about business strategies

1. CULTURAL ENVIRONMENT
• After a company identifies the differences
in the country in which it indents to do
business, must it alter its customary or
preferred practices in order to be successful
there?
• At times the host society is willing to accept
unwanted changes as a trade off for other
advantages.

2. Nation as a definition of Society
• Nation is a useful definition of society because:
• Similarity among people is a cause and an effect
of national boundaries
• Laws apply primarily along national lines
• Country-by-country analysis has limitations
because:
• Not everyone in a country is alike
• Variations within some countries are great
• Similarities link groups from different countries

3. Concept of Culture
• Culture consists of specific learned norms based
on attitudes, values, and beliefs all of which exist
in every society.
• Cultural value systems are set early in life and are
difficult to change but change may come through:
• Choice or imposition
• Contact with other cultures.

4. Culture
• Cultural imperialism has occurred when colonial
powers introduced their legal systems abroad, by
prohibiting established practices and defining
them as being criminal
• Isolation tends to stabilize a culture whereas
contact tends to create a cultural borrowing.
• Language is a major factor that affects cultural
stability: more cultural similarities between
English speaking countries.

5. Culture
• Religion is a strong shaper of values:Friday is not
a working day in Muslim countries. Tunisia
adheres to Christian work calendar.
• Behavioral practices affecting businesses:
• Group affiliations:
• Affiliations determined by birth known as ascribed group
membership
• Affiliations not determined by birth are called acquired
group membership- political, professional,and other
associations.

6. Group affiliation
• Role of competence: In some societies a person’s
acceptability for jobs and promotions is based on
competence.
• Egalitarian societies place less importance on
group membership.
• Local attitudes may force hiring according to local
norms or opinions.

7. Importance of different group
memberships
• Gender based groups:Chinese and Indians show
an extreme degree of male preference.
• Age based groups: Many cultures assume the age
and wisdom are correlated.
• Family based groups: In societies where there is
low trust outside the family, such as China,
southern Italy,the family run businesses are more
successful than large business organizations where
people are from different families.

8. Importance of work
• Protestant ethic: work was viewed as a means of
salvation.
• In much of Europe, the highest place in social
structure, is held by the aristocracy, which
historically has been associated with leisure.
• Attitudes toward work may change as economic
gains are achieved.

9. Belief in success and reward
• People are more eager to work if
• Rewards for success are high.
• There is some uncertainty of success.
• The work ethic is related to habit- after a long period of
sustained work a person may have problems deciding what
to do with the leisure time
• An international company may find it easier in some
societies to motivate its workforce with shorter hours and
longer vacation periods.

10. High need achievement
• High- need achievers want
• personal responsibility
• to take calculated risks in order to achieve
reasonable goals
• performance feedback
• Lower-need achievers often prefer smooth social
relationships: purchase managers

11. Importance of Occupation
• The perception of what jobs are ‘best’ varies
somewhat among countries- Belgium, and France
have more retail establishments per capita than
most other countries.
• Self Reliance
• Superior-subordinate relationships
• Uncertainty avoidance
• Trust
• Degree of fatalism
• Individual versus group

12. Communications
• Language: All languages are complex and reflective of
environment.
• A common language within countries is a unifying force.
• English and French traditionally have been chosen because
of commercial links developed during colonial periods.
• Translating one language into another does not work
always as intended.
• France: “ Please leave your values at the desk”

13. Communications
• Silent language includes such things as:
• color associations,
• sense of appropriate distance,
• Time and status cues, and
• Body language

14. Obtaining and evaluating information
• National norms differ in preference for
• Focused versus broad information
• Sequential versus simultaneous handling of
situations
• Handling principals versus small issues first

15. Reconciliation of International
Differences
• Cultural Awareness
• Samsung, Korea’s largest company, experimented
with a cultural awareness programme that involves
sending 400 junior employees abroad for a year.
• Some people encounter culture shock when they
return to their home countries-a situation known
as reverse culture shock.

16. Cultural Needs in the
Internationalization process
• Polycentrism: Polycentrists are overwhelmed by
national differences and risk not introducing
workable changes.
• Polycentrism may be, an overly cautious response.
• American Express

17. Ethnocentrism
• Ethnocentrism is the belief that one’s own group
is superior to others.
• Ethnocetrists overlook national differences and
ignore important factors
• Believe home-country objectives should prevail
• Think change is easily introduced
• Geocentrism refers to operations based on an
informed knowledge of both home and host
country needs, capabilities, and constraints.

18. Managing change
• The more a change upsets important values, the
more resistance it will engender.
• A company must consider the expected cost-benefit
relationship of any adjustments it makes
abroad.
• Resistance to change maybe lower if the number
of changes is not too great.
• People are more willing to implement change
when they are involved in the decision to change

19. Managing change
• People are more apt to support change when they
expect personal or group rewards.
• Managers seeking to introduce change should first
convince those who can influence others.
• Companies should time change to occur when
resistance is likely to be lower.

20. Learning abroad
• International companies
• Change some things abroad
• Change themselves when encountering foreign
environments
• Learn things abroad that they can apply at home.