Slide 5.1

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

International sociocultural environment

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Slide 5.2

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Definitions of culture • ‘Culture should be regarded as the set of

distinctive spiritual, material, intellectual and emotional features of society or a social group, and that it encompasses, in addition to art and literature, ways of living together, value systems, traditions and beliefs’ (UNESCO 2002).

• Culture… is that complex whole which includes knowledge, belief, art, morals, law, custom, and any other capabilities and habits acquired by man as member of society. (Encyclopædia Britannica 2000).

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Slide 5.3

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

• http://www.youtube.com/watch?v=8tIUilYX56E&feature=BFa&list=PL636501B39E70CBA8&index=5

• 4 min high & low Contexts

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Slide 5.4

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

High context cultures – Edward Hall

• Define personality more in terms of the group than the individual

• Low boundaries in terms of personal space• Initiate and receive more bodily contact when

talking• Are polychronic, i.e. time has non-linear

aspects so punctuality and scheduling are low priority.

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Slide 5.5

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Low context cultures – Edward Hall

• Are more individualistic than group • High boundaries in terms of personal space• Convey more information via explicit codes

rather than non-verbal language• Are monochronic, i.e. time is linear so

punctuality and scheduling are high priority.

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Slide 5.6

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Hofstede’s five cultural dimensions

• Individualism (versus collectivism)• Power distance• Uncertainty avoidance• Masculinity/Femininity• Long-term orientation (versus short-

term).

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Slide 5.7

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Societies - Hofstede• United States, the United Kingdom,

Australia, Canada, New Zealand and the Netherlands tend to be relatively individualist in their values.

• Mexico, Greece, Hong Kong, Taiwan, Peru, Singapore, Colombia and Pakistan tend to be relatively collectivist in their values.

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Slide 5.8

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Power distance - Hofstede

• Philippines, Mexico, Venezuela, India, Singapore, France, Spain, Japan and Brazil tend to be relatively power respecting (large power distance).

• Austria, Israel, Denmark, New Zealand, Ireland, Great Britain, Germany, Australia, Canada and the USA have small power distance.

• http://www.youtube.com/watch?v=jU2gp3QjnNU8

Slide 5.9

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Uncertainty Avoidance - Hofstede

• Nordic and Anglo-Saxon countries as well as most other Asian and sub-Saharan countries exhibit weak uncertainty avoidance.

• Latin, Mediterranean and Central and Eastern European countries, Japan, South Korea and Pakistan exhibit strong uncertainty avoidance.

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Slide 5.10

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Masculinity/Femininity - Hofstede

• Masculinity refers to cultures in which the social gender roles are clearly distinct; men are supposed to be more assertive and acquisitive, valuing material possessions and money.

• Femininity refers to cultures in which social gender roles overlap; both men and women are supposed to be modest, tender and concerned with the quality of life.

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Slide 5.11

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Long-term orientation

• Long-term orientation means focusing on the future, delaying immediate gratification by practising persistence and thriftiness. • E.g. China, Hong Kong, Taiwan, Japan

and South Korea…

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Slide 5.12

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

• Short-term orientation means a greater focus on the present and a more immediate gratification of need, such as spending to support current consumption even if this means borrowing money.• E.g. Pakistan, Philippines and Bangladesh

and all Western countries…

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Short-term orientation

Slide 5.13

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Impacts of different cultural dimensions at the workplace (1)

Cultural dimension Impacts at the workplace

Individualist Same value standards apply to all: universalism

Other people seen as potential resources

Task prevails over relationship

Calculative model of employer–employee

relationship

Collectivist Value standards differ for in-group and out-

groups: particularism

Other people seen as members of their group

Relationship prevails over task

Moral model of employer–employee relationship13

Slide 5.14

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Impacts of different cultural dimensions at the workplace (2)Cultural dimension Impacts at the workplace

Large power distance (power respect) Hierarchy reflects on existential

inequality of roles

Subordinates expect to be told what to

do

Ideal boss is a benevolent autocrat

(good father)

Small power distance (power tolerance) Hierarchy means an inequality of roles,

established for convenience

Subordinates expect to be consulted

Ideal boss is a resourceful democrat14

Slide 5.15

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Impacts of different cultural dimensions at the workplace (3)Cultural dimension Impacts at the workplace

Weak uncertainty avoidance (uncertainty

acceptance)

Dislike of rules, written or unwritten

Less formalisation and standardisation

Readiness to accept change

Strong uncertainty avoidance Emotional need for rules, written or unwritten

More formalisation and standardisation

Reluctance to accept change

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Slide 5.16

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Impacts of different cultural dimensions at the workplace (4)Cultural dimension Impacts at the workplace

Masculinity (aggressive goal behaviour) Assertiveness appreciated

Oversell yourself

Stress on careers

Decisiveness

Femininity (passive goal behaviour) Assertiveness ridiculed

Undersell yourself

Stress on life quality

Intuition16

Slide 5.17

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Power distance and international business practice• E.g. a firm from a country with a small

power distance, such as the UK or US when negotiating in a joint venture, may send a team of experts who are relatively junior. If this team is sent to a large power distance (power-respecting) culture, such as India, this may be viewed as an insult.

• http://www.youtube.com/watch?v=BrJTf97Ev8o&feature=rellist&playnext=1&list=PL636501B39E70CBA8

• 5 min17

Slide 5.18

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Uncertainty avoidance and international business practice• E.g. Japanese firms, such as Toyota & Honda

operating in uncertainty accepting countries such

as Canada and the United States have been

forced to modify their pay and promotion policies

because North American workers are more

oriented towards an individualistic ‘pay me what

I’m worth’ attitude and are less worried about job

insecurity.18

Slide 5.19

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Interpreting high-context communications

What the British say What they really mean

Not bad Good, or very good

Quite good A bit disappointing

Interesting That is interesting, or It is interesting that you think it is

interesting – it seems rather boring to me!

Oh, by the way,… I am about to get to the primary purpose of our

discussion

I hear what you say I disagree and do not wish to discuss it any further

With the greatest respect… I think that you are wrong (or a fool)

Perhaps we could consider some other opinions I don’t like your ideas19

Slide 5.20

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Video break• http://www.youtube.com/watch?v=I0AKSSAdsHQ&feature=

related• 1.5 min Mistakes of Americans in Business

• http://www.youtube.com/watch?v=LZVzMQGc6cY&feature=related

• 6 min Selling to Hispanics…Multicultural marketing

• http://www.youtube.com/watch?v=U9XoD9V9Bvg&feature=related

• 6 min 10 Tips on doing business in Arab cultures20

Slide 5.21

Wall, Minocha and Rees, International Business, 3rd Edition, © Pearson Education Limited 2010

Four key strategies for multicultural teams

• Brett et al. (2006) put forth four key strategies.• Adaptation: team members adapt practices or attitudes

themselves, without changing the team membership or the tasks allocated.

• Structural intervention; formally re-organising the team or redistributing tasks.

• Managerial intervention: leader(s) intervene to establish norms of behaviour and decision making which take account of the multicultural characteristics of the team.

• Exit: removing one or more members from the team.

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