Chapter 3 - Difference in culture

Chapter 4 – Ethnic in International Business

Kelompok 3 – Bisnis Internasional
(Annisa R, Karina E, Ma’ruf G, Revita M, Rifa N, Rifqi A)
Chapter 3
Difference in culture
 What is Culture?
Hodsstede and Namenwirth and Weber :
● Culture as a system of values and norms that
are dhared among a group of people and that
when taken together constitute a design for
living.
What is Values?
● Values means group believes to be good,
right and desirable. Value form the bedrock
of a culture
● Values are often reflected in the political and
economic system of society
What is Norms?
Norms mean the social rule and
guidelines that prescribe appropriate
behavior in particular situations.
Norms can be subdivided to :
a. Folkways : the routine
conventions of everyday life.
b. Mores : norms that are seen as
central to the functioning of a
society and to its life.
What is Society?
Society refer to a group of people who
share a common set of values and
norms
Social Structure
Social structure refers to its basic social organization.
Individuals Group
Individualsm is a basic building of
Group is an association of two or more
the social organization.
individuals who have a shared sense of
identity who interact with each other in
structured ways on the basis of a common
Social Stratification set of expectations.

• Social Mobility : To which individuals can move out of the strata into which they are born.
• Caste system : a Closed system of stratification in which social position is determined bu
the family into which person is born.
• Class system : less rigid form of social stratification in which social mobility is possible.
• Class consciousness : condition where people tend to perceive themselves iin terms of
their class background
 Religious and Ethnical Systems
Religion
System of shared beliefs and rituals that are concerned with the realm of the sacred.

Christian Islam Hinduism Buddhism Confucianism

Ethnical Systems
set of moral principles, or values that are used to guide and shape behaviour
 • Differentiate in which country the language is used.
Language •
•
Defining the characteristic of culture.
Enable people to communicate with each other.

q Spoken Language q Unspoken Language

- verbal communication - non verbal communication.
- widely spoken language known is - We all communicate with each other by a host
English of nonverbal cues, example : smile as a sign of
joy, raising eyebrows as a sign of recognition
in most culture.
Education
• The formal education plays a key role in a society.
• Supplements the family’s role in socializing the young into the values and norms of a society
• Important factor explaining the country’s post war economic success and national competitive
advantage.
• The general education level of a country is also good index of kind of product that might sell in
a country and of the type of promotional material.
 Culture and the Workplace
The most famous study of how culture relates to values in the workplace was undertaken by Geert Hofstede.

Hofstede’s Power Hofstede’s Uncertainty

Distance Dimension
How society deals with the
fact that people are
unequal in physical and
intellectual capabilities.
Country Power Distance
Argentina
The Individualism
Avoidance Dimension
Measured to the extent to which versus collectivism
different cultures socialized their Focussed on the relationship
members into accepting between the individual and his her
ambiguous situations and fellows.
tolerating uncertainty. Journal of International Business
Studies 14 (Fall 1983), pp 75-89
Uncertainty Individualism Masculinity
Avoidance
49 86 46 56

Indonesia 78 48 14 46

Japan 54 92 46 95

Thailand 64 64 20 34
Cultural Change
Ø Culture is not a constant and it evolves over time.
Ø Changes in value system can be slow and painful
for a society.
Ø Culture society may also change as they become
richer because economic progress.
Ø Cultural change is not unidirectional with national
culture converging toward some homogenous
global entity.
Cross Cultural Literacy
● Doing business in different cultures
requires adaptation to conform with the
value system and norms.
● International business should consider
employing local citizens to help do
business in a particular culture.
● International business must also
constantly on guard against the dangers
of ethnocentric (a belief in the superiority
of one’s own ethnic group or culture)
behavior.
 Culture and Competitive Advantage

Competitive
Value System Cost of Doing
Advantage In Global
Business
Marketplace.
affect affect

Japan ü Group affiliation, loyalty, reciprocal

obligations, honesty and education boost
the Japanese companies.

ü The raise Japan as an economic power

during the 20th century may in part be
attribute to the economic consequence to
its culture.
 Chapter 4 -
Ethnic in International Business
 Ethnics Accepted principles of right or wrong that govern the conduct of a person.

Ethnical
Strategy, or course of action that does not violate these accepted principle
Strategy

Ethical Issues in International Business

q Employment Practices
Business Accepted principles of right o Work conditions in host nation are clearly different
or wrong governing the in a multinational’s home nations.
Ethnics conduct of businesspeople o Companies must determine how much divergence
is acceptable?

q Human Rights q Environmental Pollution q Corruption

o Basic human rights still are
not respected in many
nations.
o The most obvious historic
examples was South Africa
which did not end until 1994.
o Environmental regulations in
host nations could be different
to those in home nation.
o Those regulations are often
lacking in developing nations.
o Tragedy of Commons named by
Garret Hardin.
o Corruption has been a problem in
almost every society.
o There are argument for corruption
from economists, such as it can
reduces the return on business
investment, had a significant
negative impact on country’s
growth rate, and etc.
 Moral Obligations
Social responsibility : The idea that business people should
consider the social consequences of economic action when
making business decisions.

Large successful business need to recognize Noblesse Oblige

Noblesse Oblige : Honorable and benevolent behavior considered the responsibility of people of high).

The situations in which none of the available alternatives

Ethical Dilemma seems ethnically acceptable

Decision
The Roots of Unethical Making
Personal Behavior Process
Ethics
Unrealistic
Organization Leadership
Performance
Culture
Goals
 Ethical Dilemma
Personal Ethics
Generally accepted principles of
right and wrong governing the
conduct of individuals.
Organization Culture
● The values and norms that
employee of an organization
share.
● It has an important influence on
the ethnics business decision
making
Leadership
Leader set the example that others
follow. If the leader do not behave in
ethical manner, other employee might
not either.
Decision Making Process
● Business need to answer the
question of “Is this decision or
action ethical?”
● Business need to incorporate
ethical considerations into
business decision making.
Unrealistic Performance Goals
● The pressure of parent company to meet
unrealistic performance goals that can be
attained only by cutting corners is unethical
manner.
● In such circumstance, there is a greater
average probability that the managers will
violate their own personal ethics and engage
in unethical behavior.
 Philosophical Approaches to Ethics
Straw Men When making a move, consider approaches that form the basis
for current models of ethical behavior in international business.

Friedman Cultural The Righteous

Doctrine relativism
Only responsibility of Belief that ethics are nothing
business is to increase more than the reflection of a
profit culture.
Assert the manager of a
The Naïve multinational see that firms from
other nations are not following
Moralist ethical norm In a host nation
Moralist
Claims that a multinational’s
home country standard od ethics
are appropriate ones for
companies to follow in foreign
country.
 Philosophical Approaches to Ethics
Utilitarian and Kantian Ethics
Utilitarian
Ethics hold that the moral worth or action or practices determine by their consequences.

Kantian Ethics
People should be treated as ends and never purely as means to the ends of others..

Right Theories
Recognize that human beings have fundamental right and privileges that transcend national
boundaries and cultures.

Justice Theories
Focus on the attainment of a just distribution of economics, good and services. It also that is
considered fair and equitable.
 Hiring and Promotion
• It is importance to hire people who have a strong sense of personal ethics and would not
engage in unethical or illegal behavior.
• How to know someone has a poor sense of personal ethics?
• - With the physiological test and incentives

Organization Culture and Leadership

• Companies do drafting the Code of Ethics.
• Code of Ethics is a formal statement of the ethical priority a business adhere to.

Decision-Making Processes
• Businesspeople must be able to think through the ethical implications of decision making.
• Decision making would affect Stakeholder. Is it affect the internal stakeholder, external
stakeholder or both of them.
Ethics Officers
To make sure that a business in
an ethical manner.
Moral Courage
• Enables managers to walk away from a decision
that is profitable by unethical.
• Give the Employee the strength to say no to a
superior who instruct her to pursue actions that are
unethical.
Case Study Chapter 3
1. WHAT ARE THE ETHICAL ISSUES THAT MIGHT ARISE WHEN DRAWING UPON GUANXIWANG TO GET
THINGS DONE IN CHINA? WHAT DOES THIS SUGGEST ABOUT THE LIMITS OF USING GUANXIWANG FOR A
WESTERN BUSINESS COMMITTED TO HIGH ETHICAL STANDARDS?

Masalah etika bisnis yang muncul dengan memanfaatkan guanxiwang adalah peluang bisnis tidak akan
banyak. Bagi mereka yang baru memulai bisnis, perusahaan yang memiliki guanxiwang bisa menjadi penghalang
untuk memasuki pasar. Misalnya, pebisnis yang dapat memanfaatkan guanxiwang memperoleh hak terbatas dalam
menggunakan fasilitas penting untuk menjalankan kegiatan bisnis dari pemerintah. Hal itu dapat merusak sistem
persaingan pasar bebas.

Guanxiwang merupakan suatu hal yang etis bagi masyarakat China dan memainkan peran penting dalam etika
bisnis di China. Bagi mereka, kepercayaan perusahaan merupakan faktor terpenting dalam berbisnis karena tidak
mungkin menyelesaikan apapun tanpa perantara atau pihak ketiga yang memperkenalkan cara kerja berbisnis di
China. Hal ini sepenuhnya legal dalam budaya China dan bukan merupakan penyuapan seperti di Amerika Serikat
sehingga Bisnis Barat tidak akan bisa mengikuti guanxiwang jika mereka berkomitmen pada standar etika yang
tinggi dalam berbisnis. Jika pebisnis Barat ingin melakukan bisnis di China, maka mereka harus menentang
keyakinan mereka terhadap etika bisnis Barat dan mengadopsi budaya guanxiwang.
WHAT ARE THE ETHICAL ISSUES THAT MIGHT ARISE WHEN DRAWING UPON GUANXIWANG TO GET
THINGS DONE IN CHINA? WHAT DOES THIS SUGGEST ABOUT THE LIMITS OF USING GUANXIWANG FOR A
WESTERN BUSINESS COMMITTED TO HIGH ETHICAL STANDARDS?

Masalah etika bisnis yang muncul dengan memanfaatkan guanxiwang adalah peluang bisnis tidak akan
banyak. Bagi mereka yang baru memulai bisnis, perusahaan yang memiliki guanxiwang bisa menjadi penghalang
untuk memasuki pasar. Misalnya, pebisnis yang dapat memanfaatkan guanxiwang memperoleh hak terbatas dalam
menggunakan fasilitas penting untuk menjalankan kegiatan bisnis dari pemerintah. Hal itu dapat merusak sistem
persaingan pasar bebas.

Guanxiwang merupakan suatu hal yang etis bagi masyarakat China dan memainkan peran penting dalam etika
bisnis di China. Bagi mereka, kepercayaan perusahaan merupakan faktor terpenting dalam berbisnis karena tidak
mungkin menyelesaikan apapun tanpa perantara atau pihak ketiga yang memperkenalkan cara kerja berbisnis di
China. Hal ini sepenuhnya legal dalam budaya China dan bukan merupakan penyuapan seperti di Amerika Serikat
sehingga Bisnis Barat tidak akan bisa mengikuti guanxiwang jika mereka berkomitmen pada standar etika yang
tinggi dalam berbisnis. Jika pebisnis Barat ingin melakukan bisnis di China, maka mereka harus menentang
keyakinan mereka terhadap etika bisnis Barat dan mengadopsi budaya guanxiwang.
3. WHAT DOES THE EXPERIENCE OF DMG TELL US ABOUT THE WAY THINGS WORK IN CHINA? WHAT
WOULD LIKELY HAPPEN TO A BUSINESS THAT OBEYED ALL THE RULES AND REGULATIONS, RATHER THAN
TRYING TO FIND A WAY AROUND THEM AS DAN MINTZ APPARENTLY DOES?

Pengalaman DMG di Shanghai ini mengajarkan kita bahwa budaya merupakan hal yang sangat berpengaruh di
China. Seperti yang kita ketahui, Dan Mintz selaku pendiri DMG tidak memiliki pengalaman dalam bidang periklanan
sama sekali dan tidak bisa berbahasa Mandarin, namun Dan Mintz memiliki koneksi (guanxi) dengan dua pemuda
yang memiliki hubungan baik dengan orang-orang dari berbagai tingkatan khususnya pemerintahan. Berkat kedua
pemuda ini, DMG menjadi salah satu agensi periklanan dengan pertumbuhan tercepat di China. Keberhasilan DMG
ini menunjukkan kepada kita bahwa guanxi merupakan kunci keberhasilan perusahaan yang berbisnis di China.

Dan Mintz percaya bahwa guanxi dan guanxiwang sangat berguna bagi perusahaan karena dapat membantu
mengatasi permasalahan yang dapat membatasi perusahaan dalam menjalankan fungsi bisnisnya di China. Oleh
karena itu, berbisnis di China tanpa memiliki koneksi tidak akan berjalan dengan baik karena jika suatu perusahaan
tidak dapat menerobos aturan hukum di China, hampir tidak mungkin untuk mencapai keberhasilan bisnis.
Case Study Chapter 4
1. Mexico’s weaker environmental regulation and lax legal enforcement allow for higher levels of lead
pollution than would be permissible in the United States. Is it ethical for U.S. companies to therefore
engage in practices that result in higher levels of lead pollution?

Jika perusahaan AS yang mengekspor baterai bekas ke Meksiko menyebabkan penyakit serius pada anak-anak
yang terpapar lead / timbal, berarti tindakan ekspor tersebut tidak etis dan kurang tanggung jawab sosial. Terutama
karena paparan timbalnya sangat berbahaya bagi anak-anak yang tinggal di dekat pabriknya. Selain itu karena
tingkat polusinya sangat tinggi polusi yang dibuang keluar dari pabrik akan menyebar ke udara dan tanah di
sekitarnya. Biarpun regulasi yang mengatur di Meksiko lebih lemah daripada AS namun secara etis akan tetap sama
maupun di AS atau di Meksiko atau di negara apapun. Jika penyakit yang tersebar karena polusinya menyebabkan
penyakit yang serius maka perusahaan AS juga bisa diproses secara hukum dengan adanya korban dan saksi.
2. As seem in the case, Exide refuses to export used batteries to Mexico. What ethical principles do you
think the company follows?

Exide sudah jelas bertindak etis karena mereka tidak melakukan sama sekali ekspor baterai
bekasnya. Dan untuk Johnson Controls, menurut saya jika mereka menempatkan pabriknya
benar-benar jauh dari pemukiman, dan mau bertanggungjawab jika ada yang sakit terkena
polusi, maka Johnson Controls masih bertindak etis.

Bentuk tanggung jawab yang bisa dilakukan Johnson Controls adalah membayar tagihan
medis, memindahkan pemukiman warga (jika ada sebelumnya), memberikan alat
perlindungan medis untuk warga yang membutuhkan dan membagi keuntungan kepada
warga sekitar (jika ada).
3/ Johnson Controls, on the other hand, chooses to recycle in Mexico but only under the stringent
conditions of its own plants. Which of these two companies (Johnson Controls and Exide) is acting
in an ethical manner?

Ada 6 dasar ethical principles. Yaitu, dapat dipercaya (trustworthiness), menghormati

(respect), tanggung jawab (responsibility), keadilan (fairness), kepedulian (caring), dan
kewarganegaraan (citizenship).

Jika Exide menolak untuk ekspor baterai bekas ke Meksiko berarti Exide mengikuti prinsip
kepedulian. Karena dengan tidak melakukan ekspor baterai bekas berarti perusahaan
peduli terhadap kesehatan warga.