Cultural Aspects of Internationl Business

International
Business,
8th Edition
Griffin & Pustay
COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-1

Learning Objectives
 Discuss the primary characteristics of culture
 Describe the various elements of culture and provide
examples of how they influence international business
 Identify the means by which members of a culture
communicate with each other
 Discuss how religious and other values affect the
domestic environments in which international businesses
operate
 Describe the major cultural clusters and their usefulness
for international managers
 Explain Hofstede’s primary findings about differences in
cultural values
 Explain how cultural conflicts may arise in international
business
Characteristics of Culture
 Culture is the collection of values, beliefs,

behaviors, customs, and attitudes that
distinguish one society from another
Characteristics
Learned behavior
Of Culture
Interrelated
Adaptive
Shared

• Culture reflects learned behavior that is transmitted from one
member of a society to another. Some elements of culture are
transmitted intergenerationally, as when parents teach their children
table manners. Other elements are transmitted intragenerationally, as
when seniors educate incoming freshmen about a school’s traditions.
• The elements of culture are interrelated. For example, Japan’s group-
oriented, hierarchical society stresses harmony and loyalty, which
historically translated into lifetime employment and minimal job
switching.
• Because culture is learned behavior, it is adaptive; that is, the culture
changes in response to external forces that affect the society. For
example, after World War II, Germany was divided into free-market-
oriented West Germany and communist-controlled East Germany.
Despite their having a common heritage developed over centuries, this
division created large cultural differences between Ossis (East
Germans) and Wessis (West Germans). The differences resulted from
adaptations of the East German culture to the dictates of communist
ideology regarding attitudes toward work, risk taking, and fairness of
reward systems.
• Culture is shared by members of the society and indeed defines the
membership in the society. Individuals who share a culture are
members of a society; those
COPYRIGHTwho do not
© 2015 PEARSON are outside
EDUCATION, INC. the boundaries
Chapter 4-4of
Elements of Culture

A society’s culture determines how its members
communicate and interact with each other. The basic
elements of culture (see Figure 4.1) are social structure,
language, communication, religion, and values and
attitudes. The interaction of these elements affects the
local environment in which international businesses
operate. They also affect the ability of countries to
respond to changing circumstances.
COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4- 6

Elements of Culture:
Social Structure
 Individuals, Families, and Groups

Defining family
Individual’s role within groups
Importance of the individual relative to the group
 Social Stratification
Attributes
Highly stratified societies
Less stratified societies
 Social mobility
Low social mobility
Socially mobile societies

• Basic to every society is its 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
• Societies differ in the way they define family and in the relative
importance they place on the individual’s role within groups
• Cultures also differ in the importance of the individual relative
to the group
• Societies differ in their degree of social stratification. All societies
categorize people to some extent on the basis of their birth,
occupation, educational achievements, or other attributes. However,
the importance of these categories in defining how individuals
interact with each other within and between these groups varies by
society
• Social mobility is the ability of individuals to move from one
stratum of society to another. Social mobility tends to be higher in
less stratified societies

• Language is a 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. It filters observations and
perceptions and thus affects unpredictably the messages
that are sent when two individuals try to communicate
• In addition to shaping one’s perceptions of the world,
language provides important clues about the cultural
values of the society and aids acculturation
• The presence of more than one language group is an
important signal about the diversity of a country’s
population and suggests that there may also be differences
in income, cultural values, and educational achievement
Language
 Delineates cultural groups

 Shapes one’s perceptions of the world
 Filters observations and perceptions
 Provides important clues about the cultural
values of the society
 Offers indications about the diversity of a
country’s population

Language
 Language as a Competitive Weapon

Linguistic legacy of colonialism
 Predominant common language, or Lingua
Franca
English
 Translation
Backtranslation
 Words may have different meanings
Saying No

• Language as a Competitive Weapon : Linguistic ties often create
important competitive advantages because the ability to communicate is
so important in conducting business transactions
• Lingua Franca: To conduct business, international businesspeople must
be able to communicate. As a result of British economic and military
dominance in the nineteenth century and U.S. dominance since World
War II, English has emerged as the predominant common language, or
lingua franca, of international business
• Translation: Of course, some linguistic differences may be overcome
through translation. The process, however, requires more than merely
substituting words of one language for those of another. Translators
must be sensitive to subtleties in the connotations of words and focus
on translating ideas, not the words themselves. Far too often,
translation problems create marketing disasters
• Firms can reduce the chances that they are sending the wrong message
to their customers by using a technique known as backtranslation.
With backtranslation, one person translates a document, then a second
person translates the translated version back into the original language.
This technique provides a check that the intended message is actually
being sent, thus avoiding communication mistakes
• Saying No: Another cultural difficulty international businesspeople face
is that words may have different meanings to persons with diverse
cultural backgrounds
• Members of a society communicate with each other
using more than words. In fact, some researchers
believe 80 to 90 percent of all information is
transmitted among members of a culture by means
other than language. This nonverbal communication
includes facial expressions, hand gestures,
intonation, eye contact, body positioning, and body
posture
• Although most members of a society quickly
understand nonverbal forms of communication
common to their society, outsiders may find the
nonverbal communication difficult to comprehend.
Table lists some of the many common forms of
nonverbal communication
Communication
 Nonverbal
Communication
Facial Expressions
Hand Gestures
Intonation
Eye Contact
Body Positioning
Body Posture

Communication
 Gift-Giving and Hospitality

Important means of communication
Different gift giving etiquettes
Hospitality customs also differ
Communicating bad news

• Gift-Giving and Hospitality
Gift-giving are important means of communication in many
business cultures
• Japanese business etiquette requires solicitous hospitality.

Elaborate meals and after-hours entertainment serve to
build personal bonds and group harmony among the
participants. These personal bonds are strengthened by the
exchange of gifts, which vary according to the occasion and
the status of the giver and the recipient.
• However, business gifts are opened in private so as not to

cause the giver to lose face should the gift be too
expensive or too cheap relative to the gift offered in return.
Because the rules for gift-giving can be quite complicated,
even to native Japanese, etiquette books that detail the
appropriate gift for each circumstance are available
Gift giving and hospitality
• Hospitality customs also differ. When wooing

clients, power-lunching U.S. executives
often seek the most conspicuous table in a
fancy restaurant as a means of
communicating their status and clout.
Conversely, in China business banquets are
an important mechanism for developing the
personal relationships so important in that
business culture

Gift giving and bad news
• Norms of hospitality even affect the way bad news

is delivered in various cultures. In the United
States bad news is typically delivered as soon as it
is known. In Korea it is delivered at day’s end so it
will not ruin the recipient’s whole day. Further, in
order not to disrupt personal relationships, the bad
news is often only hinted at. In Japan maintaining
harmony among participants in a project is
emphasized, so bad news often is communicated
informally from a junior member of one
negotiating team to a junior member of the other
team. Even better, a third party may be used to
deliver the message to preserve harmony within
the group
Religion

• Religion is an important aspect of most
societies. It affects the ways in which members
of a society relate to each other and to
outsiders. Approximately 84 percent of the
world’s 6.9 billion people claim some religious
affiliation.
• As reflected in Map 77 percent of the world’s
population adheres to one of four religions:
Christianity (31.5 percent), including Roman
Catholics, Protestants, and Eastern Orthodox;
Islam (23.2 percent); Hinduism (15.0 percent);
and Buddhism (7.1 percent)
COPYRIGHT © 2015 PEARSON EDUCATION, INC.
Chapter 4- 20
Religion
 Shapes attitudes of  Impact on
adherents international
 Constraints the businesses
roles of individuals Legal system
in society Homogeneity of
religious beliefs
 Affects consumer
buying behavior  Tolerance
 Affects seasonal
patterns of
consumption

• Religion shapes the attitudes its adherents have
toward work, consumption, individual
responsibility, and planning for the future
• Religion affects the business environment in
other important ways. Often religions impose
constraints on the roles of individuals
• Religion also affects the types of products
consumers may purchase as well as seasonal
patterns of consumption
• The impact of religion on international
businesses varies from country to country,
depending on the country’s legal system, its
homogeneity of religious beliefs, and its
toleration of other religious viewpoints
Values and Attitudes
 Time
 Age
 Education
 Status

• Culture also affects and reflects the secular values
and attitudes of the members of a society.
• Values are the principles and standards accepted
by the members;
• attitudes encompass the actions, feelings, and
thoughts that result from those values.
• Cultural 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.
• Cultural attitudes toward such factors as time, age,
education, and status reflect these values and in
turn shape the behavior of and opportunities
available to international businesses operating in a
given culture
Values and attitudes
• Time: Attitudes about time differ dramatically
across cultures. In Anglo-Saxon cultures, the
prevailing attitude is “time is money.” Time
represents the opportunity to produce more and to
raise one’s income, so it is not to be wasted
• Age: Important cultural differences exist in
attitudes toward age. Youthfulness is considered a
virtue in the United States. Many U.S. firms devote
much time and energy to identifying young “fast-
trackers” and providing them with important, tough
assignments, such as negotiating joint ventures with
international partners. In Asian and Arab cultures,
however, age is respected and a manager’s stature
is correlated with age Chapter 4-25
• Education: A country’s formal system of
public and private education is an important
transmitter and reflection of the cultural
values of its society
• Status: The means by which status is
achieved also vary across cultures. In some
societies status is inherited as a result of the
wealth or rank of one’s ancestors. In others
it is earned by the individual through
personal accomplishments or professional
achievements

Low context culture and high context
culture
• One useful way of characterizing differences in
cultures is the low-context–high-context
approach developed by Edward and Mildred Hall. In
a low-context culture, the words used by the
speaker explicitly convey the speaker’s message to
the listener.
• Anglo-Saxon countries such as Canada, the United
Kingdom, and the United States, and Germanic
countries are good examples of low-context cultures
(see Table 4.2). In a high-context culture, the
context in which a conversation occurs is just as
important as the words that are actually spoken, and
cultural clues are important in understanding what is
being communicated. Examples are Arab countries
and Japan Chapter 4-27
Business behaviors in high-context cultures often
differ from those in low-context cultures.
For example, German advertising is typically fact
oriented, whereas Japanese advertising is often
more emotion oriented.
High-context cultures place higher value on
interpersonal relations in deciding whether to enter
into a business arrangement. In such cultures
preliminary meetings are often held to determine
whether the parties can trust each other and work
together comfortably.
Low-context cultures place more importance on the
specific terms of a transaction
Seeing the Forest, Not the Trees:
Hall’s Low-Context–High-Context Approach
 Low-context
culture vs. High-
context culture
Words
Context
Cultural clues
Business behaviors

• The cultural cluster approach is another technique for classifying
and making sense of national cultures. Similarities exist among
many cultures, thereby reducing some of the need to customize
business practices to meet the demands of local cultures.
Anthropologists, sociologists, and international business scholars
have analyzed such factors as job satisfaction, work roles, and
interpersonal work relations in an attempt to identify clusters of
countries that share similar cultural values that can affect
business practices
• A cultural cluster comprises countries that share many cultural

similarities, although differences do remain. Many clusters are
based on language similarities, as is apparent in the Anglo,
Germanic, Latin American, and Middle East (excepting Turkey)
clusters and, to a lesser extent, in the Nordic and Latin European
clusters. Of course, one can disagree with some placements of
countries within clusters. Spain and the countries of Latin
America share many culture values,

The Cultural Cluster Approach
 Internationalization strategies
 Foreign Market Entry Methods

• Many international businesses instinctively use the
cultural cluster approach in formulating their
internationalization strategies. U.S. firms’ first exporting
efforts often focus on Canada and the United Kingdom.
Hong Kong and Taiwanese firms have been successful in
exploiting China’s markets. Similarly, many Spanish firms
have chosen to focus their international expansion efforts
on Spanish-speaking areas in the Americas
• Closeness of culture may affect the form that firms use to

enter foreign markets. Researchers have found, for
example, that Canadian firms are more likely to enter the
British market by establishing joint ventures with British
firms, whereas Japanese firms are more likely to enter
the British market via a greenfield investment, that is, a
brand-new investment. The likely reason for the
difference? Because of the relative closeness of their
national cultures, Canadian firms are more comfortable
working with British partners than are Japanese firms
The Cultural Cluster Approach

Hofstede’s five dimensions
The most influential studies analyzing cultural differences and

synthesizing cultural similarities are those performed by Geert
Hofstede, a Dutch researcher who studied 116,000 people working
for IBM in dozens of different countries. Although Hofstede has been
criticized for methodological weaknesses, his own cultural biases, it
remains the largest and most comprehensive work of its kind.
Hofstede’s work identified five important dimensions along which

people seem to differ across cultures. Note that these dimensions
reflect tendencies within cultures, not absolutes. Within any given
culture, there are likely to be people at every point on each
dimension. Moreover, cultures can change over time, albeit usually
slowly

Hofstede’s Five Dimensions

Social Orientation

Power Orientation

Power Orientation
Power Orientation
Extremes
Power Respect
Power Tolerance

• Some cultures are characterized by power respect. This
means that people in a culture tend to accept the power
and authority of their superiors simply on the basis of the
superiors’ positions in the hierarchy. These same people
tend to respect the superiors’ right to that power. People
at all levels accept the decisions and mandates of those
above because of the belief that higher-level positions
carry the right to make decisions and issue mandates.
• In contrast, people in cultures characterized by power
tolerance attach less significance to a person’s position
in the hierarchy. These people are more willing to
question a decision or mandate from someone at a higher
level or even refuse to accept it. They are willing to follow
a leader when that leader is perceived to be right or when
it seems to be in their own self-interest to do so not
because of the leader’s intangible right to issue orders
• Persons from power-tolerant cultures believe that
hierarchies exist to solve problems and organize tasks
within organizations Chapter 4-39
Uncertainty Orientation

• Uncertainty orientation is the feeling people have
regarding uncertain and ambiguous situations. The
extremes of this dimension are summarized in Table 4.6
• People in cultures characterized by uncertainty
acceptance are stimulated by change and thrive on
new opportunities. Ambiguity is seen as a context
within which an individual can grow, develop, and carve
out new opportunities. In these cultures certainty
carries with it a sense of monotony, routineness, and
overbearing structure
• In contrast, people in cultures characterized by
uncertainty avoidance dislike ambiguity and will
avoid it whenever possible. Ambiguity and change are
seen as undesirable. These people tend to prefer a
structured and routine, even bureaucratic, way of doing
things

Goal Orientation

Time Orientation
Time Orientation
Short-Term
Long-Term

International Management and Cultural
Differences: Understanding New Cultures
Self-reference
criterion Acculturation
• Cross-cultural
literacy
When dealing with a new culture, many international

businesspeople make the mistake of relying on the self-reference
criterion, the unconscious use of one’s own culture to help assess
new surroundings
• To be successful, international businesspeople
traveling abroad must remember that they are the
foreigners and must attempt to behave according
to the rules of the culture at hand. There are
numerous ways to obtain knowledge about other
cultures to achieve cross-cultural literacy
• Cross-cultural literacy is the first step in
acculturation, the process by which people not
only understand a foreign culture but also modify
and adapt their behavior to make it compatible
with that culture.
• Acculturation is of importance to home country
managers who frequently interact with host country
nationals—for example, a plant manager from the
country working overseas at a foreign subsidiary
Sam Lucas, a construction supervisor for an international
engineering firm, had been chosen to supervise construction on a
new hotel project, in Jeddah, Saudi Arabia, primarily because of
his outstanding work record. On this project, Sam supervised the
work of about a dozen Americans and nearly one hundred Saudi
laborers.
It was not long before Sam realized that the Saudi laborers, to his
way of thinking, were nowhere as reliable as the workers he had
supervised in the United States. He was becoming increasingly
annoyed
at the seeming lack of competence of the local workforce.
Following the leadership style that held him in such good stead at
home, he began reprimanding any worker who was not doing his
job properly, and made certain that he did it publicly so that it
would serve as an object lesson to all the other workers. He was
convinced that he was doing the right thing and was being fair, for
after all, he reprimanded both Americans and Saudis alike. He was
troubled, however, by the fact that the problems seemed to be
growing worse and more numerous.
What advice might you give Sam?

Review Questions
 What is culture?
 What are the primary characteristics of culture?
 Describe the difference between high-context and low-context
cultures.
 What are cultural clusters?
 What are individualism and collectivism? How do they differ?
 Discuss the differences in pay systems between U.S. and
Japanese firms. To what extent are these differences
culturally determined?
 What is power orientation?
 What is uncertainty orientation?
 What are aggressive and passive goal behaviors? How do
they differ?
 What is the self-reference criterion?

Cultural Aspects of Internationl Business

Uploaded by

Copyright:

Available Formats

Cultural Aspects of Internationl Business

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Cultural Aspects of Internationl Business

Uploaded by

Copyright:

Available Formats

International

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-1

 Culture is the collection of values, beliefs,

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-3

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-5

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4- 6

 Individuals, Families, and Groups

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-7

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-8

 Delineates cultural groups

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-10

 Language as a Competitive Weapon

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-11

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-14

 Gift-Giving and Hospitality

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-15

• Japanese business etiquette requires solicitous hospitality.

• However, business gifts are opened in private so as not to

• Hospitality customs also differ. When wooing

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-17

• Norms of hospitality even affect the way bad news

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-19

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-21

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-23

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-26

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-29

• A cultural cluster comprises countries that share many cultural

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4- 30

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-31

• Closeness of culture may affect the form that firms use to

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-33

The most influential studies analyzing cultural differences and

Hofstede’s work identified five important dimensions along which

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4- 34

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-35

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-36

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-37

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-38

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-40

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4- 41

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-42

COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 4-43

When dealing with a new culture, many international

What advice might you give Sam?

You might also like