Cross-Cultural Business Copyright © 2014 Pearson Education, Inc. 2

Cross-CulturalCross-CulturalBusinessBusiness

Copyright © 2014 Pearson Education, Inc.

2


Chapter ObjectivesChapter Objectives

• Describe culture and explain the significance of both national

culture and subcultures

• Identify the components of culture and describe their impact

on international business

• Describe cultural change and explain how companies and

culture affect each other

• Explain how the physical environment and technology

influence culture

• Describe two frameworks used to classify cultures and explain

their practical use

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HariboHaribo

• Problem: Not serving $2 billion subculture• Culprit: Pork-based gelatin in the candies• Solution: New bacteria-based compound

• Problem: Not serving $2 billion subculture• Culprit: Pork-based gelatin in the candies• Solution: New bacteria-based compound

Copyright © 2014 Pearson Education, Inc. 2 - 3


What is Culture?What is Culture?

Set of values, beliefs, rules, and institutions held by a specific group of people

Cultural literacyDetailed knowledge of a culture that enables a person to function

happily and effectively within it √√

EthnocentricityBelief that one’s own

ethnic group or culture is superior to

that of others

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Culture Matters:Culture Matters:Creating a Global MindsetCreating a Global Mindset

CulturalAdaptability

CulturalAdaptability

Bridgingthe GapBridgingthe Gap

FlexibilityIs Key

FlexibilityIs Key

BuildingGlobal Mentality

BuildingGlobal Mentality

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National CultureNational Culture

Nation states build museums and monuments to preserve the legacies of important events and people

Filmmakingand

Broadcasting

Filmmakingand

Broadcasting

Guggenheimand

Hong Kong Disney

Guggenheimand

Hong Kong Disney

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SubcultureSubculture

People who share a unique way of life within a larger culture (language, race, lifestyle, attitudes, etc.)

EXAMPLES

Goth, Punk, Emo

China’s Dialects

Groups in U.S.

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Discussion QuestionDiscussion Question

Why should business people try to avoid ethnocentricity and develop cultural literacy?

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Answer to Discussion QuestionAnswer to Discussion Question

Ethnocentricity distorts our view of other cultures and causes us to overlook important human and environmental differences among cultures.

Cultural literacy improves the ability of managers to manage employees, develop and market products, and conduct negotiations in local markets.

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Components of CultureComponents of Culture

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Physicalenvironments

Education

Personalcommunication

Religion

Social structure

Manners &customs

Values &attitudes

Aesthetics

CultureCulture


AestheticsAesthetics

Music

Painting

Dance

Drama

Architecture

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Values and AttitudesValues and Attitudes

ValuesValuesValuesValues AttitudesAttitudesAttitudesAttitudes

Positive or negative Positive or negative evaluations, feelings, and evaluations, feelings, and tendencies people hold tendencies people hold

toward objects or conceptstoward objects or concepts

Ideas, beliefs, and Ideas, beliefs, and customs to which customs to which

people are emotionally people are emotionally attachedattached

• FreedomFreedom• ResponsibilityResponsibility• HonestyHonesty

• TimeTime• WorkWork• Cultural changeCultural change

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Cultural DiffusionCultural Diffusion

Spread of cultural traits across cultures causes much cultural change

Spread of cultural traits across cultures causes much cultural change



Manners and CustomsManners and Customs

Manners

Appropriate behavior, speech, and dressing

in general

Customs

Traditional ways or behavior in specific

circumstances

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CustomsCustoms

Gift GivingGift Giving

FolkFolk

PopularPopular

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Customs differ from _______ in that they define appropriate ways or behaviors in specific situations.

a. Values

b. Attitudes

c. Manners

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Customs differ from _______ in that they define appropriate ways or behaviors in specific situations.

a. Values

b. Attitudes

c. Manners

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Manager’s Briefcase:Manager’s Briefcase:

A Globetrotter’s Guide to A Globetrotter’s Guide to MeetingsMeetings

Familiarity

Personal Space

Religious Values

Business Cards

Comedy

Body Language

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Social StructureSocial Structure

Social groupTwo or more people who identify and

interact with each other

Social stratificationProcess of ranking people into social layers

Social mobilityEase of moving up or down a culture's

"social ladder"

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World ReligionsWorld Religions

Christianity

Islam

Hinduism

Buddhism

Confucianism

Judaism

Shinto

Origin ofHuman Values

Origin ofHuman Values

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Modernization andModernization andTraditional BeliefsTraditional Beliefs

Does globalization endanger traditional beliefs, such as living a life void of

materialistic ambitions?

Does globalization endanger traditional beliefs, such as living a life void of

materialistic ambitions?



Language BlundersLanguage Blunders

Japanese knife manufacturer labeled its exports to the United States

with “Caution: Blade extremely sharp! Keep out of children.”

English sign in a Moscow hotel read, “You are welcome to visit the

cemetery where famous Russians are buried daily, except Thursday.”

Sign for non-Japanese-speaking guests in a Tokyo hotel read, “You

are respectfully requested to take advantage of the chambermaids.”

Sign in English at Copenhagen ticket office read, “We take your bags

and send them in all directions.”

Braniff Airlines’ English-language slogan “Fly in Leather” was

translated into “Fly Naked” in Spanish.2 - 22

• Many endangered languages

• Yet English, Mandarin, and Spanish are expanding

• Lost languages means lost knowledge

• Linguists are recording most threatened languages

Global Sustainability:Global Sustainability:

Speaking in Fewer TonguesSpeaking in Fewer Tongues

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Lingua FrancaLingua Franca

¿Hola? Guten Tag?

Hello??

Ni Hao? Bonjour?

Hello!!!

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Mixed SignalsMixed Signals

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How does an understanding of the spoken, written, and body language in a market abroad contribute to business success?

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Knowledge of a culture’s spoken, written, and body language gives international managers insight into why people think and act the way they do.

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EducationEducation

Cultures pass on traditions, customs, and values through schooling, parenting, group memberships, etc.

Education level

Well-educated attract high-paying jobs, while poorly educated attract low-paying manufacturing jobs

Brain drain

Departure of highly educated people from one profession, geographic region or nation to another

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Problem of IlliteracyProblem of Illiteracy

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Physical and Material CulturePhysical and Material CulturePhysical and Material CulturePhysical and Material Culture

These influence a culture’s development and pace of changeThese influence a culture’s development and pace of change

TopographyPhysical features characterizing the surface of a geographic region

TopographyPhysical features characterizing the surface of a geographic region

ClimateWeather conditions of a geographic region

ClimateWeather conditions of a geographic region

Material CultureTechnology used to manufacture goods and provide services

Material CultureTechnology used to manufacture goods and provide services

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Kluckhohn-Strodtbeck Kluckhohn-Strodtbeck FrameworkFramework

Relation to nature

Time orientation

Trust and control

Material or spiritual

Responsibility to others

View of personal space

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Hofstede FrameworkHofstede Framework

Individualism Individualism vs. collectivismvs. collectivismIndividualism Individualism

vs. collectivismvs. collectivismPowerPower

distancedistancePowerPower

distancedistance

MasculinityMasculinityvs. femininityvs. femininity

MasculinityMasculinityvs. femininityvs. femininity

UncertaintyUncertaintyavoidanceavoidance

UncertaintyUncertaintyavoidanceavoidance

Long-termLong-termorientationorientationLong-termLong-termorientationorientation

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Power Distance &Power Distance &Individualism vs. CollectivismIndividualism vs. Collectivism

Source: Geert Hofstede, “The Cultural Relativity of Organizational Practices and Theories,” Journal of International Business Studies, Fall 1983, p. 82.

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Power Distance &Power Distance &Uncertainty AvoidanceUncertainty Avoidance

Source: Geert Hofstede, “The Cultural Relativity of Organizational Practices and Theories,” Journal of International Business Studies, Fall 1983, p. 84.

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Cultures with small ____________ tend to display greater equality and a more equal distribution of rewards.

a. Individualism

b. Power distance

c. Uncertainty avoidance

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Cultures with small ____________ tend to display greater equality and a more equal distribution of rewards.

a. Individualism

b. Power distance

c. Uncertainty avoidance

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Cross-Cultural Business Copyright © 2014 Pearson Education, Inc. 2