International Business Chapter 4

1. The Cultural Environment of IB
Chapter 4

2. What we learnt in Chap 3
 Overviewed participants in International Business
 Arranging those participants in value chain
 Focal firms in IB
 International entry strategies of focal firms
 Intermediaries & Facilitators in IB

3. What we will learn in Chap 4
 Nature of Cross-cultural Risk
 Characteristics of Culture
 Lenses to understand Culture
 Dimensions of Culture
 Cultural Change
 Context in IB

4. Culture
https://www.youtube.com/watch?v=BT0kzF4A-WQ&t=3s
https://www.youtube.com/watch?v=mUCODUvKbzE
https://www.youtube.com/watch?v=UdCcbT23Qkk&t=25s
Culture is a learned, shared, and enduring
orientation patterns in a society. In simple
words:
Culture is a word for people’s “way of life”
People demonstrate their culture through
values, ideas, attitudes, behaviors and
symbols

5. Essentials for Understanding Culture in IB
Culture
Cross
Cultural Risk
Characteristics of
Culture
Models and
Explanations
Managerial
Implication
IB Context
Cultural
Change
Language
Religion

6. Nature of Cross Cultural Risk

7. Nature of Cross Cultural Risk
Cross cultural mis-understanding can ruin a business deal, some
examples are of mis understanding are
1. Head Nod
2. Hand shake/Greeting
3. Card Sharing
4. Gift exchange
5. Slurping/Drinking tea
6. Eating habits

9. Orientation in Culture
- Ethnocentric Orientation: Using our own culture as the standard
for judging other cultures
- Polycentric Orientation: A host country mind set in which the
manager develops a strong affinity with the country in which
she/he conducts business
- Geocentric orientation: a global mindset in which a manager is
able to understand a business or market without regard to
country boundaries

10.  Culture can be viewed as “Collective Mental Programming” or
“Software of Mind”
 Culture captures how members of a society behave i.e. how they
eat, dress, talk and live. It also explains how they interact with
others
Characteristics of Culture

11. Culture is Not:
 Right or wrong: it is relative, there is no
cultural absolute
 Is not about individual behavior: it is a
group thing not by individual
 Not inherited: people are not born with
a culture, they take from the
environment they are brought up into.
What Culture is Not

12.  Socialization: the process of learning rules and behavioral patterns
appropriate to one’s given society
 This is not how we do it here
 Acculturation: process of adjusting and adapting to a culture other
than one’s own
 We experience this when we go abroad to live/work
 Many Dimensions of Culture:
 Culture can be seen as iceberg.
Characteristics of Culture (contd.)

14. - While studying culture,
anthropologists
encounter 2
perspectives:
- Emic
- Etic
Lenses to understand culture

15.  High & Low context Cultures
 A culture that relies on
elaborate verbal,
explanations, putting much
emphasis on spoken words
is low context culture
 A culture that emphasizes on
nonverbal messages and
views communication as a
means to promote smooth,
harmonious relationships.
Lenses to understand culture (contd.)

17.  A distinctive tradition or institution strongly associated with a
particular society.
Cultural Metaphors

18.  Culture can broadly be grouped into:
Dimensions of Culture
Subjective Dimension Objective Dimension
Values & Attitudes Symbols
Deal vs relationship orientation Material and creative production
Manners and customs
Religion
Perception of space
Perceptions of time

19.  Often described as expression or mirror of culture
 It not only been used for expression or communication but also give
insights into culture
Language

20.  Managers not only need to develop empathy and tolerance toward
cultural differences but also must acquire a sufficient degree of
factual knowledge about beliefs and values of foreign parties. Some
consideration can be:
Context in IB