Transcript Chapter 5

CHAPTER 5
CULTURE
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Copyright © 2011 John Wiley & Sons
1.
To define and demonstrate the effect of culture’s
various dimensions on business
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2.
Learning
Objectives
To examine ways in which cultural knowledge
can be acquired and individuals and
organizations prepared for cross-cultural
interaction
3.
To illustrate ways in which cultural risk poses a
challenge to the effective conduct of business
communications and transactions
4.
To suggest ways in which businesses act as
change agents in the diverse cultural
environments in which they operate
5.
To evaluate the ways in which training programs
assist international managers to develop
international business skills of their employees
6.
Analyzes the strategies corporations can take to
work with cultural differences in order to expand
their business internationally
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Introduction
 As firms expand internationally, two tasks
become necessary:


To understand cultural differences and the ways they manifest
themselves
To determine similarities across cultures and exploit them in
strategy formulation
 In international business, cultural risk is just as
real as commercial risk or political risk
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Culture Defined
Culture – An integrated system of
learned behavior patterns that are
characteristic of the members of any
given society
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Culture Defined
Acculturation – Adjusting and adapting to a specific
culture other than one’s own
 High-context cultures – Behavioral and
environmental nuances are an important means of
conveying information
 Low-context cultures – Information is conveyed
explicitly in the words spoken
 International business acts as a change agent by
introducing new products, ideas, and practices
 International business may threaten a culture’s heritage
through cultural imperialism

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Focus on Politics:
Original Taste of Place
The European Union (EU) has established policies aimed at
protecting European products based on geographic
indication. For example, kalamata olives get their name
from the region they are grow n, and the same type of olive
grown in a different region must go by a different name. EU
governments claim that this protects and rew ards quality
products, but many claim that this is just another form of
protectionism that has no merit on protecting product
quality or value.
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International Business Culture
The International Business Center is a not-for-profit organization that
supports global business. The international culture portion of its website
provides award-winning information on international business meeting and
gift exchange protocol for various countries, building business relationships in
diverse cultures, and international business etiquette and manners.
Here are some examples of information found on this site:
• Use of handshakes and greetings used in different countries
• Countries in which gifts are expected or recommended during business
transactions
• Recommendations on how to accept gifts from business associates in
different countries
Source: International Business Center -- http://www.international-business-center.com/international_culture.html
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Elements of Culture
Language
(Verbal and Nonverbal)
Religion
Values
and
Attitudes
Manners and Customs
Education
Social Institutions
Material Elements
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Aesthetics
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Language
NONVERBAL
VERBAL
 Four international
 Five key topics:
 Time
 Space
 Material possessions
 Friendship patterns
 Business agreements
business roles:
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Information gathering and
evaluation
Access to local society
Company
communications
Interpretation of contexts
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Teaching Computers to Recognize
Nonverbal Communication
Even when one person is doing all the talking, a conversation is an interactive
process. The listener participates through expression, posture and movement,
and the speaker interprets what he sees to determine what the listener does
and does not understand. Computer technology normally cannot make such
interpretations.
A study by Louis-Philippe Morency of the University of Southern California
and his colleagues shows that a computer can be given the ability to
understand at least one significant human gesture: the nod.
Source: The Economist -- http://www.economist.com/node/16295584?story_id=16295584
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Dominant Religions of the World
Islam
Christianity
(1.2 billion
people)
Confucianism
(150 million
people)
(2 billion people)
Judaism
Buddhism
Hinduism
(360 million
people)
(860 million
people)
(14 million
people)
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Values and Attitudes
Values are shared beliefs or group
norms internalized by individuals
Attitudes are evaluations of
alternatives based on values
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Manners and Customs
 Understanding manners and customs is specially
important in negotiations
 Gift giving is a particularly sensitive area that
requires preparation and sensitivity
 Consumer focus groups can help avoid problems
arising from differing manners and customs
 In-depth studies are also used to study consumer
needs across markets
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Material Elements
 Material culture refers to the results of technology
and is directly related to how a society organizes its
economic activity
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Economic infrastructure – Transportation, energy, and
communications
Social infrastructure – Housing, health, and educational
systems
Financial and marketing infrastructure – Provides
facilitating agencies for operation in a market
 Cultural convergence – Increasing similarities
among cultures are accelerated by technological
advances
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Aesthetics and Education
 Aesthetics
 What is considered of good taste, as expressed in the arts and
symbolism of colors, form, and music?
 There are differences in the use of sex, meaning of colors and
symbols
 Education
 Educational emphasis varies by culture
 Educational levels of a culture can be assessed using:
Literacy rates
 Enrollment in secondary education
 Enrollment in higher education

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Focus on Telecommunication:
Mobile Payments Across
the Globe?
Mobile payment services enable consumers to pay for
goods and services from their bank account using their
mobile phone. Although these services have taken off
in Japan and Korea, they have failed to reach estimated
potential in the European Union and the United States.
In some countries, consumers may not be eager to move
away from a familiar system. Despite the uneven global
acceptance, it is predicted that mobile payment
transactions will increase ten-fold by 2012.
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Social Institutions
 Family patterns affect consumption and
obligations
 Social stratification – Division of a particular
population into classes
 Reference groups – Groups such as family, coworkers, and professional and trade organizations
provide values and attitudes that influence and
shape behavior
 Roles of managers and subordinates are
determined by cultural social organizations
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Sources of Cultural Knowledge
 Objective or factual information – Gained
from others through communication, research,
and education
 Experiential knowledge – Gained by being
involved in a culture
 Interpretive knowledge – An acquired ability
to understand and appreciate the nuances of
foreign cultural traits and patterns
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Cross-Cultural Behavior Model
Strategic
Opinion
Leadership
Change
Agent
Cognitive
Search
Communication
about
Innovation
Adoption
Tendency
Adoption
Propensity
to Change
Evaluation
of
Innovation
Cognitive
Distortion
Cultural
Lifestyle
Consequences
Sheth and Sethi. 1977. Consumer and
Industrial Buyer Behavior
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Cultural Lifestyle
 Differences in cultural lifestyle can be explained by
five dimensions of culture:
Individualism
Power
Distance
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Long-term v.
Short-term
Orientation
Uncertainty
Avoidance
Masculinity
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Reducing Cultural Bias
 Self-reference criterion – The unconscious reference to
one’s own cultural values
 An analytical approach to reduce cultural bias:
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Define the problem in terms of domestic cultural traits, habits, or
norms
Define the problem in terms of the foreign cultural traits, habits, or
norms. Make no value judgments
Isolate the self-reference criterion influence, and examine it carefully
to see how it complicates the problem
Redefine the problem without the self-reference criterion influence,
and solve for the optimum-goal situation
 Ethnocentrism – Regarding one’s own culture as
superior to others’
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The Training Challenge
 Lack of foreign language and international business
skills have cost U.S. firms
 There is an increased need for cultural sensitivity
training
 Training programs may include:
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culture-specific information
general cultural information
self-specific information
 Area studies – Training programs that provide factual
preparation prior to an overseas assignment
 Other methods of training:
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Cultural assimilator
Sensitivity training
Field experience
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Cultural Awareness International, Inc.
Cultural Awareness International (CAI) Inc. is one of many consulting
companies that offers culture training to international businesses.
Core services include:
• Cross-cultural management and training
• Destination and relocation services
CAI aims to impact a company’s bottom line with:
• Higher return on investment via improved employee retention
• Gains in employee productivity
• A stronger global talent pool and a more versatile workforce
• Improved corporate image
Source: Cultural Awareness International, Inc. -- http://www.culturalawareness.com/index.html
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Making Culture Work for Business
Success
Embrace
Local Culture
Build
Relationships
Employ
Locals to Gain
Cultural
Knowledge
Help
Employees
Understand
You
Adapt
Products and
Processes to
Local Markets
Coordinate by
Region
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Chapter 5
Focus on E-Business:
Cultural Awareness Online
Online cultural training can supplement classroom
training and is useful when time is at a premium.
Web-based training includes:
• Detailed scenarios
• Gradual delivery
• Support
• Online discussions
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