1. International
Business
Fourth Edition

2. Differences in Culture
CHAPTER 3
Differences in Culture

3. Chapter Focus What is culture/ Focus on differences in:
Social structure.
Religion.
Language.
Influence of education.
Discuss cultural change.

4. What is Culture? A system of values and norms shared among a group of
people and, when
taken together,
constitute a design
for living.

5. Norms and Values Norms: Values:
Social rules and guidelines that prescribe appropriate behavior in particular situations.
Folkways:
Routine conventions of everyday life.
Mores:
Central to functioning of society and its social life.
Values:
Abstract ideas about what a group believes to be good, right, and desirable.
The bedrock of culture.
Have emotional significance.
Freedom.

6. Culture, Society and the Nation-State
Nation-States are political creations
Not a strict
one-to-one
correspondence

7. Determinants of Culture
Norms and
Value
Systems
Education
Economic
Philosophy
Political
Religion
Language
Social
Structure

8. two or more individuals
Social Structure
Mobile
Managers
Hard to
Build
Teams
Lack of
Loyalty
Entrepreneurship
Individual
Western
Lack of
Lifetime
Employment
Identity
Group
Eastern
Nonmobile
two or more individuals
with a shared sense
of identity

9. Social Stratification
Class Consciousness:
May play a role in
a firm’s operations
Typically defined by family background, occupation, and income.
Class: some social mobility
Caste:
Virtually no mobility

10. Religion
Shared beliefs and rituals concerned with the realm of the sacred.
Ethical Systems:
Moral principles or values used to guide and shape behavior.
Shapes attitudes toward work and entrepreneurship and can affect the cost of doing business.

11. World’s Religions

12. Religion and Economic Implications
Christianity
“Protestant Work Ethic” and “The Spirit of Capitalism”.
Islam
Favors market-based systems.
No payment or receipt of interest.
Hinduism
Asceticism may have an impact.
Caste system plays a role.
Buddhism
Little emphasis on entrepreneurial behavior.
Confucianism
Loyalty, reciprocal obligations, and honesty in dealings.

13. Language Allows people to communicate.
Structures the way the world is perceived.
Directs attention to certain features of the world rather than others.
Helps define culture.
Creates separatist tendencies?

14. Spoken Language

15. Nonspoken Language Nonverbal cues: eyebrows fingers/thumbs
hand gestures
feet
personal space
body gestures

16. Education For int’l business, it is a Formal education
supplements family role
in teaching values
and norms
Focus on facts of social
and political nature
of society
Obligations of
citizenship
Cultural norms such as
respect, obedience, honesty
For int’l business, it is a
determinant of national
competitive advantage
Medium to learn
language, conceptual,
and math skills
Value of personal
achievement and
competition

17. Hofstede
Study (IBM) is a general way to look at differences between cultures.
4 dimensions:
Power distance.
Individualism versus collectivism.
Uncertainty avoidance.
Masculinity versus femininity.
But:
Assumption of one-to-one relationship between culture and nation-state.
Research may be culturally bound.
Respondents worked within a single company.
Work is beginning to look dated ( ).

18. Work Related Values for Selected Countries
Table 3.1

19. Culture is Dynamic
Cultural Change

20. Culture and Competitive Advantage
The connection suggests:
Which countries are likely to be the most viable competitors.
Which countries in which to locate production facilities and do business.

21. Culture and Ethics Do the “right” thing.
Thomas Donaldson’s Three Principles:
Respect for core human values (human rights), which determine the absolute moral threshold for all business activities.
Respect for local tradition.
The belief that context matters when deciding what is right and what is wrong.