1. © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
chapter
Differences in Culture
McGraw-Hill/Irwin
Global Business Today, 5e
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

2. Differences in Culture
Culture, Society, and the Nation-State
A society can be defined as a group of people that share a common set of values and norms; that is, a group bound together by a common culture
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

3. What is Culture?
Culture is defined as an integrated system of learned behavior patterns that are characteristic of the members of any given society.
Context Orientation in Major Cultures

4. Elements of Culture CONCRETE ELEMENTS Language ABSTRACT ELEMENTS
Verbal
Nonverbal
Infrastructure
Education
Social Institutions
ABSTRACT ELEMENTS
Religion
Values and attitudes (norms)
Manners and customs
Aesthetics

5. Concrete Elements of Culture
LANGUAGE
Language, has been described as the mirror of culture; both spoken and unspoken, is one of the defining characteristics of culture.
Spoken Language
While English is the language of international business, knowledge of the local language is beneficial, and in some cases, critical for business success. Backtranslation could be a useful tool to identify errors in translation.
Nonverbal Language
Unspoken language such as facial expressions and hand gestures can be important for communication. This kind of language encompasses nonverbal actions and behaviors that reveal hidden clues to culture. Misunderstandings are common

6. Concrete Elements of Culture
Top Ten World Languages
Convey messages through spoken word and nonverbal gestures, body position and eye contact.
Approx. # of Speakers (in millions)
Aides information gathering and evaluation.
Provides local society access.
Reduces risk of errors.
Extends beyond the mechanics of communication in accurate interpretation of cultural contexts.
SOURCE: Adapted from Raymond G. Gordon, Ethnologue, 13th ed. (Summer Institute of Linguistics, Inc.:1996), accessed from downloaded January 30, 2008

7. Concrete Elements of Culture Infrastructure
Economic Infrastructure (transportation, energy & communication systems in a country.
Social Infraestructure
Refers to housing. health, educational and other social systems.
Financial and Marketing Infrastructure
Banks, marketing research firms.

8. Concrete Elements of Culture
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. The 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.

9. Concrete Elements of Culture
Culture, Society, and the Nation-State
Social institutions affect the ways people relate to one another. A society can be defined as a group of people that share a common set of values and norms; that is, a group bound together by a common culture
Social Stratification occurs by the division of a particular population into classes.

10. Differences in Culture
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

11. Concrete Elements of Culture.
Reference Groups
A group such as the family, co-workers, and professional and trade associations, that provides the values and attitudes that influence and shape behavior, including consumer behavior. (The Chinese emphasis on guanxi or personal relationships).

12. Abstract Elements of Culture
Religion is a system of shared beliefs and rituals that are concerned with the realm of the sacred. The religions with the greatest following are Christianity, Islam, Hinduism, and Buddhism. Confucianism influences behavior and shapes culture in many parts of Asia. Ethical systems are a set of moral principles, or values, that are used to guide and shape behavior. The ethical practices of individuals within a culture are often closely intertwined with their religion.

13. Religion
Has an impact on international marketing that is seen in a culture’s values and attitudes toward entrepreneurship, consumption, and social organization.

14. Abstract Elements of Culture
Christianity
Christianity with more than 2 billion people is the largest religion and is common throughout Europe, the Americas, and other countries settled by Europeans
Economic Implications of Christianity:
The Protestant Work Ethic
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

15. Abstract Elements of Culture
Islam
With more than 1.2 billion followers, Islam extends the underlying roots of Christianity to an all-embracing way of life that governs one's being.
Islamic Fundamentalism
In the West, Islamic fundamentalism is associated in the media with militants, terrorists, and violent upheavals. However, the vast majority of Muslims point out that Islam teaches peace, justice, and tolerance. Fundamentalists have gained political power in many Muslim countries, and have tried to make Islamic law the law of the land.
Economic Implications of Islam
In 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. While Islam is supportive of business, the way business is practiced is prescribed.
Country Focus: Islamic Banking in Pakistan
Summary
This feature focuses on changes in the Pakistani banking system as the country adopts Islamic banking methods. Because Islamic banks cannot pay or charge interest, they must find an alternate means of making money. Currently, Pakistan’s banks are experimenting with two different Islamic banking methods, the mudarabah (a contract similar to a profit-sharing scheme), and the murabaha (a contract that involves a mark-up that is paid directly to the bank).
Suggested Discussion Questions
1. Describe the basic difference between Islamic banking and conventional Western banking. Compare and contrast the two Islamic banking methods that are being considered by Pakistan’s banks. Which method is more likely to be adopted? Explain your answer.
2. Discuss the transition process from conventional Western banking to the Islamic system. What challenges should banks be prepared for?

16. Abstract Elements of Culture
Hinduism
With 860 million followers, Hinduism is 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
Economic Implications of Hinduism
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?
2. Did McDonald’s handle the revelation that its French fries contained beef extract well? What would you have done differently?

17. Abstract Elements of Culture
Buddhism
With 360 million followers, Buddhists stress spiritual growth and the afterlife, rather than achievement while in this world
Buddhism, practiced mainly in South East Asia, does not support the caste system, however, so individuals do have some mobility and can work with individuals from different classes

18. Abstract Elements of Culture
Confucianism
With over 150 million followers, Confucianism is practiced mainly in China, teaches the importance of attaining personal salvation through right action.
The need for high moral and ethical conduct and loyalty to others is central in Confucianism
Economic Implications of 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

19. Abstract Elements of Culture
The religion with the largest following in the world is
Christianity
Islam
Hinduism
Buddhism

20. Abstract Elements of Culture
The fundamental building blocks of culture are values shared beliefs of group norms that have been internalized by individuals. (abstract ideas about what a group believes to be good, right, and desirable) and attitudes or norms are evaluations of alternatives based on these values. (The social rules and guidelines that prescribe appropriate behavior in particular situations) The term society refers to a group of people who share a common set of values and norms.

21. Abstract Elements of Culture
Manners and Customs
Religion
Values
Attitudes
Manners and Customs provide clues to culture and are influenced by religion, values and attitudes.

22. Differences in Culture
The extent to which an individual can move out of the social strata into which they are born is called
Social stratification
Class mobility
Social mobility
Caste system

23. Differences in Culture
Aesthetics or 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.

24. Differences in Culture
Geert Hofstede isolated four dimensions that he claimed summarized different cultures:
Power Distance is focused on how a society deals with the fact that people are unequal in physical and intellectual capabilities
Individualism Versus Collectivism is focused 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

25. Understanding Cultural Differences
Four Dimensions of Culture
Individualism
Power distance
Uncertainty avoidance
Masculinity

26. Differences in Culture
Formal training Programs
Individuals and firms must develop cross-cultural literacy
International businesses that are ill informed about the practices of another culture are unlikely to succeed in that culture
Individuals must also beware of ethnocentric behavior, or a belief in the superiority of one's own culture
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 originally was 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?
2. What lesson can companies learn from the Boeing and Bell Helicopter incident? How can companies prevent similar misunderstandings?

27. Gaining Cultural Knowledge
GMAC Global
Cultural knowledge is:
factual
experiential
Increased cultural sensitivity training and formal training programs help to avert culture shock.