The document discusses the significant impact of social and cultural environments on international business, emphasizing the necessity of understanding customs, beliefs, and consumption habits in different markets. It explains the variations in cultural values, such as color symbolism and communication styles, alongside Hofstede’s dimensions of national culture, which include individualism versus collectivism and power distance. Additionally, it highlights the importance of language, religion, and etiquette in facilitating successful cross-cultural interactions in business contexts.

1. Social and cultural Environment
International Business

2. Prepared By
Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com
Kindly restrict the use of slides for personal purpose.
Please seek permission to reproduce the same in public forms and presentations.

3. Social and cultural Environment
• The socio-cultural fabric
is an important
environmental factor that
should be analysed while
formulating business
strategies. The cost of
ignoring the customs,
traditions, taboos, tastes
and preferences, etc., of
people could be very
high.

4. Elements of culture
• Culture is the sum total
of the societal behavior.
It is simply the totally
life way of people.

5. Culture Definition
• Knowledge and beliefs - It refers
to a people’s prevailing notions
of reality.
• Ideals – It refer to the societal
norms which define what is
expected.
• Preferences – It refer to society’s
definitions of those things in life
which are attractive or
unattractive as objects of desire.

6. Social and cultural Environment
• The buying and
consumption habits of
the people, their
language, beliefs and
values, customs and
traditions, tastes and
preferences, education
are all factors that
affect business.

7. Social and cultural Environment
In Thailand, Helene Curtis
switched to black
shampoo because Thai
women felt that it made
their hair look glossier.
Nestle, a Swiss
multinational company,
today brews more than
forty varieties of instant
coffee to satisfy different
national tastes.

8. Social and cultural Environment
Even when people of different
cultures use the same basic
product, the mode of
consumption, conditions of
use, purpose of use or the
perceptions of the product
attributes may vary so much
so that the product attributes
method of presentation,
positioning, or method of
promoting the product may
have to be varied to suit the
characteristics of different
markets.

9. Social and cultural Environment
For example, the two most
important foreign markets for
Indian shrimp are the U.S and
Japan. The product attributes for
the success of the product in these
two markets differ. In the U.S.
market, correct weight and
bacteriological factors are more
important rather than eye appeal,
colour, uniformity of size and
arrangement of the shrimp which
are very important in Japan.
Similarly, the mode of consumption
of tuna, another seafood export
from India, differs between the U.S.
and European countries.

10. Social and cultural Environment
The values and beliefs
associated with colour
vary significantly between
different cultures. Blue,
considered feminine and
warm in Holland is
regarded as masculine
and cold in Sweden. Green
is a favourite colour in the
Muslim world; but in
Malaysia, it is associated
with illness.

11. Social and cultural Environment
White indicates death and
mourning in China and
Korea; but in some
countries, it expresses
happiness and is the
colour of the wedding
dress of the bride. Red is a
popular colour in the
communist countries; but
many African countries
have a national distaste
for red colour.

12. Hofstede’s Research on National Culture
• Individualism versus
collectivism
• Power distance
• Uncertainty avoidance
• Masculinity versus
femininity
• long-term versus short-term
orientation

13. Hofstede’s Research on National Culture
Individualism versus
collectivism refers to
whether a person functions
primarily as an individual or
within a group. In
individualistic societies, ties
among people are relatively
loose, and each person tends
to focus on his or her own
self-interest. These societies
prefer individualism over
group conformity.

14. Hofstede’s Research on National Culture
Power distance describes
how a society deals with
the inequalities in power
that exist among people.
Societies characterized by
high power distance are
relatively indifferent to
inequalities and allow
them to grow over time.
There are substantial gaps
between the powerful and
the weak.

15. Hofstede’s Research on National Culture
Uncertainty avoidance
refers to the extent to
which people can
tolerate risk and
uncertainty in their lives.
People in societies with
high uncertainty
avoidance create
institutions that
minimize risk and ensure
financial security.

16. Hofstede’s Research on National Culture
Masculinity versus
femininity refers to a
society’s orientation, based
on traditional male and
female values. Masculine
cultures tend to value
competitiveness,
assertiveness, ambition, and
the accumulation of wealth.
They are characterized by
men and women who are
assertive, focused on career
and earning money, and may
care little for others.

17. Hofstede’s Research on National Culture
long-term versus short-term
orientation . This
dimension denotes the
degree to which people
and organizations defer
gratification to achieve
long-term success. That is,
firms and people in
cultures with a long-term
orientation tend to take
the long view to planning
and living. They focus on
years and decades.

18. High-Context Cultures
• Infer information from
message context, rather than
from content.
• Prefer indirectness,
politeness & ambiguity.
• Convey little information
explicitly.
• Rely heavily on nonverbal
signs.
• Asian
• Latin American
• Middle Eastern

19. Low-Context Cultures
• Rely more on content
rather than on context.
• Explicitly spell out
information.
• Value directness.
• See indirectness as
manipulative.
• Value written word more than
oral statements.
• European
• Scandinavian
• North American

20. Some Cultural Scenarios
Japan China
India Mexico

21. JAPAN
To help her American Company establish a
presence in Japan, Mrs. Torres wants to hire a
local interpreter who can advise her on business
customs. Ms. Tomari has superb qualifications
on paper, but when Mrs. Torres tries to probe
about her experience, Ms. Tomari just says, “I
will do my best. I will try very hard.” She never
gives details about any of the previous positions
she has held. Mrs. Torres begins to wonder if
Ms. Tamari's résumé is inflated.

22. CHINA
Stan Williams wants to negotiate a joint venture
between his American firm and a Beijing-based
company. He asks Tung-Sen Lee if the Chinese
people have enough discretionary income to afford
his product. Mr. Lee is silent for a time, and then
says, “Your product is good. People in the West
must like it.” Stan smiles, pleased that Mr. Lee
recognizes the quality of his product, and he leaves
a contract for Mr. Lee to sign. Weeks later, Stan still
hasn’t heard anything. If China is going to be so
inefficient, he wonders if his company should try to
do business there.

23. INDIA
Gloria Johnson is proud of her participatory
management style. Assigned in Bombay on behalf of
her U.S.-based company, she is careful not to give
orders but to ask for suggestions. But the employees
rarely suggest anything. Even a formal suggestion
system she established does not work. Worse still,
she doesn’t sense the respect and camaraderie that
she felt at the plant she managed in Texas. Perhaps
the people in India just are not ready for a woman
boss.

24. MEXICO
Alan Caldwell is a U.S. sales representative in Mexico
City. He makes appointments with Senõr Lopez and
is careful to be on time, but his host is frequently
late. To save time, Alan tries to get right to business,
his host wants to talk about sightseeing and about
Alan’s family. Even worse, the meetings are
interrupted constantly with phone calls, long
conversations with other people, and even
customers’ children who come into the office. Alan’s
first report to his home office is very negative. He
hasn’t yet made a sale. Perhaps Mexico just isn’t the
right place to do business.

25. Religion
• The cost of ignoring certain
religious aspects could be
very high, sometimes fatal,
in international business.
• When Mac Donalds was
planning to enter India, one
political party stated that it
would oppose the marketing
of beef products in the
country by MNC.

26. Language
• Differences in the language
are a very important
problem area in business.,
• Non verbal
communications create
equally difficult problems.

28. Etiquette
• The ways of meeting and
greeting people,
expression of appreciation
or disapproval, methods of
showing respect etc vary
quite widely between
cultures.
• Handshake.

29. In Japan, bowing is the norm in both business and personal settings. Here,
Japanese Foreign Minister Yoriko Kawaguchi and a U.S. Trade representative
(left) bow to each other before a 2004 meeting

30. • There are even differences in
one country and some may
consider certain regions more
hospitable and polite; it is
often just a matter of
understanding their traditions.

31. For example, friends can give three kisses in
certain countries if they meet each other; others
will give one, two and there are even consider
kissing between friends as insulted. There is no
difference between the hospitality and politeness
between these countries; they have just different
etiquettes.

32. • Most everyone knows the traditional Thai Greeting (the
Wang). Thai people put both hands in a prayer position and
bow their head a little bit to their hands. They always smile
and only use this “Way greeting” to foreigners or elderly
persons. This kind of greeting is also used in some other
countries in Asia, for example India, the Philippines,
Myanmar, China and many others.

33. • Kissing and shaking hands are the most common greeting
gestures between different countries and cultures. Shaking
hands is a traditional way of greeting when American people
meet someone for the first time.

34. • American people are friendly people and say “hi” to everyone
they meet, even if they don’t know them. It is more a form of
politeness and they expect you return the same greeting. No
return of greeting is considered to be a form of rudeness. It is
unusual to kiss foreigners and even friends. Cheek kissing is
acceptable but unusual in Northern America.

35. Cheek kissing is more common in Europe and Latin America.
There are either differences between the countries in these
continents.
• For example in France, Spain, Portugal, Switzerland, Belgium they usually
give one on each cheek
• there are either parts of Belgium, France and Switzerland where they gave
three or even four kisses.
• Cheek kissing is uncommon in Asia, they greet mostly with a bow or they
shake hands. Shaking hands is also the most common form of greeting in
Africa.

36. • People in Turkey are talkative and welcome almost all visitors
of their country. They invite you at home for a drink or to
spend some time with the family. People of this country are
proud of their country and want to show all the beauties to
every tourist.

37. • Life in Asia is not easy and they treat every tourist with
respect. It is a part of their culture. You may find some
countries impolite at first sight because you don’t know the
meaning of their traditions.
• For example; Chinese people are noisy when they eat and they
even slurp when they eat noodles.

38. • People of Europe, America and many other countries of the
world may consider this as impolite but according theChinese
culture, it is a sign they enjoyed the meal. There is no reason to
consider their behavior as less polite than western culture; it is
just different.

39. • It is more a matter of accepting these differences and you will
find hospitable and polite people in every country and culture
of the world. Discovering the differences in traditions between
countries and cultures is really a wonderful experience and
may help you to see the positive things in every culture.