Title: Culture!
1Culture!
2What is culture?
- Culture is the integrated sum total of learned
behavioral traits that are shared by members of a
society (Hoebel). - What are some examples of learned behavioral
traits that are shared in society?
33 fundamentals
- Culture is a total pattern of behavior that is
consistent and compatible in its components. It
is not a collection of random behaviors - Culture is a learned behavior. It is not
biologically transmitted. It depends on
environment, not heredity. - Culture is behavior that is shared by a group of
people, a society. It is the distinctive way of
life of a people.
4Learned behavior can mean almost anything, from
the way we dress to the way we speak to the food
we choose to eat. Whenever we brush our teeth,
cross our legs, send our parents' a birthday
card, kiss someone, listen to music, or go out
for recreation we are practicing learned
behaviors which are a part of our culture.
5So what should be know about Culture
- Understanding the cultural environment will help
in analyzing the other macro-environments
(political, legal, economic)
6Two levels of cultural diversity
- External cultural diversity
- Cultural determinants influencing purchasing and
consumption behaviors (Who buys? What? Where?
How? Why?) - Cultural determinants influencing negotiations
(relationships with suppliers, buyers, partners) - Internal cultural diversity
- Observed within all MNCs
- Cultural differences that affect the way
subsidiaries work together
Explicit culture languages, behavior, know-how,
institutions (directly observable)
Implicit culture moral values, learning process,
beliefs
7A new term to add
- A subsidiary, in business, is an entity which is
controlled by another entity. The controlled
entity is called a company or Corporation. - The most common way that control of a subsidiary
is achieved is through the ownership of shares in
the subsidiary by the company. These shares give
the company the necessary votes to determine the
composition of the board of the subsidiary and so
exercise control.
8There are quite a few reasons why companies have
subsidiaries, but one of the most important one
is.
- Risk Many businesses use subsidiaries to manage
risk. This is achieved usually by setting up a
subsidiary corporation to undertake the higher
risk venture. If that venture subsequently become
subject to litigation or liability, legally the
subsidiary corporation would be liable and not
the parent (unless the parent made guarantees, in
which case the parent is liable for the
guarantees it made).
9According to Hoebel
- There are 3 types of cultural norms in terms of
behavior - 10 of norms are technical
- explicit, logical and transferable written norms
of a society (laws, technical manuals, rules,
etc) - 30 of norms are formal
- explicit, moral and transmissible traditions of
a culture learned through education (manners,
courtesy) - 60 of norms are informal
- implicit, instinctive and imitated facial
expressions, body language, cultural perspective
on time and space)
10How do we measure cultural distance?
- Hofstedes Cultural Index
- - National character survey
- - 116.000 IBM employees
- - 43 countries and 20 languages
- Five different poles make up the cultural index
- - Power distance
- - Uncertainty avoidance
- - Individualism
- - Masculinity
- - (Long term orientation)
11Hofstedes cultural index
- Power distance (PDI) shows class or social
structure. It shows how well a society accepts an
uneven distribution of power in organizations and
institutions and focuses on the degree of
equality, or inequality, between people in the
countrys society. - Uncertainty avoidance (UAI) shows how threatened
a society feels by uncertain or unstable
situations. It focuses on the level of tolerance
for uncertainty and ambiguity within the society. - Individualism (IDV) focuses on the degree that
society reinforces individual or collective
achievement and interpersonal relationships. It
distinguishes between societies where the group
and being a member is important (collectively)
and societies where the group is less important
(individualism).
12Hofstedes cultural index
- Masculinity (MAS) focuses on the degree the
society reinforces, or does not reinforce, the
traditional masculine work role model of male
achievement, control and power. Indicates the
degree of gender differentiation and the
importance of masculine values (assertiveness,
money, material goods). - Long-term orientation (LTO) focuses on the
degree the society embraces, or does not embrace,
long-term devotion to traditional, forward
thinking values. Indicates whether the country
prescribes to the values of long-term commitments
and respect for tradition.
13Examples of Hofstedes Dimensions
14- Uncertainty Avoidance Index (UAI) deals with a
society's tolerance for uncertainty and
ambiguity it ultimately refers to man's search
for Truth. - It indicates to what extent a culture programs
its members to feel either uncomfortable or
comfortable in unstructured situations.
Unstructured situations are novel, unknown,
surprising, different from usual. Uncertainty
avoiding cultures try to minimize the possibility
of such situations by strict laws and rules,
safety and security measures, and on the
philosophical and religious level by a belief in
absolute Truth 'there can only be one Truth and
we have it'. - People in uncertainty avoiding countries are also
more emotional, and motivated by inner nervous
energy. The opposite type, uncertainty accepting
cultures, are more tolerant of opinions different
from what they are used to they try to have as
few rules as possible, and on the philosophical
and religious level they allow many currents to
flow side by side. People within these cultures
are not expected by their environment to express
emotions.
15Intracultural differences
- Few cultures are homogeneous in terms of cultural
traits and norms. - Intracultural differences based on nationality,
religion, race, language or geographic areas have
resulted in the emergence of distinct
subcultures. - It is important to distinguish relevant
cross-cultural and intracultural differences and
isolate potential opportunities and problems. - However, international business may act as a
change agent by introducing new products or ideas
or practices.
16To summarize on culture
- Cultural distance is essential in international
business - Culture is complex and multi-dimensional
- Acculturation (adjusting and adapting to a
specific culture other than ones own) is one of
the keys to success in international operations