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What is Culture?
Culture is the sum of the knowledge, values, beliefs and attitudes shared by a particular society and a group of people.
Culture includes: --Material culture --General life style --Belief system/religion --Aesthetics --Language/education --Time orientation --Space --Taste
Characteristics of Culture
Culture is omnipresent;Culture is different;Culture is dynamic;Culture is never wrong or right.
• Cultural aware• Cultural tolerant• Cultural adaptive
ReligionReligion
ShintoShinto IslamIslam
JudaismJudaism HinduismHinduism
ConfucianismConfucianism BuddhismBuddhism
ChristianityChristianity
MannersMannersand and
CustomsCustoms
BehaviorBehavior
SpeechSpeech
DressDress
Folk CustomsFolk Customs
Popular CustomsPopular Customs
Aesthetics
• Music
• Painting
• Dance
• Drama
• Architecture
Identification and Dynamics of CulturesThe nation as a point of reference
• Each nation has certain human, demographic, and behavioral Characteristics that give it a national identity
– people share values, language, and race• Laws governing business apply along national
lines• Problems using a country-by-country
approach– individual differences within a country– similarities link groups from different
countriesCultural formation and dynamics
• Value systems set early in life, but may change
• Values may change due to choice or imposition
– cultural imperialism • IB increases change in cultures and
governments
Identification and Dynamics of Cultures (cont.)Language as a cultural stabilizer
• Culture spreads rapidly when people from different areas speak the same language
• Stronger adherence to a culture if it does not share its language with other peoples
• English, French, and Spanish are widespread– most of IB conducted in English
Religion as a cultural stabilizer• Religion has a strong influence on values• Specific beliefs may affect business
– not all nations that practice the same religion have the same constraints on business
– where rival religions vie for political control, resulting strife may disrupt business
Cultural Context
• Low-Context Culture: Communication depends on explicit, verbally expressed vehicles, such as contract, reports, and other written documents. So, people get down to business quickly.
• High-Context Culture: Communication depends on implicit and nonverbal aspects such as metaphor, hinting, and personal relationship. So, business processes are lengthy.
Contextual Background of Various Countries
High Context Implicit
Japanese
Arabian
Latin American
Spanish
ItalianEnglish (UK)
French
North American (US)
Scandinavian
GermanSwiss
Low Context Explicit
Business Customs in Different Cultural Contexts
Event Low Context High Context meeting People Informal or formal? Informal or formal?
getting acquainted Fast or Slow? Fast or Slow? depth of
relationship Shallow or Deep? Shallow or Deep
trust in relationship
Little or Much? Little or Much?
focus in Business
Transaction or Relationship?
Transaction or Relationship?
relationship in business
Business or personal? Business or personal?
length of meeting
Efficient/ short or lengthy?
Efficient or lengthy?
Hofstede’s Cultural Typology
PDI- Power Distance Index
• This refers to the degree to which power differences are accepted and sanctioned by society.
• A high PDI describes a society that believes there should be a well - defined order in which everyone has a rightful place.
• Whereas the low PDI is associated with the prevalent belief that all people should have equal rights and the opportunity to change their position in the society.
IDV - Individualism
• This refers to the degree to which individual decision making and action are accepted and encouraged by society.
• A high IDV score depicts a society that emphasises the role of the individual. Conversely a low IDV emphasises a societal emphasis on the importance of the group model.
• Individualism vs. Collectivism
MAS - Masculinity
• This refers to the degree to which traditional male values are important to society.
• A high MAS would have clearly differentiated sex roles with men being dominant. In low MAS culture, the sex roles are more fluid and there is predominance of feminine values.
UAI - Uncertainty Avoidance Index
• This refers to the degree to which society is willing to accept and deal with uncertainty.
• A high UAI score suggests a culture that seeks certainty and security and wishes to avoid uncertainty.
• A low UAI score reflects the society is comfortable with a high degree of uncertainty and is open to the unknown.
Long-term Orientation
• This concerns a society’s search for virtue, rather than a search for truth. It assesses the sense of immediacy within a culture, whether gratification should be immediate or deferred.
a. life time employmentb. hard workc. loyaltyd. extensive traininge. generalised trainingf. promotion based on seniority
Cultural AwarenessProblems that hinder cultural awareness
• Subconscious reactions to circumstances• Assumption that all societal subgroups are similar
Cultural awareness can be improved• Research descriptions of specific cultures• Observe behavior or respected foreign nationals• Study foreign market directly
Company’s need for cultural knowledge increases as it• Moves from one to multiple foreign functions• Increases the number of countries in which it
operates• Moves from similar to dissimilar foreign
environments• Converts from external to internal handling of
international operations
Strategies for Instituting ChangeValue system
• The more a change upsets important values, the more resistance it will engender
Cost benefit of change• Company must consider the expected cost-benefit
relationship of any adjustments it makes abroadResistance to too much change
• Resistance to change may be lower if the number of changes is not great
• Make fewer demands at one time and phase in other policies more slowly
Participation• Discussing proposed change with stakeholders in
advance may reduce resistance• Participation must not violate prevailing value
system
Strategies for Instituting Change (cont.)Reward sharing
• Employees are more apt to support change when they expect personal or group rewards
Opinion leaders• Should be convinced first about benefits of
change• Can help speed up the acceptance of
changeTiming
• Change should be timed to occur when resistance is likely to be low
• Must attend to attitudes and needs of culture
Learning abroad• International companies should learn things
abroad that they can apply at home
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