International cultural-environment

Chapter 7: International Cultural Chapter 7: International Cultural EnvironmentEnvironment

International BusinessInternational Business

Ranjani Srinivasan Ranjani Srinivasan

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INTERNATIONAL INTERNATIONAL CULTURAL ENVIRONMENTCULTURAL ENVIRONMENT

Chapter 7


Learning ObjectivesLearning Objectives To understand the significance of culture in To understand the significance of culture in

international business decisionsinternational business decisions

To elucidate the concept of culture and its To elucidate the concept of culture and its

constituentsconstituents

To explain comparisons of cross-cultural To explain comparisons of cross-cultural

behaviour behaviour

To discuss cultural orientation in international To discuss cultural orientation in international

businessbusiness

To appreciate To appreciate emicemic versus versus eticetic dilemma and its dilemma and its

operationalization operationalization


Significance of CultureSignificance of Culture

A firm operating internationally comes A firm operating internationally comes

across a wide range of diverse cultural across a wide range of diverse cultural

environments, which significantly influence environments, which significantly influence

international business decisions. Managers international business decisions. Managers

operating internationally need to appreciate operating internationally need to appreciate

the differences among cultural behaviours of the differences among cultural behaviours of

their business partners and consumers their business partners and consumers

across various countries. across various countries.

Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi


Self Reference Criterion (SRC)Self Reference Criterion (SRC)

An unconscious reference to one’s own cultural An unconscious reference to one’s own cultural

values, experiences, and knowledge as a basis values, experiences, and knowledge as a basis

for decision-making. SRC significantly influences for decision-making. SRC significantly influences

ability of international managers to objectively ability of international managers to objectively

evaluate environmental factors and make evaluate environmental factors and make

business decision.business decision.



Approach to Eliminate SRCApproach to Eliminate SRC Step 1:Step 1:Define the business problem or goal in Define the business problem or goal in

home-country traits, habits, or norms.home-country traits, habits, or norms.Step 2:Step 2:Define the business problem or goal in Define the business problem or goal in

foreign foreign country cultural traits, habits, or country cultural traits, habits, or norms. Make no value judgments.norms. Make no value judgments.

Step 3:Step 3:Isolate the SRC influence in the problem Isolate the SRC influence in the problem and examine it carefully to see how it and examine it carefully to see how it complicates the problem.complicates the problem.

Step 4:Step 4:Redefine the problem without the SRC Redefine the problem without the SRC influence and influence and solve for the optimum business solve for the optimum business

goal situation.goal situation.



The Concept of CultureThe Concept of Culture

Culture is the way of life of people, including Culture is the way of life of people, including

their attitudes, values, beliefs, arts, sciences, their attitudes, values, beliefs, arts, sciences,

modes of perception, and habits of thought and modes of perception, and habits of thought and

activity. Cultiral differences across the countries activity. Cultiral differences across the countries

significantly influence business decisions. significantly influence business decisions.



Constituents of CultureConstituents of Culture

A variety of learned traits that influence human A variety of learned traits that influence human

behaviour can contribute to the culture of a social behaviour can contribute to the culture of a social

group, the major constituents, include:group, the major constituents, include:

• value systemvalue system

• normsnorms

• aestheticsaesthetics

• customs and traditionscustoms and traditions

• language language

• religionreligion

Characteristics of cultureCharacteristics of culture

LearnedLearned Shared Shared Trans-generationalTrans-generational SymbolicSymbolic PatternedPatterned Adaptive Adaptive





Value SystemValue System

Shared assumptions of a group about how Shared assumptions of a group about how

things ought to be or abstract ideas about things ought to be or abstract ideas about

what a group believes to be good, what a group believes to be good,

desirable, or right. desirable, or right.

Value systemValue system

Value systems vary among managers Value systems vary among managers across different countries :across different countries :

Eg. US managers : high achievement Eg. US managers : high achievement orientation vs Japanese managers orientation vs Japanese managers how have a growth and size how have a growth and size orientation vs Indian Managers who orientation vs Indian Managers who have moralistic orientation.have moralistic orientation.





NormsNorms

Guidelines or social rules that Guidelines or social rules that

prescribe appropriate behaviour in a prescribe appropriate behaviour in a

given situation. given situation.

NormsNorms For eg. In Japan, aggressive selling is not perceived For eg. In Japan, aggressive selling is not perceived

in the positive spirit.in the positive spirit. Eg. Indian use hands or different types of spoons Eg. Indian use hands or different types of spoons

for eating. Chinese and Japanese use chopsticks.for eating. Chinese and Japanese use chopsticks. Europeans and American use forks and knives to cut Europeans and American use forks and knives to cut

the food before eating. the food before eating. LessonsLessons: International managers need to know what : International managers need to know what

is acceptable , unacceptable in foreign culture. They is acceptable , unacceptable in foreign culture. They also need to know cultural tolerance to business also need to know cultural tolerance to business customs that may be grouped as :customs that may be grouped as :

Cultural Imperatives; Cultural Exclusives; Cultural Cultural Imperatives; Cultural Exclusives; Cultural Adiaphora Adiaphora

Culture Imperatives Culture Imperatives It refers to norms that must be followed / avoided in a foreign It refers to norms that must be followed / avoided in a foreign

country.country. For Eg. Too much eye contact in Japan is considered to For Eg. Too much eye contact in Japan is considered to

completely offensive.completely offensive. On the other hand in the Gulf , strong eye contact necessary On the other hand in the Gulf , strong eye contact necessary

with an Arab, to establish trustworthiness.with an Arab, to establish trustworthiness.

Cultural ExclusivesCultural Exclusives:: Social patterns which are considered appropriate for locals and Social patterns which are considered appropriate for locals and

in which foreigners are expected not to participate. in which foreigners are expected not to participate. Eg. Foreigners should stay away from discussions on local Eg. Foreigners should stay away from discussions on local

country politics, social customs and practices.country politics, social customs and practices.

Cultural Adiaphora Cultural Adiaphora : social customs in which a foreigner may : social customs in which a foreigner may participate, so that the Intl. manager may decide whether to participate, so that the Intl. manager may decide whether to participate or avoid. Eg. Bowing in Japanese culture is not participate or avoid. Eg. Bowing in Japanese culture is not expected of foreigners, but such display may be appreciated .expected of foreigners, but such display may be appreciated .



AestheticsAesthetics

Ideas and perceptions that a cultural Ideas and perceptions that a cultural

group upholds in terms of beauty and group upholds in terms of beauty and

good taste. It includes areas related to good taste. It includes areas related to

music, dance, painting, drama, music, dance, painting, drama,

architecture, etc. architecture, etc.

AestheticsAesthetics Eg. Colours have different aesthetic value in Eg. Colours have different aesthetic value in

different cultures:different cultures: Africa : bright colours are favouritesAfrica : bright colours are favourites Japan : pastel colours preferred as they express Japan : pastel colours preferred as they express

harmony.harmony. China : red is lucky colour but associated with China : red is lucky colour but associated with

witchcraft in Africa. witchcraft in Africa. America : blues and greys are perfect for official America : blues and greys are perfect for official

environments. But blue is evil in Africaenvironments. But blue is evil in Africa

Death colours Death colours : Black signifies death in America, : Black signifies death in America, Europe; In India, Japan & other Asian countries it is Europe; In India, Japan & other Asian countries it is white, For Latin Americans Purple means death; white, For Latin Americans Purple means death; Dark red is the mourning colour in the Ivory Coast.Dark red is the mourning colour in the Ivory Coast.



Traditions and CustomsTraditions and Customs

TraditionsTraditions:: The elements of culture The elements of culture

passed down from generation to passed down from generation to

generation. generation.

CustomsCustoms:: An established pattern of An established pattern of

behaviour within a society. behaviour within a society.

Traditions and Customs Traditions and Customs International managers need to know the customs and International managers need to know the customs and

traditions of the culture being dealt with:traditions of the culture being dealt with: Eg. Food Habits eg. Chocolate flavors preferred are Eg. Food Habits eg. Chocolate flavors preferred are

different in different cultures : Eg. Americans and different in different cultures : Eg. Americans and Germans prefer blends, French- Dark, Dutch –White.Germans prefer blends, French- Dark, Dutch –White.

Coffee brews: Nescafe manufactures200 different Coffee brews: Nescafe manufactures200 different varieties of coffee to suit local tastes. varieties of coffee to suit local tastes.

The concept of Indian vegetarianism is very complex for The concept of Indian vegetarianism is very complex for foreigners to understand. Vessels used for cooking both foreigners to understand. Vessels used for cooking both should be different. KFC offers vegetarian dishes in its should be different. KFC offers vegetarian dishes in its Indian outlets. Pizza Hut offers Jain Pizza in India alone. Indian outlets. Pizza Hut offers Jain Pizza in India alone.

LessonsLessons: companies need to modify products/services to : companies need to modify products/services to suit the local customs and traditions.suit the local customs and traditions.

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Manners and Customs...Manners and Customs... Manners in gift givingManners in gift giving:: A lot of preparation and sensitivity required while A lot of preparation and sensitivity required while

giving gifts. What and when is important. giving gifts. What and when is important. China : occasion : New YearChina : occasion : New Year Preferred Gifts: Modest gifts such as coffee table, Preferred Gifts: Modest gifts such as coffee table,

books, ties, pens.books, ties, pens. Japan: Oseibo( January 1) Japan: Oseibo( January 1) Preferred Gifts : Brandy. Scotch, round fruits such Preferred Gifts : Brandy. Scotch, round fruits such

as melonsas melons Manners and Customs in the Way Products are used Manners and Customs in the Way Products are used

should also be consideredshould also be considered Example Orange juice: Example Orange juice: Breakfast item in US, Refreshment in France Breakfast item in US, Refreshment in France Moisturizers : After bath lotion in one, beauty Moisturizers : After bath lotion in one, beauty

product in another. product in another.

LanguageLanguage

A systematic means of communicating ideas A systematic means of communicating ideas

or feelings by the use of conventionalized or feelings by the use of conventionalized

signs, gestures, marks, or especially signs, gestures, marks, or especially

articulate vocal sounds.articulate vocal sounds.

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LanguageLanguageThe Four Roles of LanguageThe Four Roles of Language

Language aids in information gathering and Language aids in information gathering and evaluation.evaluation.

Language provides access to local society.Language provides access to local society.

Language capability is increasingly Language capability is increasingly important in company communications.important in company communications.

Language provides more than the ability to Language provides more than the ability to communicate because it extends beyond communicate because it extends beyond mechanics to the interpretation of contexts mechanics to the interpretation of contexts that may influence business operations.that may influence business operations.

LanguagesLanguages

1. Chinese, Mandarin 885 2. Spanish 332 3. English 322 4. Bengali 189

5. Hindi 182 6. Portuguese 170 7. Russian 170 8. Japanese 125 9. German, Standard 98 10. Chinese, Wu 77

Language Population (in millions)

Top Ten World Languages

Language … some lessons for Language … some lessons for managersmanagers

Even though English is considered lingua-franca for non Even though English is considered lingua-franca for non English speaking countries, it fails to provide non-verbal English speaking countries, it fails to provide non-verbal cues … for example:cues … for example:

Coca – Cola Coca – Cola was named Ke-kou-ke-la in China which was named Ke-kou-ke-la in China which translates in Mandarin to ‘Bite the wax tadpole’. translates in Mandarin to ‘Bite the wax tadpole’. Subsequently Coke found a close phonetic equivalent Subsequently Coke found a close phonetic equivalent Ko-kou-ko-Le which translates to ‘Happiness in the Ko-kou-ko-Le which translates to ‘Happiness in the mouth’ after researching 40,000 Chinese characters.mouth’ after researching 40,000 Chinese characters.

The Swedish vacuum cleaner Manufacturer Electrolux The Swedish vacuum cleaner Manufacturer Electrolux introduced the same print ad which was successful in introduced the same print ad which was successful in Britain in the US Market with the tag line ‘ Nothing sucks Britain in the US Market with the tag line ‘ Nothing sucks like an Electrolux’. Later they found this to be a disaster like an Electrolux’. Later they found this to be a disaster in the US because ‘sucks’ in American means ‘really in the US because ‘sucks’ in American means ‘really Bad’. i.e. Electrolux is a ‘really bad vacuum cleaner’Bad’. i.e. Electrolux is a ‘really bad vacuum cleaner’

ReligionReligion

Religious beliefs significantly influence people Religious beliefs significantly influence people behaviour and business decision making. behaviour and business decision making.

Religion encompasses three distinct Religion encompasses three distinct elements: elements: •Explanation:Explanation: God seen as a ‘first cause’ behind the creation of God seen as a ‘first cause’ behind the creation of

the universethe universe

•A standard organizationA standard organization: Consisting of places of worships and : Consisting of places of worships and

rituals rituals

•Moral rules of good behaviourMoral rules of good behaviour : concerning principles of right : concerning principles of right

and wrong in human behaviour.and wrong in human behaviour.

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Dominant ReligionsDominant Religions

Christianity

Islam

Hinduism

Buddhism

Confucianism

Religion : lessons for managersReligion : lessons for managersConsiderable influences international business Considerable influences international business

decisions. decisions. For. Eg. Location of commerical buildings and office For. Eg. Location of commerical buildings and office

interiors need to be as per Fen shui in China and interiors need to be as per Fen shui in China and Vastu Shastra in India, as it concerns free flow of Vastu Shastra in India, as it concerns free flow of cosmic energy and keeps evil spirits away.cosmic energy and keeps evil spirits away.

Advertisements and corporate communications Advertisements and corporate communications must keep religious sentiments in mind. For eg. must keep religious sentiments in mind. For eg. Islam does not permit shaving. So Shaving Islam does not permit shaving. So Shaving equipment makers like Gillette need to be equipment makers like Gillette need to be sensitive while advertising their product in Islamic sensitive while advertising their product in Islamic countries.countries.



Comparison of Cross Cultural Comparison of Cross Cultural BehaviorBehavior

An appreciation of cultural differences An appreciation of cultural differences

facilitates international managers to facilitates international managers to

conceptualize and implement business conceptualize and implement business

strategies in view of cultural sensitivities in strategies in view of cultural sensitivities in

various countries. various countries.



Hofstede’s Cultural ClassificationHofstede’s Cultural Classification

Power distancePower distance

The extent to which less powerful members The extent to which less powerful members

of an institution accept that power is of an institution accept that power is

distributed unequally.distributed unequally.



High Power Distance CountriesHigh Power Distance Countries•High social inequalities tolerated with High social inequalities tolerated with differences in power and income distribution differences in power and income distribution

•Organizational structures are hierarchical Organizational structures are hierarchical based an inequality among superiors and based an inequality among superiors and subordinatessubordinates

•Decision making is centralizedDecision making is centralized•Juniors blindly follow the orders of their Juniors blindly follow the orders of their superiorssuperiors

For instance, For instance, Malaysia, Mexico, Arab Malaysia, Mexico, Arab countries, Indiacountries, India etc. etc.

Low Power Distance CountriesLow Power Distance Countries

Superiors and subordinates consider each Superiors and subordinates consider each other equalother equal

Organizations are relatively flatterOrganizations are relatively flatter Decision making is decentralizedDecision making is decentralized

For instance, Austria, Sweden, Great Britain, For instance, Austria, Sweden, Great Britain, the US etc.the US etc.

Lessons: Lessons: In view of the power distance, the international In view of the power distance, the international manager has to asses the organizational dynamics, identify manager has to asses the organizational dynamics, identify the key decision makers and accordingly formulate their the key decision makers and accordingly formulate their business strategy for different countries.business strategy for different countries.

Individualism vs. CollectivismIndividualism vs. CollectivismIndividualism:Individualism:

The tendency of people to look after themselves and their The tendency of people to look after themselves and their

immediate family.immediate family.

Strong work ethicsStrong work ethics

Promotions based on meritPromotions based on merit

Involvement of employees in the organization is Involvement of employees in the organization is

calculative.calculative.

Ability to be independent of others is considered to be Ability to be independent of others is considered to be

the key criterion for success in individualistic the key criterion for success in individualistic

societies.societies.

Countries with high individualism include, Countries with high individualism include, the US, Great the US, Great

Britain, France, South Africa etcBritain, France, South Africa etc

Collectivism:Collectivism:

The tendency of people to belong to groups and to The tendency of people to belong to groups and to

look after each other in exchange for loyalty. In such look after each other in exchange for loyalty. In such

cultures, interest of groups have precedence over cultures, interest of groups have precedence over

individual interest .individual interest .

For instance, For instance, Guatemala, Pakistan, Singapore, Guatemala, Pakistan, Singapore,

Malaysia etc. Malaysia etc.

Lessons: International Business strategy is greatly Lessons: International Business strategy is greatly

influenced by individualism vs. collectivism in terms of influenced by individualism vs. collectivism in terms of

decision making and market communication. For a decision making and market communication. For a

product to be successful. In collective societies, it product to be successful. In collective societies, it

should have group acceptability unlike in the should have group acceptability unlike in the

individualistic societies.individualistic societies.

Masculinity vs. femininity Masculinity vs. femininity

In In masculinemasculine societiessocieties, the dominant values emphasize , the dominant values emphasize on work goals, such as earnings, advancement, success, on work goals, such as earnings, advancement, success, and material belongings. e.g. and material belongings. e.g. Japan, Switzerland, Great Japan, Switzerland, Great Britain, the US etc.Britain, the US etc.In In feminine societiesfeminine societies the dominant values are the dominant values are achievement of personal goals, such as quality of life, achievement of personal goals, such as quality of life, caring for others, friendly atmosphere, getting along caring for others, friendly atmosphere, getting along with boss and others. with boss and others. e.g. e.g. Sweden, Norway, Denmark, Thailand etc. Sweden, Norway, Denmark, Thailand etc.

India falls in between.India falls in between.

Summarily, in masculine societies, people ’live to work’, Summarily, in masculine societies, people ’live to work’, whereas in feminine societies people’ work to live’.whereas in feminine societies people’ work to live’.

Uncertainty avoidanceUncertainty avoidance

The extent to which people feel threatened by The extent to which people feel threatened by

ambiguous situations. ambiguous situations.

In high uncertainty avoidance societies there is lack In high uncertainty avoidance societies there is lack

of tolerance for ambiguity and the need for formal of tolerance for ambiguity and the need for formal

rules. For instance, rules. For instance, Greece, Portugal, Japan, France Greece, Portugal, Japan, France

are the most uncertainty avoidance countries. are the most uncertainty avoidance countries.

Low uncertainty avoidance countries include Low uncertainty avoidance countries include

Singapore, Denmark, India, the US etc. Singapore, Denmark, India, the US etc.



Trompenaars’ Cultural Trompenaars’ Cultural

ClassificationClassification



Universalism vs. ParticularismUniversalism vs. Particularism

Universalism:Universalism: The belief that ideas and practices The belief that ideas and practices can be defined and applied everywhere without can be defined and applied everywhere without modification modification

e.g. the e.g. the US, Australia, Germany, Sweden etc.US, Australia, Germany, Sweden etc.

Particularism:Particularism: The belief that unique The belief that unique circumstances and relationships, rather than circumstances and relationships, rather than abstract rules are more important considerations abstract rules are more important considerations that determine how ideas and practices should be that determine how ideas and practices should be applied applied

e.g. e.g. Venezuela, the US, Indonesia, China etc. Venezuela, the US, Indonesia, China etc.

Individualism vs. Individualism vs. CommunitarianismCommunitarianism

Individualism:Individualism: people regarding themselves as individuals. people regarding themselves as individuals.

For instance For instance the US, Czechoslovakia, Argentina, the CIS, the US, Czechoslovakia, Argentina, the CIS,

Mexico, and the UKMexico, and the UK . .

Societies with high individualism make frequent references to ‘I’ Societies with high individualism make frequent references to ‘I’

and ‘me’. And achievement and responsibility are personal.and ‘me’. And achievement and responsibility are personal.

Communitarianism: Communitarianism: people regarding themselves as part of a people regarding themselves as part of a

group. group.

For instance, For instance, Singapore, Thailand, Japan, and Indonesia. Singapore, Thailand, Japan, and Indonesia.

In collectivist societies ‘we’ is used more frequently than ‘I’ and In collectivist societies ‘we’ is used more frequently than ‘I’ and

achievement is considered group achievement. achievement is considered group achievement.

Neutral vs. AffectiveNeutral vs. AffectiveNeutral Cultures:Neutral Cultures: Cultures in which people tend to hold back Cultures in which people tend to hold back

their emotions and try not to exhibit their feelings. their emotions and try not to exhibit their feelings.

For instance, For instance, Japan, the UK, Singapore, Australia, etc.Japan, the UK, Singapore, Australia, etc.

Will consider anger, delight or intensity in the workplace as Will consider anger, delight or intensity in the workplace as

‘unprofessional’‘unprofessional’

Affective Cultures:Affective Cultures: Cultures where emotions are expressed Cultures where emotions are expressed

openly. openly.

For instance, For instance, Mexico, Netherlands, Switzerland, China, Brazil, Mexico, Netherlands, Switzerland, China, Brazil,

etc. etc.

Will consider holding back of emotions by colleagues to signify Will consider holding back of emotions by colleagues to signify

‘emotionally dead’ or a ‘mask of deceit’.‘emotionally dead’ or a ‘mask of deceit’.

Specific vs. DiffusedSpecific vs. DiffusedThe relative size of ‘Public space and Private space ‘ and The relative size of ‘Public space and Private space ‘ and

the degree to which individuals feed comfortable sharing it the degree to which individuals feed comfortable sharing it

with others differ considerably across societies with others differ considerably across societies..

Specific CulturesSpecific Cultures:: Cultures in which individuals tend to have a Cultures in which individuals tend to have a

large public space which is readily shared, and a smaller private large public space which is readily shared, and a smaller private

space. space.

For instance, For instance, Australia, the UK, the USA and SwitzerlandAustralia, the UK, the USA and Switzerland. .

Diffused Cultures:Diffused Cultures: Culture in which public and private space are Culture in which public and private space are

more or less similar more or less similar and public space is guarded more and public space is guarded more

carefully. carefully.

For instance, For instance, Venezuela, China and Spain Venezuela, China and Spain



Achievement vs. AscriptionAchievement vs. AscriptionAchievement CulturesAchievement Cultures: Culture in which status is : Culture in which status is

accorded to high achievers and high performers. accorded to high achievers and high performers.

For instance For instance Austria, the USA, Switzerland, the UK, Austria, the USA, Switzerland, the UK,

Sweden and Mexico etcSweden and Mexico etc..

Ascription CulturesAscription Cultures: Culture in which status is : Culture in which status is

accorded to those who ‘naturally’ evoke admiration accorded to those who ‘naturally’ evoke admiration

from others such as elderly, seniors, highly from others such as elderly, seniors, highly

qualified and skilled people. qualified and skilled people.

For instance, For instance, Venezuela, Indonesia, China, the Venezuela, Indonesia, China, the

CIS, and Singapore etc.CIS, and Singapore etc.



Other Cross-Cultural Other Cross-Cultural

ClassificationsClassifications



High Context vs. Low ContextHigh Context vs. Low Context

High Context Cultures:High Context Cultures: Culture in which high Culture in which high significance is given to implicit communications, significance is given to implicit communications, such as non-verbal and subtle situational cues. such as non-verbal and subtle situational cues.

For instance, For instance, China, Korea, Japan and Arab China, Korea, Japan and Arab countries.countries.

Low Context CulturesLow Context Cultures: Cultures in which : Cultures in which communication is more explicit with heavy reliance communication is more explicit with heavy reliance on words to convey the meanings. on words to convey the meanings.

For instance, For instance, Germany, Switzerland, Scandinavia, Germany, Switzerland, Scandinavia, North America and Britain.North America and Britain.



Homophilous vs. HeterophilousHomophilous vs. HeterophilousHomophilous CulturesHomophilous Cultures: Cultures where : Cultures where

people share beliefs, speak the same people share beliefs, speak the same

language, and practice the same religion. language, and practice the same religion.

For instance, For instance, Japan, Korea and Scandinavian Japan, Korea and Scandinavian

countries.countries.

Heterophilous CulturesHeterophilous Cultures: Countries that : Countries that

have a fair amount of differentiation in have a fair amount of differentiation in

languages, beliefs, and religions followed. languages, beliefs, and religions followed.

For instance, For instance, India and ChinaIndia and China..



Relationship vs. Deal-focusedRelationship vs. Deal-focusedRelationship-focused Cultures:Relationship-focused Cultures: Cultures in Cultures in which strong orientation towards building which strong orientation towards building relationships and developing mutual trust. relationships and developing mutual trust.

For instance, For instance, India, Japan, China, Singapore, India, Japan, China, Singapore, Saudi Arabia, United Arab Emirates, Egypt, Saudi Arabia, United Arab Emirates, Egypt, Brazil, Mexico, and Russia. Brazil, Mexico, and Russia.

Deal-focused CulturesDeal-focused Cultures: : Task-oriented Task-oriented cultures with openness to hold direct business cultures with openness to hold direct business talks with strangers. talks with strangers.

For instance, For instance, Britain, USA, Germany, Britain, USA, Germany, Denmark, Australia, Canada, Finland etc.Denmark, Australia, Canada, Finland etc.



Formal vs. informal culturesFormal vs. informal cultures

Formal CulturesFormal Cultures:: Status differences are large and Status differences are large and

valued and formality is used to show respect. valued and formality is used to show respect.

For instance, For instance, India, UAE, Egypt, Brazil, Russia, India, UAE, Egypt, Brazil, Russia,

Poland, Japan, China,, Singapore, France, Belgium, Poland, Japan, China,, Singapore, France, Belgium,

Britain, Germany, Denmark, Finland etc.Britain, Germany, Denmark, Finland etc.

Informal Cultures: Informal Cultures: Status differences are not Status differences are not

valued and Informal behaviour is not considered valued and Informal behaviour is not considered

disrespectful. For instance, disrespectful. For instance, the USA, Canada, and the USA, Canada, and

Australia etc. Australia etc.



Polychronic vs. MonochronicPolychronic vs. MonochronicPolychronic CulturesPolychronic Cultures:: Cultures in which time Cultures in which time

schedules and deadlines are flexible and relationships schedules and deadlines are flexible and relationships

take precedence. For instance, take precedence. For instance, India, Thailand, India, Thailand,

Philippines, UAE, Egypt, Brazil, Russia etcPhilippines, UAE, Egypt, Brazil, Russia etc. .

Monochronic CulturesMonochronic Cultures: : Cultures with rigid time Cultures with rigid time

schedules and deadlines with high emphasis on schedules and deadlines with high emphasis on

punctuality. For instance, punctuality. For instance, Japan, China, Singapore, Japan, China, Singapore,

Britain, USA, Canada, Australia, Germany, Denmark Britain, USA, Canada, Australia, Germany, Denmark

etc. etc.



Expressive vs. Reserved CulturesExpressive vs. Reserved Cultures

Expressive cultures: Expressive cultures: people are more people are more expressive with direct eye contact. expressive with direct eye contact.

For instance, For instance, Russia, Poland, Romania, Russia, Poland, Romania, USA, Australia, and Canada USA, Australia, and Canada

Reserved cultures Reserved cultures : people restrain their : people restrain their facial expression and gesturing. facial expression and gesturing.

For instance, For instance, India, Japan, China, India, Japan, China, Singapore, Britain, Germany, Denmark, Singapore, Britain, Germany, Denmark, Finland etc. Finland etc.



Parochialism vs. SimplificationParochialism vs. Simplification

ParochialismParochialism:: Belief that views the rest Belief that views the rest

of the world from one’s own cultural of the world from one’s own cultural

perspective. perspective.

Simplification:Simplification: Exhibiting same cultural Exhibiting same cultural

orientation towards different cultural orientation towards different cultural

groups.groups.



EPRG ApproachEPRG Approach

EEthnocentric orientationthnocentric orientation

The belief which considers one’s own culture as The belief which considers one’s own culture as

superior to others. The belief that the business superior to others. The belief that the business

strategy which has worked in the home country strategy which has worked in the home country

would also be suitable in alien cultures. would also be suitable in alien cultures.



PPolycentric orientationolycentric orientation

It is based on the belief that substantial It is based on the belief that substantial

differences exist among various countries. differences exist among various countries.

Therefore, a single business strategy cannot be Therefore, a single business strategy cannot be

effective across the world and customized effective across the world and customized

business strategies need to be adapted in business strategies need to be adapted in

different countries. different countries.

RRegiocentric orientationegiocentric orientation

A firm treats the region as a uniform cultural A firm treats the region as a uniform cultural

segment and adopts a similar business strategy segment and adopts a similar business strategy

within the region but not across the region. within the region but not across the region.

For example Mc Donald’s strategy is to not serve beef based For example Mc Donald’s strategy is to not serve beef based

products in India, but serves beef based products in other products in India, but serves beef based products in other

countries. Also in the Middle East, it does not serve pork and all countries. Also in the Middle East, it does not serve pork and all

meat based preparations are made out of halal process onlymeat based preparations are made out of halal process only. .

GGeocentric orientationeocentric orientation

The approach considers the whole world a single The approach considers the whole world a single

market and attempts to formulate integrated business market and attempts to formulate integrated business

strategies. A geocentric firm attempts to identify strategies. A geocentric firm attempts to identify

cultural similarities across countries and formulates a cultural similarities across countries and formulates a

globally uniform business strategy. globally uniform business strategy.

Examples: the Harry Potter series of books and films, Examples: the Harry Potter series of books and films,

cartoon characters and their serials, apparels like cartoon characters and their serials, apparels like

Jeans, T-shirts etc… Jeans, T-shirts etc…

Emic vs. Etic DilemmaEmic vs. Etic Dilemma The The EmicEmic school holds that attitudes, interests, school holds that attitudes, interests,

and behaviour are unique to a culture and best and behaviour are unique to a culture and best understood in their own terms. It emphasizes understood in their own terms. It emphasizes studying the business research problem in each studying the business research problem in each country’s specific context and identifying and country’s specific context and identifying and understanding its unique facets. understanding its unique facets.

The The EticEtic school emphasizes identifying and school emphasizes identifying and assessing universal attitudinal and behavioural assessing universal attitudinal and behavioural concepts and developing ‘pan-cultural’ concepts and developing ‘pan-cultural’ measures. Thus, measures. Thus, eticetic is basically concerned with is basically concerned with measuring universal behavioural and attitudinal measuring universal behavioural and attitudinal traits.traits.



Operationalisation of Emic and EticOperationalisation of Emic and Etic

Emphasis is often placed an identifying Emphasis is often placed an identifying

and developing constructs that are and developing constructs that are

feasible across countries and cultures, feasible across countries and cultures,

while conducting cross country research. while conducting cross country research.