how differences in culture can affect international business

7/18/2019 How Differences in Culture Can Affect International Business

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HOW DIFFERENCES INCULTURE CAN AFFECT

INTERNATIONAL BUSINESS?Frida Chagoya Hernández

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Wha% i& '()%(re?

• C()%(re is defined by Geert Hofstede

as “the collective programming of the

mind which distinguishes the

members of one human group from

another. Culture includes systems ofvalues”

• *a)(e&+ abstract ideas about what a

group believes to be good or right.

• Nor,&+ Social rules and guidelines.

• So'ie%y+ A group of people who

share a common set of values and

norms.



The i,-or%an'e o. /a)(e&

• alues provide the conte!t within which society"s norms

are established and #ustified.

•alues include society$s attitudes toward concepts as%individual freedom& truth& #ustice& etc. And such attitudes

have a great emotional singificance.

•

'orms are the social rules that govern people"s actions&they are divided in fol(ways and mores.



The de%er,ina%& o. '()%(re

)he values and norms of a culture are the evolutionary

product of a number of factors including%

•0o)i%i'a) and e'ono,i' -hi)o&o-hy

• The &o'ia) &%r('%(re o. &o'ie%y

• Re)igion

• Lang(ag(e

• Ed('a%ion



I,-or%a% 'on'e-%& re)a%ed %o '()%(re

• *ndividuals vs groups

*ndividual is the way people percieve themselfs and relate

to each other in social and business in contrast to a group

that is the primary unit of social organi+ation and is the

importance attached to group membership or identification.



• Social stratification

)he way how societies are

stratified on hierarchical basis

into social categories ,family

bac(ground& occupation andincome-.

• Social mobility the e!tent to

which individuals can move out

of the strata into they are born

Ca&%e &y&%e, /& ')a&& &y&%e,



Re)igion

• )here are dominate

religions in the world%

Christianity& *slam&

Hinduism and /uddhism

0eligions shape attitudes

toward wor( and

entreprenurship and they

can affect the costs of doing

business.



Chri&%iani%y

• )he most widely practiced

religion in the world.

• 1onotheistic

• )wo ma#or organi+ations%)he0oman Catholic Church and

2rtodo! Church

• 3conomic implications%

Conection between protestant

ethics and capitalism.alues% Hard wor( and wealth

creation& religious freedom&

individualism as an economic

and political philosophy.



I&)a,

• )he 45 largest religion of the

world.

• 1a#ority in more than 67

countries. ,coast of Africa&

middle 3ast& China& 1alaysia-.• alues% no distinction between

church and state& islam is a

lifestyle.

• 3conomic implications% pro8

free enterprise& earninglegitimate profit through trade

and commerce& protection of

the right of free property&

interest are forbbiden.



Hind(i&,

• 9racticed on the *ndian

subcontinet.

• )here is not an official sacred

boo(.

• alues% acceptance ofresponsabilities called dharma&

reicarnation& (arma& spiritual

progression& scetic lifestyle of

material and physical self8denial&

caste system.

• 3conomic implications% Hindus

believe that the pursuit of material

affects their spititual needs

despite of that *ndia$s economy is

growing rapidly.



B(ddi&,

• :ounded in *ndia.

• 47; followers

• alues% life is comprised

of suffering& /uddismlac( of support of caste

system & afterlife&

e!treme ascetic behavior.

• *mpact in business% fertileground of

entrepreneurship activity.



Lang(age

• 3nable people to comunicate each other and helps define

culture.

• Although english the language of international business it

is important to leatn the local language to avoid blunders

thruoght improper translation.

• =nspo(en language is important.



Ed('a%ion

• :ormal education is the medium thought which individuals

learn many of the languague& conceptual and

mathematical s(ills that are indispensable in a modern

society.

• )he availability of pool of s(illed and educated wor(ers

seems to be a ma#or determinant of the economic

success in a country.

•



C()%(re+ i,-)i'a%ion& .or 1(&ine&&

• Cross8cultural literacy% the danger of being ill8informed.

Adaptations of all aspects of an international$s firms

operations in a foreing country.

• )he conection between culture and competitive

advantage.

• Culture and business ethic% customs vary from country to

country. 1anagers are re>uired to use their own moral

#udgment to solve ethical dilemmas.

•

how differences in culture can affect international business

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