1. International Business
Session 3

2. Culture Language Religion
The way in which a group of people solves problems and reconciles dilemmas.
A code of attitudes, norms and values,
our way of thinking.
Determines how we see ourselves and how we see the world.
Is not right or wrong; it is not inherited, but learned.
Social Structure
Communication
Values/ Attitudes/
Beliefs

3. Artifacts and Products Norms and Values Basic Assumptions explicit
implicit

4. Cross-Cultural Proficiency is Paramount in Managerial Tasks
Developing products and services
Communicating and interacting with foreign business partners
Screening and selecting foreign distributors and other partners
Negotiating and structuring international business ventures
Interacting with current and potential customers from abroad
Preparing for overseas trade fairs and exhibitions
Preparing advertising and promotional materials

5. What are your top 10 values?
Age/seniority
Authority
Belongingness
Collectiveness
Competition
Compromise
Cooperation
Devotion
Directness
Efficiency
Equality
Independence
Family harmony
Family security
Freedom
Go-between
Group consensus
Group harmony
Independence
Indirectness
Individualism
Hospitality
Openness
Parental guidance
Patience
Quality
Self-reliance
Time

6. Priorities of Cultural Values
Table 4-1
Priorities of Cultural Values: United States, Japan, and Arab Countries
United States Japan Arab Countries
Freedom
Independence
Self-reliance
Equality
Individualism
Competition
Efficiency
Time
Directness
Openness
Belonging
Group harmony
Collectiveness
Age/seniority
Group consensus
Cooperation
Quality
Patience
Indirectness
Go-between
Family security
Family harmony
Parental guidance
Age
Authority
Compromise
Devotion
Patience
Indirectness
Hospitality
Note: “1” represents the most important cultural value, “10” the least.
Adapted from Table 4-1: Priorities of Cultural Values: United States, Japan, and Arab Countries

7. Culture as a normal distribution – bell curve

8. stereotypes

10. Mini-Quiz on Culture
At what time should you arrive for a 10:00 meeting: in USA? China? Spain?
If given a gift, should you open it: in Saudi Arabia? China?
Should you give bad news in the morning: in USA? Korea?
Is it a bad sign if you didn’t really speak about business in your first meeting: in UK? Japan?
Should you send a young executive to a meeting: in USA? Japan?

11. How to Categorize and Understand Cultures
Key Researchers:
Hofstede, Geert
Hall, Edward
Trumpenaars, Fons
Develop Frameworks for Understanding Cultures

12. Which definition do you agree with more?
A company is….
a system designed to perform functions and tasks in an efficient way. People are hired to perform these functions with the help of machines and other equipment. They are paid for the tasks they perform.
a group of people working together. They have social relations with other people and with the organization. The functioning is dependent on these relations.

13. A company is…..
… a group
… a system

14. Mini-Case
Six months after the ABC mining company had signed a long- term contract with a foreign buyer to buy bauxite in 20 annual installments, the world price of bauxite collapsed. Instead of paying $4 a ton below world market prices, the buyer now faced paying $3 above. The buyer faxed ABC to say it wished to renegotiate. The final words of the fax stated: “You cannot expect us as your new partner to carry alone the now ruinous expense of these contract terms.”

15. Options A contract is a contract. We had a deal. We won.
A contract symbolizes the underlying relationship. Where circumstances transform the mutual spirit, the terms must be renegotiated to preserve the relationship.
A contract symbolizes the underlying relationship. But such rigid terms are too brittle for turbulent environments. We need to be flexible.
A contract is a contract. Had the price risen we wouldn’t have complained. We would, however, consider a second contract who’s terms would help offset their losses.

16. Hofstede’s Five Dimensions
Social Orientation
Power Orientation
Uncertainty Orientation
Goal Orientation
Time Orientation

17. Social Orientation Individualism Collectivism
Relative importance of the
interests of the individual versus
interests of the group

18. power/authority within
Power Orientation
Power Respect Power Tolerance
Appropriateness of
power/authority within
organizations

19. Uncertainty Orientation
Uncertainty Acceptance Uncertainty Avoidance
An emotional response
to uncertainty and change

20. to achieve different goals
Goal Orientation
Aggressive Goal Behavior Passive Goal Behavior
(masculine) (feminine)
What motivates people
to achieve different goals

21. Time Orientation Long-term Outlook Short-term Outlook
The extent to which
members of a culture
adopt a long-term or a short-term
outlook on work and life

22. Other Cultural Orientations
Inner-directed vs. Outer-directed
High context vs. Low context
Neutral vs. Emotional
Achievement vs. Ascription
Achievement culture: people are accorded status based on how well they perform their jobs
Ascription culture: status is attributed based on who or what the person is

23. Synthesis of Country Clusters
Adapted from Figure 4–8: A Synthesis of Country Clusters

24. Power Distance Index

25. Individualism

26. Masculinity

27. Uncertainty Avoidance Index

28. Hofstede Results Comparison

29. Hofstede’s Dimensions