The Cultural Environment of International Business

MGT 3403_International Business Management

Batch 20.2 / 20.3

Ms Dilki Hansika
Department of Management

NSBM Green University - Department of Management

 WHAT WILL WE
COVER?
• Culture?

• Cultural Adaptation Cycle

• Cultural Shock & Reverse Cultural Shock & W Curve

• Cultural Diversity &Cultural Awareness

• Hofstede's Cultural Dimensions

• Self Learning Activities

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 Culture
Shared values, beliefs, norms, behaviors,….. and
characteristics in a particular group of people.
• Country
• Religious
institution
• Schools
• Universities
• Organizations

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 Do you know why
culture is identified as
“The Software of the
Mind”

Do you know why

culture is identified as
“A Social Program”

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Last Week Recap

International Business means

a business that is primarily
based in a single country
but acquires some Interacting with
more than one
meaningful share of its countries
resources or revenues (or • Home Country

both) from other

• Host Country

countries.
 CULTURE &
INTERNATIONAL BUSINESS
Since International businesses are functioning
in different countries, it interact with different
national cultures and different organizational
cultures.
Different Organizational Cultures in Different Cultures
• Generally in Sri Lankan organizations we use “Sir//Madam” to
address the supervisors.
but in UK/USA organizations, they use the first name to
call supervisors.
• In Sri Lankan organizations, the employees are wearing some
formal dress code. But in countries like USA/UK the employees
are wearing casual dresses.
• The Sri Lankan organizational greetings we use “Aybowan”. The
countries like USA, UK use handshaking. The countries like Japan
use “bowing”.
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CULTURAL
ADAPTATION
CYCLE

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CULTURAL ADAPTATION CYCLE

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 CULTURAL SHOCK
https://youtu.be/z5EEz_R_RiE

Cultural shock is a feeling

Cultural of confusion , insecurity
Shock and anxiety caused by
strangeness of the new
environment.

NSBM Green University - Department of Management

 REVERSE CULTURAL
SHOCK
Reverse culture shock is the emotional
and psychological distress suffered by
people when they return home after several
years of being overseas.

This can result in unexpected difficulty in

readjusting to the culture and values of the
home country, now that the previously
familiar culture has now become unfamiliar.

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NSBM Green University - Department of Management
 CULTURAL DIVERSITY
The cultural variety and cultural differences that exist in the world, a
society, or an institution

***

Cultural diversity in the workplace is a result of practices, values,

traditions, or beliefs of employees based on race, age, ethnicity, religion,
or gender.

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Hofstead’s Cultural
Dimensions Model

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HOFSTEDE’S CULTURAL DIMENSIONS
POWER DISTANCE

Extent to which less powerful members of institutions and organizations accept that
power is distributed unequally

High Power Distance Countries:

• People blindly obey the orders of their superiors

• Centralized and tall organization structures

Low Power Distance Countries:

• Decentralized and flatter organization structures,

• Positional power is not distinctive

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 Uncertainty Avoidance Dimension

Extent to which people feel threatened by ambiguous situations and have created
beliefs and institutions that try to avoid such situations

High Uncertainty AvoidanceCcountries:

• People have high need for security,

• Structured organizational activities,

• More written rules & regulations

• Less risk taking by managers

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 Low Uncertainty Avoidance Countries:

• People are more willing to accept risks associated with the unknown,

• Less structured organizational activities

• Fewer written rules.

• More risk taking by managers,

• Relatively high employee turnover to be seen

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 Individualisms & Collectivism

Individualism
Tendency of people to look after themselves and their immediate family only

Countries High in Individualism:

• Tend to be wealthier

• Greater individual initiative

• Promotions based on market value

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 Collectivism
Tendency of people to belong to groups or collectives and to look after each other
in exchange for loyalty

Countries High in Collectivism

• Tend to be poorer

• Less individual initiative

• Promotions based on seniority

NSBM Green University - Department of Management

 Masculinity & Femineity

Masculinity

A culture in which the dominant social values are success, money and things

Countries High in Masculinity

• Great importance on earnings, recognition, advancement, challenge, and wealth.

• High job stress.

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 Femininity
A culture in which the dominate social values are caring for others and the quality of
life

Countries high in Femininity

• Great importance on cooperation, friendly atmosphere, employment security, group

decision making, and living environment.

• Low stress and more employee freedom.

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 Long-term & Short term orientation

Long-term Orientation:
These cultures focus on long-term goals, investment in the future, and are prepared to sacrifice
short-term profit.

Short-term Orientation:
These cultures focus on short-term goals, current consumption, and are not prepared to sacrifice
short-term profit.

NSBM Green University - Department of Management

 THESE VIDEOS WILL PROVIDE YOU WITH KNOWLEDGE TIPS
RELATED TO THE TOPIC!
TAKE A WHILE TO WATCH, ENJOY & LEARN!

Managing diversity and cultural differences at workplace - how

to get along with others
https://www.youtube.com/watch?v=Kqixxo_yu4A

Erin Meyer: How to lead a successful international team |

Scottish Enterprise
https://www.youtube.com/watch?v=Q3X7legs3gM

NSBM Green University - Department of Management