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International Business Management MBA Course
- 1. International Business Environments & Operations Daniels● Radebaugh ● Sullivan
- 2. Chapter 2 The CulturalEnvironments Facing Business
- 3. What isCulture? A way of life refers to the learned norms based on values, attitudes, and beliefs of a group of people living in a geographic area, in a society or a nation.
- 4. Norms: Anaccepted standard or a way of behaving or doing things that most people agree with. Values: The principles that help you to decide what is right and wrong, and how to act in various situations.
- 5. Nation delineate cultures Nation itself Creates ethnic group, race, classes. People follow same norm, ethics, custom Language as diffuser & stabilizer People of same language feel comfort in moving and meeting together. People within an area try to speak in same language and like to stay together. Make easier to buyer & seller to start business within the People of same language.
- 6. Nation delineate cultures Religionas cultural stabilizer Specific religion makes specific value & belief. Religious influence continue to play a major role in shaping cultural values and behavior. McDonald’s serves neither beef nor pork in India to keep from offending its Hindu or Muslim populations.
- 7. Language: Cultural Diffuser andStabilizer Distribution Of The World’s Major Languages
- 8. Language: Cultural Diffuser andStabilizer Major Language Groups: Population and Output
- 9. Religion: Cultural Stabilizer DistributionOf The World’s Major Religions
- 10. Evolution of Cultures 3stages of the Evolution of Cultures Form Culture is transmitted in various ways—from parent to child, teacher to pupil, social leader to follower, peer to peer. Developmental psychologists believe that most people acquire their basic value systems as children, including such concepts as evil versus good, dirty versus clean, ugly versus beautiful, unnatural versus natural, abnormal versus normal and irrational versus rational. These values are not easily changed later on
- 11. Evolution of Cultures 3stages of the Evolution of Cultures Change by choice Change by choice may occur as a reaction to social and economic situations that present people with new alternatives. Ex: When rural people choose to accept factory jobs, changes are appeared in social interactions, daily routine, weekend activities. Change by imposition Change by imposition—sometimes called cultural imperialism— involves imposing certain elements from an alien culture, such as a forced change in laws by an occupying country that, over time, becomes part of the subject culture. Ex: Wearing tie in banking hour, helmet in factory.
- 12. Behavioral Practices Affecting BehavioralPractices Affecting Business Business Social Stratification Work Motivation Relationship Preferences Risk-taking Behavior Information and Task Processing Communications
- 13. 1. Social Stratification Group affiliations can be Ascribed vs Acquired group memberships Ascribed : based on gender, family, age, caste, and ethnic, racial, or national origin Acquired : based on religion, political affiliation, professional association Gender (Choice and life style of male, female and other) Age (Choice and life style of the people of different ages) Family In some cultures, such as in UAE, KSA the most important group membership is the family. A person’s position in society depends heavily on the family’s social status or “respectability” rather than on individual achievement. Ethnic and Racial (Different Ethnic groups exist in a county like Chakma, Marma etc in BD) Occupation (A person’s choice and life style depends heavily on his occupations)
- 14. 2. Work Motivation The motivation to work differs across cultures Materialism vs Motivation. In some countries where material wealth is valued, economical achievement is a greater motivation to work. (USA) In some other countries self-discipline, hard work, honesty, belief are the motivational elements. (Japan) Productivity vs leisure vs trade off Some cultures place more value on leisure time than others. They push for working shorter hours, take more holidays and vacations, and generally spend more time and money on leisure activities. Ex: Mandatory leave in SIBL, DBBL, MTBL. BSRM Masculinity-femininity index A study using the masculinity–femininity index found significant differences in attitudes toward achievement among employees in 50 countries. Deployment of employees: Production floor: Male , R&D: Female Hierarchy of needs theory
- 15. Hierarchy of needstheory
- 16. Hierarchy of needstheory Physiological needs (Food, warmth, shelter) Safety (working in a safe environment, stable and sufficient source of income, physical health with no serious illnesses) Love and belonging (friends, emotional intimacy, feeling accepted by loved ones Esteem (feeling worthy of respect, independence, fame or reputation) Self-actualization (appreciation for life, consistent and strong morals, creativity)
- 17. 3. Relationship references Power distance From country to country, employee preferences tend to differ in terms of interacting with bosses, subordinates, and peers. Individualism vs collectivism Individualism describes an employee’s preference to fulfill leisure time and improve skills outside the organization, receive direct monetary compensation Collectivism, in contrast, typifies an employee’s penchant for dependence on the organization through training, satisfactory workplace conditions, and good benefits.
- 18. 5. Communications Spokenand written language Silent language Color Distance Time and punctuality Body language Prestige
- 19. Communications Body Language IsNot A Universal Language
- 20. Company and Management orientations Threecompany and management orientations Polycentrism business units abroad should act like local companies Ethnocentrism home culture is superior to local culture overlook national differences the principle of “What works at home will work abroad” Geocentrism integrate home and host practices
- 21. Strategies for Instituting Change Change and resistance to change Value Systems Cost-Benefit Analysis of change Resistance to too much change Participation Reward Sharing Opinion Leadership Timing Learning Abroad
- 22. Strategies for Instituting Change Change and resistance to change Value Systems Add features in product , services and distribution what the target customer like and boost the sales. Cost-Benefit Analysis of change Introducing products and practices abroad is sometimes costly, sometimes not. It can result in greatly improved performance, or only marginal change. Resistance to too much change Focus on target customer and Keep limitation in changes.
- 23. Strategies for Instituting Change Participation Discuss with stakeholders (employees, suppliers, customers, and the like) in advance before imposing any change. The discussion might help management assess the strength of the resistance, stimulate stakeholders to recognize the need for change, and ease fears about the consequences of changes. People might be satisfied that management has at least listened to them, regardless of the decisions it ultimately makes. Reward Sharing Sometimes a proposed change may have no foreseeable benefit for those whose support is needed. Production workers may have little incentive to try new work practices. Compensation can be offered to the native people where you want to establish a new factory. Can offer high price for acquiring their land. Opinion Leadership Timing Learning Abroad
- 24. Strategies for Instituting Change Opinion Leadership By making use of local channels of influence, or opinion leaders, a firm may be able to facilitate the acceptance of change. Local leaders or workforce can motivate people or resist unexpected harassment. Cultural Bridge Closely linked to opinion leadership are the attributes of people deciding about and then implementing changes abroad.
- 25. Strategies for Instituting Change Timing Many well-conceived changes fail simply because they’re ill-timed. A proposed labor-saving production method, say, might make employees nervous about losing their jobs no matter how much management tries to reassure them. If, however, the proposal is made during a period of labor shortage, the firm will likely encounter less fear and resistance. Learning Abroad as companies gain more experience in foreign operations, they may learn as well as impart valuable knowledge—knowledge that proves just as useful at home as in the host country.
- 26. The Future ofNational Cultures Scenario 1: New hybrid cultures will develop and personal horizons will broaden Scenario 2: Outward expressions of national culture will continue to become homogeneous while distinct values will remain stable Scenario 3: Nationalism will continue to reinforce cultural identity Scenario 4: Existing national borders will shift to accommodate ethnic differences
- 27. Chapter 2: Discussion Chapter2: Discussion Questions Questions 1. Define culture? Why an international business manager should study the culture of a country? 2. Explain how the dynamic interplay of nation, language and religion shapes the culture of a country. 3. Explain the six behavioral practices that affect the business in a country. I may ask you to explain any two or three of them. 4. How can we deal with, adapt to, and influence foreign cultures? Explain. 5. Explain the five cultural values of Hofstede. I may ask you to explain any two or three of them also.
Editor's Notes
- #1 International Business Environments and Operations by Daniels, Radebaugh, and Sullivan
- #2 Chapter 2: The Cultural Environment Facing Business
- #3 What is culture? Culture refers to the learned norms based on values, attitudes, and beliefs of a group of people. Culture can be based on nationality, ethnicity, gender, religion, work organization, profession, age, political party membership, income level, and so on. International business activities incorporate people from all different groups and backgrounds, thus, every business function is subject to cultural differences.
- #5 We often use the idea of a nation when we talk about culture. In general, within national borders, people largely share such essential attributes as values, language, and race. There is a feeling of “we” that casts foreigners as “they.” Rites and symbols—flags, parades, rallies—and the preservation of national sites, documents, monuments, and museums promote a common perception of history and perpetuates national identity.
- #6 We often use the idea of a nation when we talk about culture. In general, within national borders, people largely share such essential attributes as values, language, and race. There is a feeling of “we” that casts foreigners as “they.” Rites and symbols—flags, parades, rallies—and the preservation of national sites, documents, monuments, and museums promote a common perception of history and perpetuates national identity.
- #7 This Map shows the distribution of the world’s major languages. Notice the large number of English speaking, French speaking, and Spanish speaking countries.
- #8 This Figure shows the relationship between major language groups and world output. Notice the importance of English as a language of international business.
- #9 This Map shows the distribution of major religions around the world.
- #10 Culture is learned – from parent to child, teacher to student, peer to peer, and so on. So, while cultural value systems tend to be established early in life, they can change. Change can be by choice or it can be imposed – this type of change is called cultural imperialism. Cultural value systems can also change as a result of contact with other cultures. This is known as cultural diffusion. When this change results in mixing cultural elements, the process is known as creolization.
- #11 Culture is learned – from parent to child, teacher to student, peer to peer, and so on. So, while cultural value systems tend to be established early in life, they can change. Change can be by choice or it can be imposed – this type of change is called cultural imperialism. Cultural value systems can also change as a result of contact with other cultures. This is known as cultural diffusion. When this change results in mixing cultural elements, the process is known as creolization.
- #13 An individual may belong to a group because of age, gender, family, racial, or ethnic variables. This is known as ascribed group membership. When membership is based on religion, political affiliation, or professional association it’s an acquired group membership. In general, equalitarian societies tend to put more emphasis on acquired group membership. Keep in mind that education and social connections also impact an individual’s rank in a society.
- #14 The desire to work differs across cultures. In countries where material wealth is valued, there is generally a greater motivation to work. This of course, also helps to promote economic development. In fact, the higher level of development that exists in some countries can be explained by the work of Max Weber who suggested that self-discipline, hard work, honesty, and a belief in a just world foster work motivation and, thus, economic growth. Typically, people are also more eager to work when the potential rewards are high. We can also measure attitudes toward work and achievement using the masculinity-femininity index. The degree to which individuals are assertive, confrontational, and aggressive in their relationships with others varies across borders. These attitudinal differences help explain why an international company may encounter managers abroad who behave differently from what it expects or prefers.
- #15 The hierarchy-of-needs theory suggests that people fill lower-level needs before filling higher level needs. An understanding of this theory is helpful to managers as they make decisions regarding reward preferences of employees in different countries. In very poor countries, for example, workers might be motivated with enough compensation to simply satisfy their needs for food and shelter. Workers in other countries may be motivated by other needs.
- #16 The hierarchy-of-needs theory suggests that people fill lower-level needs before filling higher level needs. An understanding of this theory is helpful to managers as they make decisions regarding reward preferences of employees in different countries. In very poor countries, for example, workers might be motivated with enough compensation to simply satisfy their needs for food and shelter. Workers in other countries may be motivated by other needs.
- #17 The desire to work differs across cultures. In countries where material wealth is valued, there is generally a greater motivation to work. This of course, also helps to promote economic development. In fact, the higher level of development that exists in some countries can be explained by the work of Max Weber who suggested that self-discipline, hard work, honesty, and a belief in a just world foster work motivation and, thus, economic growth. Typically, people are also more eager to work when the potential rewards are high. We can also measure attitudes toward work and achievement using the masculinity-femininity index. The degree to which individuals are assertive, confrontational, and aggressive in their relationships with others varies across borders. These attitudinal differences help explain why an international company may encounter managers abroad who behave differently from what it expects or prefers.
- #18 Communication across cultures can be problematic when communications are not translated with the same meaning as intended. This problem can occur with not only with spoken and written language and but also with silent language. Even a slight misuse of words or phrases can have a significant impact on the meaning of a message. Moreover, it’s important to recognize that even when two countries share a language problems can exist. For example, some 4,000 words have different meanings in British and American English. Silent language refers to a host of nonverbal cues. How these physical cues or “body language” are perceived and interpreted varies between cultures. Many Western countries, for instance, associate black with death ,while white has the same connotation in some parts of Asia. Similar differences exist with perceptions of time and punctuality. In the United States, people usually arrive early for business appointments, a few minutes late for dinner at someone’s home, and a bit later still for large social gatherings. In other countries though, the concept of punctuality in any or all of these situations may be different. The appropriate distance people maintain during conversations and prestige also differs between countries. For Americans, the customary distance for a business discussion is 5 to 8 feet; for personal business, it’s 18 inches to 3 feet. The much smaller distances common in Latin America can make many Americans quite uncomfortable. Likewise, a U.S. manager who places great faith in objects as cues to prestige may underestimate the status of foreign counterparts who don’t value large, plush offices on high floors. A foreigner may underestimate U.S. counterparts who perform their own services, such as opening their own doors, fetching their own coffee, and answering unscreened phone calls.
- #19 These images show how a simple gesture is interpreted quite differently around the world.
- #20 Companies and managers doing business abroad will typically take one of three basic approaches when dealing with foreigners. Those that take a polycentric approach believe that business units abroad should act like local companies. In contrast, those that take an ethnocentric orientation believe that the home culture is superior to the local culture, and therefore national differences can be overlooked. Finally, those that integrate both home and host practices have a geocentric orientation. Managers should recognize that excessive polycentrism or ethnocentrism can be dangerous. A geocentric approach is often the safest.
- #21 Companies that choose a geocentric approach to their operations will often combine both home and host practices requiring that people in both countries adapt to some degree. Companies may face some resistance to these changes, and so must manage the process carefully. There are various ways to implement changes. Companies may need to promote changes in value systems. A cost-benefit analysis of change can reveal whether a change makes sense. Moving too quickly can create additional resistance to change. Many companies find that encouraging stakeholders to become involved in change and sharing the rewards of making changes can be beneficial. Similarly, using the right channels of influence and the right timing can make a big difference in whether change is accepted. Finally, companies should recognize that they can gain important knowledge from other companies in the market. Emulating their methods can often be successful.
- #22 Companies that choose a geocentric approach to their operations will often combine both home and host practices requiring that people in both countries adapt to some degree. Companies may face some resistance to these changes, and so must manage the process carefully. There are various ways to implement changes. Companies may need to promote changes in value systems. A cost-benefit analysis of change can reveal whether a change makes sense. Moving too quickly can create additional resistance to change. Many companies find that encouraging stakeholders to become involved in change and sharing the rewards of making changes can be beneficial. Similarly, using the right channels of influence and the right timing can make a big difference in whether change is accepted. Finally, companies should recognize that they can gain important knowledge from other companies in the market. Emulating their methods can often be successful.
- #23 Companies that choose a geocentric approach to their operations will often combine both home and host practices requiring that people in both countries adapt to some degree. Companies may face some resistance to these changes, and so must manage the process carefully. There are various ways to implement changes. Companies may need to promote changes in value systems. A cost-benefit analysis of change can reveal whether a change makes sense. Moving too quickly can create additional resistance to change. Many companies find that encouraging stakeholders to become involved in change and sharing the rewards of making changes can be beneficial. Similarly, using the right channels of influence and the right timing can make a big difference in whether change is accepted. Finally, companies should recognize that they can gain important knowledge from other companies in the market. Emulating their methods can often be successful.
- #24 Companies that choose a geocentric approach to their operations will often combine both home and host practices requiring that people in both countries adapt to some degree. Companies may face some resistance to these changes, and so must manage the process carefully. There are various ways to implement changes. Companies may need to promote changes in value systems. A cost-benefit analysis of change can reveal whether a change makes sense. Moving too quickly can create additional resistance to change. Many companies find that encouraging stakeholders to become involved in change and sharing the rewards of making changes can be beneficial. Similarly, using the right channels of influence and the right timing can make a big difference in whether change is accepted. Finally, companies should recognize that they can gain important knowledge from other companies in the market. Emulating their methods can often be successful.
- #25 Companies that choose a geocentric approach to their operations will often combine both home and host practices requiring that people in both countries adapt to some degree. Companies may face some resistance to these changes, and so must manage the process carefully. There are various ways to implement changes. Companies may need to promote changes in value systems. A cost-benefit analysis of change can reveal whether a change makes sense. Moving too quickly can create additional resistance to change. Many companies find that encouraging stakeholders to become involved in change and sharing the rewards of making changes can be beneficial. Similarly, using the right channels of influence and the right timing can make a big difference in whether change is accepted. Finally, companies should recognize that they can gain important knowledge from other companies in the market. Emulating their methods can often be successful.
- #26 What will happen to national cultures in the future? Only time will tell. One scenario is that new hybrid cultures will develop and personal horizons will broaden. Another scenario suggests that outward expressions of national culture will continue to become homogeneous while distinct values will remain stable. A third scenario is that nationalism will continue to reinforce cultural identity. Finally, a fourth scenario suggests that existing national borders will shift to accommodate ethnic differences.