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Frameworks and Skills
Binod Sundararajan
Oksana Shkurska & Shannon Lin
Cross-Cultural Practices in Business
and Finance
Binod Sundararajan · Oksana Shkurska ·
Shannon Lin
Cross-Cultural Practices
in Business and Finance
Frameworks and Skills
Binod Sundararajan Oksana Shkurska
Dalhousie University Dalhousie University
Halifax, NS, Canada Halifax, NS, Canada
Shannon Lin
Dalhousie University
Halifax, NS, Canada
© The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature
Switzerland AG 2023
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Acknowledgments
I would like to first acknowledge both my co-authors Dr. Oksana Shkurska and
Dr. Shannon Lin, for agreeing to take this journey with me and help co-create
a one-of-a-kind, from the scratch textbook aimed at the International & Inter-
cultural Management and International Business practices space. Their talent and
knowledge have helped enhance this work and has resulted in the creation of a
unique book, by immigrant academics to Canada, diverse perspectives of people
who have lived, traveled, and worked in multiple countries and bring their rich,
lived experiences into this textbook.
I would like to thank our Faculty of Management that has helped nurture a
fertile and nurturing environment to enable such efforts. A huge thank you to
Marcus Ballenger and Geetha Chockalingam of Palgrave Macmillan for their help
and support during the writing process.
I would like to thank my wife Dr. Alamelu Bharadwaj, a renowned Cancer
researcher in her own right, and my two children Lara and Mithra, for giving me
the love and the space to forego spending time with them and allowing me to
take these leaps of creative endeavor. I would like to thank my father, late, Mr.
Sundararajan Parthasarathy, my mother Komala Sundararajan, sister Dr. Malavika
Sundararajan, brother Sharad Sundararajan, and sister-in-law Shreya Amin, for
their constant support and cheerleading.
I would like to acknowledge Kim Brooks, the Dean of the Faculty of Management
(now an Acting Provost and Vice-President Academic at Dalhousie University),
and Mike Smit, the Acting Dean of the Faculty of Management, for their contin-
uing support and encouragement. Special thanks go to Linda Macdonald, a very
good colleague and friend who is always full of innovative teaching ideas and
inspiration.
I also wish to thank Marcus Ballenger, a senior editor, and Geetha Chock-
alingam from Palgrave Macmillan for their patience and guidance during the whole
writing process.
v
vi Acknowledgments
Finally, I would like to thank my husband Serge and my daughter Dasha who
never fail to support and push me to move forward.
I would like to thank my co-authors Dr. Binod Sundararajan and Dr. Oksana
Shkurska for their intellectual contributions, as well as support and patience
throughout the writing of this book. I also wish to thank my husband Dr.
Lorn Sheehan and my daughters Caroline and Linnette for their love and
encouragement.
Contents
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PESTLE (STEEPLE, PESTEL, PESTLIED, SLEPT,
LONGPESTLE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Political Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Economic Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Sociocultural Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Hofstede’s Cultural Dimensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Technological Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Legal Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Environmental Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Waterbody Innovations and Technologies Inc. (WITI) . . . . . . . . . . . . . . . . 12
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2 Political, Economic, and Cultural Climate of International
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Perceptions of Business Across Cultures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Types of Economies that Have Flourished Across Cultures . . . . . . . . . . . 17
Market Economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
State Capitalism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
State Run . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Distributed Economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
National Culture vs. Organizational Culture . . . . . . . . . . . . . . . . . . . . . . . . . . 23
National Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Organizational Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Does Culture Override Business Strategy? . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Cultural Sensitivity, Diversity Training, and Truly Benefiting
from a Culturally Diverse Workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Unconscious Biases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Affinity Bias . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Confirmation Bias . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Attribution Bias . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Conformity Bias . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
The Halo Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
vii
viii Contents
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
About the Authors
xiii
xiv About the Authors
xv
xvi List of Figures
xvii
Introduction
1
The Introduction section will lay out broadly, not only the scope of the textbook,
but also provide instances of the complexities and uncertainties that can develop
when people do business across borders and across cultures. For example, what
can businesses do when there is a potential for a global pandemic to which gov-
ernments do not yet have an organized response? Would technology be able to
come to the rescue? Possibly, at the least for meetings across time zones. How-
ever, what about supply chain-related issues? Movement of goods across borders
can be affected, resulting in shortages in goods or other equipment and resources
to make goods. If the movement of people is affected, even for a few months, the
tourism industry, a lifeline for many smaller countries with little else to produce
or offer to the world, can be seriously affected. Financial markets are very sensi-
tive to global events, political events, and force majeure (acts of God) are part of
all international contracts for trade. The trickle-down effect of even a few months
of downturn in businesses can be devastating for many small and medium-sized
(SME) businesses.
People generally want a peaceful and predictable life. But local and global
events often tend to make people nervous and very quickly they revert to type, i.e.
protective of the local and shunning of the global. Backlash occurs when domi-
nant cultures, usually ignorant, misinformed, or misled, start openly antagonizing
minority populations, often ascribing blame for their country’s misfortunes (slow-
ing down of global trade affects imports and exports alike) on the presence of the
minorities amidst them. In one fell swoop, all the good work done to integrate
newcomers to countries will be wasted and people must start all over again.
Moving beyond just posing these questions, the introduction will aim to pre-
pare the students, specifically, to understand cross-cultural nuances beyond just the
usual discussions of high vs. low contexts, power distance, uncertainty avoidance,
and such dimensions of cross-cultural interactions. These cultural dimensions,
introduced in this Chapter, but treated more thoroughly in Chapter 3, will be
woven across the textbook and will form the background for presenting and dis-
cussing chapter concepts. Broadly, the textbook will also aim to equip students
and readers with very useful and practical information that will allow them to use
this knowledge and build towards proactive behaviors when doing business across
cultures.
Each chapter will discuss broadly major cultural aspects of business practices
in the different regions around the world but provide specific examples and sce-
narios involving different types of businesses in specific countries and specifically
treat the aspect of accounting and international finance and banking practices in
Chapters 6 (Accounting Practices) and 7 (Banking and Financial Markets around
the globe). It would be a steep challenge to discuss every country in the world,
but there would be sufficient information provided to allow students to begin ask-
ing the right questions when faced with the opportunity to work with people from
other cultures, be it in their home countries or in a host country halfway around
the world. Using both theories to provide context and allowing for current research
in the topics to inform the students, and with real examples from several cross-
cultural business operations, the content in each chapter will lead and scaffold
students towards a better understanding of the need for such an approach and help
create a mindset that takes into account, adaptability, awareness of complexities,
uncertainties, and an openness and eagerness to learn about the different cultures
and making working globally and locally, a richer experience.
In this book we will explore and lay out business, financial, cultural, and media
use practices across different countries and cultures. Similar ideas have been
made available to the academic and practitioner communities via textbooks on
International and Intercultural Communication & Management, Global Business
Practices, and online articles on how to do something or how not to do some-
thing when interacting with people across cultures, particularly in the context of
a business meeting or collaboration. These books make an excellent case for the
ideas professed, using established and not so well-established theories about high-
context and low-context cultures, collectivist and individualist cultures, cultural
norms, practices, and expectations. However, while we will discuss these aspects
and frameworks in the earlier chapters, our purpose in writing this book is to
provide very practical and situational examples involving countries and regions
around the world that will serve as a starting point for business professionals,
academics, and students (on exchange, new job opportunities etc.) to learn about
the cultural and business practices of people from different backgrounds, ethnici-
ties, diversities, educational levels, and social strata and hierarchies. Towards this
effort, we will integrate the discussion of chapter concepts within the context of
these cultural frameworks. We will include discussions on how academics can be
supportive and encouraging of the international students in their classrooms and
how practitioners can help their international recruits/employees (in house or as
part of their global teams) feel that they belong to the team and the organization.
As we write these chapters, the world entered the second year of being gripped
by the pandemic, COVID-19 variants are causing several waves of infection surges,
the world’s supply chains have been disrupted, and global and national businesses
PESTLE (STEEPLE, PESTEL, PESTLIED, SLEPT, LONGPESTLE) 3
and governments are dealing with new realities and new ways of doing things,
particularly, transacting business across countries and continents. While saving the
lives of citizens of every country is the topmost priority of every government on
the planet, these governments also need to ensure that their country’s economic
engines, businesses, continue to operate and survive disruptions and continue to
contribute to national GDP’s (Gross Domestic Product). Additionally, as the book
has neared publication, we have emerged from the pandemic, but the threat of
variants still looms over people and nations, and travel across and between coun-
tries has been plagued by airline fare hikes, increases in the prices of gasoline,
commodities, and goods, coupled with surging inflation and recession in many
countries.
In our treatment of the various aspects of cross-cultural business and financial
practices, we will adopt the following approach:
Among the many assessments or analyses of markets, whether they are domestic or
international, the PEST or PESTLE approach has allowed organizations to consider
the broadest possible set of factors to consider when they plan to expand the orga-
nizational footprint into these markets. Figure 1.1 describes some of the variants of
this approach—that consider Political, Economic, Sociological (or Sociocultural),
Technological, Legal, Ethical/Environmental (PESTEL or PESTEEL) factors in a
bid to aid the organization in long-range planning and adapting the business to the
potential new market or environment. These factors play an even more important
4 1 Introduction