3-1 international business: opportunities and challenges in a flattening world, 1e by mason...

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International Business: Opportunities and Challenges in a Flattening World, 1e

By Mason Carpenter and Sanjyot P. Dunung

© Sanjyot Dunung 2011, published by Flat World Knowledge

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Chapter 3Culture and Business


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Learning Objectives

• Understand what is meant by culture

• Know that there are different kinds of culture

• Identify several different kinds of culture

• Know several methods to describe cultures

• Define and apply Hofstede’s and Hall’s categories for cultural identification

• Identify and discuss additional determinants of culture


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Learning Objectives

• Identify the ways that culture can impact how we do business

• Understand the aspects of business most impacted by culture

• Define what global business ethics are, and discover how culture impacts business ethics

• Learn how ethical issues impact global business

• Identify how companies develop, implement, and enforce ethical standards


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What Is Culture

• Culture is the beliefs, values, mind-sets, and practices of a group of people

• It includes the behavior pattern and norms of that group—the rules, the assumptions, the perceptions, and the logic and reasoning that are specific to a group

• It’s the collective programming of our minds from birth

– It’s this collective programming that distinguishes one group of people from another

• Challenge - Whenever we deal with people from another culture, we expect people to behave as we do and for the same reasons© Sanjyot Dunung 2011, published by Flat World Knowledge

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What Is Culture

• Culture awareness - Having an understanding of another culture’s values and perspective

– Understanding another culture’s mind-set and how its history, economy, and society have impacted what people think

• Cross-cultural understanding: The requirement that we reorient our mind-set and, most importantly, our expectations, in order to accurately interpret the gestures, attitudes, and statements of the people we encounter from other cultures


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What Is Culture

• Value: Something that we prefer over something else—whether it’s a behavior or a tangible item

– Values are acquired early in life and are usually nonrational—although we may believe that ours are actually quite rational

– Our values are the key building blocks of our cultural orientation

– Each of us has been raised with a considerably different set of values from those of our colleagues and counterparts around the world


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What Is Culture

• In coming to terms with cultural differences, we tend to employ generalizations

– Generalizations can save us from sinking into what may be abstruse, esoteric aspects of a culture

• Cultures and values are not static entities

– They’re constantly evolving—merging, interacting, drawing apart, and reforming

• Understanding what we mean by culture and what the components of culture are will help us better interpret the impact on business at both the macro and micro levels© Sanjyot Dunung 2011, published by Flat World Knowledge

What Kinds of Culture Are There?

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Nationalities Subcultures Organizations


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Hofstede and Values

• Geert Hofstede: An influential Dutch social psychologist who studied the interactions between national cultures and organizational cultures

• Value dimensions: The specific values included in Hofstede’s research. Values, in this case, are broad preferences for one state of affairs over others, and they are mostly unconscious


Key Methods Used to Describe Cultures

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• The value dimension referring to how openly a society or culture accepts or does not accept differences between people in hierarchies in the workplace, in politics

Power Distance

• The value dimension referring to people’s tendency to take care of themselves and their immediate circle of family and friends, perhaps at the expense of the overall societyIndividualism

• The value dimension referring to how a society views traits that are considered feminine or masculineMasculinity

• The value dimension referring to how much uncertainty a society or culture is willing to accept

Uncertainty Avoidance

(UA)

• The value dimension referring to whether a culture has a long-term or short-term orientation

Long-Term Orientation


Figure 3.1 - The United States’ Five Value Dimensions


Edward T. Hall

• Edward T. Hall: A respected anthropologist who applied his field to the understanding of cultures and intercultural communications

– Hall is best noted for three principal categories of how cultures differ: context, space, and time

• High- and low-context communication: How a message is communicated

– In high-context cultures, the physical context of the message carries a great deal of importance

– In low-context cultures, people verbally say exactly what they mean

• Space: The study of physical space and people; called proxemics, one of Hall’s principal categories on describing how cultures differ


Attitudes toward Time: Polychronic versus Monochronic Cultures

• Polychronic culture: A culture in which people can do several things at the same time

• Monochronic culture: A culture in which people tend to do one task at a time


Ethnocentrism

• The view that a person’s own culture is central and other cultures are measured in relation to it

• The challenge occurs when we feel that our cultural habits, values, and perceptions are superior to other people’s values


Understanding How Culture Impacts Local Business Practices

• Culture impacts:

– The pace of business

– Business protocol—how to physically and verbally meet and interact

– Decision making and negotiating

– Managing employees and projects

– Propensity for risk taking

– Marketing, sales, and distribution

• To conduct business with people from other cultures, you must put aside preconceived notions and strive to learn about the culture of your counterpart 3-19© Sanjyot Dunung 2011, published by Flat World Knowledge

Understanding How Culture Impacts Local Business Practices

• Your understanding of culture will affect your ability to:

– Enter a local market

– Develop and maintain business relationships

– Negotiate successful deals

– Conduct sales

– Conduct marketing and advertising campaigns

– Engage in manufacturing and distribution


Global Business Ethics

• Ethics: A branch of philosophy that seeks to address questions about morality—that is, about concepts such as good and bad, right and wrong, justice, and virtue

• The areas of business impacted by global perceptions of ethical, moral, and socially responsible behavior include the following:

– Ethics and management

– Ethics and corruption

– Corporate social responsibility


Corporate Social Responsibility

• The corporate conscience, citizenship, social performance, or sustainable responsible business, and is a form of corporate self-regulation integrated into a business model

• Corporate social responsibility encompasses what companies do with their profits and how they make them

– It goes beyond philanthropy and compliance and addresses how companies manage their economic, social, and environmental impacts, their relationships in all key spheres of influence:

• The workplace, the marketplace, the supply chain, the community, the public policy realm 3-22© Sanjyot Dunung 2011, published by Flat World Knowledge

Enforcement of Ethical Guidelines and Standards

• In the interest of expediency, many governments may not strictly enforce the rules governing corporate ethics

– Example: The practice of gift giving

• Governments do not enforce laws until it’s politically expedient to do so

– Example: Child labor


The Evolution of Ethics

• Ethics evolves over time

• Changing values, as influenced by global media, and changing perceptions and cultures will impact global ethics

• The most challenging aspect is that global business does not have a single definition of “fair” or “ethical


3-1 international business: opportunities and challenges in a flattening world, 1e by mason...

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