Summary about global business
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CH4.pptxChapter 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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Cross-cultural literacy understanding how the culture of a country affects the way business is practiced
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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Culture A system of values and norms that are shared among a group of people and that when taken together constitute a design for living
Values Abstract ideas about what a group believes to be good, right, and desirable
Norms Social rules and guidelines that prescribe appropriate behavior in particular situations
Society A group of people sharing a common set of values and norms
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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Folkways Routine conventions of everyday life
Mores Norms seen as central to the functioning of a society and to its social life
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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 The basic social organization of a society
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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Group An association of two or more individuals who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other’s behavior
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 strata Hierarchical social categories often based on family background, occupation, and income
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 mobility The extent to which individuals can move out of the strata into which they are born
Caste system A system of social stratification in which social position is determined by the family into which a person is born, and change is usually not possible during an individual's lifetime
Class system A system of social stratification in which social status is determined by the family into which a person is born and by subsequent socioeconomic achievements; mobility between classes is possible
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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Class consciousness A tendency for individuals to perceive themselves in terms of their class background
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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Religion A system of shared beliefs and rituals concerned with the realm of the sacred
Ethical system A set of moral principles, or values, that is used to guide and shape behavior
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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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Power distance refers to how a society deals with the fact that people are unequal in physical and intellectual capabilities.
Uncertainty avoidance measures the extent to which different cultures socialized their members into accepting ambiguous situations and tolerating uncertainty.
Individualism vs. collectivism focuses on the relationship between the individual and his or her fellows.
Masculinity vs. femininity looks at the relationship between gender and work roles.
Long-term vs. short-term orientation refers to the extent to which a culture programs its citizens to accept delayed gratification of their material, social, and emotional needs.
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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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Ethnocentrism is a belief in the superiority of one’s own ethnic group or culture.
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
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