MKM 101:

International Trade &

THE ROLE OF CULTURE
Agreement

PRESENTATION 2
CULTURE
o the ideas, customs, and social behavior of a particular
person or society
o in a business context, it relates to what behavior is
common and accepted professionally in one location
compared to another
THE PEOPLE FACTOR
o business involves people
o business employs, sells to, buys from, and is owned and
regulated by people
o international business involves people from different
national cultures which affects every business function
CULTURAL DIVERSITY
o the existence of societies, communities, or subculture that
differ substantially from one another
o communities or subcultures that function within a larger
society while maintaining their distinct culture traits
o in international business, it can be a competitive
advantage but managing it can be difficult
CULTURAL AWARENESS
o refers to understanding and respecting the influences and
effects of other cultures
o a term used to indicate consciousness of different cultural
values, beliefs and behaviors, as well as the cultural
expectations of others
o the first step towards gaining intercultural competences
(Hofstede, 1991)
COMMON SHORTCOMINGS OF RESEARCH FINDINGS
ON CULTURE

1. Comparing countries by what people say can be risky.

2. Researchers who focus on national differences in terms
of averages may overlook specific variations within
countries.
3. Research may be outdated because cultures evolve.
 o may occur as a reaction to
social and economic
situations that present
people with new alternatives
Change by o e.g., when rural people
choose factory jobs over
Choice farm works, they have to
accept changes in some
basic customs such as the
shift from social interactive
work time to non-interactive
work time
HOW CULTURES FORM AND CHANGE
 o sometimes called as cultural
imperialism
o involves imposing certain
elements from an alien
Change by culture, such as forced
change in laws by an
Imposition occupying country that
becomes part of the subject
culture overtime
o entails the concept of
cultural diffusion and
creolization
HOW CULTURES FORM AND CHANGE
CULTURAL DIFFUSION
o a distinctive approach to running a creative enterprise
through applied creativity, shared discourse and social
construction, going beyond the conventional
understanding of cultural production and consumption
o used to explore the social and creative processes of
interaction between the creative enterprise and the
audience
CREOLIZATION
o occurs when participants select elements from incoming
or inherited cultures, endow these with meanings different
from those they possessed in the original cultures, and
then creatively merge these to create new varieties that
supersede the prior forms (Cohen, 1994)
LANGUAGE: A DIFFUSER AND STABILIZER OF CULTURE

o language limits people’s contact with other cultures

o when people from different areas speak the same
language, culture spreads more easily
“Commerce is easier among nations that share
the same language because there is no need to
translate everything.”
WHY ENGLISH TRAVELS SO WELL
o the most widespread spoken and written language in the
world and is considered as the lingua franca of
international business and communication
o the world’s most important second language
o multinational enterprises from non-English speaking
countries have adopted English as their operating
language
ENGLISH LANGUAGE

“English is a language, not a

measure of intelligence.”
RELIGION AS A CULTURAL STABILIZER
o religion has an impact on almost every business function
o many religions influence specific beliefs that may affect
business, such as inhibiting the sale of certain products or
the performance of work at certain times
o companies must take religious beliefs into account as
cultural stabilizer
SOCIAL STRATIFICATION
o dictates a person’s class, status, and financial rewards
within a culture
o entails the practice of ranking members of managerial
groups more highly than production group members in a
business perspective
ASCRIBED GROUP MEMBERSHIPS

o determined by birth including gender, family, age, caste,

ethnic, racial, and/or national origin
ACQUIRED GROUP MEMBERSHIPS

o include those based on religion, political affiliation,

educational place and achievement, and profession
GROUP MEMBERSHIPS

Ethnic and Gender-Based

Racial Groups Groups

Age-Based Family-Based
Groups Groups
MOTIVATION Intensity describes how hard a
o the process that person tries in achieving his/her
account for an goals.
individual’s intensity,
Direction pertains to the effort
direction, and
directed and consistent with the
persistence of effort
organization’s goals.
toward attaining a goal
(Robbins & Judge, 2012)
Persistence is a dimension that
o something that keeps
measures how long a person
people moving forward, can maintain the effort.
towards the realization
of those goals
CATEGORIES OF MOTIVATION
Intrinsic motivation refers to
behavior that is driven by internal
rewards. Intrinsically motivated
activities are ones for which
there is no apparent reward
except for the activity itself.
Extrinsic motivation refers to
behavior that is driven by
external rewards which can be
tangible or intangible. This arises
from some consequences that is
separate from the activity itself.
WORK MOTIVATION
o a set of energetic forces that originate both within and
beyond an individual’s being, to initiate work-related
behavior, and to determine its form, direction, intensity and
duration
o motivated employees are normally more productive than
those who aren’t which influences companies’ efficiency
and countries’ economic development
PRODUCTIVITY/LEISURE TRADE-OFF

Some cultures place more value on leisure time than others.

They push for working shorter hours, take more holidays and
vacations, and generally spend more time and money on
leisure activities.
SUCCESS AND REWARD ACROSS BORDERS

Performed in different countries, the same tasks come with

different probabilities of success, different rewards for
success, and different consequences for failure. In cultures
which the perceived rewards of success are low, people tend
to view work as necessary but unsatisfying.
MASLOW’S HIERARCHY OF NEEDS
Self-
actualization

Esteem

Love & Belonging

Safety Needs

Physiological Needs
BUSINESS APPLICATION OF MASLOW’S HIERARCHY
Create
Envision
Think big
Recognition
Feeling valued
Belonging
Sense of community
Part of something bigger
Treated with respect
Support for risk-taking
Opportunity to offer input and be heard
Good, safe work environment
The right tools to do job
 UP NEXT!
PRESENTATION 3:
End of Presentation 2 The International Environment

Thank you! Keep safe and

God bless!

References:
o Daniels, J.D., Radebaugh, L.H., & Sullivan, D.P. (2015). International business environments and operations (15th edition). Pearson Education Limited.
o Internet-Based references