The Cultural Environment: Diversity and globalization THE INTERNATIONAL BUSINESS ENVIRONMENT DR(PROF) M AMBASHANKAR 1

WHAT IS CULTURE? ‘learned, shared…set of symbols whose meanings provide a set of orientations for members of a society’ (Terpstra and David, 1991) Includes: - values and beliefs, - all forms of communication - norms of behaviour - customs - art, music, literature, sport DR(PROF) M AMBASHANKAR 2

HOW IS CULTURE RELEVANT TO BUSINESS? National culture – a society’s shared language, religion, history and identity National culture exerts a strong influence – we acquire basic values in childhood Diversity of national cultures is a key factor for businesses to understand in the international environment. Ethnocentrism vs polycentrism: relating to the world in terms of your own culture vs being open to other people’s cultures DR(PROF) M AMBASHANKAR 3

LANGUAGES Low-context culture - clear, direct communication, characteristic of the US High-context culture - importance of relationships and indirect communication, characteristic of Asian cultures Sources of linguistic diversity: indigenous cultures, colonialism, immigration Is English the global language? DR(PROF) M AMBASHANKAR 4

Web content by language Dr(Prof) M Ambashankar5

Growth of major world religions Dr(Prof) M Ambashankar6

IMPACT OF RELIGION ON BUSINESS LIFE Religious laws which impact on business contracts and employment laws Role of women Food and drink restrictions Requirements for prayer and religious observance Restrictions on media, e.g. output deemed to conflict with predominant religion Restrictions on trading hours DR(PROF) M AMBASHANKAR 7

MULTI-CULTURAL SOCIETIES Assimilation – Immigrants adopt the culture and language of their new society (example: France) Melting pot – Society evolves its own identity and culture, based on a mixture of the different cultures which formed it (examples: ‘settler’ societies of the US and Australia) Cultural pluralism – Immigrants and indigenous peoples form subcultures which remain distinct - becoming more common (examples: UK and possibly US at present) DR(PROF) M AMBASHANKAR 8

Hofstede Theory based on cultural dimensions of national culture: Power distance Uncertainty avoidance Individualism v collectivism Masculinity v femininity Long-term v short-term orientation Trompenaars Theory based on five relationship orientations: Universalism v particularism Individualism v collectivism Neutral v emotional Specific v diffuse Achievement v ascription CULTURE THEORIES DR(PROF) M AMBASHANKAR 9

ORGANIZATIONAL OR CORPORATE CULTURE Dominant values, such as high product quality and customer orientation Norms of behaviour among staff and between the organization and other firms Preference for formal or informal means of communication Degree of empowerment of employees DR(PROF) M AMBASHANKAR 10

CULTURE CHANGE Affects individuals, organizations and whole societies Factors leading to change: - Industrialization – transition from agricultural to industrial society - Capitalist development – the ‘Protestant’ work ethic (based on individualism); but Asian societies, where a ‘Confucian’ ethic exists, have pursued different path - Material well-being and prosperity - Changes in the nature of work DR(PROF) M AMBASHANKAR 11

CULTURAL GLOBALIZATION: MYTH OR REALITY? Theorists such as Ohmae have predicted the fading away of cultural differences as consumer markets become globalized. However, in markets for consumer products and entertainment, successful global companies find that local diversity calls for different strategies. Although most web content is in English, multilingual websites reach more consumers. DR(PROF) M AMBASHANKAR 12

Online language populations – percentages of those accessing the internet in major languages DR(PROF) M AMBASHANKAR 13

CONCLUDING SUMMARY AND QUESTIONS Culture refers to a society’s values, norms, language and shared history, which impact on differing markets for consumer products and ways in which businesses operate. Most states are multi-cultural. Individuals, organizations and societies undergo cultural changes over time. Are there ‘core’ values which may remain constant despite economic changes? The Internet has facilitated a more connected-up world, but not as yet cultural globalization. DR(PROF) M AMBASHANKAR 14