CBM

CULTURE’S EFFECT IN INTERNATIONAL BUSINESS
• Culture can differ sharply, even between neighboring countries. Managers not only need to develop empathy
and tolerance toward cultural differences but also must acquire a sufficient degree of factual knowledge about
the beliefs and values of foreign counterparts. Cross-cultural proficiency is paramount in many managerial
tasks, including:
 Managing employees.
 Communicating and interacting with foreign business partners.
 Negotiating and structuring international business ventures.
 Developing products and services.
 Preparing advertising and promotional materials.
 Preparing for international trade fairs and exhibitions.
 Screening and selecting foreign distributors and other partners.
 Interacting with current and potential customers from abroad.

MODELS AND EXPLANATIONS OF CULTURE
High- and Low-Context Cultures
• When communicating, people in low-context cultures rely heavily on

spoken words and detailed verbal explanations. In such cultures, the main
function of speech is to express ideas and thoughts clearly, logically, and
convincingly; communication is direct, and meaning is straightforward. By
contrast, high-context cultures, emphasize nonverbal messages and view
communication as a means to promote smooth, harmonious relationships. They
prefer an indirect and polite style that emphasizes mutual respect and care for
others.
6 independent dimensions of national culture,
Dr. Geert Hofstede published his cultural dimensions

model at the end of the 1970s, based on a decade of
research. Since then, it's become an internationally
recognized standard for understanding cultural
differences..
Individualism versus collectivism refers to whether a person
functions primarily as an individual or as part of a group. In
individualistic societies, each person tends to focus on his or her
own self-interest, and ties among people are relatively loose. By
contrast, in collectivist societies, ties among individuals are highly
valued. Business is conducted in the context of a group in which
others’ views are strongly considered. The group is all-important
because life is a cooperative experience.
Example:
• After suffering an injury, an adult with a highly individualistic cultural
background may be focused on self-sufficiency and independence.
• For individuals with a collectivist background, the focus may be on

providing ongoing assistance to an individual. Extended family may be
very involved in caretaking.
Power distance describes how a society deals with the inequalities in power that
exist among people. In societies with low power distance, the gaps between the
powerful and weak are small. Societies characterized by high power distance do
not care very much about inequalities and allow them to grow over time. In high
power-distance firms, autocratic management styles focus power at the top and
grant little self-rule to lower-level employees. In low power-distance firms,
managers and subordinates are relatively equal and cooperate to achieve
organizational goals.
Example:
Societies with a smaller power distance:
• Parents commonly treat children as equals
• Older people aren't outright respected or disrespected for their
age
• Income distribution is meant to be even
Societies with a larger power distance:

• Parents teach children to be obedient, especially to their elders
• Older people are respected by younger people
• Income distribution is more uneven
Uncertainty avoidance refers to the extent to which

individuals can tolerate risk and uncertainty in their lives.
People in societies with high uncertainty avoidance create
institutions that minimize risk and ensure financial security.
Companies emphasize stable careers and produce many
rules to regulate worker actions and minimize uncertainty.
Example:
A culture with high uncertainty avoidance has the following traits:
• Uncertainty in life is thought of as a continuous threat
• Uncertainty in life should be avoideds
• There is higher stress, anxiety, and emotion
Uncertainty accepting cultures have the following traits:

• They believe uncertainty is an inherent part of life
• Uncertainty should be accepted and welcomed
• They maintain higher levels of self-control and ease
Masculinity versus femininity refers to a society’s

orientation based on traditional male and female values.
In masculine cultures, both men and women put high
priority on achievement, ambition, and economic growth.
Society values competitiveness and boldness. In
business, the masculinity dimension reveals itself as self-
confidence and leadership.
Example:
• For example, the women in feminine societies are quite modest and
caring. In masculine societies, they are somewhat assertive and
competitive, but not as much as the male population.
• Cultures that are more masculine tend to have large differences of
social and emotional roles between genders.
• Feminine cultures tend to have small differences of social and
emotional roles between genders.

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CULTURE’S EFFECT IN INTERNATIONAL BUSINESS

 Communicating and interacting with foreign business partners.

 Negotiating and structuring international business ventures.

 Developing products and services.

 Preparing advertising and promotional materials.

 Preparing for international trade fairs and exhibitions.

 Screening and selecting foreign distributors and other partners.

 Interacting with current and potential customers from abroad.

High- and Low-Context Cultures

• When communicating, people in low-context cultures rely heavily on

6 independent dimensions of national culture,

Dr. Geert Hofstede published his cultural dimensions

• For individuals with a collectivist background, the focus may be on

Societies with a larger power distance:

Uncertainty avoidance refers to the extent to which

Uncertainty accepting cultures have the following traits:

Masculinity versus femininity refers to a society’s

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