Ib, Chapter#02


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International Business by Daniels

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Ib, Chapter#02

  1. 1. PART TWO COMPARATIVE ENVIRONMENTAL FRAMEWORKS International Business Chapter Two The Cultural Environments Facing Business
  2. 2. Chapter Objectives <ul><li>To understand the major causes of cultural differences and change </li></ul><ul><li>To grasp behavioral factors influencing countries’ business practices </li></ul><ul><li>To become familiar with cultural guidelines for companies that operate internationally </li></ul><ul><li>To learn to discuss the problems and methods of learning about cultural environments </li></ul>
  3. 3. Culture Defined <ul><li>Culture: the specific learned norms of a society that reflect attitudes, values, and beliefs </li></ul><ul><li>Major problems of cultural collision are likely to occur if: </li></ul><ul><li>-a firm implements practices that do not reflect local customs and values and/or </li></ul><ul><li>-employees are unable to accept or adjust </li></ul><ul><li> to foreign customs . </li></ul>
  4. 4. Fig. 2.1: Cultural Influences on International Business
  5. 5. Cultural Dynamics <ul><li>Cultures consist of societies , i.e., relatively homogeneous groups of people, who share attitudes, values, beliefs, and customs. </li></ul><ul><li>Cultures are dynamic; they evolve over time. </li></ul><ul><li>Cultural value systems are set early in life, but may change because of: </li></ul><ul><li>-choice or imposition </li></ul><ul><li>-contact with other cultures. </li></ul>
  6. 6. The Nation as a Point of Reference <ul><li>The basic similarity amongst people within countries is both a cause and an effect of national boundaries. </li></ul><ul><li>National identity is perpetuated through the rites and symbols of a country and a common perception of history. </li></ul><ul><li>Subcultures may link groups from different nations more closely than certain groups within nations. </li></ul>
  7. 7. Cultural Formation and Change <ul><li>Societal values and customs constantly evolve in response to changing realities. </li></ul><ul><li>Cultural imperialism is brought about by the imposition of one culture upon that of another. </li></ul><ul><li>Certain elements introduced from outside a culture may be known as creolization, indigenization, or cultural diffusion. </li></ul>
  8. 8. Language as a Cultural Stabilizer <ul><li>Isolation from other groups, especially because of language, tends to stabilize cultures. </li></ul><ul><li>Some countries see language as being so important that they regulate the inclusion of foreign words and/or mandate the use of the country’s official language for business purposes. </li></ul>
  9. 9. Social Stratification Systems <ul><li>Ascribed group memberships are defined at birth; they may include gender, family, age, caste, and ethnic or national origin. </li></ul><ul><li>Acquired group memberships are based on one’s choice of affiliation, such as political party, religion, and social and professional organizations. </li></ul><ul><li>Social stratification affects both business strategy and operational practices. </li></ul>
  10. 10. Factors Affecting Work Ethics <ul><li>The desire for material wealth vs. the desire for leisure ( Protestant Ethic) </li></ul><ul><li>The expectation of success and reward </li></ul><ul><li>Assertiveness ( Hofstede’s m asculinity vs. femininity index) </li></ul><ul><li>Needs satisfaction (Maslow’s Hierarchy) </li></ul><ul><li>Motivated employees are normally more productive, and higher productivity leads to lower costs . </li></ul>
  11. 11. Factors Affecting Relationship Preferences <ul><li>Power distance , i.e., the psychological and social distance between superiors and subordinates </li></ul><ul><li>Individualism vs. collectivism </li></ul><ul><ul><li>Individualism represents a desire for personal freedom, time, and challenge. </li></ul></ul><ul><ul><li>Collectivism represents a dependence on the organization as well as a need for a safe environment. </li></ul></ul>
  12. 12. Factors Affecting Risk-taking Behavior <ul><li>Uncertainty avoidance, i.e., one’s tolerance </li></ul><ul><li>of risk </li></ul><ul><li>Trust , i.e., one’s belief in the reliability and honesty of another </li></ul><ul><li>Future orientation , i.e., the need for immediate vs. delayed gratification </li></ul><ul><li>Fatalism , i.e., the belief that life is pre-destined, that events are “the will of God” </li></ul>
  13. 13. Factors Affecting Information and Task Processing <ul><li>Selective perception of cues </li></ul><ul><li>Communication context </li></ul><ul><li>- low-context cultures [explicit] </li></ul><ul><li>- high-context cultures [implicit] </li></ul><ul><li>• Information processing </li></ul><ul><li>- monochronic [work sequentially] </li></ul><ul><li>-polychronic [multi-task] </li></ul><ul><li>Whereas idealistic cultures are principle driven, pragmatic cultures are detail driven. </li></ul>
  14. 14. Factors Affecting the Communication Process <ul><li>Spoken language </li></ul><ul><li>Written language </li></ul><ul><li>Silent language </li></ul><ul><li>-color associations </li></ul><ul><li>-conversational distance </li></ul><ul><li>-perception of time </li></ul><ul><li>-kinesics [body language and gestures] </li></ul><ul><li>Problems in communication may arise, even </li></ul><ul><li>when nations share the same basic language </li></ul><ul><li>(e.g., British, Canadian, and American English). </li></ul>
  15. 15. Factors Affecting Strategies for Instituting Cultural Change <ul><li>Value systems </li></ul><ul><li>Cost/benefits of change </li></ul><ul><li>Resistance to change </li></ul><ul><li>Participation in decision-making </li></ul><ul><li>Reward sharing </li></ul><ul><li>Role of opinion leaders </li></ul><ul><li>Timing </li></ul><ul><li>Opportunities to learn from abroad </li></ul>
  16. 16. Implications/Conclusions <ul><li>Culture is dynamic and evolves over time. Economic development and globalization are two engines of cultural change. </li></ul><ul><li>In addition to being part of a national culture, people are simultaneously part of other cultures, such as social and professional associations and business and government organizations. [continued] </li></ul>
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