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Fourth Edition

International Business. Fourth Edition. CHAPTER 3. Differences in Culture. Chapter Focus. What is culture/ Focus on differences in: Social structure. Religion. Language. Influence of education. Discuss cultural change. What is Culture?. A system of values and norms shared

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Fourth Edition

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  1. International Business Fourth Edition

  2. CHAPTER 3 Differences in Culture

  3. Chapter Focus • What is culture/ • Focus on differences in: • Social structure. • Religion. • Language. • Influence of education. • Discuss cultural change.

  4. What is Culture? A system of values and norms shared among a group of people and, when taken together, constitute a design for living.

  5. Norms: Social rules and guidelines that prescribe appropriate behavior in particular situations. Folkways: Routine conventions of everyday life. Mores: Central to functioning of society and its social life. Values: Abstract ideas about what a group believes to be good, right, and desirable. The bedrock of culture. Have emotional significance. Freedom. Norms and Values

  6. Nation-States are political creations Not a strict one-to-one correspondence Culture, Society and the Nation-State

  7. Economic Philosophy Education Political Philosophy Culture: Norms and Value Systems Language Social Structure Religion Determinants of Culture

  8. Hard to Build Teams Individual Western Mobile Managers Entrepreneurship Group two or more individuals with a shared sense of identity Lack of Loyalty Group Nonmobile Managers Lack of Entrepreneurship Eastern Lifetime Employment Identity Social Structure

  9. Class Consciousness: May play a role in a firm’s operations Social Stratification Typically defined by family background, occupation, and income. Class: some social mobility Caste: Virtually no mobility

  10. Religion • Shared beliefs and rituals concerned with the realm of the sacred. • Ethical Systems: • Moral principles or values used to guide and shape behavior. • Shapes attitudes toward work and entrepreneurship and can affect the cost of doing business.

  11. World’s Religions

  12. Religion and Economic Implications • Christianity • “Protestant Work Ethic” and “The Spirit of Capitalism”. • Islam • Favors market-based systems. • No payment or receipt of interest. • Hinduism • Asceticism may have an impact. • Caste system plays a role. • Buddhism • Little emphasis on entrepreneurial behavior. • Confucianism • Loyalty, reciprocal obligations, and honesty in dealings.

  13. Language • Allows people to communicate. • Structures the way the world is perceived. • Directs attention to certain features of the world rather than others. • Helps define culture. • Creates separatist tendencies?

  14. Spoken Language

  15. Nonspoken Language • Nonverbal cues: • eyebrows • fingers/thumbs • hand gestures • feet • personal space • body gestures

  16. For int’l business, it is a determinant of national competitive advantage Formal education supplements family role in teaching values and norms Medium to learn language, conceptual, and math skills Cultural norms such as respect, obedience, honesty Focus on facts of social and political nature of society Value of personal achievement and competition Obligations of citizenship Education

  17. Hofstede • Study (IBM) is a general way to look at differences between cultures. • 4 dimensions: • Power distance. • Individualism versus collectivism. • Uncertainty avoidance. • Masculinity versus femininity. • But: • Assumption of one-to-one relationship between culture and nation-state. • Research may be culturally bound. • Respondents worked within a single company. • Work is beginning to look dated (1967-1973).

  18. Work Related Values for Selected Countries Table 3.1

  19. Culture is Dynamic Cultural Change

  20. Culture and Competitive Advantage • The connection suggests: • Which countries are likely to be the most viable competitors. • Which countries in which to locate production facilities and do business.

  21. Culture and Ethics • Do the “right” thing. • Thomas Donaldson’s Three Principles: • Respect for core human values (human rights), which determine the absolute moral threshold for all business activities. • Respect for local tradition. • The belief that context matters when deciding what is right and what is wrong.

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