Difference in Culture

Introduction
• Cross-cultural literacy (an understanding of how
cultural differences across and within nations can
affect the way in which business is practiced) is
important to success in international business
• There may be a relationship between culture and the
costs of doing business in a country or region
• Culture is not static, and the actions of MNEs can
contribute to cultural change
 What is Culture?
Question: What is culture?

• Culture is a system of values (abstract ideas about what a

group believes to be good, right, and desirable. Or one's
judgment of what is important in life) and norms (the social
rules and guidelines that prescribe appropriate behavior in
particular situations) that are shared among a group of people
and that when taken together constitute a design for living
• A society is a group of people who share a common set of
values and norms
 The Determinants of Culture
The Determinants of Culture
 Social Structure
• A society's social structure is its basic social
organization

Two dimensions to consider:

• the degree to which the basic unit of social
organization is the individual, as opposed to the
group
• the degree to which a society is stratified into classes
or castes
 Individuals and Groups
• In societies where the individual is emphasized
– Individual achievement and entrepreneurship are
promoted.
– This can encourage job switching, competition between
individuals in a company rather than team building, and a
lack of loyalty to the firm.
– May be good in general skills but lack the knowledge,
experience, and network of interpersonal contacts.
– Many Western countries emphasize the individual.
• In societies with a strong identification with the group
– Cooperation and team work are encouraged and life time
employment is common.
– Groups are common in many Asian societies
 Social Stratification
• All societies are stratified on a hierarchical basis into
social categories, or social strata (usually defined by
characteristics such as family background,
occupation, and income)
 Social Stratification
• Social mobility refers to the extent to which individuals can
move out of the strata into which they are born
• The most rigid system is the caste system (a closed system of
stratification in which social position is determined by the
family into which a person is born, and change in that position
are unlikely)
• A less rigid system is the class system (a form of open social
stratification in which the position a person has by birth can
be changed through achievement or luck)
 Religious and Ethical Systems
• Religion is a system of shared beliefs and rituals
• Religions with the greatest following are
– Christianity (2.1 billion)
– Islam (1.5 billion)
– Hinduism (99 million)
– Buddhism (487 million)
 Language
• Countries differ in terms of language
• Language is one of the defining characteristics of
culture
• Countries with more than one language often have
more than one culture
– Chinese is the mother tongue of the largest
number of people in the world
– English is the most widely spoken language in the
world, and is becoming the language of
international business
• However, knowledge of the local language is
beneficial, and in some cases, critical for business
success
 Education
• Formal education is the medium through which
individuals learn many of the language, conceptual,
and mathematical skills that are indispensable in a
modern society
• The knowledge base, training, and educational
opportunities available to a country's citizens can
also give it a competitive advantage in the market
and make it a more or less attractive place for
expanding business
• The general education level of a country is a good
indicator of the types of products that might sell in
that location or the type of promotional materials
that might be successful
 Cultural Dimensions in China
• Greetings are done in order of age–always greet the eldest
member of a group first
• As status is recognized by age, university degree and
profession, use of a person’s title is important. Address
someone as Dr. or Professor whenever possible. Do not
call someone by their first name until they ask you to.
 Cultural Dimensions in China

• Deploy senior staff members to communicate and make

announcements to general staff
• Be prepared for answers like “we will see,” or “let us think
about it” which in the non-confrontational Chinese society
actually mean “no”
• Expect frequent rescheduling of meetings. It is a good idea to
set up appointments a few weeks in advance and reconfirm
1-2 days before the scheduled meeting
 Cultural Dimensions in America
• Time and Its Control: For Americans, time is a critical
factor that is battled on a daily basis.
• Comfort with Change: Americans link change to
progress, development, and growth. We like things that
are “New and Improved!”
• Self-Sufficiency: To succeed without depending on others
shows supreme self-determination, self-reliance, and
self-confidence.
• Status: In American culture we value the idea of equality.
The quotation “All men are created equal…” is arguably
the best-known phrase in any of America’s political
documents.
 Cultural Dimensions in India
▪ Respect is based on seniority and not necessarily on
proficiency, skills or knowledge.
▪ Lay out clear instructions and procedures to employees.
▪ Expect low job turnover.
▪ Expect frequent rescheduling of meetings.
▪ Do not expect decisions to be made at meetings, as
meetings are merely forums for exchange of information.
▪ Aim to build lasting relationships.
▪ Put your university degree or any accreditations on your
business card.
 Cultural Dimensions in England
▪ ‘Please’ and ‘thank you’ are words that should be used a
lot. In the UK we consider it rude if you do not use them.
▪ British people love pets! If you go to a park it is likely that
you will see many people walking their dogs.
▪ Queuing…The British are well know for their love of
queues! It is considered very rude to jump a queue. If
there is a queue for something, please wait your turn.
 Cultural Dimensions in Dubai
● High power distance – UAE has social statuses that differs on
each level e.g. certain ruling families have greater power
● High Collectivism – UAE has a strong focus on family e.g.
during Ramadan, it is very important for them to gather with
family relatives.
 Culture and the Workplace
Question: How does a society's culture impact
on the values found in the workplace?

Answer:
• Geert Hofstede isolated four dimensions that
summarized different cultures
1. Power distance
2. Individualism versus collectivism
3. Uncertainty avoidance
4. Masculinity versus femininity
 Culture and the Workplace
1. Power distance - how a society deals with the fact
that people are unequal in physical and intellectual
capabilities
2. Individualism versus collectivism - the relationship
between the individual and his or her fellows
3. Uncertainty avoidance - the extent to which different
cultures socialize their members into accepting
ambiguous situations and tolerating ambiguity
4. Masculinity versus femininity - the relationship
between gender and work roles
 Cultural Change

• Culture evolves over time, although changes

in value systems can be slow and painful for a
society
– social turmoil is an inevitable outcome of cultural
change
– cultural change is particularly common as
countries become economically stronger
 Implications for Managers
Differences in culture imply that
1. There is a need for managers to develop cross-
cultural literacy.
2. There is a connection between culture and national
competitive advantage.
3. there is a connection between culture and ethics in
decision making
4. Individuals must also beware of ethnocentric
behavior (belief that your culture or values, norms,
and traditions are superior to another's).
• ethnocentric behavior: belief that your
culture or values, norms, and traditions are
superior to another's.
• polycentric behavior: adopt the belief that
every country is unique and needs a different
approach to match cultural and societal
norms. E.g products and marketing strategy.
• Geocentric behavior:
 Class Activity

Dialog on Managers Ethnocentric Behavior

toward Global Business.