1. International Business

2. Differences in Culture
Chapter 3
Differences
in Culture

3. How Do Cultural Differences Affect International Business?
Understanding and adapting to the local cultural is important international companies
cross-cultural literacy - an understanding of how cultural differences across and within nations can affect the way in which business is practiced
A relationship may exist between culture and the costs of doing business in a country or region
MNEs can be agents of cultural change

4. What Is Culture?
Culture - a system of values and norms that are shared among a group of people and that when taken together constitute a design for living
where
values are abstract ideas about what a group believes to be good, right, and desirable
norms are the social rules and guidelines that prescribe appropriate behavior in particular situations
Society - a group of people who share a common set of values and norms
LO 1: Explain what is meant by the culture of a society.

5. How Are Culture, Society, And The Nation-State Related?
The relationship between a society and a nation state is not strictly one-to-one
Nation-states are political creations
can contain one or more cultures
A culture can embrace several nations
the values and norms of a culture evolve over time

6. What Determines Culture?
Determinants of Culture
LO2: Identify the forces that lead to differences in social culture.

7. What Is A Social Structure?
Social structure - a society’s basic social organization
A group is an association of two or more people who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other’s behavior
individuals are involved in families, work groups, social groups, recreational groups, etc.

8. What Is Social Stratification?
All societies are stratified on a hierarchical basis into social categories, or social strata
Social mobility - the extent to which individuals can move out of the strata into which they are born
caste system
class system
The significance attached to social strata in business contacts
class consciousness
LO2: Identify the forces that lead to differences in social culture.
LO3: Identify the business and economic implications of differences in culture.

9. How Do Religious And Ethical Systems Differ?
Religion - shared beliefs and rituals that are concerned with the realm of the sacred
Christianity
Islam
Hinduism
Buddhism
5. Confucianism influences behavior and culture
Ethical systems - a set of moral principles, or values, that are used to guide and shape behavior
LO2: Identify the forces that lead to differences in social culture.
LO3: Identify the business and economic implications of differences in culture.

10. What Is The Role Of Language In Culture?
Language - the spoken and unspoken (nonverbal communication such as facial expressions, personal space, and hand gestures) means of communication
Chinese is the mother tongue of the largest number of people
English is the most widely spoken language in the world and is also becoming the language of international business
but, knowledge of the local language is still beneficial, and in some cases, critical for business success
failing to understand the nonverbal cues of another culture can lead to communication failure
LO2: Identify the forces that lead to differences in social culture.

11. What Is The Role Of Education In Culture?
Formal education is the medium through which individuals learn many of the language, conceptual, and mathematical skills that are indispensable in a modern society
important in determining a nation’s competitive advantage
Japan’s postwar success can be linked to its excellent education system
general education levels can be a good index for the kinds of products that might sell in a country
ex. impact of literacy rates
LO2: Identify the forces that lead to differences in social culture.

12. How Does Culture Impact The Workplace?
Hofstede’s dimensions of culture:
Power distance - how a society deals with the fact that people are unequal in physical and intellectual capabilities
Uncertainty avoidance - the relationship between the individual and his fellows
Individualism versus collectivism - the extent to which different cultures socialize their members into accepting ambiguous situations and tolerating ambiguity
Masculinity versus femininity -the relationship between gender and work roles
LO4: Recognize how differences in social culture influences values in the workplace.

13. How Does Culture Impact The Workplace?
Work-Related Values for 20 Countries

14. How Does Culture Impact The Workplace?
Hofstede later expanded added a fifth dimension called Confucian dynamism or long-term orientation
captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors
Japan, Hong Kong, and Thailand scored high on this dimension
the U.S. and Canada scored low

15. Does Culture Change? Culture evolves over time
changes in value systems can be slow and painful for a society
Social turmoil - an inevitable outcome of cultural change
as countries become economically stronger, cultural change is particularly common
economic progress encourages a shift from collectivism to individualism
globalization also brings cultural change

16. What Do Cultural Differences Mean For Managers?
It is important to develop cross-cultural literacy
companies that are ill informed about the practices of another culture are unlikely to succeed in that culture
There is a connection between culture and national competitive advantage
suggests which countries are likely to produce the most viable competitors
has implications for the choice of countries in which to locate production facilities and do business
LO5: Demonstrate an appreciation for the economic and business implications of cultural change.