International business 7e chapter 3

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International business 7e chapter 3

International business 7e chapter 3

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  • Managers must be sensitive to trends in the evolution of a culture in order to maintain their effectiveness in the workplace.
  • While culture is a characteristic of society as a whole, it shapes individual behavior by identifying appropriate and inappropriate forms of human interaction. In a sense culture is the collective programming of the mind which distinguishes the members of one human group from another.
  • Folkways are the routines conventions of everyday life, but generally have little moral significance. Examples would be dress, eating habits, and social graces. An outsider can easily be forgiven for being ignorant of a folkway. Timeliness is a good example. (One way to reinforce the understanding of this concept is to ask individuals in the class what time they would choose to arrive at a party if the party invitation specified that the party starts at 8pm. It is not uncommon for different individuals in the class to have widely varying positions on the “right” time to arrive for an 8pm party. ) Mores are serious standards of behavior. The term comes from the Latin mos (customs), and although mores are fewer in number than folkways, they are more coercive. Negative mores are taboos, usually supported by religious or philosophical sanctions. Whereas folkways guide human conduct in the more mundane areas of life, mores tend to control those aspects connected with sex, the family, or religion. Mores can vary greatly between countries: what in one country may be viewed as an innocent flirt in another may constitute a serious affront to someone's dignity or even harassment. While it is acceptable, and even expected, to consume alcohol with business associates in Japan, where evening business contacts often border on drunkenness, such actions would be disallowed in the United Arab Emirates.
  • The answer is b.
  • The answer is c.
  • While in earlier times the group was usually the family or the village, today the group may be a work team or business organization. In a social setting, Asian employees may often say they work for Sony, while a Western employee may say he/she is an electrical engineer. In Asia, the worth of an individual is more linked to the success of the group rather than individual achievement.
  • The answer is a.
  • The answer is b.
  • The class of a person may be very important in some hiring and promotion decisions, particularly in sales organizations where the person will be dealing with customers that may also come from a particular class.
  • Why is social stratification important? The social stratification of a society is significant if it affects the operation of business organizations In cultures where there is a great deal of consciousness over the class of others, the way individuals from different classes work together (i.e. management and labor) may be very prescribed and strained in some cultures (i.e. Britain), or have almost no significance in others (i.e. Japan) Class consciousness is a condition where people tend to perceive themselves in terms of their class background, and this shapes their relationships with others The mobility permitted by culture affects whether individuals can move up in strata, and can limit the types of jobs and education available. In the US individuals are very mobile ("anyone can become president"), in Britain there is less mobility, and the caste system in India used to limit mobility. Despite the laws against it, the effects of the caste system in India still exist today, and are especially prevalent certain rural areas.
  • Country Focus Islamic Capitalism in Turkey Summary This feature examines the business environment in Turkey. Turkey, a Muslim state, wants to join the European Union, a move many critics believe would not work. Discussion of the feature can revolve around the following questions: 1. Why are critics concerned about the possible entry of Turkey to the European Un ion? Do you agree? Why or why not? Discussion Points: Critics worry that Western-style capitalism and Islam do not mix. Supporters however, claim that this notion may be incorrect. They point out that Kayseri, a city in Central Turkey, is often referred to as the “Anatolian Tiger” to recognize the number of thriving multinational enterprises it has produced. Local business leaders feel that the success of the region is due in part to the entrepreneurial spirit that has emerged.
  • At the turn of the century Weber suggested that it was the Protestant work ethic (focus on hard work, wealth creation, and frugality) that was the driving force of capitalism. This is the most widely practiced religion in the world, approximately 20% of the world’s people identify themselves as Christians. Christianity grew out of Judaism and has monotheistic beliefs. Christianity can be subdivided into three separate organizations: The Orthodox church The Roman Catholic church Protestants which is an umbrella for several denominations Several sociologists have argued that protestants have made a significant economic impact Max Weber commented That business leaders and owners of capital, as well as the higher grades of skilled labor, and even more the higher technically and commercially trained personnel of modern enterprises, are overwhelmingly Protestant. That Protestant ethics emphasize the importance of hard work and wealth creation (for the glory of God) and frugality (abstinence from worldly pleasures). That the combination of hard work and the accumulation of capital, which could be used to finance investment and expansion, paved the way for the development of capitalism in Western Europe and subsequently in the United States.
  • The central principle of Islam is that there is but the one true omnipotent God. Islam requires unconditional acceptance of the uniqueness, power, and authority of God and the understanding that the objective of life is to fulfill the dictates of his will in the hope of admission to paradise According to Islam, worldly gain and temporal power are an illusion. Other major principles of Islam include: Honoring and respecting parents Respecting the rights of others Being generous but not a squanderer Avoiding killing except for justifiable causes Not committing adultery Dealing justly and equitably with others Being of pure heart and mind Safeguarding the possessions of orphans Being humble and unpretentious The Koran establishes some explicit economic principles, many of which are pro-free enterprise The Koran speaks approvingly of free enterprise and of earning legitimate profit through trade and commerce (the prophet Mohammed was once a trader) The protection of the right to private property is also embedded within Islam Islam is critical of those who earn profit through the exploitation of others Given the Islamic proclivity to favor market-based systems, Muslim countries are likely to be receptive to international businesses as long as those businesses behave in a manner that is consistent with Islamic ethics.
  • Management Focus: McDonald’s and Hindu Culture Summary This feature describes the unique challenges faced by McDonald’s in India. The cow is considered sacred in India’s Hindu culture prompting McDonald’s to alter its menu to offer mutton and chicken alternatives to its traditional beef burgers. However, the company recently made news when it was discovered that its French fries were cooked in oil that contained beef extract. Suggested Discussion Questions 1. How did McDonald’s change its product line to meet the needs of the Indian market? Does the Indian version of McDonald’s still maintain the company’s identity? Discussion Points: In response to the needs of the Indian market, McDonald’s changed its menu to include mutton and chicken products rather than the beef based products that are featured in its regular menu. Most students will probably suggest that even with the changes, the company remained true to its identity because it used names similar to traditional names to describe the new products, and built its restaurants following the traditional American style. 2. Did McDonald’s handle the revelation that its French fries contained beef extract well? What would you have done differently? Discussion Points: The lawsuit against McDonald’s over the presence of beef extract in its French fries caught the company off-guard. McDonald’s quickly acknowledged its mistake, and settled the lawsuit. The company also made a public apology and vowed to be more accurate in its food labeling in the future. However, many students will probably argue that the company failed to adequately reassure consumers in India, where angry Hindus protested in the streets. Students might suggest that the company should have responded not only to the Indians located in the United States who prompted the lawsuit, but also to the citizens of India, and other Hindu customers. Another Perspective: Students can learn more about McDonald’s India at the company’s website in India at { http://www.mcdonaldsindia.com/home.html }.
  • The close ties between Japanese auto companies and their suppliers, called keiretsus, have been an important ingredient in the Japanese success in the auto industry. They have facilitated loyalty, reciprocal obligations, and honesty. In countries where these relationships are more adversarial and not bound by these same values, the costs of doing business are probably higher.
  • The answer is c.
  • The language of a society allows it to communicate but also directs the attention of people towards certain features of the world and human interactions. A good example is how the Inuit have 24 words for snow, but no word for the overall concept. Language helps describe how different people see the world differently.
  • The answer is d.
  • EduThe knowledge base, training, and educational opportunities available to a country's citizens can also give it a competitive advantage in the market and make it a more or less attractive place for expanding business It is easier to start operations in a nation with a trained workforce, than in nation where time-consuming and costly training is necessary.
  • How does a society's culture impact on the values found in the workplace?
  • While Hofstede’s results are interesting, one should be careful about reading too much into them because: He assumes a one-to-one relationship between culture and nation-state. It seems clear that a nation can include multiple cultures. The reality of culture in the workplace is considerably more complex than Hofstede’s results would suggest. His research team was composed of Europeans and Americans. This shaped their questions as well their analysis of the answers could be shaped by their own biases. All of his respondents were from a single industry – the computer industry – and were employees of a single company, IBM!
  • The answer is a.
  • For example, economic advancement is often accompanied by a shift away from collectivism towards individualism.
  • One of the biggest dangers for firms expanding abroad is being ill-informed. One way to bring more knowledge of the local culture into the firm is to hire local managers. Management Focus: Cross-Cultural Illiteracy Summary This feature describes the debacle resulting from the publication of a print ad depicting a helicopter hovering above a mosque with soldiers being lowered to the roof and a tag line stating “It descends from the heavens, ironically it unleashes hell…Consider it a gift from above.” The ad was commissioned by the aircraft makers, Boeing and Bell Helicopter, and was originally published in the Armed Forces Journal. The ad was seen as conveying the message that the war on terror was really a war on Islam. The two companies withdrew the ad immediately, but not before it was also printed in the National Journal. The two companies publicly apologized for the ad. Suggested Discussion Questions 1. What message was the ad trying to convey? How was the ad interpreted? Discussion Points: Students will probably agree that the ad was designed to promote the power of the helicopter, and its potential as a part of a military campaign. However, the ad backfired when people interpreted it as having religious connotations, and that it was a message that the war on terror was actually a war on Islam. 2. What lesson can companies learn from the Boeing and Bell Helicopter incident? How can companies prevent similar misunderstandings? Discussion Points: The Boeing and Bell Helicopter incident clearly demonstrates the need for companies to carefully review their promotional materials to ensure that they are not misinterpreted. To prevent mistakes like this one, companies can use techniques such as back translation. Some students may also recommend that given the fact that at least in this particular situation, the use of culturally diverse focus groups to prescreen materials could have been beneficial. Another Perspective: Students may want to explore the International Business and Etiquette web site at { http://www.international-business-etiquette.com /}. The site contains cultural information on a number of different countries.

Transcript

  • 1. InternationalBusiness 7eby Charles W.L. HillMcGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
  • 2. Chapter 3Differences in Culture
  • 3. 3-3IntroductionSuccessful international managers need cross-culturalliteracy - an understanding of how cultural differencesacross and within nations can affect the way in whichbusiness is practicedA relationship may exist between culture and the costs ofdoing business in a country or region
  • 4. 3-4What Is Culture?Culture is a system of values and norms that are sharedamong a group of people and that when taken togetherconstitute a design for livingwhere-values are abstract ideas about what a group believes tobe good, right, and desirable-norms are the social rules and guidelines that prescribeappropriate behavior in particular situationsSociety refers to a group of people who share a commonset of values and norms
  • 5. 3-5Values And NormsValues provide the context within which a society’s normsare established and justified and form the bedrock of acultureNorms include folkways (the routine conventions ofeveryday life) and mores (norms that are seen as central tothe functioning of a society and to its social life)
  • 6. 3-6Classroom Performance SystemAbstract ideas about what a group believes to be good,right, and desirable are calleda) normsb) valuesc) folkwaysd) mores
  • 7. 3-7Culture, Society, And The Nation-stateThere is not a strict one-to-one relationship between asociety and a nation stateNation-states are political creations that can contain oneor more culturesSimilarly, a culture can embrace several nations
  • 8. 3-8The Determinants Of CultureThe values and norms of a culture are the evolutionaryproduct of a number of factors at work in a society includingreligion, political and economic philosophies, education,language, and social structure
  • 9. 3-9Social StructureSocial structure refers to a society’s basic socialorganizationTwo dimensions to consider:the degree to which the basic unit of social organizationis the individual, as opposed to the groupthe degree to which a society is stratified into classes orcastes
  • 10. 3-10Classroom Performance SystemThe basic social organization of a society is itsa) cultureb) social stratac) social structured) caste system
  • 11. 3-11Individuals And GroupsA group is an association of two or more people whohave a shared sense of identity and who interact with eachother in structured ways on the basis of a common set ofexpectations about each other’s behaviorSocieties differ in terms of the degree to which the groupis viewed as the primary means of social organization
  • 12. 3-12Individuals And GroupsIn many Western societies, there is a focus on theindividual, and individual achievement is commonThis contributes to the dynamism of the US economy,and high level of entrepreneurshipBut, leads to a lack of company loyalty and failure to gaincompany specific knowledge, competition betweenindividuals in a company instead of than team building, andless ability to develop a strong network of contacts within afirm
  • 13. 3-13Individuals And GroupsIn many Asian societies, the group is the primary unit ofsocial organization This may discourage job switching between firms,encourage lifetime employment systems, and lead tocooperation in solving business problemsBut, might also suppress individual creativity and initiative
  • 14. 3-14Classroom Performance SystemThe group is the primary unit of social organization ina) Japanb) the United Statesc) Switzerlandd) Mexico
  • 15. 3-15Classroom Performance SystemWhich of the following is not characteristic of individualism?a) individual achievementb) low managerial mobilityc) low company loyaltyd) entrepreneurial behavior
  • 16. 3-16Social StratificationAll societies are stratified on a hierarchical basis intosocial categories, or social strataWhile all societies are stratified to some extent, they differby:the degree of mobility between social stratathe significance attached to social strata in businesscontacts
  • 17. 3-17Social StratificationSocial mobility is the extent to which individuals canmove out of the strata into which they are bornA caste system is a closed system of stratification inwhich social position is determined by the family into whicha person is born, and change in that position is usually notpossible during an individuals lifetimeA class system is a form of open social stratification inwhich the position a person has by birth can be changedthrough his or her achievement or luck
  • 18. 3-18Social StratificationThe social stratification of a society is significant if itaffects the operation of business organizationsClass consciousness is a condition where people tend toperceive themselves in terms of their class background,and this shapes their relationships with othersIn cultures where class consciousness is high, the wayindividuals from different classes work together may bevery prescribed and strained
  • 19. 3-19Religious And Ethical SystemsReligion is a system of shared beliefs and rituals that areconcerned with the realm of the sacredEthical systems are a set of moral principles, or values,that are used to guide and shape behaviorReligion and ethics are often closely intertwinedFour religions dominate society -Christianity, Islam,Hinduism, and BuddhismConfucianism is also important in influencing behaviorand culture in many parts of Asia
  • 20. 3-20Religious And Ethical SystemsMap 3.1 World Religions
  • 21. 3-21ChristianityChristianity is the world’s largest religion and is foundthroughout Europe, the Americas, and other countriessettled by EuropeansPerhaps the most important economic implication ofChristianity is the Protestant work ethicIn 1804, Max Weber suggested that it was this ethic andits focus on hard work, wealth creation, and frugality, thatwas the driving force of capitalism
  • 22. 3-22IslamIslam, the world’s second largest religion, extends the underlyingroots of Christianity to an all-embracing way of life that governs onesbeingIn the West, Islamic fundamentalism is associated in the media withmilitants, terrorists, and violent upheavals, but in fact Islam teachespeace, justice, and toleranceFundamentalists, who demand rigid commitment to religious beliefsand rituals, have gained political power in many Muslim countries, andblame the West for many social problemsThe key economic implication of Islam is that under Islam, people donot own property, but only act as stewards for God and thus must takecare of that which they have been entrusted with, so while Islam issupportive of business, the way business is practiced is prescribed
  • 23. 3-23HinduismHinduism, practiced primarily on the Indian sub-continent,focuses on the importance of achieving spiritual growth anddevelopment, which may require material and physical self-denialSince Hindus are valued by their spiritual rather thanmaterial achievements, there is not the same work ethic orfocus on entrepreneurship found in some other religionsPromotion and adding new responsibilities may not bethe goal of an employee, or may be infeasible due to theemployees caste
  • 24. 3-24BuddhismBuddhism, which has about 350 millions followers,stresses spiritual growth and the afterlife, rather thanachievement while in this worldBuddhism does emphasize wealth creation, and soentrepreneurial behavior is not stressedHowever, because Buddhism does not support the castesystem, individuals do have some mobility and can workwith individuals from different classes
  • 25. 3-25ConfucianismConfucianism, an ideology practiced mainly in China,teaches the importance of attaining personal salvationthrough right actionHigh morals, ethical conduct, and loyalty to others iscentral in ConfucianismThree key teachings of Confucianism - loyalty, reciprocalobligations, and honesty - may all lead to a lowering of thecost of doing business in Confucian societies
  • 26. 3-26Classroom Performance SystemWhich religion promotes the notion that a moral force insociety requires the acceptance of certain responsibilitiescalled dharma?a) Islamb) Buddhismc) Hinduismd) Confucianism
  • 27. 3-27LanguageLanguage refers to the spoken and unspoken means ofcommunicationLanguage is one of the defining characteristics of culture
  • 28. 3-28Spoken LanguageCountries with more than one language often have morethan one cultureThe most widely spoken language in the world, butChinese is the mother tongue of the largest number ofpeopleEnglish is also becoming the language of internationalbusiness, but knowledge of the local language is beneficial,and in some cases, critical for business success
  • 29. 3-29Unspoken LanguageUnspoken language refers to nonverbal communicationsuch as facial expressions, personal space, and handgesturesFailing to understand the nonverbal cues of anotherculture can lead to communication failure
  • 30. 3-30Classroom Performance SystemThe most widely spoken language in the world isa) Chineseb) Spanishc) Hindid) English
  • 31. 3-31EducationFormal education is the medium through whichindividuals learn many of the language, conceptual, andmathematical skills that are indispensable in a modernsocietyEducation is important in determining a nation’scompetitive advantageGeneral education levels can also be a good index for thekinds of products that might sell in a country
  • 32. 3-32Culture And The WorkplaceIt is important for companies to understand how asociety’s culture affects workplace valuesManagement processes and practices must be adaptedto culturally-determined work-related valuesGeert Hofstede identified four dimensions of culture:power distance, uncertainty avoidance, individualismversus collectivism, and masculinity versus femininity
  • 33. 3-33Culture And The WorkplacePower distance focuses on how a society deals with thefact that people are unequal in physical and intellectualcapabilitiesIndividualism versus collectivism focuses on therelationship between the individual and his or her fellowsUncertainty avoidance measures the extent to whichdifferent cultures socialize their members into acceptingambiguous situations and tolerating ambiguityMasculinity versus femininity looks at the relationshipbetween gender and work roles
  • 34. 3-34Culture And The WorkplaceTable 3.1: Work-Related Values for 20 Selected Countries
  • 35. 3-35Culture And The WorkplaceHofstede later expanded his study to include a fifthdimension called Confucian dynamism which capturesattitudes toward time, persistence, ordering by status,protection of face, respect for tradition, and reciprocation ofgifts and favors
  • 36. 3-36Classroom Performance System_______ focuses on how society deals with the fact thatpeople are unequal in physical and intellectual capabilities.a) power distanceb) individualism versus collectivismc) uncertainty avoidanced) masculinity versus femininity
  • 37. 3-37Cultural ChangeCulture evolves over time, although changes in valuesystems can be slow and painful for a societySocial turmoil is an inevitable outcome of cultural changeAs countries become economically stronger, culturalchange is particularly common
  • 38. 3-38Implications For ManagersSocieties differ because their cultures varyCultures vary because of profound differences in socialstructure, religion, language, education, economicphilosophy, and political philosophyThere are three important implications that flow from thesedifferences:1. There is a need to develop cross-cultural literacy2. There is a connection between culture and nationalcompetitive advantage3. There is a connection between culture and ethics indecision making
  • 39. 3-39Cross-Cultural LiteracyCross-cultural literacy is critical to the success ofinternational businessesCompanies that are ill informed about the practices ofanother culture are unlikely to succeed in that cultureManagers must also beware of ethnocentric behavior, ora belief in the superiority of ones own culture
  • 40. 3-40Culture And Competitive AdvantageThe connection between culture and competitive advantageis important because:it suggests which countries are likely to produce the mostviable competitorsit has implications for the choice of countries in which tolocate production facilities and do business