©2004 Prentice Hall3-1

Joint venture between

Volkswagen and the Shanghai Automotive

Industry Group

©2004 Prentice Hall3-2

Intellectual Property

Patents Copyrights Trademarks Brandnames

Intellectual property often forms the basis of a firm’s competitive advantage!

©2004 Prentice Hall3-3

International Treaties Protecting Intellectual Property Rights

International Convention for the Protection of Industrial Property Rights (i.e., the Paris Convention)

Berne Convention for the Protection of Literary and Artistic Works

Universal Copyright Convention Trade-Related Intellectual Property Rights

agreement

©2004 Prentice Hall3-4

Figure 3.2 Software Revenue Lost to Piracy

©2004 Prentice Hall3-5

Political Risk

Ownership risk Operating risk Transfer risk

©2004 Prentice Hall3-6

Table 3.1 Examples of Political Risks

Expropriation Confiscation Campaigns against

foreign goods Mandatory labor

benefits legislation Civil wars Inflation

Kidnappings, terrorist threats, and other forms of violence

Repatriation Currency

devaluations Increased taxation

©2004 Prentice Hall3-7

Basic Country Knowledge

Is the country a democracy or dictatorship? Does country rely on free market or

government controls? Does government view foreign firms as

positive influence? Are firm’s customers private or public? Does government act arbitrarily? Is existing government stable?

©2004 Prentice Hall3-8

Insurance against Political Risks

Overseas Private Investment Corporation (OPIC)

Multilateral Investment Guarantee Agency (MIGA)

©2004 Prentice Hall3-9

Map 3.2 Countries’ Relative Political Riskiness, 2002

©2004 Prentice Hall3-10

Translation Disasters

KFC’s Finger Lickin’ Good– Eat your fingers off (China)

Pillsbury’s Jolly Green Giant– Intimidating green ogre (Saudia Arabia)

Google Translation Tool– “The quick fox jumped over the picket fence.”

©2004 Prentice Hall3-11

Yes and No Across Cultures

Latin America– meaning of “manana”

Japan – meaning of “yes” versus “yes, I

understand”

©2004 Prentice Hall3-12

Caterpillar has developed its own

simplified language instruction program

–Caterpillar Fundamental

English

©2004 Prentice Hall3-13

Table 4.1 Forms of Nonverbal Communication_1

Hand gestures Facial expression Posture and stance Clothing/ hair style Walking behavior Interpersonal

distance

Touching Eye contact Architecture/

Interior design Artifacts and non-

verbal symbols Graphic symbols

©2004 Prentice Hall3-14

Table 4.1 Forms of Nonverbal Communication_2

Art and rhetorical forms

Smell Speech rate, pitch,

inflection, volume Color symbolism Synchronization of

speech and movement

Taste, symbolism of food, oral gratification

Cosmetics Sound signals Time symbolism Timing and pauses Silence

©2004 Prentice Hall3-15

Religion

Christianity– Catholicism– Protestant– Eastern Orthodox

Islam Hinduism Buddhism

72% of the world

adheres to one of these four

religions!

©2004 Prentice Hall3-16

Map 4.3 Major World Religions

©2004 Prentice Hall3-17

Two million Muslims annually

descend on the Grand Mosque in

Mecca, Saudia Arabia as part of

the Haij

©2004 Prentice Hall3-18

Values and Attitudes

Values: accepted principles and standards Attitudes: actions, feelings, and thoughts

that result from values– Time– Age– Education– Status

©2004 Prentice Hall3-19

Theories of Culture

Hall’s Low-Context, High-Context Approach

Cultural Cluster Approach Hofstede’s Five Dimensions

©2004 Prentice Hall3-20

Hall’s Low-Context, High-Context Approach

Low-context: words used by speaker explicitly convey speaker’s message

High-context: the context in which a conversation occurs is just as important as the words spoken; cultural clues are critical to communication

©2004 Prentice Hall3-21

Figure 4.2 High- and Low-Context Cultures

Ger

man

Sw

iss

Sca

ndin

avia

n

U.S

./ C

anad

ian

Bri

tain

Ital

ian

Spa

nish

Gre

ek

Ara

b

Vie

tnam

ese

Japa

nese

Kor

ean

Chi

nese

LowContext

HighContext

©2004 Prentice Hall3-22

Map 4.4 A Synthesis of Country Clusters

©2004 Prentice Hall3-23

Table 4.2 Cultural Differences in Negotiating Styles

©2004 Prentice Hall3-24

Hofstede’s Five Dimensions

Social Orientation Power Orientation Uncertainty Orientation Goal Orientation Time Orientation

©2004 Prentice Hall3-25

Social Orientation

Individualism Collectivism

Relative importance of theinterests of the individual versus

interests of the group

©2004 Prentice Hall3-26

Power Orientation

Power Respect Power Tolerance

Appropriateness of power/authority within

organizations

©2004 Prentice Hall3-27

Uncertainty Orientation

Uncertainty Acceptance Uncertainty Avoidance

An emotional responseto uncertainty and change

©2004 Prentice Hall3-28

Goal Orientation

Aggressive Goal Behavior Passive Goal Behavior

What motivates peopleto achieve different goals

©2004 Prentice Hall3-29

Time Orientation

Long-term Outlook Short-term Outlook

The extent to whichmembers of a culture

adopt a long-term or a short-termoutlook on work and life

©2004 Prentice Hall3-30

Figure 4.4 Social Orientation and Power Orientation

Patterns

©2004 Prentice Hall3-31

Understanding New Cultures

Self-reference criterion – when we act ignorantly in other cultures.

Cultural literacy – is learned. Acculturation – is cultural literacy in

practice.