Chapter 3

Culture and Business

 What Is Culture ?
• Culture is the beliefs, values, mind-sets, and practices of
a specific group of people.
• It includes the behavior pattern and norms of a specific
group—the rules, the assumptions, the perceptions, and
the logic and reasoning that are specific to a group.
• Culture is really the collective programming of our
minds from birth. It’s this collective programming that
distinguishes one group of people from another.
• Cultural awareness most commonly refers to having an
understanding of another culture’s values and
perspective
 What Is Culture?
• When trying to understand how cultures
evolve, we look at the factors that help
determine cultures and their values.
• In general, a value is defined as something
that we prefer over something else—whether
it’s a behavior or a tangible item.
• Values are usually acquired early in life and
are usually non rational. Our values are the
key building blocks of our cultural orientation.
What Kinds of Culture Are There?
• When we say cultural, we don’t always just mean
people from different countries.
• Cultures exist in all types of groups. There are
even subcultures within a country or target
ethnic group.
• Each person belongs to several kinds of cultures:
national, sub cultural (regional, gender, ethnic,
religious, generational, and socioeconomic), and
group or workplace (corporate culture).
What Kinds of Culture Are There?
 Geert Hofstede, Edward T. Hall
• There are two key methods used to describe and
analyze cultures.
• Geert Hofstede , focuses on five key dimensions that
interpret behaviors, values, and attitudes: power
distance, individualism, masculinity, uncertainty
avoidance, and long-term orientation.
• Edward T. Hall , focuses on three main categories for
how communications and interactions between
cultures differ: high-context versus low-context
communications, space, and attitudes toward time.
 Power distance
• refers to how openly a society or culture accepts or
does not accept differences between people, as in
hierarchies in the workplace, in politics, and so on.
• For example, high power distance cultures openly
accept that a boss is “higher” and as such deserves
a more formal respect and authority.
• Examples of these cultures include Japan, Mexico,
and the Philippines. In Japan or Mexico, the senior
person is almost a father figure and is automatically
given respect and usually loyalty without questions
 Individualism
• It refers to people’s tendency to take care of
themselves and their immediate circle of
family and friends, perhaps at the expense of
the overall society.
• In individualistic cultures, what counts most is
self-realization. Initiating alone, sweating
alone, achieving alone—not necessarily
collective efforts—are what win applause.
• In individualistic cultures, competition is the
fuel of success.
 masculinity
• It’s about how a society views traits that are
considered masculine or feminine
• In masculine-oriented cultures, gender roles are
usually crisply defined. Men tend to be more
focused on performance, ambition, and material
success.
• They cut tough and independent personas, while
women cultivate modesty and quality of life.
• Cultures in Japan and Latin American are examples
of masculine-oriented cultures.
 uncertainty avoidance
• This refers to how much uncertainty a society or
culture is willing to accept.
• It can also be considered an indication of the risk
propensity of people from a specific culture.
• People who have high uncertainty avoidance
generally tend to appreciate very clear
instructions
• At the office, sharply defined rules and rituals are
used to get tasks completed.
 uncertainty avoidance
• Stability and what is known are preferred to instability
and the unknown.
• Company cultures in these countries may show a
preference for low-risk decisions, and employees in
these companies are less willing to exhibit
aggressiveness.
• In countries with low uncertainty avoidance, people are
more willing to take on risks, companies may appear
less formal and structured, and “thinking outside the
box” is valued.
• Examples of these cultures are Denmark, Singapore,
Australia
 long-term orientation
• refers to whether a culture has a long-term or short-
term orientation the effort to understand the
difference in thinking between the East and the West
• The long-term orientation values persistence,
perseverance, thriftiness, and having a sense of
shame. These are evident in traditional Eastern
cultures.
• Based on these values, it’s easy to see why a
Japanese CEO is likely to apologize or take the blame
for a faulty product or process.
 long-term orientation
• The short-term orientation values tradition
only to the extent of fulfilling social obligations
or providing gifts or favors.
• These cultures are more likely to be focused
on the immediate or short-term impact of an
issue.
• Not surprisingly, the United Kingdom and the
United States rank low on the long-term
orientation.
 other determinants of culture.
• In addition to the main analytical methods for
comparing and contrasting cultures, there are a
number of other determinants of culture.
• These determinants include manners, mind-sets,
values, rituals, religious beliefs, laws, arts, ideas,
customs, beliefs, ceremonies, social institutions,
myths and legends, language, individual identity,
and behaviors.
• Language includes both verbal and physical
languages.
What Else Determines a Culture?
Understanding How Culture Impacts Local
Business Practices
• Professionals often err when they think that in
today’s shrinking world, cultural differences no
longer pertain.
• People mistakenly assume that others think alike
just because they dress alike and even sound
similar in their choice of words in a business
setting.
• Even in today’s global world, there are wide
cultural differences and these differences influence
how people do business.
 Spotlight on Cultures and
Entrepreneurship
• Culture impacts many elements of business,
including the following:
– 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
 Impact of Culture on Business
• When you’re dealing with people from
another culture, you may find that their
business practices and communication and
management styles are different from what
you are accustomed to.
• Understanding the culture of the people you
are dealing with is important to successful
business interactions as well as to
accomplishing business objectives.
 Impact of Culture on Business
• For example, you’ll need to understand the
following:
– how people communicate
– how culture impacts how people view time and deadlines
– how people are likely to ask questions or highlight
problems
– how people respond to management and authority
– how people perceive verbal and physical communications
– how people make decisions
 global business ethics
• Culture impacts how local values influence the
concept of global business ethics.
• Each professional is influenced by the values,
social programming, and experiences he or
she has absorbed since childhood.
• These collective factors impact how a person
perceives an issue and the related correct or
incorrect behavior.
 global business ethics
• For some cultures, the evolution of
international business and culture sometimes
creates a conflict, such as what is seen in gift-
giving practices or views on women in the
workplace.
• Ethics impacts global business in the areas of
management, corruption, and corporate social
responsibility.
 Conducting Business and Negotiating
• One of the most important cultural factors in
many countries is the emphasis on
networking or relationships.
• Even if you have been invited to bid on a
contract, you are still trying to sell your
company and yourself
• Make sure you understand how your
overseas associates think about time and
deadlines.
 Conducting Business and Negotiating
• You need to understand the predominant
corporate culture of the country you are
dealing with—particularly when dealing with
vendors and external partners.
• Understand how you can build trust with
potential partners.
• How do people communicate?
 Conducting Business and Negotiating
• Focus on communications of all types and
learn to find ways around cultural obstacles.
• There are no clear playbooks for operating in
every culture around the world.
• Make sure in any interaction that you have a
decision maker on the other end.
• When negotiating with people from a different
culture, try to understand your counterpart’s
position and objectives.
 Conducting Business and Negotiating
• Even in today’s wired world, don’t assume
that everyone in every country is as reliant
on the Internet and e-mail as you are.
• As with any business transaction, use legal
documents to document relationships and
expectations.