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INTRODUCTION

When doing business abroad, a company

first should determine whether a usual
business practice in a foreign country
differs from its home-country experience.

Understanding the cultures of groups of

people is useful because business
employs, sells to, buys from, is regulated
by, and is owned by people.

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 The Concept Of Culture
Culture: consists of specific learned norms
based on attitudes, values, and beliefs, all of
which exist in every society.
A system of values and norms shared among
a group of people and, when taken together,
constitute a design for living.
Culture cannot easily be isolated from such factors
as economic and political conditions.
Isolation tends to stabilize a culture, whereas contact
tends to create cultural borrowing

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 What is culture?
• Culture is everything that people have,
think or do as members of their society
– shared by two or more people
– transmitted by a learning process
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CULTURE CONSISTS OF:
– Material objects
– Ideas, values and attitudes
– Normative or expected patterns of behaviour

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 Norms and Values

• Norms: • Values:
– Social rules and – Abstract ideas about
guidelines that prescribe what a group
appropriate behaviour in
believes to be good,
particular situations.
right, and desirable.
– Folkways:
– The bedrock of
• Routine conventions
of everyday life. culture.
– Mores: – Have emotional
• Central to functioning significance.
of society and its • Freedom.
social life.

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 Cultural Awareness in International Business
• Building cultural awareness is not an easy task.
• Business people agree that cultural differences exists
but disagree on what they are.
• Problems areas that can hinder managers’ cultural
awareness are:
– Subconscious reactions to circumstances
– The assumption that all societal subgroups are
similar.
• A company’s need for cultural knowledge increases as-
– Its number of foreign functions increases
– The number of countries of operations increases
– It moves from external to internal handling of
operations.
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 Nations and Culture

National culture
Nation states build museums and monuments to
preserve the legacies of important events and people

Subculture
Group of people that share a unique way of life within a
larger culture (language, race, lifestyle, attitudes, etc.)

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 Components of Culture

Aesthetics
Physical Values &
environments attitudes

Manners &
Education Culture customs

Personal Social structure

communication
Religion

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01. Aesthetics

Music
Painting
Dance
Drama
Architecture

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 02. Values and Attitudes

Values Attitudes
The Ideas, beliefs and Positive or negative
customs to which evaluations, feelings and
tendencies people hold
people are emotionally toward objects or concepts
attached

• Freedom • Time
• Responsibility • Work
• Honesty • Cultural change

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 03. Manners and Customs

Manners Customs
Appropriate behavior, Traditional ways or
speech and dressing behavior in specific
in general circumstances

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04. Social Structure

Social structure
Culture’s groups, institutions, social
positions and resource distribution

Social stratification
Process of ranking people into social layers

Social mobility
Ease of moving up or down a culture's
"social ladder"

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 05. World Religions

 Christianity
 Islam
 Hinduism
Origin of
 Buddhism
Human Values
 Confucianism
 Judaism
 Shinto

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 06. Language Blunders
 Braniff Airlines’ English-language slogan “Fly in Leather” was
translated into “Fly Naked” in Spanish.
 Sign in English on a Majorcan storefront read, “English well-
talking” and “Here speeching American.”
 Sign for non-Japanese-speaking guests in a Tokyo hotel read,
“You are respectfully requested to take advantage of the
chambermaids.”
 English sign in a Moscow hotel read, “If this is your first visit to
the USSR, you are welcome to it.”
 Japanese knife manufacturer labeled its exports to the United
States with “Caution: Blade extremely sharp! Keep out of
children.”
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 Mixed Signals

"Okay" "It's a secret" "Crazy"

"Vulgar gesture" "Very nosey" " Very Clever "

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 07. Education

Cultures pass on traditions, customs, and values through

schooling, parenting, group memberships, etc.

Education level
Well-educated attract high-paying jobs, while poorly educated
attract low-paying manufacturing jobs

Brain drain
Departure of highly educated people from one profession,
geographic region or nation to another

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 08. Physical and Material Culture

These influence a culture’s development and pace of change

Topography
Physical features characterizing the surface of a geographic region

Climate
Weather conditions of a geographic region

Material Culture
Technology used to manufacture goods and provide services

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 Global Business
Etiquette/Protocol/Manner
1. Dress code
2. Punctuality
3. Non-verbal greetings
4. Forms of address
5. Verbal greeting
6. Exchange business cards
7. Gifts
8. Refreshments
9. Wining and dining

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 Identification and Dynamics of Cultures

• The nation as a point of reference

• Cultural formation and dynamics
• Language as a Cultural Stabilizer
• Religion as a Cultural Stabilizer

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 Religion

• Shared beliefs and rituals concerned with

the realm of the sacred.
• Ethical Systems:
– Moral principles or values used to guide and
shape behavior.
• Shapes attitudes toward work and
entrepreneurship and can affect the cost of
doing business.

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 Religion and Economic Implications

• Christianity
– “”Protestant Work Ethic” and “The Spirit of Capitalism””.
• Islam
– Favors market-based systems.
– No payment or receipt of interest.
• Hinduism
– Asceticism may have an impact.
– Caste (Racial) system plays a role.
• Buddhism
– Little emphasis on entrepreneurial behavior.
• Confucianism
– Loyalty, reciprocal obligations, and honesty in dealings.

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 Behavioral Practices Affecting Business

1. Social Stratification Systems

2. Motivation
3. Relationship Preferences
4. Risk Taking Behavior
5. Information and Task Processing

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 01. Social Stratification Systems

• Group memberships
• Performance orientation
• Gender-Based Groups
• Age-Based Groups
• Family-Based Groups
• Occupation

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 Behavioral Practices Affecting Business ..

1. Group Affiliation: a person’s affiliations

reflecting class or status.
2. Role of Competence: rewarded highly in some
societies. Seniority in Japan
3. Gender Based Groups: there are strong country-
specific differences in attitudes towards males
and females.
4. Age-Based Groups: many cultures assume that
age and wisdom are correlated
5. Family-Based Groups:
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 Behavioral Practices Affecting Business
6. Importance of Work: protestant ethic, belief in success
and reward; work as a habit, high-need achiever.
7. Need Hierarchy: people try to fulfill lower-order
needs sufficiently before moving on to higher ones.
The hierarchy of needs theory is helpful for
differentiating the reward preferences of employees.
8. Importance of Occupation: The importance of
business as a profession
9. Self-Reliance: uncertainty avoidance, trust, fatalism,
individual versus group
10. Preference for Autocratic versus Consultative
Management
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 Social Stratification….

Typically defined by
family background,
occupation, and income.
Class:
some social
Caste: mobility
Virtually no mobility
Class Consciousness:
May play a role in
a firm’s operations

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 02. Motivation

• Materialism and Leisure

• Expectation of Success and Reward
• Assertiveness
• Need Hierarchy

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 03. Relationship Preferences

• Power Distance
• Individualism versus Collectivism

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 04. Risk-Taking Behavior

• Uncertainty Avoidance
• Trust
• Future Orientation
• Fatalism

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 05. Information and Task Processing

• Perception of Cues
• Obtaining Information
• Information Processing

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Strategies for Dealing with Cultural Differences
• Making Little or No Adjustment
• Communications
– Spoken and Written Language
– Silent Language
• Cultural Shock
• Company and Management Orientation
• Polycentrism
• Ethnocentrism
• Geocentrism
• Strategies for Instituting Change
– Value system
– Cost Benefit of Change
– Resistance to Too Much Change
– Participation
– Reward Sharing
– Opinion Leaders
– Timing
– Learning Abroad 31
 Language

Language: all languages are complex and

reflective of Environment
Translating one language into another.
Silent Languages: color associations, sense of
appropriate distance, time, body language.
Low-Context cultures, High-context cultures
Monochronic versus Polychronic

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 Language
• Allows people to communicate.
• Structures the way the world is
perceived.
• Directs attention to certain features of the
world rather than others.
• Helps define culture.
• Creates separatist tendencies?

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Spoken Language

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 Language dimensions

• The spoken language

• The written language
• The official language
• Linguistic pluralism
• Language hierarchy
• International language
• Mass media language
• The non-spoken language/ body- language
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 Nonspoken Language

• Nonverbal cues:
– eyebrows
– fingers/thumbs
– hand gestures
– feet
– personal space
– body gestures

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 Education

Formal education For int’l business, it is a

supplements family role determinant of national
in teaching values competitive advantage
and norms Medium to learn
language, conceptual,
and math skills
Cultural norms such as
respect, obedience, honesty

Focus on facts of social

Value of personal and political nature
achievement and of society
competition
Obligations of
citizenship

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Reconciliation Of International Differences

1. Stereotypes
2. Cultural Shock
3. Polycentrism
4. Ethnocentrism
5. Geocentrism

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 Preparation

• Define Culture. Discuss different components

of Culture that affect the international
business.
• How do the Religion and Language influence
international business? Discuss different
types of language in brief.
• Explain different types of Strategies for
Dealing with Cultural Differences for
managing international Business.

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