PART TWO COMPARATIVE ENVIRONMENTAL FRAMEWORKS International Business

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PART TWOCOMPARATIVE ENVIRONMENTAL
FRAMEWORKSInternational Business

• Chapter Two
• The Cultural Environments Facing Business

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Chapter Objectives

• To understand the major causes of cultural
  differences and change
• To grasp behavioral factors influencing
  countries business practices
• To become familiar with cultural guidelines for
  companies that operate internationally
• To learn to discuss the problems and methods of
  learning about cultural environments

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Culture Defined

• Culture the specific learned norms of a society
  that reflect attitudes, values, and beliefs
• Major problems of cultural collision are likely
  to occur if
• -a firm implements practices that do not
  reflect local customs and values and/or
• -employees are unable to accept or adjust
• to foreign customs.

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Fig. 2.1 Cultural Influenceson International
Business
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Cultural Dynamics

• Cultures consist of societies, i.e., relatively
  homogeneous groups of people, who share
  attitudes, values, beliefs, and customs.
• Cultures are dynamic they evolve over time.
• Cultural value systems are set early in life, but
  may change because of
• -choice or imposition
• -contact with other cultures.

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The Nation as a Point of Reference

• The basic similarity amongst people within
  countries is both a cause and an effect of
  national boundaries.
• National identity is perpetuated through the
  rites and symbols of a country and a common
  perception of history.
• Subcultures may link groups from different
  nations more closely than certain groups within
  nations.

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Cultural Formation and Change

• Societal values and customs constantly evolve in
  response to changing realities.
• Cultural imperialism is brought about by the
  imposition of one culture upon that of
  another.
• Certain elements introduced from outside a
  culture may be known as creolization,
  indigenization, or cultural diffusion.

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Language as a Cultural Stabilizer

• Isolation from other groups, especially because
  of language, tends to stabilize cultures.
• Some countries see language as being so important
  that they regulate the inclusion of foreign words
  and/or mandate the use of the countrys official
  language for business purposes.

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Map 2.2 Major Languagesof the World
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Fig. 2.2 Importance of Major Language Groups
Two Views
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Religion as a Cultural Stabilizer

• Religion is a major source of both cultural
  imperatives and cultural taboos.
• Major religions include
• -Buddhism
• -Christianity
• -Hinduism
• -Islam
• -Judaism

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Map 2.3 Major Religionsof the World
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Social Stratification Systems

• Ascribed group memberships are defined at birth
  they may include gender, family, age, caste, and
  ethnic or national origin.
• Acquired group memberships are based on ones
  choice of affiliation, such as political party,
  religion, and social and professional
  organizations.
• Social stratification affects both business
  strategy and operational practices.

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Factors Affecting Work Ethics

• The desire for material wealth vs. the desire for
  leisure (Protestant Ethic)
• The expectation of success and reward
• Assertiveness (Hofstedes masculinity vs.
  femininity index)
• Needs satisfaction (Maslows Hierarchy)
• Motivated employees are normally more
  productive, and higher productivity leads to
  lower costs.

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Fig. 2.4 The Hierarchy of Needs and
Need-Hierarchy Comparisons
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Factors Affecting Relationship Preferences

• Power distance, i.e., the psychological and
  social distance between superiors and
  subordinates
• Individualism vs. collectivism
• Individualism represents a desire for personal
  freedom, time, and challenge.
• Collectivism represents a dependence on the
  organization as well as a need for a safe
  environment.

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Factors Affecting Risk-taking Behavior

• Uncertainty avoidance, i.e., ones tolerance
• of risk
• Trust, i.e., ones belief in the reliability and
  honesty of another
• Future orientation, i.e., the need for immediate
  vs. delayed gratification
• Fatalism, i.e., the belief that life is
  pre-destined, that events are the will of God

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Factors Affecting Information and Task Processing

• Selective perception of cues
• Communication context
• -low-context cultures explicit
• -high-context cultures implicit
• Information processing
• -monochronic work sequentially
• -polychronic multi-task
• Whereas idealistic cultures are principle
  driven, pragmatic cultures are detail driven.

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Factors Affecting the Communication Process

• Spoken language
• Written language
• Silent language
• -color associations
• -conversational distance
• -perception of time
• -kinesics body language and gestures
• Problems in communication may arise, even
• when nations share the same basic language
• (e.g., British, Canadian, and American English).

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Managerial Issues Associated with Cultural
Differences

• Accommodation of foreigners
• Cultural distance degree of similarity
• Culture shock and reverse culture shock
• Managerial orientations
• polycentric
• ethnocentric
• geocentric

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Map 2.4 A Synthesis of Country Clusters
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Factors Affecting Strategies for Instituting
Cultural Change

• Value systems
• Cost/benefits of change
• Resistance to change
• Participation in decision-making
• Reward sharing
• Role of opinion leaders
• Timing
• Opportunities to learn from abroad

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Implications/Conclusions

• Culture is dynamic and evolves over time.
  Economic development and globalization are two
  engines of cultural change.
• In addition to being part of a national culture,
  people are simultaneously part of other
  cultures, such as social and professional
  associations and business and government
  organizations. continued

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• Host cultures do not always expect firms and
  individuals to conform to their norms in some
  instances they may choose to accommodate
  differences in traditions.
• International firms should make a concerted
  effort to identify ideas and behaviors in host
  countries and foreign cultures that can be
  usefully applied across the whole of their
  organizations.