Report on Culture and Its determinants Course Name: Globalization and Business Course Number: IB-302 Source: C apter

0!"Barbara #ar$er%
Prepared for: Dr. Khondoker Bazlul Hoque Professor Dept. of International Business University of Dhaka

Prepared by: Moha ad Mobarak Hossain !oll: "# IB$ %st Bat&h '(rd year %st se ester) Depart ent of IB University of Dhaka

&ate o' submission: 20t (ebruar) 20**

20t (ebruar) 20** &r+ , ondo$ar Bozlul -o.ue #ro'essor &ept+ o' International Business /ni0ersit) o' & a$a Sub1ect: Report submission on Culture and its determinants Sir 2it 3reat pleasure4 I am submittin3 m) report on Culture and its determinants t at )ou assi3ned+ It is m) 3reat pleasure t at I a0e t e opportunit) to ma$e a better understandin3 on t is topic+ I a0e done m) best to complete t is report in time and 5it t e .ualit) o' )our e6pectation+ I ope t is report 5ill meet )our e6pectation and standard+ I a0e en1o)ed stud)in3 t is topic and a0e learnt a lot+ I am 3rate'ul to )ou 'or t is report submission+ 7oreo0er4 I 5ill be loo$in3 'or5ard to $no5in3 t at )ou 5ill be satis'ied 5it t is report+

Sincerel) )ours 7o ammad 7obara$ -ossain Roll: 89 IB- *st Batc "3rd )ear *st semester% &epartment o' IB /ni0ersit) o' & a$a

Acknowledgement

:t t e 0er) outset4 I 5ant to con3ratulate our onorable course teac er #ro'essor &r+ , ondo$ar Bozlul -o.ue to 3i0e us t e tas$ o' preparin3 a report on culture+ I e6press m) 3ratitude to all t e 5ell-5is ers 5 o supported me all t e time 5it t eir elpin3 ands+

;6ecuti0e Summar)
Culture is a 5a) o' li'e+ Culture is a s ared s)stem o' s)mbols4 Belie's4 attitudes4 0alues4 e6pectations4 and norms o' be a0ior+ Culture is a s)stem o' 0alues "abstract ideas about 5 at a 3roup belie0es to be 3ood4 ri3 t4 and desirable% and norms "t e social rules and 3uidelines t at prescribe appropriate be a0ior in particular situations% t at are s ared amon3 a 3roup o' people and t at 5 en ta$en to3et er constitute a desi3n 'or li0in3 : societ) is a 3roup o' people 5 o s are a common set o' 0alues and norms+ &eterminants o' culture are pre0ailin3 political and economic p ilosop ies4 a societ)<s social structure4 t e dominant reli3ion4 lan3ua3e4 and education+ Countries are di''erent because t eir cultures 0ar)+ = eir cultures 0ar) because o' pro'ound di''erences in pre0ailin3 political and economic p ilosop ies4 a societ)<s social structure4 t e dominant reli3ion4 lan3ua3e4 and education4 : compan)<s success 5 ic is doin3 business in across t e national boundar) a0e to consider t ese cultural di''erences+ Culture in'luences t e bene'its4 costs4 and ris$ associated 5it doin3 business in di''erent countries+ = e costs o' doin3 business in a countr) in'luence t e abilit) o' 'irms to establis a competiti0e ad0anta3e in t e 3lobal mar$etplace+ :nd competiti0e ad0anta3e is so muc important 'or t e business sur0i0al and its prosperit)+ = at<s 5 ) a mana3er doin3 is 1ob in across t e 5orld as to conscious about t is di''erence ot er5ise t e) 5ill loss t e mar$et and conse.uentl) 5ill be t e cause o' business 'ailure+

Culture and Its Determinants

Definition of culture:
Culture is a 5a) o' li'e+ Culture is a s ared s)stem o' s)mbols4 Belie's4 attitudes4 0alues4 e6pectations4 and norms o' be a0ior+ : simple 5a) o' de'inin3 culture is: >Culture is a s)stem 'or di''erentiatin3 bet5een in-3roup and out-3roup people+> 7an) people a0e stru33led to de'ine culture+ Belo5 some t ou3 ts are 3i0en Culture is t e collecti0e pro3rammin3 o' t e uman mind t at distin3uis es t e members o' one uman 3roup 'rom t ose o' anot er+ Culture in t is sense is a s)stem o' collecti0el) eld 0alues+ -- Geert Hofstede Culture is t e deeper le0el o' basic assumptions and belie's t at are s ared b) members o' an or3anization t at operate unconsciousl) and de'ine in a basic ?ta$en 'or 3ranted< 'as ion an or3anization@s 0ie5 o' its sel' and its en0ironment+ -- Edgar Schein Culture is t at comple6 5 ole 5 ic includes $no5led3e4 belie'4 art4 morals4 la54 custom4 and an) ot er capabilities and abits ac.uired b) man as a member o' societ)+-- :nt ropolo3ist ;d5ard B+ =a)lor Culture consists o' patterns4 e6plicit and implicit4 o' and 'or be a0ior ac.uired and transmitted b) s)mbols4 constitutin3 t e distincti0e ac ie0ement o' uman 3roups4 includin3 t eir embodiment in arti'actsA t e essential core o' culture consists o' traditional "i+e+ istoricall) deri0ed and selected% ideas and especiall) t eir attac ed 0aluesA culture s)stems ma)4 on t e one and4 be considered as products o' action4 on t e ot er as conditionin3 elements o' 'urt er action+ -- ,roeber and ,luc$ o n

=o sum up all4 5e can sa) t at Culture is a s)stem o' 0alues "abstract ideas about 5 at a 3roup belie0es to be 3ood4 ri3 t4 and desirable% and norms "t e social rules and 3uidelines t at prescribe appropriate be a0ior in particular situations% t at are s ared amon3 a 3roup o' people and t at 5 en ta$en to3et er constitute a desi3n 'or li0in3 : societ) is a 3roup o' people 5 o s are a common set o' 0alues and norms+

The Determinants of Culture:

= e 0alues and norms o' a culture are t e e0olutionar) product o' a number o' 'actors at 5or$ in a societ) includin3 pre0ailin3 political and economic p ilosop ies a societ)<s social structure t e dominant reli3ion4 lan3ua3e4 and education

Figure: The Determinants of Culture

1. Social Structure:
: societ)@s social structure is its basic social or3anization+ =5o dimensions to consider: t e de3ree to 5 ic t e basic unit o' social or3anization is t e indi0idual4 as opposed to t e 3roup t e de3ree to 5 ic a societ) is strati'ied into classes or castes

Individuals and Groups

: 3roup is an association o' t5o or more indi0iduals 5 o a0e a s ared sense o' identit) and 5 o interact 5it eac ot er in structured 5a)s on t e basis o' a common set o' e6pectations about eac ot er<s be a0ior+ Groups are common in man) :sian societies+ 7an) 2estern countries emp asize t e indi0idual

2. Social Stratification
:ll societies are strati'ied on a ierarc ical basis into social cate3ories4 or social strata "usuall) de'ined b) c aracteristics suc as 'amil) bac$3round4 occupation4 and income% Societies di''er in terms o' t e de3ree o' mobilit) bet5een social strata+ = e si3ni'icance attac ed to social strata in business conte6t +Social mobilit) re'ers to t e e6tent to 5 ic indi0iduals can mo0e out o' t e strata into 5 ic t e) are born+ = e most ri3id s)stem is t e caste s)stem "a closed s)stem o' strati'ication in 5 ic social position is determined b) t e 'amil) into 5 ic a person is born4 and c an3e in t at position is unli$el)%+ : less ri3id s)stem is t e class s)stem "a 'orm o' open social strati'ication in 5 ic t e position a person as b) birt can be c an3ed t rou3 ac ie0ement or luc$% Buestion: 2 at is t e si3ni'icance o' social strati'ication 'or businessC In cultures 5 ere t ere is a 3reat deal o' class consciousness "a condition 5 ere people tend to percei0e t emsel0es in terms o' t eir class bac$3round4 and t is s apes t eir relations ips 5it ot ers%4 t e 5a) indi0iduals 'rom di''erent classes 5or$ to3et er "i+e+ mana3ement and labor% ma) be prescribed :nta3onism bet5een labor and mana3ement can raise t e costs o' doin3 business

3. eligious and !thical S"stems:

Reli3ion is a s)stem o' s ared belie's and rituals t at are concerned 5it t e realm o' t e sacred+ Reli3ions 5it t e 3reatest 'ollo5in3 are C ristianit) "*+! billion ad erents% Islam "* billion ad erents% -induism "!90 million ad erents% Budd ism "390 million ad erents% Con'ucianism also in'luences be a0ior and s apes culture in man) parts o' :sia ;t ical s)stems are a set o' moral principles4 or 0alues4 t at are used to 3uide and s ape be a0ior+ = e et ical practices o' indi0iduals 5it in a culture are o'ten closel) intert5ined 5it t eir reli3ion

Christianit"
C ristianit) is t e most 5idel) practiced reli3ion and is common t rou3 out ;urope4 t e :mericas4 and ot er countries settled b) ;uropeans+ Buestion: 2 at are t e economic implications o' C ristianit)C In *D084 7a6 2eber su33ested t at it 5as t e #rotestant 5or$ et ic "'ocus on ard 5or$4 5ealt creation4 and 'ru3alit)% t at 5as t e dri0in3 'orce o' capitalism

Islam
:d erents o' Islam4 called 7uslims4 belie0e t at t ere is one true omnipotent God+ Islam is an all-embracin3 5a) o' li'e t at 3o0erns one@s bein3+

Buestion: 2 at is Islamic 'undamentalismC In t e 2est4 Islamic 'undamentalism is associated in t e media 5it militants4 terrorists4 and 0iolent up ea0als4 o5e0er4 t e 0ast ma1orit) o' 7uslims point out t at Islam teac es peace4 1ustice4 and tolerance+ #er aps in response to t e in'luence o' 2estern ideas4 some 7uslims 'eel t reatened4 and are promotin3 a commitment to traditional belie's and practices+ (undamentalists a0e 3ained political po5er in man) 7uslim countries4 and a0e tried to ma$e Islamic la5 t e la5 o' t e land

Buestion: 2 at are t e economic implications o' IslamC /nder Islam4 people do not o5n propert)4 but onl) act as ste5ards 'or God and t us must ta$e care o' t at 5 ic t e) a0e been entrusted 5it +2 ile Islam is supporti0e o' business4 t e 5a) business is practiced is prescribed+ Businesses t at are percei0ed to be ma$in3 a pro'it t rou3 t e e6ploitation o' ot ers4 b) deception4 or b) brea$in3 contractual obli3ations are un5elcome

#induism
-induism4 practiced primaril) on t e Indian sub-continent4 'ocuses on t e importance o' ac ie0in3 spiritual 3ro5t and de0elopment4 5 ic ma) re.uire material and p )sical sel'-denial

Buestion: 2 at are t e economic implications o' -induismC -indus are 0alued b) t eir spiritual rat er t an material ac ie0ements+ #romotion and addin3 ne5 responsibilities ma) not be t e 3oal o' an emplo)ee4 or ma) be in'easible due to t e emplo)ee@s caste

$uddhism
Budd ists4 'ound mainl) in Central and Sout east :sia4 C ina4 ,orea4 and Eapan4 stress spiritual 3ro5t and t e a'terli'e4 rat er t an ac ie0ement 5 ile in t is 5orld Buestion: 2 at are t e economic implications o' Budd ismC Budd ism does not support t e caste s)stem4 so indi0iduals do a0e some mobilit) and can 5or$ 5it indi0iduals 'rom di''erent classes+ ;ntrepreneurial acti0it) is acceptable in Budd ist societies

%. &anguage
Countries di''er in terms o' lan3ua3e or means o' communication+ = ere are t5o 'orms lan3ua3e spo$en unspo$en Fan3ua3e is one o' t e de'inin3 c aracteristics o' culture

Spo'en &anguage
Countries 5it more t an one spo$en lan3ua3e o'ten a0e more t an one culture+ C inese is t e mot er ton3ue o' t e lar3est number o' people in t e 5orld+ ;n3lis is t e most 5idel) spo$en lan3ua3e in t e 5orld4 and is becomin3 t e lan3ua3e o' international business+ -o5e0er4 $no5led3e o' t e local lan3ua3e is bene'icial4 and in some cases4 critical 'or business success

(nspo'en &anguage
/nspo$en lan3ua3e re'ers to non0erbal cues+ /nspo$en lan3ua3e suc as 'acial e6pressions and and 3estures can be important 'or communication+ 7an) non0erbal cues are culturall) bound and because t e) ma) be interpreted di''erentl)4 can result in misunderstandin3s

). !ducation:
(ormal education is t e medium t rou3 5 ic indi0iduals learn man) o' t e lan3ua3e4 conceptual4 and mat ematical s$ills t at are indispensable in a modern societ)+ = e $no5led3e base4 trainin34 and educational opportunities a0ailable to a countr)@s citizens can also 3i0e it a competiti0e ad0anta3e in t e mar$et and ma$e it a more or less attracti0e place 'or e6pandin3 business+ = e 3eneral education le0el o' a countr) is a 3ood indicator o' t e t)pes o' products t at mi3 t sell in t at location or t e t)pe o' promotional materials t at mi3 t be success'ul

Implications for *anagers:

&i''erences in culture impl) t at *+ t ere is a need 'or mana3ers to de0elop cross-cultural literac) 2+ t ere is a connection bet5een culture and national competiti0e ad0anta3e 3+ t ere is a connection bet5een culture and et ics in decision ma$in3

Cross+Cultural &iterac":
Indi0iduals and 'irms must de0elop cross-cultural literac). International businesses t at are ill in'ormed about t e practices o' anot er culture are unli$el) to succeed in t at culture+ Indi0iduals must also be5are o' et nocentric be a0ior

Culture and Competitive ,dvantage:

(or international companies4 t e connection bet5een culture and competiti0e ad0anta3e is important 'or t5o reasons+ (irst is t e connection su33ests 5 ic countries are li$el) to produce t e most 0iable competitors+ :nd second one is t e connection as implications 'or t e c oice o' countries in 5 ic to locate production 'acilities and do business+

Conclusion:
=o sum up all4 t e most important t in3s about culture and its determinants are Countries are di''erent because t eir cultures 0ar) = eir cultures 0ar) because o' pro'ound di''erences in its determinants Culture di''erences in'luences t e bene'its4 costs4 and ris$ associated 5it doin3 business in di''erent countries+ = e costs o' doin3 business in a countr) in'luence t e abilit) o' 'irms to establis a competiti0e ad0anta3e in t e 3lobal mar$etplace+ :nd competiti0e ad0anta3e is so muc important 'or t e business sur0i0al and its prosperit)+ = at<s 5 ) a mana3er doin3 is 1ob in across t e 5orld as to conscious about t ese di''erences ot er5ise t e) 5ill lose t e mar$et and conse.uentl) 5ill be t e cause o' business 'ailure+