Differences in Culture Chapter 3 Differences in Culture

What Is Culture? Culture is a system of values and norms that are shared among a group of people and that when taken together constitute a design for living where -values are abstract ideas about what a group believes to be good, right, and desirable -norms are the social rules and guidelines that prescribe appropriate behavior in particular situations Society refers to a group of people who share a common set of values and norms While culture is a characteristic of society as a whole, it shapes individual behavior by identifying appropriate and inappropriate forms of human interaction. In a sense culture is the collective programming of the mind which distinguishes the members of one human group from another.

Values And Norms Values provide the context within which a society’s norms are established and justified and form the bedrock of a culture Norms include folkways (the routine conventions of everyday life) and mores (norms that are seen as central to the functioning of a society and to its social life) Folkways are the routines conventions of everyday life, but generally have little moral significance. Examples would be dress, eating habits, and social graces. An outsider can easily be forgiven for being ignorant of a folkway. Timeliness is a good example. (One way to reinforce the understanding of this concept is to ask individuals in the class what time they would choose to arrive at a party if the party invitation specified that the party starts at 8pm. It is not uncommon for different individuals in the class to have widely varying positions on the “right” time to arrive for an 8pm party. ) Mores are serious standards of behavior. The term comes from the Latin mos (customs), and although mores are fewer in number than folkways, they are more coercive. Negative mores are taboos, usually supported by religious or philosophical sanctions. Whereas folkways guide human conduct in the more mundane areas of life, mores tend to control those aspects connected with sex, the family, or religion. Mores can vary greatly between countries: what in one country may be viewed as an innocent flirt in another may constitute a serious affront to someone's dignity or even harassment. While it is acceptable, and even expected, to consume alcohol with business associates in Japan, where evening business contacts often border on drunkenness, such actions would be disallowed in the United Arab Emirates.

Culture, Society, And The Nation-state There is not a strict one-to-one relationship between a society and a nation state Nation-states are political creations that can contain one or more cultures Similarly, a culture can embrace several nations

The Determinants Of Culture The values and norms of a culture are the evolutionary product of a number of factors at work in a society including religion, political and economic philosophies, education, language, and social structure

Social Structure Social structure refers to a society’s basic social organization Two dimensions to consider: the degree to which the basic unit of social organization is the individual, as opposed to the group the degree to which a society is stratified into classes or castes

Individuals And Groups A group is an association of two or more people who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other’s behavior Societies differ in terms of the degree to which the group is viewed as the primary means of social organization

Individuals And Groups In many Western societies, there is a focus on the individual, and individual achievement is common This contributes to the dynamism of the US economy, and high level of entrepreneurship But, leads to a lack of company loyalty and failure to gain company specific knowledge, competition between individuals in a company instead of than team building, and less ability to develop a strong network of contacts within a firm

Individuals And Groups In many Asian societies, the group is the primary unit of social organization This may discourage job switching between firms, encourage lifetime employment systems, and lead to cooperation in solving business problems But, might also suppress individual creativity and initiative While in earlier times the group was usually the family or the village, today the group may be a work team or business organization. In a social setting, Asian employees may often say they work for Sony, while a Western employee may say he/she is an electrical engineer. In Asia, the worth of an individual is more linked to the success of the group rather than individual achievement.

Social Stratification All societies are stratified on a hierarchical basis into social categories, or social strata While all societies are stratified to some extent, they differ by: the degree of mobility between social strata the significance attached to social strata in business contacts

Social Stratification Social mobility is the extent to which individuals can move out of the strata into which they are born A caste system is a closed system of stratification in which social position is determined by the family into which a person is born, and change in that position is usually not possible during an individual's lifetime A class system is a form of open social stratification in which the position a person has by birth can be changed through his or her achievement or luck The class of a person may be very important in some hiring and promotion decisions, particularly in sales organizations where the person will be dealing with customers that may also come from a particular class.

Social Stratification The social stratification of a society is significant if it affects the operation of business organizations Class consciousness is a condition where people tend to perceive themselves in terms of their class background, and this shapes their relationships with others In cultures where class consciousness is high, the way individuals from different classes work together may be very prescribed and strained Why is social stratification important? The social stratification of a society is significant if it affects the operation of business organizations In cultures where there is a great deal of consciousness over the class of others, the way individuals from different classes work together (i.e. management and labor) may be very prescribed and strained in some cultures (i.e. Britain), or have almost no significance in others (i.e. Japan) Class consciousness is a condition where people tend to perceive themselves in terms of their class background, and this shapes their relationships with others The mobility permitted by culture affects whether individuals can move up in strata, and can limit the types of jobs and education available. In the US individuals are very mobile ("anyone can become president"), in Britain there is less mobility, and the caste system in India used to limit mobility. Despite the laws against it, the effects of the caste system in India still exist today, and are especially prevalent certain rural areas.

Religious And Ethical Systems Religion is a system of shared beliefs and rituals that are concerned with the realm of the sacred Ethical systems are a set of moral principles, or values, that are used to guide and shape behavior Religion and ethics are often closely intertwined Four religions dominate society -Christianity, Islam, Hinduism, and Buddhism Confucianism is also important in influencing behavior and culture in many parts of Asia Country Focus Islamic Capitalism in Turkey Summary This feature examines the business environment in Turkey. Turkey, a Muslim state, wants to join the European Union, a move many critics believe would not work. Discussion of the feature can revolve around the following questions: 1. Why are critics concerned about the possible entry of Turkey to the European Un ion? Do you agree? Why or why not? Discussion Points: Critics worry that Western-style capitalism and Islam do not mix. Supporters however, claim that this notion may be incorrect. They point out that Kayseri, a city in Central Turkey, is often referred to as the “Anatolian Tiger” to recognize the number of thriving multinational enterprises it has produced. Local business leaders feel that the success of the region is due in part to the entrepreneurial spirit that has emerged.

Religious And Ethical Systems Map 3.1 World Religions

Christianity Christianity is the world’s largest religion and is found throughout Europe, the Americas, and other countries settled by Europeans Perhaps the most important economic implication of Christianity is the Protestant work ethic In 1804, Max Weber suggested that it was this ethic and its focus on hard work, wealth creation, and frugality, that was the driving force of capitalism At the turn of the century Weber suggested that it was the Protestant work ethic (focus on hard work, wealth creation, and frugality) that was the driving force of capitalism. This is the most widely practiced religion in the world, approximately 20% of the world’s people identify themselves as Christians. Christianity grew out of Judaism and has monotheistic beliefs. Christianity can be subdivided into three separate organizations: The Orthodox church The Roman Catholic church Protestants which is an umbrella for several denominations Several sociologists have argued that protestants have made a significant economic impact Max Weber commented That business leaders and owners of capital, as well as the higher grades of skilled labor, and even more the higher technically and commercially trained personnel of modern enterprises, are overwhelmingly Protestant. That Protestant ethics emphasize the importance of hard work and wealth creation (for the glory of God) and frugality (abstinence from worldly pleasures). That the combination of hard work and the accumulation of capital, which could be used to finance investment and expansion, paved the way for the development of capitalism in Western Europe and subsequently in the United States.

Islam Islam, the world’s second largest religion, extends the underlying roots of Christianity to an all-embracing way of life that governs one's being In the West, Islamic fundamentalism is associated in the media with militants, terrorists, and violent upheavals, but in fact Islam teaches peace, justice, and tolerance Fundamentalists, who demand rigid commitment to religious beliefs and rituals, have gained political power in many Muslim countries, and blame the West for many social problems The key economic implication of Islam is that under Islam, people do not own property, but only act as stewards for God and thus must take care of that which they have been entrusted with, so while Islam is supportive of business, the way business is practiced is prescribed The central principle of Islam is that there is but the one true omnipotent God. Islam requires unconditional acceptance of the uniqueness, power, and authority of God and the understanding that the objective of life is to fulfill the dictates of his will in the hope of admission to paradise According to Islam, worldly gain and temporal power are an illusion. Other major principles of Islam include: Honoring and respecting parents Respecting the rights of others Being generous but not a squanderer Avoiding killing except for justifiable causes Not committing adultery Dealing justly and equitably with others Being of pure heart and mind Safeguarding the possessions of orphans Being humble and unpretentious The Koran establishes some explicit economic principles, many of which are pro-free enterprise The Koran speaks approvingly of free enterprise and of earning legitimate profit through trade and commerce (the prophet Mohammed was once a trader) The protection of the right to private property is also embedded within Islam Islam is critical of those who earn profit through the exploitation of others Given the Islamic proclivity to favor market-based systems, Muslim countries are likely to be receptive to international businesses as long as those businesses behave in a manner that is consistent with Islamic ethics.

Hinduism Hinduism, practiced primarily on the Indian sub-continent, focuses on the importance of achieving spiritual growth and development, which may require material and physical self-denial Since Hindus are valued by their spiritual rather than material achievements, there is not the same work ethic or focus on entrepreneurship found in some other religions Promotion and adding new responsibilities may not be the goal of an employee, or may be infeasible due to the employee's caste Management Focus: McDonald’s and Hindu Culture Summary This feature describes the unique challenges faced by McDonald’s in India. The cow is considered sacred in India’s Hindu culture prompting McDonald’s to alter its menu to offer mutton and chicken alternatives to its traditional beef burgers. However, the company recently made news when it was discovered that its French fries were cooked in oil that contained beef extract. Suggested Discussion Questions 1. How did McDonald’s change its product line to meet the needs of the Indian market? Does the Indian version of McDonald’s still maintain the company’s identity? Discussion Points: In response to the needs of the Indian market, McDonald’s changed its menu to include mutton and chicken products rather than the beef based products that are featured in its regular menu. Most students will probably suggest that even with the changes, the company remained true to its identity because it used names similar to traditional names to describe the new products, and built its restaurants following the traditional American style. 2. Did McDonald’s handle the revelation that its French fries contained beef extract well? What would you have done differently? Discussion Points: The lawsuit against McDonald’s over the presence of beef extract in its French fries caught the company off-guard. McDonald’s quickly acknowledged its mistake, and settled the lawsuit. The company also made a public apology and vowed to be more accurate in its food labeling in the future. However, many students will probably argue that the company failed to adequately reassure consumers in India, where angry Hindus protested in the streets. Students might suggest that the company should have responded not only to the Indians located in the United States who prompted the lawsuit, but also to the citizens of India, and other Hindu customers. Another Perspective: Students can learn more about McDonald’s India at the company’s website in India at {http://www.mcdonaldsindia.com/home.html}.

Buddhism Buddhism, which has about 350 millions followers, stresses spiritual growth and the afterlife, rather than achievement while in this world Buddhism does emphasize wealth creation, and so entrepreneurial behavior is not stressed However, because Buddhism does not support the caste system, individuals do have some mobility and can work with individuals from different classes

Confucianism Confucianism, an ideology practiced mainly in China, teaches the importance of attaining personal salvation through right action High morals, ethical conduct, and loyalty to others is central in Confucianism Three key teachings of Confucianism - loyalty, reciprocal obligations, and honesty - may all lead to a lowering of the cost of doing business in Confucian societies The close ties between Japanese auto companies and their suppliers, called keiretsus, have been an important ingredient in the Japanese success in the auto industry. They have facilitated loyalty, reciprocal obligations, and honesty. In countries where these relationships are more adversarial and not bound by these same values, the costs of doing business are probably higher.

Language Language refers to the spoken and unspoken means of communication Language is one of the defining characteristics of culture The language of a society allows it to communicate but also directs the attention of people towards certain features of the world and human interactions. A good example is how the Inuit have 24 words for snow, but no word for the overall concept. Language helps describe how different people see the world differently.

Spoken Language Countries with more than one language often have more than one culture The most widely spoken language in the world, but Chinese is the mother tongue of the largest number of people English is also becoming the language of international business, but knowledge of the local language is beneficial, and in some cases, critical for business success

Unspoken Language Unspoken language refers to nonverbal communication such as facial expressions, personal space, and hand gestures Failing to understand the nonverbal cues of another culture can lead to communication failure

Education Formal education is the medium through which individuals learn many of the language, conceptual, and mathematical skills that are indispensable in a modern society Education is important in determining a nation’s competitive advantage General education levels can also be a good index for the kinds of products that might sell in a country EduThe knowledge base, training, and educational opportunities available to a country's citizens can also give it a competitive advantage in the market and make it a more or less attractive place for expanding business It is easier to start operations in a nation with a trained workforce, than in nation where time-consuming and costly training is necessary.

Culture And The Workplace It is important for companies to understand how a society’s culture affects workplace values Management processes and practices must be adapted to culturally-determined work-related values Geert Hofstede identified four dimensions of culture: power distance, uncertainty avoidance, individualism versus collectivism, and masculinity versus femininity How does a society's culture impact on the values found in the workplace?

Culture And The Workplace Power distance focuses on how a society deals with the fact that people are unequal in physical and intellectual capabilities Individualism versus collectivism focuses on the relationship between the individual and his or her fellows Uncertainty avoidance measures the extent to which different cultures socialize their members into accepting ambiguous situations and tolerating ambiguity Masculinity versus femininity looks at the relationship between gender and work roles

Culture And The Workplace Table 3.1: Work-Related Values for 20 Selected Countries While Hofstede’s results are interesting, one should be careful about reading too much into them because: He assumes a one-to-one relationship between culture and nation-state. It seems clear that a nation can include multiple cultures. The reality of culture in the workplace is considerably more complex than Hofstede’s results would suggest. His research team was composed of Europeans and Americans. This shaped their questions as well their analysis of the answers could be shaped by their own biases. All of his respondents were from a single industry – the computer industry – and were employees of a single company, IBM!

Culture And The Workplace Hofstede later expanded his study to include a fifth dimension called Confucian dynamism which captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors

Cultural Change Culture evolves over time, although changes in value systems can be slow and painful for a society Social turmoil is an inevitable outcome of cultural change As countries become economically stronger, cultural change is particularly common For example, economic advancement is often accompanied by a shift away from collectivism towards individualism.

Implications For Managers Societies differ because their cultures vary Cultures vary because of profound differences in social structure, religion, language, education, economic philosophy, and political philosophy There are three important implications that flow from these differences: 1. There is a need to develop cross-cultural literacy 2. There is a connection between culture and national competitive advantage 3. There is a connection between culture and ethics in decision making

Cross-Cultural Literacy Cross-cultural literacy is critical to the success of international businesses Companies that are ill informed about the practices of another culture are unlikely to succeed in that culture Managers must also beware of ethnocentric behavior, or a belief in the superiority of one's own culture One of the biggest dangers for firms expanding abroad is being ill-informed. One way to bring more knowledge of the local culture into the firm is to hire local managers. Management Focus: Cross-Cultural Illiteracy Summary This feature describes the debacle resulting from the publication of a print ad depicting a helicopter hovering above a mosque with soldiers being lowered to the roof and a tag line stating “It descends from the heavens, ironically it unleashes hell…Consider it a gift from above.” The ad was commissioned by the aircraft makers, Boeing and Bell Helicopter, and was originally published in the Armed Forces Journal. The ad was seen as conveying the message that the war on terror was really a war on Islam. The two companies withdrew the ad immediately, but not before it was also printed in the National Journal. The two companies publicly apologized for the ad. Suggested Discussion Questions 1. What message was the ad trying to convey? How was the ad interpreted? Discussion Points: Students will probably agree that the ad was designed to promote the power of the helicopter, and its potential as a part of a military campaign. However, the ad backfired when people interpreted it as having religious connotations, and that it was a message that the war on terror was actually a war on Islam. 2. What lesson can companies learn from the Boeing and Bell Helicopter incident? How can companies prevent similar misunderstandings? Discussion Points: The Boeing and Bell Helicopter incident clearly demonstrates the need for companies to carefully review their promotional materials to ensure that they are not misinterpreted. To prevent mistakes like this one, companies can use techniques such as back translation. Some students may also recommend that given the fact that at least in this particular situation, the use of culturally diverse focus groups to prescreen materials could have been beneficial. Another Perspective: Students may want to explore the International Business and Etiquette web site at {http://www.international-business-etiquette.com/}. The site contains cultural information on a number of different countries.

Culture And Competitive Advantage The connection between culture and competitive advantage is important because: it suggests which countries are likely to produce the most viable competitors it has implications for the choice of countries in which to locate production facilities and do business