1. © Sanjyot Dunung 2011, published by Flat World Knowledge
International Business: Opportunities and Challenges in a Flattening World, 1e By Mason Carpenter and Sanjyot P. Dunung
© Sanjyot Dunung 2011, published by Flat World Knowledge

2. © Sanjyot Dunung 2011, published by Flat World Knowledge
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3. Chapter 3 Culture and Business
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Learning Objectives
Understand what is meant by culture
Know that there are different kinds of culture
Identify several different kinds of culture
Know several methods to describe cultures
Define and apply Hofstede’s and Hall’s categories for cultural identification
Identify and discuss additional determinants of culture
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Learning Objectives
Identify the ways that culture can impact how we do business
Understand the aspects of business most impacted by culture
Define what global business ethics are, and discover how culture impacts business ethics
Learn how ethical issues impact global business
Identify how companies develop, implement, and enforce ethical standards
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What Is Culture
Culture is the beliefs, values, mind-sets, and practices of a group of people
It includes the behavior pattern and norms of that group—the rules, the assumptions, the perceptions, and the logic and reasoning that are specific to a group
It’s the collective programming of our minds from birth
It’s this collective programming that distinguishes one group of people from another
Challenge - Whenever we deal with people from another culture, we expect people to behave as we do and for the same reasons
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What Is Culture
Culture awareness - Having an understanding of another culture’s values and perspective
Understanding another culture’s mind-set and how its history, economy, and society have impacted what people think
Cross-cultural understanding: The requirement that we reorient our mind-set and, most importantly, our expectations, in order to accurately interpret the gestures, attitudes, and statements of the people we encounter from other cultures
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What Is Culture
Value: Something that we prefer over something else—whether it’s a behavior or a tangible item
Values are acquired early in life and are usually nonrational—although we may believe that ours are actually quite rational
Our values are the key building blocks of our cultural orientation
Each of us has been raised with a considerably different set of values from those of our colleagues and counterparts around the world
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What Is Culture
In coming to terms with cultural differences, we tend to employ generalizations
Generalizations can save us from sinking into what may be abstruse, esoteric aspects of a culture
Cultures and values are not static entities
They’re constantly evolving—merging, interacting, drawing apart, and reforming
Understanding what we mean by culture and what the components of culture are will help us better interpret the impact on business at both the macro and micro levels
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10. What Kinds of Culture Are There?
Nationalities
Subcultures
Organizations
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Hofstede and Values
Geert Hofstede: An influential Dutch social psychologist who studied the interactions between national cultures and organizational cultures
Value dimensions: The specific values included in Hofstede’s research. Values, in this case, are broad preferences for one state of affairs over others, and they are mostly unconscious
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13. Key Methods Used to Describe Cultures
The value dimension referring to how openly a society or culture accepts or does not accept differences between people in hierarchies in the workplace, in politics
Power Distance
The value dimension referring to people’s tendency to take care of themselves and their immediate circle of family and friends, perhaps at the expense of the overall society
Individualism
The value dimension referring to how a society views traits that are considered feminine or masculine
Masculinity
The value dimension referring to how much uncertainty a society or culture is willing to accept
Uncertainty Avoidance (UA)
The value dimension referring to whether a culture has a long-term or short-term orientation
Long-Term Orientation
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14. Figure 3.1 - The United States’ Five Value Dimensions
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Edward T. Hall
Edward T. Hall: A respected anthropologist who applied his field to the understanding of cultures and intercultural communications
Hall is best noted for three principal categories of how cultures differ: context, space, and time
High- and low-context communication: How a message is communicated
In high-context cultures, the physical context of the message carries a great deal of importance
In low-context cultures, people verbally say exactly what they mean
Space: The study of physical space and people; called proxemics, one of Hall’s principal categories on describing how cultures differ
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16. Attitudes toward Time: Polychronic versus Monochronic Cultures
Polychronic culture: A culture in which people can do several things at the same time
Monochronic culture: A culture in which people tend to do one task at a time
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Ethnocentrism
The view that a person’s own culture is central and other cultures are measured in relation to it
The challenge occurs when we feel that our cultural habits, values, and perceptions are superior to other people’s values
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19. Understanding How Culture Impacts Local Business Practices
The pace of business
Business protocol—how to physically and verbally meet and interact
Decision making and negotiating
Managing employees and projects
Propensity for risk taking
Marketing, sales, and distribution
To conduct business with people from other cultures, you must put aside preconceived notions and strive to learn about the culture of your counterpart
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20. Understanding How Culture Impacts Local Business Practices
Your understanding of culture will affect your ability to:
Enter a local market
Develop and maintain business relationships
Negotiate successful deals
Conduct sales
Conduct marketing and advertising campaigns
Engage in manufacturing and distribution
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21. Global Business Ethics
Ethics: A branch of philosophy that seeks to address questions about morality—that is, about concepts such as good and bad, right and wrong, justice, and virtue
The areas of business impacted by global perceptions of ethical, moral, and socially responsible behavior include the following:
Ethics and management
Ethics and corruption
Corporate social responsibility
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22. Corporate Social Responsibility
The corporate conscience, citizenship, social performance, or sustainable responsible business, and is a form of corporate self-regulation integrated into a business model
Corporate social responsibility encompasses what companies do with their profits and how they make them
It goes beyond philanthropy and compliance and addresses how companies manage their economic, social, and environmental impacts, their relationships in all key spheres of influence:
The workplace, the marketplace, the supply chain, the community, the public policy realm
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23. Enforcement of Ethical Guidelines and Standards
In the interest of expediency, many governments may not strictly enforce the rules governing corporate ethics
Example: The practice of gift giving
Governments do not enforce laws until it’s politically expedient to do so
Example: Child labor
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24. The Evolution of Ethics
Ethics evolves over time
Changing values, as influenced by global media, and changing perceptions and cultures will impact global ethics
The most challenging aspect is that global business does not have a single definition of “fair” or “ethical
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