International cultural-environment

Chapter 7: International CulturalChapter 7: International Cultural
EnvironmentEnvironment
International BusinessInternational Business
Ranjani SrinivasanRanjani Srinivasan
1

INTERNATIONALINTERNATIONAL
CULTURAL ENVIRONMENTCULTURAL ENVIRONMENT
Chapter 7

Learning ObjectivesLearning Objectives
 To understand the significance of culture inTo understand the significance of culture in
international business decisionsinternational business decisions
 To elucidate the concept of culture and itsTo elucidate the concept of culture and its
constituentsconstituents
 To explain comparisons of cross-culturalTo explain comparisons of cross-cultural
behaviourbehaviour
 To discuss cultural orientation in internationalTo discuss cultural orientation in international
businessbusiness
 To appreciateTo appreciate emicemic versusversus eticetic dilemma and itsdilemma and its
operationalizationoperationalization

Significance of CultureSignificance of Culture
A firm operating internationally comesA firm operating internationally comes
across a wide range of diverse culturalacross a wide range of diverse cultural
environments, which significantly influenceenvironments, which significantly influence
international business decisions. Managersinternational business decisions. Managers
operating internationally need to appreciateoperating internationally need to appreciate
the differences among cultural behaviours ofthe differences among cultural behaviours of
their business partners and consumerstheir business partners and consumers
across various countries.across various countries.

Copyright @ Oxford University PressCopyright @ Oxford University Press
International Business R. M. JoshiInternational Business R. M. Joshi
Self Reference Criterion (SRC)Self Reference Criterion (SRC)
An unconscious reference to one’s own culturalAn unconscious reference to one’s own cultural
values, experiences, and knowledge as a basisvalues, experiences, and knowledge as a basis
for decision-making. SRC significantly influencesfor decision-making. SRC significantly influences
ability of international managers to objectivelyability of international managers to objectively
evaluate environmental factors and makeevaluate environmental factors and make
business decision.business decision.

Approach to Eliminate SRCApproach to Eliminate SRC
Step 1:Step 1:Define the business problem or goal inDefine the business problem or goal in
home-country traits, habits, or norms.home-country traits, habits, or norms.
Step 2:Step 2:Define the business problem or goal inDefine the business problem or goal in
foreignforeign country cultural traits, habits, orcountry cultural traits, habits, or
norms. Make no value judgments.norms. Make no value judgments.
Step 3:Step 3:Isolate the SRC influence in the problemIsolate the SRC influence in the problem
and examine it carefully to see how itand examine it carefully to see how it
complicates the problem.complicates the problem.
Step 4:Step 4:Redefine the problem without the SRCRedefine the problem without the SRC
influence andinfluence and solve for the optimum businesssolve for the optimum business
goal situation.goal situation.

The Concept of CultureThe Concept of Culture
Culture is the way of life of people, includingCulture is the way of life of people, including
their attitudes, values, beliefs, arts, sciences,their attitudes, values, beliefs, arts, sciences,
modes of perception, and habits of thought andmodes of perception, and habits of thought and
activity. Cultiral differences across the countriesactivity. Cultiral differences across the countries
significantly influence business decisions.significantly influence business decisions.

Constituents of CultureConstituents of Culture
A variety of learned traits that influence humanA variety of learned traits that influence human
behaviour can contribute to the culture of a socialbehaviour can contribute to the culture of a social
group, the major constituents, include:group, the major constituents, include:
• value systemvalue system
• normsnorms
• aestheticsaesthetics
• customs and traditionscustoms and traditions
• languagelanguage
• religionreligion

Characteristics of cultureCharacteristics of culture
 LearnedLearned
 SharedShared
 Trans-generationalTrans-generational
 SymbolicSymbolic
 PatternedPatterned
 AdaptiveAdaptive

Value SystemValue System
Shared assumptions of a group about howShared assumptions of a group about how
things ought to be or abstract ideas aboutthings ought to be or abstract ideas about
what a group believes to be good,what a group believes to be good,
desirable, or right.desirable, or right.

Value systemValue system
 Value systems vary among managersValue systems vary among managers
across different countries :across different countries :
 Eg. US managers : high achievementEg. US managers : high achievement
orientation vs Japanese managersorientation vs Japanese managers
how have a growth and sizehow have a growth and size
orientation vs Indian Managers whoorientation vs Indian Managers who
have moralistic orientation.have moralistic orientation.

NormsNorms
Guidelines or social rules thatGuidelines or social rules that
prescribe appropriate behaviour in aprescribe appropriate behaviour in a
given situation.given situation.

NormsNorms
 For eg. In Japan, aggressive selling is not perceivedFor eg. In Japan, aggressive selling is not perceived
in the positive spirit.in the positive spirit.
 Eg. Indian use hands or different types of spoonsEg. Indian use hands or different types of spoons
for eating. Chinese and Japanese use chopsticks.for eating. Chinese and Japanese use chopsticks.
 Europeans and American use forks and knives to cutEuropeans and American use forks and knives to cut
the food before eating.the food before eating.
 LessonsLessons: International managers need to know what: International managers need to know what
is acceptable , unacceptable in foreign culture. Theyis acceptable , unacceptable in foreign culture. They
also need to know cultural tolerance to businessalso need to know cultural tolerance to business
customs that may be grouped as :customs that may be grouped as :
 Cultural Imperatives; Cultural Exclusives; CulturalCultural Imperatives; Cultural Exclusives; Cultural
AdiaphoraAdiaphora

 Culture ImperativesCulture Imperatives
 It refers to norms that must be followed / avoided in a foreignIt refers to norms that must be followed / avoided in a foreign
country.country.
 For Eg. Too much eye contact in Japan is considered toFor Eg. Too much eye contact in Japan is considered to
completely offensive.completely offensive.
 On the other hand in the Gulf , strong eye contact necessaryOn the other hand in the Gulf , strong eye contact necessary
with an Arab, to establish trustworthiness.with an Arab, to establish trustworthiness.
 Cultural ExclusivesCultural Exclusives::
 Social patterns which are considered appropriate for locals andSocial patterns which are considered appropriate for locals and
in which foreigners are expected not to participate.in which foreigners are expected not to participate.
 Eg. Foreigners should stay away from discussions on localEg. Foreigners should stay away from discussions on local
country politics, social customs and practices.country politics, social customs and practices.
 Cultural AdiaphoraCultural Adiaphora : social customs in which a foreigner may: social customs in which a foreigner may
participate, so that the Intl. manager may decide whether toparticipate, so that the Intl. manager may decide whether to
participate or avoid. Eg. Bowing in Japanese culture is notparticipate or avoid. Eg. Bowing in Japanese culture is not
expected of foreigners, but such display may be appreciated .expected of foreigners, but such display may be appreciated .

AestheticsAesthetics
Ideas and perceptions that a culturalIdeas and perceptions that a cultural
group upholds in terms of beauty andgroup upholds in terms of beauty and
good taste. It includes areas related togood taste. It includes areas related to
music, dance, painting, drama,music, dance, painting, drama,
architecture, etc.architecture, etc.

AestheticsAesthetics
 Eg. Colours have different aesthetic value inEg. Colours have different aesthetic value in
different cultures:different cultures:
 Africa : bright colours are favouritesAfrica : bright colours are favourites
 Japan : pastel colours preferred as they expressJapan : pastel colours preferred as they express
harmony.harmony.
 China : red is lucky colour but associated withChina : red is lucky colour but associated with
witchcraft in Africa.witchcraft in Africa.
 America : blues and greys are perfect for officialAmerica : blues and greys are perfect for official
environments. But blue is evil in Africaenvironments. But blue is evil in Africa
 Death coloursDeath colours : Black signifies death in America,: Black signifies death in America,
Europe; In India, Japan & other Asian countries it isEurope; In India, Japan & other Asian countries it is
white, For Latin Americans Purple means death;white, For Latin Americans Purple means death;
Dark red is the mourning colour in the Ivory Coast.Dark red is the mourning colour in the Ivory Coast.

Traditions and CustomsTraditions and Customs
TraditionsTraditions:: The elements of cultureThe elements of culture
passed down from generation topassed down from generation to
generation.generation.
CustomsCustoms:: An established pattern ofAn established pattern of
behaviour within a society.behaviour within a society.

Traditions and CustomsTraditions and Customs
 International managers need to know the customs andInternational managers need to know the customs and
traditions of the culture being dealt with:traditions of the culture being dealt with:
 Eg. Food Habits eg. Chocolate flavors preferred areEg. Food Habits eg. Chocolate flavors preferred are
different in different cultures : Eg. Americans anddifferent in different cultures : Eg. Americans and
Germans prefer blends, French- Dark, Dutch –White.Germans prefer blends, French- Dark, Dutch –White.
 Coffee brews: Nescafe manufactures200 differentCoffee brews: Nescafe manufactures200 different
varieties of coffee to suit local tastes.varieties of coffee to suit local tastes.
 The concept of Indian vegetarianism is very complex forThe concept of Indian vegetarianism is very complex for
foreigners to understand. Vessels used for cooking bothforeigners to understand. Vessels used for cooking both
should be different. KFC offers vegetarian dishes in itsshould be different. KFC offers vegetarian dishes in its
Indian outlets. Pizza Hut offers Jain Pizza in India alone.Indian outlets. Pizza Hut offers Jain Pizza in India alone.
 LessonsLessons: companies need to modify products/services to: companies need to modify products/services to
suit the local customs and traditions.suit the local customs and traditions.

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Manners and Customs...Manners and Customs...
 Manners in gift givingManners in gift giving::
 A lot of preparation and sensitivity required whileA lot of preparation and sensitivity required while
giving gifts. What and when is important.giving gifts. What and when is important.
 China : occasion : New YearChina : occasion : New Year
Preferred Gifts: Modest gifts such as coffee table,Preferred Gifts: Modest gifts such as coffee table,
books, ties, pens.books, ties, pens.
 Japan: Oseibo( January 1)Japan: Oseibo( January 1)
Preferred Gifts : Brandy. Scotch, round fruits suchPreferred Gifts : Brandy. Scotch, round fruits such
as melonsas melons
 Manners and Customs in the Way Products are usedManners and Customs in the Way Products are used
should also be consideredshould also be considered
 Example Orange juice:Example Orange juice:
 Breakfast item in US, Refreshment in FranceBreakfast item in US, Refreshment in France
 Moisturizers : After bath lotion in one, beautyMoisturizers : After bath lotion in one, beauty
product in another.product in another.

LanguageLanguage
A systematic means of communicating ideasA systematic means of communicating ideas
or feelings by the use of conventionalizedor feelings by the use of conventionalized
signs, gestures, marks, or especiallysigns, gestures, marks, or especially
articulate vocal sounds.articulate vocal sounds.

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LanguageLanguage
The Four Roles of LanguageThe Four Roles of Language
Language aids in information gathering andLanguage aids in information gathering and
evaluation.evaluation.
Language provides access to local society.Language provides access to local society.
Language capability is increasinglyLanguage capability is increasingly
important in company communications.important in company communications.
Language provides more than the ability toLanguage provides more than the ability to
communicate because it extends beyondcommunicate because it extends beyond
mechanics to the interpretation of contextsmechanics to the interpretation of contexts
that may influence business operations.that may influence business operations.

LanguagesLanguages
1. Chinese, Mandarin 885
2. Spanish 332
3. English 322
4. Bengali 189
5. Hindi 182
6. Portuguese 170
7. Russian 170
8. Japanese 125
9. German, Standard 98
10. Chinese, Wu 77
Language Population (in millions)
Top Ten World Languages

Language … some lessons forLanguage … some lessons for
managersmanagers
 Even though English is considered lingua-franca for nonEven though English is considered lingua-franca for non
English speaking countries, it fails to provide non-verbalEnglish speaking countries, it fails to provide non-verbal
cues … for example:cues … for example:
 Coca – ColaCoca – Cola was named Ke-kou-ke-la in China whichwas named Ke-kou-ke-la in China which
translates in Mandarin to ‘Bite the wax tadpole’.translates in Mandarin to ‘Bite the wax tadpole’.
Subsequently Coke found a close phonetic equivalentSubsequently Coke found a close phonetic equivalent
Ko-kou-ko-Le which translates to ‘Happiness in theKo-kou-ko-Le which translates to ‘Happiness in the
mouth’ after researching 40,000 Chinese characters.mouth’ after researching 40,000 Chinese characters.
 The Swedish vacuum cleaner Manufacturer ElectroluxThe Swedish vacuum cleaner Manufacturer Electrolux
introduced the same print ad which was successful inintroduced the same print ad which was successful in
Britain in the US Market with the tag line ‘ Nothing sucksBritain in the US Market with the tag line ‘ Nothing sucks
like an Electrolux’. Later they found this to be a disasterlike an Electrolux’. Later they found this to be a disaster
in the US because ‘sucks’ in American means ‘reallyin the US because ‘sucks’ in American means ‘really
Bad’. i.e. Electrolux is a ‘really bad vacuum cleaner’Bad’. i.e. Electrolux is a ‘really bad vacuum cleaner’

ReligionReligion
Religious beliefs significantly influence peopleReligious beliefs significantly influence people
behaviour and business decision making.behaviour and business decision making.
 Religion encompasses three distinctReligion encompasses three distinct
elements:elements:
•Explanation:Explanation: God seen as a ‘first cause’ behind the creation ofGod seen as a ‘first cause’ behind the creation of
the universethe universe
•A standard organizationA standard organization: Consisting of places of worships and: Consisting of places of worships and
ritualsrituals
•Moral rules of good behaviourMoral rules of good behaviour : concerning principles of right: concerning principles of right
and wrong in human behaviour.and wrong in human behaviour.

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Dominant ReligionsDominant Religions
Christianity
Islam
Hinduism
Buddhism
Confucianism

Religion : lessons for managersReligion : lessons for managers
Considerable influences international businessConsiderable influences international business
decisions.decisions.
For. Eg. Location of commerical buildings and officeFor. Eg. Location of commerical buildings and office
interiors need to be as per Fen shui in China andinteriors need to be as per Fen shui in China and
Vastu Shastra in India, as it concerns free flow ofVastu Shastra in India, as it concerns free flow of
cosmic energy and keeps evil spirits away.cosmic energy and keeps evil spirits away.
Advertisements and corporate communicationsAdvertisements and corporate communications
must keep religious sentiments in mind. For eg.must keep religious sentiments in mind. For eg.
Islam does not permit shaving. So ShavingIslam does not permit shaving. So Shaving
equipment makers like Gillette need to beequipment makers like Gillette need to be
sensitive while advertising their product in Islamicsensitive while advertising their product in Islamic
countries.countries.

Comparison of Cross CulturalComparison of Cross Cultural
BehaviorBehavior
An appreciation of cultural differencesAn appreciation of cultural differences
facilitates international managers tofacilitates international managers to
conceptualize and implement businessconceptualize and implement business
strategies in view of cultural sensitivities instrategies in view of cultural sensitivities in
various countries.various countries.

Hofstede’s Cultural ClassificationHofstede’s Cultural Classification
Power distancePower distance
The extent to which less powerful membersThe extent to which less powerful members
of an institution accept that power isof an institution accept that power is
distributed unequally.distributed unequally.

High Power Distance CountriesHigh Power Distance Countries
•High social inequalities tolerated withHigh social inequalities tolerated with
differences in power and income distributiondifferences in power and income distribution
•Organizational structures are hierarchicalOrganizational structures are hierarchical
based an inequality among superiors andbased an inequality among superiors and
subordinatessubordinates
•Decision making is centralizedDecision making is centralized
•Juniors blindly follow the orders of theirJuniors blindly follow the orders of their
superiorssuperiors
For instance,For instance, Malaysia, Mexico, ArabMalaysia, Mexico, Arab
countries, Indiacountries, India etc.etc.

Low Power Distance CountriesLow Power Distance Countries
 Superiors and subordinates consider eachSuperiors and subordinates consider each
other equalother equal
 Organizations are relatively flatterOrganizations are relatively flatter
 Decision making is decentralizedDecision making is decentralized
For instance, Austria, Sweden, Great Britain,For instance, Austria, Sweden, Great Britain,
the US etc.the US etc.
Lessons:Lessons: In view of the power distance, the internationalIn view of the power distance, the international
manager has to asses the organizational dynamics, identifymanager has to asses the organizational dynamics, identify
the key decision makers and accordingly formulate theirthe key decision makers and accordingly formulate their
business strategy for different countries.business strategy for different countries.

Individualism vs. CollectivismIndividualism vs. Collectivism
Individualism:Individualism:
The tendency of people to look after themselves and theirThe tendency of people to look after themselves and their
immediate family.immediate family.
 Strong work ethicsStrong work ethics
 Promotions based on meritPromotions based on merit
 Involvement of employees in the organization isInvolvement of employees in the organization is
calculative.calculative.
 Ability to be independent of others is considered to beAbility to be independent of others is considered to be
the key criterion for success in individualisticthe key criterion for success in individualistic
societies.societies.
Countries with high individualism include,Countries with high individualism include, the US, Greatthe US, Great
Britain, France, South Africa etcBritain, France, South Africa etc

Collectivism:Collectivism:
The tendency of people to belong to groups and toThe tendency of people to belong to groups and to
look after each other in exchange for loyalty. In suchlook after each other in exchange for loyalty. In such
cultures, interest of groups have precedence overcultures, interest of groups have precedence over
individual interest .individual interest .
For instance,For instance, Guatemala, Pakistan, Singapore,Guatemala, Pakistan, Singapore,
Malaysia etc.Malaysia etc.
Lessons: International Business strategy is greatlyLessons: International Business strategy is greatly
influenced by individualism vs. collectivism in terms ofinfluenced by individualism vs. collectivism in terms of
decision making and market communication. For adecision making and market communication. For a
product to be successful. In collective societies, itproduct to be successful. In collective societies, it
should have group acceptability unlike in theshould have group acceptability unlike in the
individualistic societies.individualistic societies.

Masculinity vs. femininityMasculinity vs. femininity
InIn masculinemasculine societiessocieties, the dominant values emphasize, the dominant values emphasize
on work goals, such as earnings, advancement, success,on work goals, such as earnings, advancement, success,
and material belongings. e.g.and material belongings. e.g. Japan, Switzerland, GreatJapan, Switzerland, Great
Britain, the US etc.Britain, the US etc.
InIn feminine societiesfeminine societies the dominant values arethe dominant values are
achievement of personal goals, such as quality of life,achievement of personal goals, such as quality of life,
caring for others, friendly atmosphere, getting alongcaring for others, friendly atmosphere, getting along
with boss and others.with boss and others.
e.g.e.g. Sweden, Norway, Denmark, Thailand etc.Sweden, Norway, Denmark, Thailand etc.
India falls in between.India falls in between.
Summarily, in masculine societies, people ’live to work’,Summarily, in masculine societies, people ’live to work’,
whereas in feminine societies people’ work to live’.whereas in feminine societies people’ work to live’.

Uncertainty avoidanceUncertainty avoidance
The extent to which people feel threatened byThe extent to which people feel threatened by
ambiguous situations.ambiguous situations.
In high uncertainty avoidance societies there is lackIn high uncertainty avoidance societies there is lack
of tolerance for ambiguity and the need for formalof tolerance for ambiguity and the need for formal
rules. For instance,rules. For instance, Greece, Portugal, Japan, FranceGreece, Portugal, Japan, France
are the most uncertainty avoidance countries.are the most uncertainty avoidance countries.
Low uncertainty avoidance countries includeLow uncertainty avoidance countries include
Singapore, Denmark, India, the US etc.Singapore, Denmark, India, the US etc.

Trompenaars’ CulturalTrompenaars’ Cultural
ClassificationClassification

Universalism vs. ParticularismUniversalism vs. Particularism
 Universalism:Universalism: The belief that ideas and practicesThe belief that ideas and practices
can be defined and applied everywhere withoutcan be defined and applied everywhere without
modificationmodification
e.g. thee.g. the US, Australia, Germany, Sweden etc.US, Australia, Germany, Sweden etc.
 Particularism:Particularism: The belief that uniqueThe belief that unique
circumstances and relationships, rather thancircumstances and relationships, rather than
abstract rules are more important considerationsabstract rules are more important considerations
that determine how ideas and practices should bethat determine how ideas and practices should be
appliedapplied
e.g.e.g. Venezuela, the US, Indonesia, China etc.Venezuela, the US, Indonesia, China etc.

Individualism vs.Individualism vs.
CommunitarianismCommunitarianism
Individualism:Individualism: people regarding themselves as individuals.people regarding themselves as individuals.
For instanceFor instance the US, Czechoslovakia, Argentina, the CIS,the US, Czechoslovakia, Argentina, the CIS,
Mexico, and the UKMexico, and the UK ..
Societies with high individualism make frequent references to ‘I’Societies with high individualism make frequent references to ‘I’
and ‘me’. And achievement and responsibility are personal.and ‘me’. And achievement and responsibility are personal.
Communitarianism:Communitarianism: people regarding themselves as part of apeople regarding themselves as part of a
group.group.
For instance,For instance, Singapore, Thailand, Japan, and Indonesia.Singapore, Thailand, Japan, and Indonesia.
In collectivist societies ‘we’ is used more frequently than ‘I’ andIn collectivist societies ‘we’ is used more frequently than ‘I’ and
achievement is considered group achievement.achievement is considered group achievement.

Neutral vs. AffectiveNeutral vs. Affective
Neutral Cultures:Neutral Cultures: Cultures in which people tend to hold backCultures in which people tend to hold back
their emotions and try not to exhibit their feelings.their emotions and try not to exhibit their feelings.
For instance,For instance, Japan, the UK, Singapore, Australia, etc.Japan, the UK, Singapore, Australia, etc.
Will consider anger, delight or intensity in the workplace asWill consider anger, delight or intensity in the workplace as
‘unprofessional’‘unprofessional’
Affective Cultures:Affective Cultures: Cultures where emotions are expressedCultures where emotions are expressed
openly.openly.
For instance,For instance, Mexico, Netherlands, Switzerland, China, Brazil,Mexico, Netherlands, Switzerland, China, Brazil,
etc.etc.
Will consider holding back of emotions by colleagues to signifyWill consider holding back of emotions by colleagues to signify
‘emotionally dead’ or a ‘mask of deceit’.‘emotionally dead’ or a ‘mask of deceit’.

Specific vs. DiffusedSpecific vs. Diffused
The relative size of ‘Public space and Private space ‘ andThe relative size of ‘Public space and Private space ‘ and
the degree to which individuals feed comfortable sharing itthe degree to which individuals feed comfortable sharing it
with others differ considerably across societieswith others differ considerably across societies..
Specific CulturesSpecific Cultures:: Cultures in which individuals tend to have aCultures in which individuals tend to have a
large public space which is readily shared, and a smaller privatelarge public space which is readily shared, and a smaller private
space.space.
For instance,For instance, Australia, the UK, the USA and SwitzerlandAustralia, the UK, the USA and Switzerland..
Diffused Cultures:Diffused Cultures: Culture in which public and private space areCulture in which public and private space are
more or less similarmore or less similar and public space is guarded moreand public space is guarded more
carefully.carefully.
For instance,For instance, Venezuela, China and SpainVenezuela, China and Spain

Achievement vs. AscriptionAchievement vs. Ascription
Achievement CulturesAchievement Cultures: Culture in which status is: Culture in which status is
accorded to high achievers and high performers.accorded to high achievers and high performers.
For instanceFor instance Austria, the USA, Switzerland, the UK,Austria, the USA, Switzerland, the UK,
Sweden and Mexico etcSweden and Mexico etc..
Ascription CulturesAscription Cultures: Culture in which status is: Culture in which status is
accorded to those who ‘naturally’ evoke admirationaccorded to those who ‘naturally’ evoke admiration
from others such as elderly, seniors, highlyfrom others such as elderly, seniors, highly
qualified and skilled people.qualified and skilled people.
For instance,For instance, Venezuela, Indonesia, China, theVenezuela, Indonesia, China, the
CIS, and Singapore etc.CIS, and Singapore etc.

Other Cross-CulturalOther Cross-Cultural
ClassificationsClassifications

High Context vs. Low ContextHigh Context vs. Low Context
High Context Cultures:High Context Cultures: Culture in which highCulture in which high
significance is given to implicit communications,significance is given to implicit communications,
such as non-verbal and subtle situational cues.such as non-verbal and subtle situational cues.
For instance,For instance, China, Korea, Japan and ArabChina, Korea, Japan and Arab
Low Context CulturesLow Context Cultures: Cultures in which: Cultures in which
communication is more explicit with heavy reliancecommunication is more explicit with heavy reliance
on words to convey the meanings.on words to convey the meanings.
For instance,For instance, Germany, Switzerland, Scandinavia,Germany, Switzerland, Scandinavia,
North America and Britain.North America and Britain.

Homophilous vs. HeterophilousHomophilous vs. Heterophilous
Homophilous CulturesHomophilous Cultures: Cultures where: Cultures where
people share beliefs, speak the samepeople share beliefs, speak the same
language, and practice the same religion.language, and practice the same religion.
For instance,For instance, Japan, Korea and ScandinavianJapan, Korea and Scandinavian
Heterophilous CulturesHeterophilous Cultures: Countries that: Countries that
have a fair amount of differentiation inhave a fair amount of differentiation in
languages, beliefs, and religions followed.languages, beliefs, and religions followed.
For instance,For instance, India and ChinaIndia and China..

Relationship vs. Deal-focusedRelationship vs. Deal-focused
Relationship-focused Cultures:Relationship-focused Cultures: Cultures inCultures in
which strong orientation towards buildingwhich strong orientation towards building
relationships and developing mutual trust.relationships and developing mutual trust.
For instance,For instance, India, Japan, China, Singapore,India, Japan, China, Singapore,
Saudi Arabia, United Arab Emirates, Egypt,Saudi Arabia, United Arab Emirates, Egypt,
Brazil, Mexico, and Russia.Brazil, Mexico, and Russia.
Deal-focused CulturesDeal-focused Cultures:: Task-orientedTask-oriented
cultures with openness to hold direct businesscultures with openness to hold direct business
talks with strangers.talks with strangers.
For instance,For instance, Britain, USA, Germany,Britain, USA, Germany,
Denmark, Australia, Canada, Finland etc.Denmark, Australia, Canada, Finland etc.

Formal vs. informal culturesFormal vs. informal cultures
Formal CulturesFormal Cultures:: Status differences are large andStatus differences are large and
valued and formality is used to show respect.valued and formality is used to show respect.
For instance,For instance, India, UAE, Egypt, Brazil, Russia,India, UAE, Egypt, Brazil, Russia,
Poland, Japan, China,, Singapore, France, Belgium,Poland, Japan, China,, Singapore, France, Belgium,
Britain, Germany, Denmark, Finland etc.Britain, Germany, Denmark, Finland etc.
Informal Cultures:Informal Cultures: Status differences are notStatus differences are not
valued and Informal behaviour is not consideredvalued and Informal behaviour is not considered
disrespectful. For instance,disrespectful. For instance, the USA, Canada, andthe USA, Canada, and
Australia etc.Australia etc.

Polychronic vs. MonochronicPolychronic vs. Monochronic
Polychronic CulturesPolychronic Cultures:: Cultures in which timeCultures in which time
schedules and deadlines are flexible and relationshipsschedules and deadlines are flexible and relationships
take precedence. For instance,take precedence. For instance, India, Thailand,India, Thailand,
Philippines, UAE, Egypt, Brazil, Russia etcPhilippines, UAE, Egypt, Brazil, Russia etc..
Monochronic CulturesMonochronic Cultures:: Cultures with rigid timeCultures with rigid time
schedules and deadlines with high emphasis onschedules and deadlines with high emphasis on
punctuality. For instance,punctuality. For instance, Japan, China, Singapore,Japan, China, Singapore,
Britain, USA, Canada, Australia, Germany, DenmarkBritain, USA, Canada, Australia, Germany, Denmark
etc.etc.

Expressive vs. Reserved CulturesExpressive vs. Reserved Cultures
Expressive cultures:Expressive cultures: people are morepeople are more
expressive with direct eye contact.expressive with direct eye contact.
For instance,For instance, Russia, Poland, Romania,Russia, Poland, Romania,
USA, Australia, and CanadaUSA, Australia, and Canada
Reserved culturesReserved cultures : people restrain their: people restrain their
facial expression and gesturing.facial expression and gesturing.
For instance,For instance, India, Japan, China,India, Japan, China,
Singapore, Britain, Germany, Denmark,Singapore, Britain, Germany, Denmark,
Finland etc.Finland etc.

Parochialism vs. SimplificationParochialism vs. Simplification
ParochialismParochialism:: Belief that views the restBelief that views the rest
of the world from one’s own culturalof the world from one’s own cultural
perspective.perspective.
Simplification:Simplification: Exhibiting same culturalExhibiting same cultural
orientation towards different culturalorientation towards different cultural
groups.groups.

EPRG ApproachEPRG Approach
EEthnocentric orientationthnocentric orientation
The belief which considers one’s own culture asThe belief which considers one’s own culture as
superior to others. The belief that the businesssuperior to others. The belief that the business
strategy which has worked in the home countrystrategy which has worked in the home country
would also be suitable in alien cultures.would also be suitable in alien cultures.

PPolycentric orientationolycentric orientation
It is based on the belief that substantialIt is based on the belief that substantial
differences exist among various countries.differences exist among various countries.
Therefore, a single business strategy cannot beTherefore, a single business strategy cannot be
effective across the world and customizedeffective across the world and customized
business strategies need to be adapted inbusiness strategies need to be adapted in
different countries.different countries.

RRegiocentric orientationegiocentric orientation
A firm treats the region as a uniform culturalA firm treats the region as a uniform cultural
segment and adopts a similar business strategysegment and adopts a similar business strategy
within the region but not across the region.within the region but not across the region.
For example Mc Donald’s strategy is to not serve beef basedFor example Mc Donald’s strategy is to not serve beef based
products in India, but serves beef based products in otherproducts in India, but serves beef based products in other
countries. Also in the Middle East, it does not serve pork and allcountries. Also in the Middle East, it does not serve pork and all
meat based preparations are made out of halal process onlymeat based preparations are made out of halal process only..

GGeocentric orientationeocentric orientation
The approach considers the whole world a singleThe approach considers the whole world a single
market and attempts to formulate integrated businessmarket and attempts to formulate integrated business
strategies. A geocentric firm attempts to identifystrategies. A geocentric firm attempts to identify
cultural similarities across countries and formulates acultural similarities across countries and formulates a
globally uniform business strategy.globally uniform business strategy.
Examples: the Harry Potter series of books and films,Examples: the Harry Potter series of books and films,
cartoon characters and their serials, apparels likecartoon characters and their serials, apparels like
Jeans, T-shirts etc…Jeans, T-shirts etc…

Emic vs. Etic DilemmaEmic vs. Etic Dilemma
 TheThe EmicEmic school holds that attitudes, interests,school holds that attitudes, interests,
and behaviour are unique to a culture and bestand behaviour are unique to a culture and best
understood in their own terms. It emphasizesunderstood in their own terms. It emphasizes
studying the business research problem in eachstudying the business research problem in each
country’s specific context and identifying andcountry’s specific context and identifying and
understanding its unique facets.understanding its unique facets.
 TheThe EticEtic school emphasizes identifying andschool emphasizes identifying and
assessing universal attitudinal and behaviouralassessing universal attitudinal and behavioural
concepts and developing ‘pan-cultural’concepts and developing ‘pan-cultural’
measures. Thus,measures. Thus, eticetic is basically concerned withis basically concerned with
measuring universal behavioural and attitudinalmeasuring universal behavioural and attitudinal
traits.traits.

Operationalisation of Emic and EticOperationalisation of Emic and Etic
Emphasis is often placed an identifyingEmphasis is often placed an identifying
and developing constructs that areand developing constructs that are
feasible across countries and cultures,feasible across countries and cultures,
while conducting cross country research.while conducting cross country research.

International cultural-environment

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