switching (Japan) Behavior is ADAPTIVE Because cultural is LEARNED behavior, it’s ADAPTIVE i.e. culture change in response to external forces that affects society Culture is SHARED Defines the membership of the society i.e. who shares the culture ‘proves’ to be a member / who does not => outside of boundaries of society 16. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

Hofstede’s 5 dimensions of cult.differencies SOCIAL orientation Person’s beliefs about the relative importance of the individual & groups to which that person belongs INDIVIDUALISM x COLLECTIVISM POWER orientation Power RESPECT x TOLERANCE UNCERTAINTY orientation Uncertainty ACCEPTANCE x AVOIDANCE GOAL orientation (Masculinity x Femininity) AGGRESSIVE x PASSIVE goal behavior TIME orientation LONG-TERM x SHORT-TERM outlook 17. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

Hofstede’s 5 dimensions SOCIAL ORIENTATION = person’s beliefs about the relative importance of the individual & groups to which that person belongs I NDIVIDUALISMCOLLECTIVISM Cultural belief that the person Belief that group comes first comes first Typically: well-defined social Key values: high degree ofnetworks, extended self-respect & independence families, tribes, co-workers 18. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

Hofstede’s 5 dimensions POWER ORIENTATION = refers to beliefs that people in a culture hold about the appropriateness of power and authority dif. in hierarchies RESPECT People tend to accept the power & authority of superiors People at all levels in firm accept decisions of superiors TOLERANCE People are more willing to question / refuse a decision or mandate from sb at a higher position 19. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

Hofstede’s 5 dimensions UNCERTAINTY ORIENTATION = is the feeling people have regarding uncertain an ambiguous situations ACCEPTANCEAVOIDANCE Stimulated by change and People dislike ambiguity and will thrive on new opportunities avid it whenever possible Ambiguity is seen as a context Amb. & change seen as one can grow, develop, carve undesirable out new opp. Preference of routine, structured Positive response to change& consistent ways of doing 20. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

Hofstede’s 5 dimensions GOAL ORIENTATION / Masculine x Feminine = is manner in which people are motivated to work toward different kinds of goals AGGRESSIVE g.behaviorPASSIVE g. behavior (Masculinity) (Femininity) People tend to place a high People place a higher value on premium on material social relationships, quality of life possessions, money & and concern for others assertiveness 21. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

Hofstede’s 5 dimensions TIME ORIENTATION = is extent to which members of a culture adopt a long- term vs. short-term outlook on work, life etc. LONG-termSHORT-term outlook Value: dedication, Value: traditions, hard work, and thrift social obligations 22. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

Basic elements of Culture Language Social structure Values & Attitudes CULTURE Communi -cation Religion 23. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

KEY terms - Culture and its impact on International Business - Characteristics of culture - Five dimensions of culture differences - Social orientation (individualism x collectivism) - Power orientation - Uncertainty orientation - Goal orientation (masculine x feminine) - Time orientation - Social stratification - Communication: verbal x non-verbal - Other culture aspects [time perception, contact zone, role of eyes, gift-giving, hospitality] 24. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.

Thank you for your attention 25. INTERNATIONAL BUSINESS [E_IB] PhDr. Karel Eliáš, CSc.