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IAF605 Week 2


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IAF605 Week 2 - The Cultural Environment Facing Business

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IAF605 Week 2

  1. 1. IAF 605 - International Business Management Week 2 The Cultural Environment Facing Business
  2. 2. Agenda
  3. 3. Review 3 Types of Int’l Organizations Modes of Operation 7 Factors - Increased Globalization 3 Criticisms of Globalization Reasons That Firms Engage in International Business
  4. 4. Does International Business Lead to Cultural Imperialism?
  5. 5. Chapter Objectives <ul><li>To understand methods for learning about cultural environments </li></ul><ul><li>To analyze the major causes of cultural difference and change </li></ul><ul><li>To discuss behavioral factors influencing countries’ business practices </li></ul><ul><li>To understand cultural guidelines for companies that operate internationally </li></ul>
  6. 6. Cultural Factors affecting International Business Operations (page 49)
  7. 7. Businesses involve people! <ul><li>Culture refers to learned norms based on the values, attitudes, and beliefs of a group of people </li></ul><ul><li>Cultural diversity | Cultural collision | Sensitivity and Adjustment </li></ul>
  8. 8. Cultural Awareness
  9. 9. The Nation as a Point of Reference <ul><li>National boundaries act as proxy for culture </li></ul><ul><li>Not everyone in a country shares the same culture </li></ul><ul><li>Certain cultural attributes may link groups from different nations more closely than certain groups within nations </li></ul>
  10. 10. Cultural values are set early in life but change can occur CHOICE IMPOSITION
  11. 11. Language as a Cultural Diffuser and Stabilizer <ul><li>people from different areas speak the same language - culture spreads more easily </li></ul><ul><li>common language - commerce is easier </li></ul><ul><li>isolation from other groups, especially because of language, tends to stabilize cultures </li></ul><ul><li>Some countries regulate the inclusion of foreign words and/or mandate the use of the country’s official language for business purposes. WHY? </li></ul>
  12. 12. Religion as a Cultural Stabilizer <ul><li>Centuries of profound religious influence continue to play a major role in shaping cultural values </li></ul><ul><li>Many religions influence specific beliefs that may affect business </li></ul>
  13. 13. Issues in Social Stratification
  14. 14. Issues in Work Motivation Source:
  15. 15. The Hierarchy of Needs vs. The Need Hierarchy (page 62)
  16. 16. Factors Affecting Relationship Preferences <ul><li>Power distance: general relationship between superiors and subordinates </li></ul><ul><li>Individualism vs. Collectivism: degree of dependence on organization </li></ul><ul><li>Family </li></ul>
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  18. 18. Factors Affecting Risk-taking Behavior <ul><li>Uncertainty Avoidance, Trust, Future Orientation and Fatalism </li></ul>
  19. 19. Factors Affecting Information and Task Processing <ul><li>Perception of cues </li></ul><ul><li>Obtaining Information: Low -Context versus High -Context Cultures </li></ul><ul><li>Information Processing </li></ul><ul><li>Mono chronic versus Poly chronic </li></ul><ul><li>Idealism versus Pragmatism </li></ul>
  20. 20.
  21. 21. Factors Affecting the Communication Process <ul><li>Spoken and 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 and punctuality </li></ul><ul><li>body language and gestures </li></ul><ul><li>prestige </li></ul>
  22. 22.
  23. 23. Dealing with Cultural Differences <ul><li>Host Society Acceptance /Accommodation </li></ul><ul><li>Cultural distance </li></ul><ul><li>Cultural friction </li></ul><ul><li>Culture shock </li></ul><ul><li>Company and Management orientations </li></ul><ul><li>poly centric | ethno centric | geo centric </li></ul>
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  25. 25. Strategies for Instituting Cultural Change
  26. 26. Image source:
  27. 27. Concerns about Charles Martin
  28. 28. Potential problems
  29. 29. Questions
  30. 30. Homework read Chapter 3 work on Group presentation