Please read the article and post your thoughts in relation to chapter 4

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Chapter 4 Differences in Culture

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Learning Objectives LO 4-1 Explain what is meant by the culture of a

society.

LO 4-2 Identify the forces that lead to differences in social culture.

LO 4-3 Identify the business and economic implications of differences in culture.

LO 4-4 Recognize how differences in social culture influence values in business.

LO 4-5 Demonstrate an appreciation for the economic and business implications of cultural change.

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Introduction Understanding and adapting to the local cultural is important in international companies.

• Cross-cultural literacy is important for business success

A relationship may exist between culture and the costs of doing business in a country or region.

• Culture • Is rooted in values and norms

• Evolves over time

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What Is Culture? 1 of 5 Learning Objective 4-1 Explain what is meant by the culture of a society.

Culture • Multiple definitions

Values • Shared assumptions about how things ought to be

Norms • Rules for appropriate behavior

Society • Some countries have several societies or subcultures

and some societies embrace more than one country

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What is Culture? 2 of 5 Values

• Provide the context within which a society’s norms are established and justified

• Invested with emotional significance

• Often reflected in the economic systems of a society

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What is Culture? 3 of 5 Norms

• Social rules that govern people’s actions • Folkways

• Violations not a serious matter

• Include rituals and symbolic behavior

• Mores • More widely observed

• Have greater moral significance than other norms

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What is Culture? 4 of 5 Culture, Society, and the Nation-State

• The relationship between a society and a nation state is not strictly one-to-one

• Nation-states are political creations

• A nation can have several cultures, and a culture can embrace several nations

• Different levels of culture

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What is Culture? 5 of 5

Determinants of Culture • The values and norms of a culture evolve over time

• Religion

• Political philosophy

• Economic philosophy

• Education

• Language

• Social structure

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Figure 4.1 Determinants of culture

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Social Structure 1 of 5 Social structure

• Two dimensions explain differences among cultures • The basic unit of social organization is the individual, as

opposed to the group

• A society is stratified into classes or castes

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Social Structure 2 of 5 Learning Objective 4-3 Identify the business and economic implications of differences in culture.

Individuals and Groups • The individual

• In many Western societies, the individual is the basic building block of social organization.

• Emphasis on individual achievement

• The group • The primary unit of social organization in many non-Western

societies

• Importance of group membership/identification

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Social Structure 3 of 5 Learning Objective 4-2 Identify the forces that lead to differences in social culture.

Social Stratification • All societies are stratified on a hierarchical basis into

social categories, or social strata • Individuals are born into a particular stratum, which affects

life chances

• Four basic principles • Trait of society

• Carries over into next generation

• Generally universal but variable

• Involves not just inequality but also beliefs

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Social Structure 4 of 5 Social Stratification continued

• Social mobility • Varies among societies

• Caste system • Social position determined by family

• India has four main castes

• Class system • Form of open social stratification

• Position can be changed through achievement or luck

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Social Structure 5 of 5 Learning Objective 4-3 Identify the business and economic implications of differences in culture.

Social Stratification continued • Significance

• Affects business operations

• Class consciousness

• Makes it difficult to establish a competitive advantage in a global economy

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Religious and Ethical Systems 1 of 6 Learning Objective 4-2 Identify the forces that lead to differences in social culture.

Religion • Concerned with the realm of the sacred

Ethical system • Most are the product of religions

• Four dominant religions

• Christianity

• Islam

• Hinduism

• Buddhism

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Map 4.1 World religions

Source: “Map 14,” Allen, John L., Student Atlas of World Politics, 10th ed. McGraw-Hill Education.

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Religious and Ethical Systems 2 of 6 Learning Objective 4-3 Identify business and economic implications of differences in culture.

Christianity • The world’s largest religion

• Found throughout Europe, the Americas, and other countries settled by Europeans

• Economic implications of Christianity • Max Weber, Protestant ethics, and the spirit of

capitalism

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Religious and Ethical Systems 3 of 6 Learning Objective 4-2 Identify the forces that lead to differences in social culture.

Islam • The world’s second largest religion dating to A.D. 610 • Monotheistic, one true omnipotent God (Allah) • Islamic fundamentalism

• Associated in the Western media with militants, terrorists, and violent upheavals

• Muslims teach peace, justice, and tolerance

• Economic implications • Many pro-free enterprise principles, protection of private

property, concern with social justice • Prohibits the payment or receipt of interest

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Religious and Ethical Systems 4 of 6 Hinduism

• Practiced primarily on the Indian subcontinent • Focus on achieving spiritual growth and development,

which may require material and physical self-denial • Economic implications

• Hindus are valued by their spiritual rather than material achievements

• Promotion and adding new responsibilities may not be important, or may be infeasible due to the employee's caste

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Religious and Ethical Systems 5 of 6 Buddhism

• Has about 535 million followers

• Stresses spiritual growth and the afterlife, rather than achievement while in this world

• Economic implications • Does not emphasize wealth creation

• Entrepreneurial behavior is not stressed culturally, but still acceptable

• Does not support the caste system, individuals do have some mobility and can work with individuals from different classes

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Religious and Ethical Systems 6 of 6 Confucianism

• Practiced mainly in China • Teaches the importance of attaining personal

salvation through right action • High morals, ethical conduct, and loyalty to others • Economic implications

• Three key teachings of Confucianism - loyalty, reciprocal obligations, and honesty - may all lead to a lowering of the cost of doing business in Confucian societies • Guanxi

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Language 1 of 2 Spoken Language

• Language structures the way we see the world

• Countries with more than one language often have more than one culture

• Chinese is the mother tongue of the largest number of people

• English is becoming the language of international business

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Language 2 of 2 Unspoken Language

• Nonverbal communication • Often culturally bound

• Personal space

Learning Objective 4-2 Identify the forces that lead to differences in culture.

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Education Learning Objective 4-2 Identify the forces that lead to differences in social culture

Formal Education • Medium through which individuals learn languages

and other skills

• Socializes the young into the values and norms of a society

• Citizenship and culture

• Provides a national competitive advantage

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Culture and Business 1 of 4 Learning Objective 4-4 Recognize how differences in social culture influence values in business.

Culture and Values in the Workplace • Hofstede’s dimensions of culture

• Power distance

• Uncertainty avoidance

• Individualism vs. collectivism

• Masculinity vs. femininity

• Long-term vs. short-term orientation

• And more recently: Indulgence vs. restraint

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Culture and Business 2 of 4

Culture and Values in the Workplace continued • Hofstede’s work is the leading research on culture,

but has received criticism • Assumes a one-to-one correspondence between culture and

the nation-state when many countries have more than one culture

• Research may be culturally bound

• Research focused on a single industry

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Culture and Business 3 of 4 Culture and Values in the Workplace continued

• Global Leadership and Organizational Behavior Effectiveness (GLOBE) Instrument

• A leader’s effectiveness is contextual • Embedded in the societal and organizational norms,

values, and beliefs of the people being led

• Nine cultural dimensions • Power distance, uncertainty avoidance, humane

orientation, institutional collectivism, in-group collectivism, assertiveness, gender egalitarianism, future orientation, and performance orientation

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Culture and Business 4 of 4 Culture and Values in the Workplace continued

• World Values Survey (WVS) • Explores people’s values and norms, how they

change over time, and what impact they have in society and business

• Dimensions • Support for democracy; tolerance of foreigners and

ethnic minorities; support for gender equality; the role of religion and changing levels of religiosity; the impact of globalization; attitudes toward the environment, work, family, politics, national identity, culture, diversity, and insecurity; and subjective well-being

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Implications for Business Practice Learning Objective 4-5 Demonstrate an appreciation for the economic and business implications of cultural change.

Cultural Literacy and Competitive Advantage • Need to develop cross-cultural literacy

• Ethnocentrism

• Connection between culture and national competitive advantage

• Connection between culture and ethics in decision making

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Change in Culture

Mary T. Barra became the chief executive officer (CEO) of General Motors (GM) on January 15, 2014. She is the first female CEO of a major global automaker.

©Rebecca Cook/Reuters