HOW CULTURE SHAPES SOCIETY
Culture encompasses so much more than surface-level traits like language
or clothing. Below are some key ways culture organizes groups of people.
Primary and Secondary Groups
We naturally form close bonds within our immediate family and tight circle
of friends. But we also join groups based on shared interests or jobs.
These secondary groups are valuable for achieving goals together.
Reference Groups
Certain social circles unconsciously influence our beliefs. We may aspire to
behave like respected friends, celebrities or community leaders we
admire. Their opinions shape how we see ourselves.
Collectivism vs Individualism
Some cultures prioritize the group over individuals. Elsewhere individual
needs prevail. Neither is "right," but leadership style must adapt
accordingly.
Gender Roles
Ideas of appropriate jobs, behaviors or basic rights vary cross-culturally.
Accepting differences leads to happier cooperation between all peoples.
Social Classes
Most societies create unofficial rankings based on qualities like wealth,
occupation or education. But mobility between classes differs drastically
worldwide.
Education's Impact
Schooling transmits cultural wisdom to youth. Yet standards vary
immensely, affecting skills and opportunities later in life. International
trade depends on talent worldwide.
The "Brain Drain" Problem
When hardship strikes economically, intellectuals flee for better lives
abroad. Yet reverse "brain drain" can replenish societies recovering from
hard times too.
Understanding social patterns uniquely shapes each place. Respecting
differences creates stronger alliances between all people internationally in
business and life itself.
STAKEHOLDER THEORY
Closely related to social responsibility is stakeholder theory. This view of
capitalism stresses interconnected relationships between a business and
those with an “stake” in the organization, both internal and external
stakeholders. An international business faces complex webs of these
exchange partnerships across countries. Ethical behavior and
responsibility seek equitable treatment for all. This approach provides
benefits and competitive advantages by aligning diverse interests without
sacrificing one for another.
Stakeholders
Practitioner and author R. Edward Freeman drew an analogy between the
human body and business. The body needs red blood cells to survive, but
life's purpose isn't making them. Likewise, Freeman says companies need
profits but their purpose isn't solely profits. If a firm gets purpose right,
profits will follow. The stakeholder view argues companies should create
value for all members of society, not just shareholders.
Benefit Corporations
Benefit corporation status is a legal structure that empowers businesses
to pursue stakeholder impacts alongside profits. This movement aligns
with growing acceptance of responsibility and stakeholder management.
To become certified as a B Corp, companies must meet high standards for
social/environmental performance, transparency, and stakeholder
accountability. Over 4,000 B Corps operate in over 70 countries today,
including well-known brands integrating purpose and profits.
Natura & Co, a $14B global cosmetics group owning Avon, Natura, The
Body Shop, and Aesop, connects its brands through shaping a better
world. Three brands are B Corps. Natura aims for net zero emissions by
2030 while ensuring traceability and human rights across its cradle-to-
grave global supply chain.
WHAT IS GLOBALIZATION?
Globalization refers to growing economic, cultural, political, and
technological interdependence among countries. National boundaries
matter less, with events in one nation affecting lives elsewhere. It's
characterized by denationalization, unlike internationalization of
cooperating across borders.
Globalization transforms business by increasing trade and investment
flows. It's not linear, expanding and contracting through stabilization
periods. Globalization surged from the 1940s until 2008's financial crisis.
Recently it's been uneven amid trade wars and supply chain shifts during
the pandemic.
People see globalization differently. A businessperson may view accessing
cheaper production and new markets as opportunities. An employee may
see it as a job opportunity or threat. An economist examines impacts on
jobs and living standards. An environmentalist considers effects on nature.
A political scientist looks at governmental power versus companies.
Globalization brings opportunities and challenges. Exposing us to other
cultures can enrich lives but practices seen as threatening may be
rebuffed. Easily buying foreign goods online benefits consumers but can
harm local businesses and livelihoods. Managers must weigh
globalization's effects on employees, customers, communities, and
stakeholders.
Globalization spurs competition, propelling some countries’ firms to gain
ground while others lose out. Chinese companies surged as U.S. and
Japanese firms declined. But enlightened firms respect people affected by
their activities. "Reduce, reuse, recycle" is now expanded to "redesign,
reimagine" - making sustainable processes and rethinking products to
reduce environmental impact.
Measuring Globalization
The KOF Globalization Index ranks countries on economic, social, and
political dimensions. Small European nations dominate the top spots. The
U.S. ranks 25th overall. The least globalized countries have half the
world's population, with barriers like unrest, commodity price volatility,
and dependence on oil exports.
But globalization doesn't just happen automatically. Companies of all sizes
drive it through importing, exporting and investing abroad. Banks and
financial markets provide financing. Governments set laws and boundaries
for business activities. All these parties facilitate globalizing markets and
production.
Globalizing Markets
Globalizing markets refers to converging buyer preferences worldwide.
Many consumer and industrial goods and services are marketed much the
same everywhere. Sportswear, software, and streaming content are
globalized, as are aviation, construction equipment, e-commerce, cars,
and consulting. Benefits include:
Reduced marketing costs through standardized campaigns simply
translated as needed.
New market opportunities abroad once domestic markets saturate.
Steadier income by offsetting seasonal or cyclical domestic sales
with international sales.
Adapting products to meet local needs may outweigh standardizing
them.
Enlightened firms consider global sustainability - development meeting
present needs without compromising future generations. Social media
quickly exposes irresponsible corporate behavior, so ethical firms respect
all people affected by their business.
Globalizing Production
Globalizing production disperses activities worldwide to minimize costs
and maximize quality. Benefits include:
Accessing lower-cost labor for production and services, from
manufacturing to customer service.
Tapping technical expertise abroad, like U.S. healthcare outsourcing
billing, coding, and analytics to India.
Accessing essential inputs like raw materials unavailable at home,
such as Japanese paper companies owning North American forests.
Relocating manufacturing where energy is cheaper, like Japanese
firms moving to Vietnam.
