1. Copyright © 2011 Pearson Education 2-1 International Business Environments and Operations, 13/e Global Edition Part Two Comparative Environmental Frameworks

2. Copyright © 2011 Pearson Education 2-2 Chapter Two The Cultural Environments Facing Business

3. Copyright © 2011 Pearson Education 2-3 Chapter Objectives To understand methods for learning about cultural environments To analyze the major causes of cultural difference and change To discuss behavioral factors influencing countries’ business practices To understand cultural guidelines for companies that operate internationally

4. Copyright © 2011 Pearson Education 2-4 Culture Learned norms based on values, attitudes, and beliefs of a group of people

5. Copyright © 2011 Pearson Education 2-5 Cultural Diversity A means of gaining global competitive advantage by bringing together people of diverse backgrounds and experience

6. Copyright © 2011 Pearson Education 2-6 Cultural Collision Occurs in international business when:  A company implements practices that are less effective  Employees encounter distress because of difficulty in accepting or adjusting to foreign behaviors

7. Copyright © 2011 Pearson Education 2-7 Cultural Factors Affecting International Business Operations

8. Copyright © 2011 Pearson Education 2-8 Cultural Awareness Problem areas that can hinder managers’ cultural awareness…  Subconscious reactions to circumstances  The assumption that all societal subgroups are similar

9. Copyright © 2011 Pearson Education 2-9 The Idea of a “Nation” – Delineating Cultures The nation is a useful definition of society because: Similarity among people is a cause and an effect of national boundaries Laws apply primarily along national lines

10. Copyright © 2011 Pearson Education 2-10 The Nation as a Cultural Mediator A national culture must be flexible enough to accommodate the diversity of various subcultures, ethnic groups, races, and classes Yet every nation boasts certain human, demographic, and behavioral characteristics that constitute its national identity

11. Copyright © 2011 Pearson Education 2-11 Country-By-Country Analysis Managers find this difficult to implement because:  Subcultures exist within nations  Similarities link groups from different countries

12. Copyright © 2011 Pearson Education 2-12 How Cultures Form and Change Change by Choice  Reaction to social and economic situations Change by Imposition  Imposed introduction into a culture of certain elements from an alien culture

13. Copyright © 2011 Pearson Education 2-13 Language as Both a Diffuser and Stabilizer of Culture A common language within a country is a unifying force

14. Copyright © 2011 Pearson Education 2-14 Major Language Groups: Population and Output

15. Copyright © 2011 Pearson Education 2-15 Religion As A Cultural Stabilizer Centuries of profound religious influence continue to play a major role in shaping cultural values and behavior

16. Copyright © 2011 Pearson Education 2-16 Behavioral Practices Affecting Business Issues in Social Stratification  Social ranking is determined by: Factors pertaining to you as an individual Factors pertaining to your affiliation with certain groups

17. Copyright © 2011 Pearson Education 2-17 Group Affiliations Can Be: Ascribed or Acquired  Include those based on gender, family, age, caste, ethnic, racial, or national origin A reflection of class and status  Include those based on religion, political affiliation, and professional and other associations

18. Copyright © 2011 Pearson Education 2-18 Social Stratification and Employment Practices Performance Orientation Open and Closed Societies Gender-Based Groups Age-Based Groups Family-Based Groups

19. Copyright © 2011 Pearson Education 2-19 Work Motivation Materialism and Motivation Expectation of Success and Reward Performance and Achievement: The Masculinity- Femininity Index Hierarchies of Needs

20. Copyright © 2011 Pearson Education 2-20 Hierarchy of Needs

21. Copyright © 2011 Pearson Education 2-21 Relationship Preferences Power Distance Individualism Versus Collectivism

22. Copyright © 2011 Pearson Education 2-22 Risk-Taking Behavior Uncertainty Avoidance Trust Future Orientation Fatalism

23. Copyright © 2011 Pearson Education 2-23 Information and Task Processing Perception of Cues Obtaining Information: Low Context versus High Context Cultures Information Processing Monochronic Versus Polychronic Cultures Idealism Versus Pragmatism

24. Copyright © 2011 Pearson Education 2-24 Communication Spoken and Written Language Silent Language Distance Time and Punctuality Body Language Prestige

25. Copyright © 2011 Pearson Education 2-25 Body Language Is Not A Universal Language

26. Copyright © 2011 Pearson Education 2-26 Degree of Cultural Differences Cultural Distance When a company moves within a cluster of culturally similar countries, it should expect to encounter fewer cultural differences and to face fewer cultural adjustments. Cultural Friction A business interaction may be viewed negatively because of possible changes in power relationships and the sovereignty that sets countries apart.

27. Copyright © 2011 Pearson Education 2-27 Company and Management Orientations Polycentrism  belief that business units in different countries should act like local companies Ethnocentrism  conviction that one’s own culture is superior to that of other countries Geocentrism  requires companies to balance knowledge of their own organizational cultures with both home and host country needs, capabilities, and constraints

28. Copyright © 2011 Pearson Education 2-28 Strategies for Instituting Change Value Systems Cost-Benefit Analysis of change Resistance to too much change Participation Reward Sharing Opinion Leadership Timing Learning Abroad

29. Copyright © 2011 Pearson Education 2-29 Future: What will happen to national cultures? Scenario 1.  New hybrid cultures will develop and personal horizons will broaden Scenario 2.  Outward expressions of national culture will continue to become homogeneous while distinct values will remain stable Scenario 3.  Nationalism will continue to reinforce cultural identity Scenario 4.  Existing national borders will shift to accommodate ethnic differences

30. Copyright © 2011 Pearson Education 2-30 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.