1. Week 2 Objectives
Understand the significance of culture for international business
Understand the sociocultural components of culture
Appreciate the significance of religion to businesspeople
Comprehend the cultural aspects of technology
Grasp the pervasiveness of the Information Technology Era
Understand why businesspeople must follow the trends of formal education
Appreciate the importance of the ability to speak the local language
Recognize the importance of unspoken language in international business
Discuss the two classes of relationships within a society
Discuss Hofstede’s four cultural value dimensions

2. Rules of Thumb for Cross Culture Business
Be prepared
Slow down
Establish trust
Understand the importance of language
Respect the culture
Understand the components of culture
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3. What is Culture? Culture
The sum total of beliefs, rules, techniques, institutions, and artifacts that characterize human populations.
Consists of learned patterns of behavior common to the members of a given society.
The unique lifestyle of a particular group of people.
Ethnocentricity
Considering your culture superior to all others
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4. Living with Other Cultures
First, realize that there are many different cultures.
Then, learn the characteristics of those cultures.
Spend a lifetime in a country.
Undergo an extensive, highly sophisticated training program that covers the main characteristics of a culture.
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5. Culture Affects All Business Functions
Marketing
Variation in attitudes and values requires firms to use different marketing mixes
P&G Japanese Camay commercials
Disneyland Paris
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Human Resource Management
Evaluation of managers
Production and Finance
Attitudes toward authority
Attitudes toward change

6. Sociocultural Components
Components of Culture
Aesthetics
Attitudes and beliefs
Religion
Material Culture
Education
Language
Societal organization
Legal characteristics
Political structures
6-7

7. Aesthetics Art Music and Folklore
Colors, symbols, numbers convey meaning
Nike air symbol
Architectural styles different
Feng shui
Music and Folklore
Musical tastes vary
Folklore discloses way of life
Cowboys in Chile or Argentina
Mexican singing cricket
6-8

8. Attitudes and Beliefs Directness and drive Deadlines
Attitude Toward Time
Problem for Americans
Americans always prompt
Mañana attitude
Siestas
Directness and drive
Perceived to be rudeness
Deadlines
Liability in Asian cultures
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Attitudes toward Achievement and Work
“American live to work, Germans and Mexicans work to live.”
Demonstration effect
Result of having seen others with desirable goods.
Job prestige
Disdain for physical labor

9. Attitudes and Beliefs Attitude Toward Change
The American firm is accustomed to the rapid acceptance by Americans of something new.
Europeans are fond of reminding Americans that they are a young nation lacking traditions.
The more consistent a new idea is with a society’s attitudes and experiences, the more quickly it will be adopted.
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10. Religion
Responsible for many of the attitudes and beliefs affecting human behavior.
Work Ethic
Protestant work ethic
Europeans and Americans generally view work as a moral virtue and look unfavorably on the idle.
Confucian work ethic
In Asian countries, this is the same as Protestant ethic.
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11. Asian Religions Hinduism
Caste system is basis of the social division of labor.
Buddhism
Jainism
Sikhism (Indian)
Confucianism
Inseparable from Chinese culture
Taoism
Shintoism (Japan)
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12. Islam About 1.3 billion followers
This youngest faith is the second largest after Christianity (2 billion adherents).
Founder of Islam is Muhammad
Muhammad was not only the prophet of God but also the head of state.
In Muslim nations, there is no separation of church and state.
Holy Book Koran
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Five Pillars of Faith
Confession of faith
Five daily prayers
Giving charity
Ramadan fast
Pilgrimage to Mecca
Jihad – holy war
Two divisions
Sunni and Shiites
Conflict gives rise to violent clashes

13. Religious Population of the World
Insert Figure 6.1

14. Material Culture Refers to all human-made objects
Concerned with how people make things and who makes what and why.
Technology
Mix of usable knowledge that society applies and directs toward attainment of cultural and economic objectives
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15. Material Culture - Technology
Importance to International Companies
Enables a firm to be competitive in world markets.
Can be sold, or be embodied in the company’s products.
Can give a firm confidence to enter a foreign market.
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Enables the firm to obtain better than usual conditions for a foreign market investment.
Enables a company with only a minority equity position to control a joint venture.
Can change the international division of labor.
Is causing major firms to form competitive alliances.

16. Material Culture - Technology
Cultural Aspects of Technology
Includes skills in marketing, finance, and management
People not always ready to adapt to changes technology brings
Technological Dualism
The side-by-side presence of technologically advanced and technologically primitive production systems.
6-17
Appropriate Technology
Choose the technology that most closely fits the society using it
Can be labor-intensive, intermediate or capital-intensive
Bommerang Effect
Technology sold to copanies in another nation used to produce competing goods

17. Material Culture - Technology
Information Technology Era
By the year 2000 the Internet economy
Already reached $850 billion.
Exceeded the size of the automobile and truck and life insurance industries.
Consumption
Japanese wide use of automation
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18. Education Equips a person to take his or her place in adult society
Yardsticks
Literacy rate
Must verify definition used
Kinds, quality and enrollment of schools
Amount per capita spent on education
Vocationally trained groups
Study trends
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19. Educational Mix
European business schools patterned on American model because of
Increased competition in the EU
Return to Europe of American business school graduates
Establishment of American-type schools with American faculties
Trend in less developed countries to emphasize humanities, law and medicine
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20. Education
Brain Drain
The emigration of highly educated professionals to industrialized nations
Reverse Brain Drain
The return of highly educated professionals to their home countries.
Korea and Taiwan are luring home engineers and scientists
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Women’s Education
Fall in illiteracy rate
Most governments now provide education for both genders
Educated women have fewer, healthier, and better educated children
Educated women achieve higher labor force participation and wages

21. Spoken Language
Language is the key to culture, and without it, people find themselves locked out of all but a culture’s perimeter
Spoken languages demarcate cultures
Switzerland four separate cultures
Many languages can exist in a single country, but one usually serves as communication vehicle
Lingua franca or link language
English primary language of business
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22. Language Must speak the local language Still need translators
Use back translations to avoid errors
Technical words do not exist in all languages
Usually resort to English
Many cultures avoid saying anything disagreeable
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23. Unspoken Language
Nonverbal communication, such as gestures and body language.
Gestures vary tremendously from one region to another
Closed doors convey different meanings
Office size different in various cultures
Conversational distance small in East
Gift giving has specific etiquette in each culture
Gift or bribe?
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24. Questionable Payments
Necessary in some countries to obtain action from the government
Foreign Corrupt Practices Act prohibits American firms from making questionable payments
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25. Societal Organization
Kinship
Extended family
Includes blood relatives and relatives by marriage.
This is a source of employees and business connections.
Member’s responsibility
Although the extended family is large, each member’s feeling of responsibility to it is strong.
6-26
Associations
Social units based on age, gender, or common interest, not on kinship.
Age
Manufacturers of consumer goods are well aware of the importance of segmenting a market by age groups.
This segmentation often cuts across cultures.

26. Societal Organization
Associations
Gender
As nations industrialize, more women enter the job market and assume greater importance in the economy
Free association
people joined together by a common bond: political, occupational, religious or recreational
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27. Understanding National Culture
Hofstede’s Dimensions of Culture
Individualism versus Collectivism
Large versus Small Power Distance
Strong versus Weak Uncertainty Avoidance
Masculinity versus Femininity
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28. World Bank Anti-Corruption Program
We believe that an effective anticorruption strategy builds on five key elements:
1. Increasing Political Accountability 2. Strengthening Civil Society Participation 3. Creating a Competitive Private Sector 4. Institutional Restraints on Power 5. Improving Public Sector Management
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29. Business Culture in Brazil
Brazilians conduct business only through personal connections. There must also be an implicit understanding that the business relationship will be long-term.
In Brazil, people quickly move to a first-name basis. Do not, however, use first names until you are invited to do so.
Maintain steady eye contact at all times; it is considered impolite to break eye contact.
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Do not give anything that is obviously expensive. Your generosity will only cause embarrassment or be misinterpreted as a bribe.
Avoid giving items in black or purple, since these are the colors of mourning. Moreover, handkerchiefs are also associated with funerals.
Brazilians also consider themselves Americans. Consequently, don't use the phrase 'in America' when referring to the United States.

30. USAID
The ability to read and write — or literacy — is a basic skill for people to live and work in today’s world. Yet more than 900 million adults are not literate, primarily in developing countries. More than 125 million children who should be in school are not. For this reason, USAID emphasizes programs of support for basic education and places a special emphasis on improving opportunities for girls, women and other underserved and disadvantaged populations.
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31. FCPA
The FCPA covers
all entities and individuals engaging in acts within the territory of the United States in furtherance of the prohibited conduct, and it covers
U. S. citizens, resident aliens, entities established under U. S. law, and
publicly held corporations, including their officers, directors, employees, shareholders and agents, whether foreign or domestic, that are registered with the SEC as an issuer that participates in corrupt practices in any fashion outside the United States.
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32. Buddhism
As of June 2001, Buddhists in Taiwan had registered 4,037 temples, 39 seminaries, five universities, three colleges, four high schools, 45 kindergartens, 30 nurseries, five orphanages, five retirement homes, one center for the mentally retarded, 64 institutions for proselytizing, three hospitals, four clinics, 118 libraries, and 28 publishing houses with 26 publications. There were also around 9,866 Buddhist clergy serving the 5.48 million Buddhists of Taiwan.
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33. World Illiteracy Rates
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