2. Sociocultural Forces McGraw-Hill/Irwin International Business, 11/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. chapter six

3. 6-3 Learning Objectives  Explain the significance of culture for international business  Identify the sociocultural components of culture  Discuss the significance of religion to businesspeople  Explain the cultural aspects of technology  Discuss the pervasiveness of the Information Technology Era

4. 6-4 Learning Objectives  Explain the importance of the ability to speak the local language  Discuss the importance of unspoken language in international business  Discuss the two classes of relationships within a society  Discuss Hofstede’s four cultural value dimensions

5. 6-5 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

6. 6-6 What is Culture The sum total of beliefs, rules, techniques, institutions, and artifacts that characterize human populations –Learned –Interrelated –Shared –Defines the boundaries

7. 6-7 Ethnocentricity –Belief in the superiority of one’s own ethnic group

8. 6-8 Living with Other Cultures Realize that there are many different cultures Learn the characteristics of those cultures –Spend a lifetime in a country –Do training program

9. 6-9 Culture Affects Business Functions Marketing –Variation in attitudes and values requires firms to use different marketing mixes P&G Japanese Camay commercials Disneyland Paris Production and Finance –Attitudes toward authority –Attitudes toward change

10. 6-10 Sociocultural Components Culture is made up of: –Aesthetics –Attitudes and beliefs –Religion –Material Culture –Language –Societal organization –Legal characteristics –Political structures

11. 6-11 Aesthetics Culture’s sense of beauty and good taste –Art conveys meaning Colors, symbols, numbers--Nike air Architectural style differences feng shui Music and Folklore –Musical tastes vary –Folklore discloses way of life Cowboys in Chile or Argentina Mexican singing cricket

12. 6-12 Attitudes and Beliefs Attitudes Toward Time –Vary across cultures –Difficult area for some Americans –Directness and drive Perceived to be rudeness –Deadlines Liability abroad

13. 6-13 Attitudes Toward Achievement and Work Germans put leisure first and work second The demonstration effect –Result of having seen others with desirable goods Job Prestige –The distinction between blue-collar workers and office employees

14. 6-14 Religion Responsible for many of the attitudes and beliefs affecting human behavior –Work Ethic Protestant work ethic –Duty to glorify God by hard work and the practice of thrift Confucian work ethic –Drive toward hard work and thrift; similar to Protestant work ethic

15. 6-15 Will this work?

16. 6-16 Material Culture –All human-made objects –concerned with how people make things (technology) and –who makes what and why (economics)

17. 6-17 Technology –Mix of usable knowledge that society applies and directs toward attainment of cultural and economic objectives

18. 6-18 Importance of Technology –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 –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 –Causes major firms to form competitive alliances

19. 6-19 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 Appropriate Technology –The technology (advanced, intermediate, or primitive) that most closely fits the society using it Boomerang Effect –Situation in which technology sold to companies in another nation is used to produce goods to compete with those of the seller of the technology.

20. 6-20 Spoken Language Most apparent cultural distinction 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

21. 6-21 Language Translation –The ability to speak the language well does not eliminate the need for translator Back Translation –To avoid translation problems Japanese hotel: “You are invited to take advantage of the chambermaid.” Bangkok dry cleaner: “Drop your trousers here for best results.”

22. 6-22 Language Issues Technical words do not exist in all languages –Usually use English Many cultures avoid saying anything disagreeable

23. 6-23 Unspoken Language Nonverbal communication –Gestures vary tremendously from one region to another –Closed doors convey different meanings –Office size has difference meanings in various cultures –Conversational distance small in East –Gift giving has specific etiquette in each culture Gift or bribe? Questionable Payments

24. 6-24 Societal Organization Kinship –Extended Family includes blood and marriage relatives –Member’s responsibility Although the extended family is large, each member’s feeling of responsibility to it is strong Associations –Social units based on age, gender, or common interest, not on kinship

25. 6-25 Societal Organization Associations –Age is important market segment criterion –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

26. 6-26 Understanding National Cultures Hofstede’s Dimensions of Culture Individualism versus Collectivism Large versus Small Power Distance Strong versus Weak Uncertainty Avoidance Masculinity versus Femininity

27. 6-27 Scores for Hofstede’s Value Dimensions

28. 6-28 Individualism versus Collectivism Collectivistic cultures –people belong to groups that are supposed to look after them in exchange for loyalty Individualistic cultures –People look after only themselves and the immediate family

29. 6-29 Large versus Small Power Distance Power distance –the extent to which members of a society accept the unequal distribution of power among individuals In large-power-distance societies – employees believe their supervisors are right; employees do not take any initiative in making non-routine decisions

30. 6-30 Strong versus Weak Uncertainty Avoidance Uncertainty avoidance –Degree to which members of a society feel threatened by ambiguity and are rule-oriented –Employees in high uncertainty-avoidance cultures tend to stay with their organizations Japan, Greece, and Portugal –Those from low uncertainty-avoidance nations are more mobile United States, Singapore, and Denmark

31. 6-31 Masculinity versus Femininity the degree to which the dominant values in a society emphasize assertiveness, acquisition of money and status –Masculinity achievement of visible and symbolic organizational rewards –Femininity emphasize relationships, concern for others, and the overall quality of life