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Chapter 3

Chapter 3. Differences in Culture. McDonald’s in China.

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Chapter 3

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  1. Chapter 3 Differences in Culture

  2. McDonald’s in China. Just two years after opening its first store in China, McDonald’s was told that it would have to move, despite having a twenty-year lease. McDonald’s took the Beijing city government to court, but the court refused to enforce the lease. Observers noted that McDonald’s lacked the all-important guanxi that is critical for success in China. guanxi - network of relationships, nepotism… http://www.time.com/time/asia/magazine/article/0,13673,501031124-543845,00.html OPENING CASE: Guanxi—Ties That Bind

  3. Societies’ differ along cultural dimensions What is culture? How/why do social structure, religion, language influence cultural differences? What are differences between culture and values in the workplace (corporate culture)? Culture(both national and business customs) changes over time. What are some reasons behind this? Implications for business managers Differences in Culture

  4. Culture: a society’s (group’s) system of shared, learned values and norms; these are the society’s (group’s) design for living Values: abstract ideas about the good, the right, the desirable Norms: social rules and guidelines; guide appropriate behavior for specific situations Folkways: norms of little moral significance dress code; table manners; timeliness Mores: norms central to functioning of social life bring serious retribution: thievery, adultery, alcohol What is Culture?

  5. “the collective programming of the mind which distinguishes the members of one human group over another… Culture, in this sense, includes systems of values; and values are among the building blocks of culture” Geert Hofstede What is Culture?

  6. Way to bound and measure culture for conduct of business culture is a key characteristic of society can differ significantly across national borders also within national borders laws are established along national lines Culture is both a cause and an effect of economic and political factors that vary across national borders National Culture

  7. Social Structure and Culture • Unit of social organization: individual or group? • Society may be stratified into classes or castes • High-low stratification • High-low mobility between strata • The individual: building block of many Western societies • Entrepreneurship • Social, geographical and inter-organizational mobility • The group: • Two or more associated individuals with a shared identity • Interact with each-other in specific ways on the basis of a common set of expectations.

  8. Individual Managerial mobility between companies Economic dynamism, innovation Good general skills Team work difficult, non-collaborative Exposure to different ways of doing business e.g., U.S. companies Group Loyalty and commitment to company In-depth knowledge of company Specialist skills Easy to build teams, collaboration Emotional identification with group or company e.g., Japanese companies Individual vs Group Societal Characteristics

  9. Religion: system of shared beliefs about the sacred Ethical systems: moral principles or values that shape and guide behavior; often products of religion Major religious groups and some economic implications Christianity protestant work ethic Islam Islamic economic principles Hinduism anti-materialistic, socially stratified Buddhism anti-materialistic, social equality Confucianism hierarchy, loyalty, honesty Religion, Ethics and Culture

  10. Language, spoken “private” does not exist as a word in many languages Eskimos: 24 words for snow Words which describe moral concepts can be unique to countries or areas Spoken language precision important in low-context cultures Language, unspoken Context... more important than spoken word in high context cultures Language: Culture Bound

  11. High/Low Context Cultures See E.T. Hall & M.R. Hall, Understanding cultural differences, 1990, Intercultural Press

  12. Education Medium through which people are acculturated Language, “myths,” values, norms taught Teaches personal achievement and competition Critical to national competitive advantage Education system may be a cultural outcome Education and Culture

  13. Hofstede finds national culture dimensions meaningful to business Basis: Work related values not universal National values may persist over MNC efforts to create corporate culture Home country values often used to determine HQ policies MNC may create morale problems with uniform moral norms Purpose: understanding of business situations across-cultures MUST understand own culture AND other culture(s) Culture and the workplace (Hofstede)

  14. Degree of social inequality considered normal by people Distance between individuals at different levels of a hierarchy Scale: from equal (small power distance) to extremely unequal (large power distance) Power Distance -- (Hofstede)

  15. Degree to which people in a country prefer to act as individuals rather than in groups Describes the relations between the individual and his/her fellows Individualism Vs. Collectivism (Hofstede)

  16. Degree of need to avoid uncertainty about the future Degree of preference for structured versus unstructured situations Structured situations: have tight rules may or may not be written down High uncertainty avoidance: people with more nervous energy (vs easy-going), rigid society, "what is different is dangerous." Uncertainty Avoidance (Hofstede)

  17. Division of roles and values in a society Masculine values prevail: assertiveness, success, competition Feminine values prevail: quality of life, maintenance of warm personal relationships, service, care for the weak, solidarity Masculinity Vs. Femininity (Hofstede)

  18. Attitudes towards Time Persistence Status in society “Face” Respect for tradition Gifts and favors Confucian Dynamism (Hofstede)

  19. Change is slow and often painful Shifts away from “traditional values” towards “secular values” Changes with shift from “survival values” to “self-expression values” Cultural Change Over Time

  20. Ethnocentrism vs Polycentrism Must a company adapt to local cultures or can corporate -- often home-country dominated -- culture prevail? Cross-cultural literacy essential Managerial Implications

  21. Do some cultures offer a national competitive advantage over others? “Cultual Borrowing”

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