Chapter Three

Cultureand Differences in Culture

Last week: Political economy

Political systems: They differ radically from one country to the next The ease of doing business varies with the system You have to understand the rules where you are

Level and nature of economic development also differs radically from one place to the next Gross National Income (GNI) and Purchasing Power

Parity GNI measure the differences

Today: Culture and cultural differences

What is Culture?

“The collective programming of the mind which distinguishes one human group

from another”- Hofstede

Components of Culture:One standard approach

Values – basic attitudes

about what is important

Norms – social rules

Society

Culture, Society, and the Nation State

There is not a strict one-to-one correspondence between a society and a nation state

Nation State:Is a political creation May contain a single culture or several cultures

CanadaIndiaMulti-tribal African nations

Societies contain subculturesethnic cultures business or professional cultures

The Determinants of Culture

Social Structure

Social structure refers to its basic social organization

Two dimensions that are particularly important include:The extent to which society is group or individually

orientedDegree of stratification into castes or classes

Religious and Ethical Systems

Religion: a system of shared beliefs and rituals that are concerned with the realm of the sacred

Ethical systems: a set of moral principles, or values, that are used to guide and shape behavior Most of the world’s ethical systems are the product of religions

Among the thousands of religions in the world today, four dominate in terms of numbers of adherents: Christianity with 1.7 billion adherents Islam with 1 billion adherents Hinduism with 750 million adherents Buddhism with 350 million adherents

Religious and Ethical Systems

Religions are hugely important, but Prof. Hill may not be too expert on them

I am not holding you responsible for the information about specific religions on pp. 96-105But the sidebars on ‘Islamic capitalism’ and

‘McDonald’s and Hindu culture’ illustrate well how religion interacts with business

Language

SpokenVerbal cuesLanguage structures perception of world

UnspokenBody languagePersonal space

Be alert for unexpected meanings of ‘silent language’

ColorsBlack symbolizes death in U.S.White indicates death in AsiaPurple indicates death in (some situations

in) Latin America

GesturesSideways head movement that means

‘yes’ in Greece looks like negative ‘no’ head shake in U.S.

Culture in the Workplace

Four dimensions of culture Power distance – the extent to which people are comfortable

with inequalities of power and wealth Uncertainty avoidance - the extent to which people accept

ambiguous situations and tolerate uncertainty Individualism versus collectivism - this dimension focuses on

the relationship between the individual and his/her fellows within a culture

Masculinity versus femininity - this dimension looks at the relationship between gender and work roles

Work-Related Values for20 Selected Countries

Problems with Hofstede

Assumes one-to-one relationship between culture and the nation state

Research may have been culturally bound Survey was of IBM employees, conducted

by Europeans and Americans

Survey respondents were from a single industry (computer) and a single company (IBM)

Other scholars have proposed many other dimensions of culture, but none have been shown more significant than the first three Hofstede developed

Cultural Change

Culture evolves over timeSince 1960s American values toward the role of women

have changedJapan moved toward greater individualism in the workplace

Globalization will continue to impact cultures around the world

Managerial Implications

Cross-cultural literacyYou need to understand differences between

cultures

Culture and competitive advantageSome cultures make business easier than

others

Culture and business ethicsAs we’ll see, cultural differences create

big ethical issues

Looking Ahead to Chapter 4

Ethics in International BusinessEthical Issues in International BusinessEthical DilemmasThe Roots of Unethical BehaviorPhilosophical Approaches to EthicsEthical Decision Making