Elements of Culture in International Business

Elements of Culture in International Business
Culture - collection of values, beliefs, behaviors, customs, and attitudes that distinguish one
society from another. A society’s culture determines the rules that govern how firms operate
within the society.
Culture is:
 learned (transmitted from one member of a society to another)
 interrelated
 adaptive (changes in response to external forces)
 shared
Basic elements of culture
 social structure
 language
 communication
 religion
 Values/ attitudes
social structure- the overall framework that determines the roles of individuals within the society,
the stratification of the society, and individuals’ mobility within the society.
Families
 The view of family ties and responsibility in the United States focuses on the nuclear
family. In other cultures, the extended family is more important—including uncles,
brothers, cousins, and in-laws as family members who are owed obligations of support
and assistance. Other societies define family even more broadly; for example, focusing
on clans, each one comprised of individuals of the same tribe who share a common
ancestor.
Individualism vs. Group Orientation
 Cultures also differ in the importance of the individual relative to the group. Culture in
the United States, for example, promotes individualism. Conversely, in group-focused
societies such as Japan, children are taught that their role is to serve the group.
social stratification- how people are classified on the basis of birth, occupation, educational
achievements, or other attributes. In addition, the importance of these categories varies by
society.
 Multinational corporations (MNCs) operating in highly stratified societies often must
adjust their hiring and promotion procedures to take into account class or clan differences
among supervisors and workers. Hiring members of one group to do jobs traditionally
performed by members of another group may lower productivity and morale on the job.
In less stratified societies, firms are freer to seek out the most qualified employees,
regardless of whether they went to the right school or belong to all the best clubs.
Social mobility- the ability for individuals to move from one stratum of society to another. Such
mobility tends to be higher in less stratified societies. Social mobility often affects individuals’
attitudes about such factors as labor relations, human capital formation, risk taking,
entrepreneurship, and education.
Language -primary delineator of cultural groups because it is an important means by which a
society’s members communicate with each other. Language organizes the way members of a
society think about the world. Language provides important clues about a society’s cultural
values and aids in the acculturation of that society.
Communication for Businesses in a Global Context
Non-verbals
 80 to 90 percent of all information is transmitted among members of a culture by means
other than language.
o Facial expressions, hand gestures, intonation, eye contact, and body language
Gift Giving
 Important means of communication in many business cultures
o Japanese- Open gifts at home (prevents losing face)
Effects of Religion and Values
Religion
 shapes the attitudes its adherents have toward work, consumption, individual
responsibility, and planning for the future
o The Protestant ethic stresses hard work, frugality, and achievement as ways of
glorifying God
o Hinduism emphasizes spiritual accomplishment, rather than economic success
o Islam is supportive of capitalism, but it places more emphasis on the individual’s
obligation to society
 imposes constraints on the roles of individuals in society
o the caste system of Hinduism restricts the jobs that individuals may perform
 affect the way products are advertised and sold
o “Sex Sells” doesn’t work in Islamic areas
 affects the types of products consumers may purchase
o Christmas means large consumption, low productivity in Christian areas.
In some countries, strong political pressure exists to preserve religious traditions
 Middle Eastern Areas
Countries characterized by religious diversity may offer even greater challenges
 You have to deal with multiple religious traditions/ customs.
o If you deny someone’s religious rights, they will most likely quit.
Values
 often stem from deep-seated beliefs about the individual’s position in relation to his or
her deity, the family, and the social hierarchy
o Attitudes toward such factors as time, age, education, and status reflect these
values in a given culture
 Time
 In American, “Time is Money”
 In Latin America, “Time is Money” viewpoints don’t hold.
 Age
 In Asian Cultures, Age is respected more than in USA
 Education
 UK provides elite education to small group
 US provides widespread education
 Status
 Some cultures, Status comes from wealth
 In others, Status comes from personal achievements
Hofstede’s Cultural Differences
Geert Hofstede
 Dutch researcher who studied 116,000 people working for IBM in dozens of different
countries
Five Characteristics
 social, power, uncertainty, goal, and time orientations
Social Differences
 a person’s beliefs about the relative importance of the individual and the groups to which
that person belongs
o Individualism is the cultural belief that the person comes first
 United States, Australia, Canada, etc.
o Collectivism is the belief that the group comes first
 Mexico, Greece, Hong Kong, etc.
Power Orientation
 refers to the beliefs that people in a culture hold about the appropriateness of power and
authority differences in hierarchies, such as business organizations
o Power Respect- tend to accept the authority of a leader or manager based on that
person’s position in an organization’s hierarchy
 Mexico, Japan, Brazil, etc.
o Power Tolerance- attach much less significance to a person’s formal position in a
hierarchy
 United States, Israel, Austria, Denmark, etc.
Uncertainty Orientation
 the feeling people have regarding uncertain and ambiguous situations
o Uncertainty Avoidance- dislike ambiguity and will avoid it whenever possible.
 Israel, Austria, Japan, etc.
o Uncertainty Acceptance- stimulated by change and thrive on new opportunities
 United States, Denmark, Sweden, etc.
Goal Orientation
 the manner in which people are motivated to work toward different kinds of goals
o Aggressive Goal Behavior- tend to place a high premium on material possessions,
money, and assertiveness
 Germany, Mexico, United States, etc.
o Passive Goal Behavior- place a higher value on social relationships, quality of
life, and concern for others
 Netherlands, Norway, Sweden, etc.
Time Orientation
 The outlook members of a culture adopt in respect to work, life, and other aspects of
society
o Long Term- value hard work, dedication, perseverance, and thrift
 Japan, Hong Kong, Taiwan, etc.
o Short Term- emphasizing respect for traditions and fulfillment of social
obligations
 United States, Germany, etc.

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