Global International Business

Culture in International
business
Usama Bin Iqbal
BBA 5 & BBA 2 Years
 Introduction
• Business success in a variety of countries requires cross-cultural literacy.
• By cross-cultural literacy, we mean an understanding of how cultural
differences across and within nations can affect the way business is practiced.
• Global communications, rapid transportation, worldwide markets, and global
brands are there but it is easy to forget just how different various cultures
• It is important for foreign businesses to gain an understanding of the culture
that prevails in those countries where they do business.
• A relationship may exist between culture and the cost of doing business in a
country or region.
• cultural factors lowered the costs of doing business in Japan and
helped to explain Japan's rapid economic ascent during the 1960s,
70s, and 80s.
• cultural factors can sometimes raise the costs of doing business.
Historically,
• class divisions were an important aspect of British culture, firms
• operating in Great Britain found it difficult to achieve cooperation
between management and labor.
 STRIKE EXAMPLE COUNTRY WISE
• Between 1995 and 2005, the number of
• days lost per 1,000 workers due to strikes in the
• United Kingdom was on average 28 eachy ear,
• United States (33 each y ear),
• Ireland (81),
• Canada (168)
 Example
• McDonald's and other Western fast-food companies may help to
change the dining culture of that nation, drawing them away from
traditional restaurants and toward fast-food outlets.
 What Is Culture?
• "that complex whole which includes knowledge, belief, art, morals,
law, custom, and other capabilities acquired by man as a member of
society.
• Robert Weber, who see culture as a system of ideas and argue that
these ideas constitute a design for living
• By values we mean abstract ideas about what a group believes to be good,
right, and desirable (individual freedom, democracy, truth, justice, honesty,
loyalty, social obligations, collective responsibility, the role of women, love,
gender , marriage)
• By norms we mean the social rules and guidelines that prescribe appropriate
behavior in particular situations –
• folkways (Folkways are the routine conventions of everyday life Eg concerns
attitudes toward time in different countries) Link with USA and Saudia
• mores (are norms that are seen as central to the functioning of a society and
to its social life. Violating mores can bring serious retribution. Mores include
such factors as indictments against theft, adultery, incest, and cannibalism )
• society refer to a group of people who share a common set of values
and norms
•
 Social structure
• A society's soc ial structure refers to its basic social organization
• Individual or Group (1)
• Class system (2)
• social strata (3). These strata are typically defined on the basis of characteristics such
as family background, occupation, and income
• A caste system is a closed system of stratification in which social position is
determined by the family into which a person is born, and change in that position is
usually not possible during an individual's lifetime
• A class system is a less rigid form of social stratification in which social mobility is
possible. Class consciousness refers to a condition where people tend to perceive
themselves in terms of their class background, and this shapes their relationships with
members of other classes
Religious and Ethical Systems
 Main Categorization
• All world religion can be broadly categorize into two main categories.
• Sementic and Non Sementic Religon
• Non Sementic Religons are classified into
• Aryan
• Non Aryan
 Semetic Religon
• Sementic Religion originated among the Semities.
• A/c to Bible Prophet Noah (PBUH) had a son name Shem.
• Hence, these religions originated among the Jews, Arabs, Assaryans,
Phoenicians.
• Major Semetic Religions are Judaism, Christianity and Islam.
 Non – Semitic Religion
• Aryan and Non Aryan Religions
 Aryan Religions
• This religion originated by Aryans. A powerful group that spread
through Iran and Northern India.
• The Aryan Religion are further sub divided into Vedic and Non Vedic
Religion.
• The Vedic religion is misnomer of Hindusim or Brahminism.
• The non Vedic religions are Sikkhism, Budhism, Jainism etc.
• All Aryan religions are Non Prophetic Religion.
• Zoroastrianism is an Aryan, Non Vedic Religion and it claims to be a
Prophetic Religion.
 Non Aryan Religions
• They have diverse origins.
• Confucianism and Taosim are of Chinese's Origin.
• While Shintoism is of Japanese origin.
• Many of these religions do not have a concept of GOD.
• They are more referred as ethical system rather religion.
 Hinduism
• Hinduism is a blanket term for an assortment of religious beliefs, most
of which are based on the Vedas, the Upanishads and the Bhagavad
Gita.
• The Cast system
• Brahman
• Kashitras
• Vishals
• Shudras
 Indian philosophy
• Indian Philisophy are philosophical traditions originating in the Indian
subcontinent.
• Traditions of Indian philosophy are generally classified as either
orthodox or heterodox.
• the authority of the Vedas and whether they accept the theories
of Brahman and Atman
•  dharma, karma, samsara, moksha and ahimsa. 
 Indian philosophy
• Dharma  is a key concept with multiple meanings in the Indian
religions.
• In Hinduism, dharma signifies behaviours that are considered to be in
accord with rta, the order that makes life and universe possible,and
includes duties, rights, laws, conduct, virtues and ‘‘right way of living.
•
 Indian philosophy
• Karma means action, work or deed; 
• it also refers to the spiritual principle of cause and effect where intent
and actions of an individual (cause) influence the future of that
individual (effect).
•  Good intent and good deed contribute to good karma and future
happiness, while bad intent and bad deed contribute to bad karma
and future sufferin
 Indian philosophy
• Saṃsāra is a Sanskrit word that means "wandering" or "world", with
the connotation of cyclic, circuitous change
• It also refers to the theory of rebirth and "cyclicality of all life, matter,
existence",
• Moksha is also called vimoksha, vimukti and mukti,is a term
in Hinduism and Hindu philosophy which refers to various forms of
emancipation, liberation, and release
• Ahimsa means 'not to injure' and 'compassion' and refers to a key
virtue in Indian religions. It simply means no Injury
 SIKHISM
• Sikhism is non Semetic, Aryan, non Vedic religion.
• It is not among major religion of world.
• It is a Branch or offshoot of hindisum founded by Guru Nanak in end
of 15th Century.
• This religion is mostly found in Pakistan and Inida.
• Guru Saheb was born in Kashytra ( warrior caste) of hinduism.
 Definition of Sikh and Sikhism
• The word is derived from the word “Sisya” which means disciple or
follower.
• Sikhism is a religion of 10 Guru, the first being Guru Nanak and 10th
being last Guru Gobind Singh.
• The sacred book of Sikhism is Sri Guru Granth also called Adi Granth
Sahib.
 The FIVE ‘K’S
• Every Sikh is supposed to keep the five ‘K’S which also serve as his
identity.
• Kesh: uncut hair; which all Gurus kept
• Kangha: comb; use to keep the hair clean.
• Kada: Metal or steel bangle; for strengthen and self strain.
• Kirpan: dagger; for self defense
• Kachaa: A cloth that is covered to your knees
 ZOROASTRIANISM
• An ancient Aryan religion originated in Persia more than 2500 years
ago.
• It has relatively few adherants less than 1030000 in whole world but
it is one of oldest religions.
• The Iranian prophet Zoroaster was the founder of Zoroastrianism
( commonly known as Parsisam).
• The sacred scripture of Parsis is the Dasatir and Avesta
• It was also the main religion of Persia.
 ZOROASTRIANISM
• GOD in zoroastrainism is known as “Ahura Mazda”. Ahura means the
Lord and Mazda means the Wise. ( Wise Lord or Wise GOD)
• Zoroastrians are not fire-worshippers, as some Westerners wrongly
believe. Zoroastrians believe that the elements are pure and that fire
represents God's light or wisdom.
 JUDAISM
• It is one of Semetic Religion. Its followers are known as Jews and they
belief in propehtic mission of Mosses or Hazrat Moosa ( PBUH).
• They also belief in ONE GOD
• Judaism was founded by Moses, although Jews trace their history
back to Abraham.
• Jews believe that there is only one God with whom they have a
covenant.
• Judaism has a rich history of religious text, but the central and most
important religious document is the Torah.
 3 GOVERNING PRINCIPLES OF JEWISH
• Jewish traditional or oral law, the interpretation of the laws of the
Torah, is called halakhah.
• Spiritual leaders are called Rabbis.
• The Jewish relationship with God is a covenant relationship.
• In exchange for the many good deeds that God has done and
continues to do for the Jewish People...
• The Jews keep God's laws
• The Jews seek to bring holiness into every aspect of their lives.
 Christianity
• Christians believe in a loving God who has revealed himself and can
be known in a personal way, in this life.
• With Jesus Christ, the person's focus is not on religious rituals or
performing good works, but on enjoying a relationship with God and
growing to know him better.
•
 Christianity
• Faith in Jesus Christ himself, not just in his teachings, is how the
Christian experiences joy and a meaningful life.
• In his life on Earth, Jesus did not identify himself as a prophet pointing
to God or as a teacher of enlightenment. Rather, Jesus claimed to be
God in human form.
• He performed miracles, forgave people of their sin and said that
anyone who believed in him would have eternal life.
• He made statements like, "I am the light of the world; he who follows
me will not walk in darkness, but will have the light of life."1
 Islam
• Muslims believe there is the one almighty God, named Allah, who is
infinitely superior to and transcendent from humankind. Allah is
viewed as the creator of the universe and the source of all good and
all evil. Everything that happens is Allah's will. He is a powerful and
strict judge, who will be merciful toward followers depending on the
sufficiency of their life's good works and religious devotion. A
follower's relationship with Allah is as a servant to Allah.
 BUDDHISM
• Buddhists do not worship any gods or God. People outside of
Buddhism often think that Buddhists worship the Buddha.
• However, the Buddha (Siddhartha Gautama) never claimed to be
divine, but rather he is viewed by Buddhists as having attained what
they are also striving to attain, which is spiritual enlightenment and,
with it, freedom from the continuous cycle of life and death.
 Jainism
• Jainism is an ancient religion from India that teaches that the way to
liberation and bliss is to live a life of harmlessness and renunciation.
• The aim of Jain life is to achieve liberation of the soul.
• The essence of Jainism is concern for the welfare of every being in
the universe and for the health of the universe itself.
 Jainism
• Mahavira is regarded as the man who gave Jainism its present-day
form.
• The texts containing the teachings of Mahavira are called the Agamas
• Jains are divided into two major sects; the Digambara (meaning "sky
clad") sect and the Svetambara (meaning "white clad") sect.
• Jainism has no priests. Its professional religious people are 
monks and nuns, who lead strict and ascetic lives.
• And it may be noted here how important a century this sixth century
B.C. was in the history of humanity. For not
• only were these Greek philosophers beginning the research for clear
ideas about this universe and man's place in it
• and Isaiah carrying Jewish prophecy to its sublimest levels, but as we
shall tell later Gautama Buddha was then
• teaching in India and Confucius and Lao Tse in China. From Athens to
the Pacific the human mind was astir.
 Culture and the Workplace
• Culture with Diversified workforce of Canada, Dubai, Australia
• Four cultural dimension
• power distance,
• uncertainty avoidance,
• individualism versus collectivism,
• masculinity versus femininity
 Power Distance
• How a society deals with the fact that people are unequal in physical
and intellectual capabilities
• In countries that let inequalities grow over time into inequalities of
power and wealth.
• Low power distance cultures were found in societies that tried to play
down such inequalities as much as possible
 Individualism versus Collectivism
• Dimension focused on the relationship between the individual and his or
her fellows.
• the ties between individuals were loose and individual achievement and
freedom were highly valued.
• In societies where collectivism was emphasized, the ties between
individuals were tight
• People were born into collectives, such as extended families, and
everyone
• was supposed to look after the interest of his or her collective
•
 Uncertainty avoidance
• extent to which different cultures socialized their members into
accepting ambiguous situations and tolerating uncertainty
• High uncertainty avoidance cultures placed a premium on job
security, career patterns, retirement benefits
• Manager need to issue clear instruction
• Lower uncertainty avoidance cultures were characterized by a greater
readiness to take risks and less emotional resistance to change.
 Masculinity versus Femininity
• dimension looked at the relationship between gender and work roles.
• In masculine cultures, gender roles were sharply differentiated and
traditional "masculine values," such as achievement and the effective
exercise of power, determined cultural ideals.
• In feminine cultures, gender roles were less sharply distinguished,
and little differentiation was made between men and women in the
same job.
 Country wise example
Americans are more individualistic and egalitarian than the Japanese
(they have a lower power distance), who in turn are more
individualistic and egalitarian than Mexicans
• Might agree that Latin countries such as Mexico place a higher
emphasis on masculine value-they are machismo cultures-than the
Nordic countries of Denmark and Sweden
 Cultural Change
• Women Empowerment and Rise of Female Entrepreneurship
• Russia from Collectivism to Individualism
• Japan expects salaryman to give up occasions etc for office is now
being changed
• As countries get richer, a shift occurs away from "traditional values"
linked to religion, family, and country, and toward "secular rational"
values. Traditionalists say religion is important in their lives
•
 Hallmark In France
• Immensely Popular in UK & USA

• Thousands of people every single day of the year

• Wording are already on Cards

• Not Universal Formulae

 Schweeps Tonic Waters in Italy
• Schweeps Tonic Waters in Italy
Was Translated as

Schweeps Toilet Waters

 Gerber In Africa
• A Renown Brand for Western Markets

• Same Packaging for African Markets

• African People Cant Read English

• Message Didn’t Get Across

 Coors In Spain
• A famous bear brand
• Its Slogan

“Turn it Loose Again”

Was Translated As

“You will suffer from Diarrhoea”

 Some Cultural Differnces
• Americans tend to be informal in nature, react strongly to being corrected or reprimanded in
public.
• Correcting strangers can shock and offend most American
• Germans can be a bit taken aback by the tendency of Americans to call everyone by their first
name. They find it insulting
• United States, giving a person a deadline is a way of increasing the urgency or relative importance
of a task
• Middle East, giving a deadline can have exactly the opposite effect. Arab takes it in negative manner
• Arab going slow as a reaction to the American's arrogance and rudeness.
• American may believe that an Arab associate is being rude if he shows up late to a meeting because
he met a friend in the street and stopped to talk
•
•
 Managerial implication
• The first is the need to develop cross-cultural literacy
• A second implication centers on the connection between culture and
national competitive advantage.
• A third implication looks at the connection between culture and
ethics in decision making
•
 Intellectual Property
• Patents
• Copyrights
• Trademarks
Intellectual property often forms the
• Brand names basis of a firm’s competitive
advantage!

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 Patents
• A patent is an exclusive right granted for an invention, which is a product or a
process that provides, in general, a new way of doing something, or offers a new
technical solution to a problem.
• To get a patent, technical information about the invention must be disclosed to
the public in a patent application.

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 Copyrights
• Copyright is an automatic right which protects original literary,
dramatic, musical and artistic works.
• A Patent is a registered right that gives the owner exclusive right to
features and processes of inventions.
• A Trade Mark protects logos and signs that are used in relation to a
particular type of product or service.

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 International Treaties Protecting Intellectual Property Rights

• International Convention for the Protection of Industrial Property

Rights (i.e., the Paris Convention)
• Berne Convention for the Protection of Literary and Artistic Works
• Universal Copyright Convention
• Trade-Related Intellectual Property Rights Agreement

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