Culture and International Business

Chapter 8

8.1 Customs and Culture

• Culture – A reflection of values and beliefs of a community or

nation– Religion, laws, language, technology, art, music and

literature define its culture• Customs

– Ways that cultural behaviors are performed• Cultural Determinants: Geography, history and religion

– Geography – climate, position – i.e. neighbors like U.S. and Canada, physical environment (e.g. mountains, rivers, soils) and hazards (earthquakes) influence the economy, trade, and behavior of citizens

– History • A study of history is also a study of culture• New settlers to a country bring cultural values with them• Aboriginals were first to live in Canada, then came Vikings,

then English and the French. Each group left a cultural ‘foot-print’.

• Later immigration to Canada expanded to include Central and Eastern Europe, the U.S., Asia, Africa, and the West Indies

• Canada’s values and culture are vastly influenced by each new group that arrives. Multiculturalism policies are a result of the many and different groups that have settled in Canada.

• Cultural norms are expectations and behaviors that are “common” to or “commonly observed” in a country or region.

• Cultural Imperialism – when one nation or group imposes values and customs on another. For example, the British Empires imposed values and beliefs on aboriginals living in Canada. Currently, many people argue that the U.S. is a cultural imperialist with ubiquitous American music and media.

– Religion• Religion has a huge impact on a nation’s culture.• Religious celebrations become national holidays – e.g. many

of Canada’s official holidays arise from the Christian religions• There is a trend towards secularism (decreased influence of

religion on national affairs, decreased participation in organized religion) in many countries.

• In other countries there is a return to more fundamentalist beliefs – e.g. Christians in the south of the U.S., followers of Islam in the Middle-East

• Religion is often very closely connected to the politics of a country and influences government policy in many ways

• When religion and politics meet, there can sometimes be difficult and powerful results – wars, oppression and discrimination have arisen from the influence of religion on the politics of countries.

8.2 Culture and Consumer

• Cultural marketing – effective international campaigns• International business / products must be relevant and

positive in the cultural context of the importing country• Cultural Differences

– Local tastes, styles, preferences, values influence the product– e.g. if people in a country consider eating in public to be rude,

then a commercial showing someone eating an apple on a public bus would be considered inappropriate

– Words and product names must be carefully examined for ‘slang’ meanings or other inappropriate associations e.g. Gerber Baby Food – the word gerber in French means “vomit” – not good!

– Languages with common origins or shared words i.e. Latin languages - French, Spanish, Portuguese and Italian are the source of potential “double meanings”

8.3 Culture and Business Practices• Negotiation styles can differ from country to country

– E.g. Canadians and Americans may rely too much on financial numbers before developing a relationship or ‘trust’

– E.g. in Russia, trust is thought to come from personal relationships and not formal legal contracts

– E.g. “we are considering other options” may be rude to some

• Language can be easily mistake due to bad translations or imperfect accents or misunderstandings– E.g. body language or symbols may have different meanings– E.g. eye contact, laughter, coughing or sneezing may all have

different cultural norms depending on where you are in the world

• Protocol – rules of correct behaviour can be very different e.g. punctuality, gift giving, entertainment, dress

8.4 Disappearing Diversity• International business is creating a global culture• Younger business people may be less likely to follow

their local and unique customs in favor of more “global” or “universal” customs that may have arisen in the U.S. or other global business “superpowers”.

• Despite the cultural differences, there are many similarities – the process of thinking of international partners as part of the “us” and less as the “others” leads to better understanding and harmony

• Global culture can help to spread tolerance,equity and respect for differences, but it can also lead to a “monoculture” in which unique and smaller languages and cultures are absorbed or eroded substantially.