globaliz culture fall 09 moodle

8/14/2019 Globaliz Culture Fall 09 Moodle

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ecture 1ecture 1GLOBALIZATIONLOBALIZATIONInternational Business BUSI

2490


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Objectivesbjectivesq Define International

Business

q Define Globalization

q ExamineGlobalizationAreas; Drivers;

Reasons


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Businessusinessq Definition: ANY COMMERCIAL

TRANSACTIONTHAT CROSSES THE

BORDERS OF TWO(OR MORE)COUNTRIES


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qObjects?Goods Consumer & Industrialgoods

Services Large varietyInvisibles Intellectual

property (licensing,

franchising), ManagementServices, Tourism,

Transportation

Financing Lending & Borrowing

usiness cont d


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nternational Business cont d nternational Business cont d

q Differences fromdomestic

business ?Legal-political,economic, social-

cultural,technological

Complexity, Size


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nternational Businessnternational Business ont dont dq It involves us all! HOW? Imports are the source of things

we use (toys, education,infrastructure)

Foreign markets (i.e., exports)are essential for our economicwellbeing

Companies we work for havesignificant internationalbusiness activities

We determine government


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ACTIVITIESCTIVITIES

q Exportq ImportqInternational Trade - for use or resaleqOriginating in North Africa Middle East

2000 B.C.

qInternational Investments(originating during colonialism)

qFDI controlling assets, propertyor companies in a host country

qPortfolio investments purchasing financial assets (notfor control)


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ASIC ACTIVITIESASIC ACTIVITIES ont dont d

qGlobal Financial Services IndustryqBanking, Securities, Insurance, Credit

cards, etc.

qSpecial, modern activitiesqLicensing intellectual property for

royaltyqFranchising know-how, logos, brand

names, etc. for royalty

qManagement contracts operatingfacilities for a feeqOutsourcing performing a business

function for a fee


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Copyright 2010 Pearson Education, Inc. publishing as Prentice HallInternational Business 5e Chapter 1 - 9

FactsFacts of Small Biz Exportingof Small Biz Exporting

ost exportersost exportershaveaveewer than 50ewer than 50employeesmployeesomprehensiveomprehensive

elpelps availables available

ost products doost products donototeed an exporteed an exportlicenseicensexport financingxport financings availables available


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Globalizationlobalization

qGlobalization is an ever

increasing relationship andinterdependency betweenentities of various countries,encompassing:

qBusinesses,qAll types of organizationsqGovernmentsqPeople

in many areas of humandevelopment:qEconomic including financialqSocial and culturalqPolitical and legalqTechnological and operational


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eas o eas oGlobalizationlobalizationq

q

q Globalization of Marketsq

q Globalization of Productionqq Globalization of Consumers

qq Globalization of Financingq

Itappliestol

arge

organiza

tionsand

SMEs


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ont dont dq

qGlobalization of MarketsqConsumer goodsqe.g., credit cards, burgersqnot prevalent, still maintaining

national characteristicsqIndustrial goods

qmost global markets

qraw materials; aircraft;computer software &hardware; financialinstruments

q


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q

qGlobalization ofProductionqseeking competitive

advantageqCost & Quality

qfor factors ofproductionqLabour , Energy,

Land, Capital,

Expertise

eas o o a za on ont d


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qGlobalization of Consumersqcommunicationtechnology providesorganizations consumersfrom any place on earth

qtastes, habits,preferences of

consumers have becomemore and more similar

qtechnology has created a

well informed global

ont d


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GlobalizationlobalizationqGlobal InstitutionsqDeclining (or removal

of) Trade and

Investment BarriersqTechnological Changeq

Otherq


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GlobalizationlobalizationqGlobal InstitutionsqGATT to reduce trade

barriers

qWTO to police the worldtrade system

qIMF to maintain order inthe international monetarysystem

qThe World Bank toromote economic


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GlobalizationlobalizationqDeclining/removal ofTrade and Investment

Barriers through

qmultilateral agreementson the free flow ofgoods, services & capital

qregional & bilateralagreements on cross-border trade and

resource movement


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GlobalizationlobalizationqTechnological ChangeqTransportation

qCommunications

qInformation processing


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Globalizationlobalizationq

OtherqPolitical changesqEmergence of mini-

Multinationals

qThe effects of expandingFDI

qDevelopment of servicesdedicated to the globalbusiness

qEver increasing

competition


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re Globalization and re Globalization and nternational Business one andnternational Business one andhe same phenomenon?he same phenomenon?

qInternational Business andGlobalization influence andfacilitate each othersevolution

Internationalbu

sinessisabout

internationaliz

ation

Globalizationisabou

tgreater

interdependenc

eamongnations&

economies(de

nationalization

)


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GlobalizationlobalizationqTo decrease cost, improve quality and

increase productivity e.g., by avoidingcostly and risky transportation systemsand using less costly inputs

qTo obtain new markets and reduce marketing

costs (Bombardier)qTo acquire inputs, resources and expertise(Mittal)

qTo access information

qTo leverage core competencies (banks)qTo minimize risks (level income streams,

complement business cycles from market tomarket)

qTo become more competitive including by- -


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Globalizationlobalization Globalization Costs Jobs &Lowers Wages

new jobs in host country =

lost jobs in home countryv Globalization Creates Jobsand Boosts Wagesvefficiencies create

savings, new investments& wealth

qv


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Globalization Has a NegativeImpact on Labour andEnvironmental Regulationsfirms move to countries with low

labour and environmental

standardsv Globalization brings positiveinfluences to Labour &Environmental regulations

vthere is evidence contradictingthe critics claims regardinglabour standards, including newlabour legislation adopted bymany emerging markets

vgovernments of emerging nations

Globalization


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Labor, Environment, &Labor, Environment, &MarketsMarkets

Globalization lowerslabor standards

Weakens protection ofthe environment

Exploits workers inpoor nations

+ Investment raiseslabor standards

+ Open economies mostenvironment friendly

+ Companies concernedfor future markets

Opponents Supporters


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Globalization is a threat toDemocracy and NationalSovereigntySupranational institutions

with appointed officialsdictate the actions ofsovereign nations

v Globalization has helped theworldwide spread of democracyvmore democracies than evervsometimes, the loss of

sovereignty (e.g., in

Globalization


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National SovereigntyNational Sovereignty

SupportersSupporters

Globalization hasGlobalization hasbenefited societies bybenefited societies by

helping to spreadhelping to spreaddemocracy worldwidedemocracy worldwide

OpponentsOpponents

SupranationalSupranationalinstitutions reduceinstitutions reduce

autonomy of national,autonomy of national,

regional, and localregional, and localgovernmentsgovernments


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Globalization has a negativeimpact on cultureCultural diversity is

destroyed and smalllocal business is wipedout

vGlobalization protects thedeep moral and culturalnorms, allows countries toexport their cultural goods

and to trade for goods that

Globalization


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Impact on CultureImpact on Culture

Opponents

Destroys culturaldiversity

Homogenizes ourworld

Bankrupts localsmall businesses

Supporters

Specialize and tradeto obtain othergoods

Import cultural

goods from othernations

Protects deepermoral and cultural

norms


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Globalization leads to a highcosts for economic growth andincome inequality

vGlobalization - a major reason for theunprecedented economic growthworldwidevhigh costs - temporary; investments =

huge benefits

vexpanding middle-classes and highstandard of livingvincome inequality is influenced more by

technology and politics than globalizationvcountries open to trade and investment

grow faster

Globalization


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Income InequalityIncome Inequality

debatedebateInequality within nationsPoor people in developingnations benefit most from

an open economy

Inequality between nationsNations open to world tradeand investment grow faster

than rich nations

Global inequality

Inequality has fallen, butexperts disagree on theextent of the decline

Income Inequa lit yIncome Inequa lit y

3

1


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ecap ofecap ofObjectivesbjectivesq Define International

Business

q Define Globalization

q ExamineGlobalizationAreas, Drivers &

Reasons


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Objectivesbjectives

q Examine some definitions ofculture

q Identify components of culture

q Discuss two frameworks forclassifying cultureq Evaluate implications of

cultural differences forinternational businessmanagement


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Prentice Hall, 2008 International Business 4e Chapter 2 - 35

What Is Culture?What Is Culture?

Set ofvalues, beliefs, rules, and

institutions held by a specificgroup of people


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ore definitionsore definitionsq CULTURE (Diana Kendall, et al, Sociology in ourtimes, 3ce)

qthe knowledge,language, values,

customs and materialobjects that are passedfrom person to personand from one generation

to the next in a humangroup of society;qin other words: ideas,

behaviour ANDmaterialpossessions common to a


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ore definitionsore definitionsq

qCULTURE = Tradition (collectiveprogramming of the mind) making the members of one groupdistinct from others.

qCulture is a societys (or a groups)

system of shared and learnedvalues and norms; as a whole,these VALUESand NORMSarethe societys (or the groups)design for living

qqValues: abstract ideas about the

good, the right, the desirableqNorms: social rules and guidelines;

determine appropriate behaviourin s ecific situations


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Components of CultureComponents of Culture

Physicalenvironme

nts

Education

Personalcommunic

ationReligion

Socialstructure

Manners &customs

Values &attitudes

Aesthetics

CultuCulturere


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AestheticsAesthetics

Music

Painting

Dance

Drama

Architecture


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Values and AttitudesValues and Attitudes

ValuesValuesValuesValues AttitudesAttitudesAttitudesAttitudes

Positive or negativePositive or negative

evaluations, feelings, andevaluations, feelings, andtendencies people holdtendencies people holdtoward objects or conceptstoward objects or concepts

The ideas, beliefs, andThe ideas, beliefs, andcustoms to whichcustoms to whichpeople are emotionallypeople are emotionallyattachedattached

FreedomFreedom ResponsibilityResponsibility

HonestyHonesty

TimeTime WorkWork

Cultural changeCultural change


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Manners and CustomsManners and Customs

MannersAppropriate behavior,

speech, and dressing in

general

CustomsTraditional ways or behavior

in specific circumstances


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PhysicalPhysicalandandMaterial CultureMaterial Culture

These influence a cultures development and pace of change

TopographyPhysical features characterizing the surface of a geographic region

Climate

Weather conditions of a geographic region

Material CultureTechnology used to manufacture goods and provide services

INFLUENCEON:

Agri-foodproductio

n&

consumption

Houseconstruction&living

conditions

Transportation


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Social StructureSocial Structure

Social structureCultures groups, institutions, socialpositions, and resource distribution

Social stratificationProcess of ranking people into social layers

Social mobilityEase of moving up or down a culture's

"social ladder"

Slide


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McGraw-Hill Ryerson 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.

Social Structure and Culture

TWO MAIN CRITERIA TO COMPARECULTURES whether the unit of social organization is the

individual or the group

the degree to which a society is stratifiedinto classes or castes

3-3

Slide


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Business implications of Individual vs.Group Societal Characteristics

Individual Managerial

mobilitybetween

companies Economic

dynamism,innovation

Good general

skills Teamwork difficult,

non-collaborative

Exposure todifferent ways

Group Loyalty and

commitment tocompany

In-depth knowledgeof company

Specialist skills

Easy to build teams,collaboration

Emotionalidentification withgroup or company

e.g., Japanese

companies

3-4

Slide


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Social StratificationFamily Background, Occupation, Income

Social Mobility Caste system

Positiondetermined by

family Change not

usually possible

Class system

Position at birthcan be changedby luck orachievements

Significance Class

consciousness

Relationshipsare based onclassbackgrounds

Mutual

antagonismeven hostility

Raises cost ofdoingbusiness

3-4


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ore on Social Classore on Social Classi.a.w. the relationto

Means of

Production(KarlMarx):

qCAPITALISTS- own & controlthe means ofproduction;

achieve wealththrough capital

qWORKINGCLASS

(PROLETARIAT) own and sell

u ltid im e n sio n a lp p ro a ch to so cia lstra tifica tio n ( )ax Weber

qW E A LT HqP O W E RqP R E S T IG E :x a m p le o f cla sse s

U p p e r ( - , -upper upper lower)u p p e r

M id d le ( - ,upper middle lower)middle

Working class Working poor

Underclass


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World ReligionsWorld Religions

ChristianityIslamHinduismBuddhismConfucianismJudaismShinto Origin ofOrigin of

Human ValuesHuman ValuesOrigin ofOrigin of

Human ValuesHuman Values

C

Slide3 5


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Religion, Ethics, and Culture

Religion = system ofshared beliefs about the sacred

Ethical systems = moral principles or values thatshape & guide behaviour; often, products ofreligion

Economic characteristics of major religious groups:

Christianity - Protestant work ethic

Islam similar principles with those inJudaism and Christianity

Hinduism - anti-materialistic, sociallystratified

Buddhism - anti-materialistic, socialequality

Confucianism - hierarchy, loyalty, honesty Shinto loyalty, respect, enjoyment of life

All have significant sub-sets with distinct beliefs and

3-5


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EducationEducation

Cultures pass on traditions, customs, and values throughschooling, parenting, group memberships, etc.

Education level

Well-educated attract high-paying jobs, while poorly educatedattract low-paying manufacturing jobs

Brain drainDeparture of highly educated people from one profession,

geographic region, or nation to another


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ayers of Cultureayers of CultureqLayers

qValues, Rituals, Heroes, Symbols =>Practices

qLevels of layers*qNational level the nation as a

wholeqRegional level ethnic, linguistic,

religious differences within anation

qGender level female vs. maleqGeneration level parents &

children, parents & grandparents

qSocial class level differences in

occupation, educational* Source: www.tamu.edu/classes/cosc/choudhury/culture.html


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Cultural LiteracyCultural LiteracyDetailed knowledge of a culture that enables

a person to function effectively within it

PolycentrismAdapt to the

local culture

Ethnocentrism

Belief that ones own ethnicgroup or culture is superior

to that of others

XXGeocentric Approach


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lassifyinglassifyingCulturesultures


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Hofstede FrameworkHofstede Framework

IndividualismIndividualism

vs. collectivismvs. collectivism

IndividualismIndividualismvs. collectivismvs. collectivism

Power distancePower distanceAccepting socialAccepting social

inequalityinequality

Power distancePower distanceAccepting socialAccepting social

inequalityinequality

UncertaintyUncertaintyavoidanceavoidance

UncertaintyUncertaintyavoidanceavoidance

AchievementAchievementvs. nurturingvs. nurturing

AchievementAchievementvs. nurturingvs. nurturing

Long-termLong-termorientationorientationLong-termLong-termorientationorientation


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Power Distance &Power Distance &Individualism vs. CollectivismIndividualism vs. Collectivism


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Power Distance & UncertaintyPower Distance & UncertaintyAvoidanceAvoidance


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ooking forwardooking forwardq

q Please Read: CHAPTERS 3and 4

qHOMEWORK!q Presentation assignments!q Keep up with MESP

requirements for TermProjects

globaliz culture fall 09 moodle

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