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Chapter 3 Differences in Culture Chapter 3 Differences in Culture

2 Guanxi-strength of relationship n n U. S. Business transactions are conducted within the 2 Guanxi-strength of relationship n n U. S. Business transactions are conducted within the framework of contract law and mechanisms for dispute resolution are in place Reciprocal networks are becoming more important but have to operate within the confines of the law Gifts may be frowned upon as bribery (Foreign Corrupt Practices Act) Mc. Graw-Hill/Irwin International Business, 5/e n n China Personal power and relationships or connections rather than rule of law are important in China Reciprocal relationship networks can often mean doing favors or offering bribes Establish relationships with gifts © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

3 What is culture? n “A system of values and norms that are shared 3 What is culture? n “A system of values and norms that are shared among a group of people and that when taken together constitute a design for living. ” n Hofstede, Mc. Graw-Hill/Irwin International Business, 5/e Namenwirth and Weber © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

4 Different components of culture n Values and Norms n Folkways and mores Mc. 4 Different components of culture n Values and Norms n Folkways and mores Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

5 Values and norms n Values: Abstract ideas/assumptions about what a group believes to 5 Values and norms n Values: Abstract ideas/assumptions about what a group believes to be good, right and desirable n Norms: social rules and guidelines that prescribe appropriate behavior in particular situations Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

6 Folkways and mores n n Folkways: Routine conventions of everyday life. n Little 6 Folkways and mores n n Folkways: Routine conventions of everyday life. n Little moral significance n Generally, social conventions such as dress codes, social manners, and neighborly behavior Mores: Norms central to the functioning of society and its social life n Greater significance than folkways n Violation can bring serious retribution n Theft, adultery, incest and cannibalism Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

7 Culture, society and nation states n n Society is a group of people 7 Culture, society and nation states n n Society is a group of people who share a common culture No one to one correspondence between society and a nation state n n Nation states are political creations Many cultures can co-exist within a nation state Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

8 Determinants of culture Fig: 3. 1 n n n Social structure Religion Language 8 Determinants of culture Fig: 3. 1 n n n Social structure Religion Language Education Economic philosophy Political philosophy Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

9 Social structure n Two dimensions n n n The extent to which society 9 Social structure n Two dimensions n n n The extent to which society is group or individually oriented Degree of stratification into castes or classes n Social mobility n Significance to business Other influences n n Political philosophy Economic philosophy Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

10 Religious and ethical systems n n n Christianity n Economic implications Hinduism n 10 Religious and ethical systems n n n Christianity n Economic implications Hinduism n Economic implications Islam n Economic implications Buddhism n Economic implications Confucianism n Economic implications Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

11 World religions Map 3. 1 Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The 11 World religions Map 3. 1 Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

12 Language n n Fig: 3. 2 Spoken n Verbal cues n Language structures 12 Language n n Fig: 3. 2 Spoken n Verbal cues n Language structures perception of world Unspoken n Body language n Personal space Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

13 Education n Education can be a source of competitive advantage n Example n 13 Education n Education can be a source of competitive advantage n Example n India n Malaysia n Singapore Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

14 Percentage of GNP spent on education Map 3. 2 Mc. Graw-Hill/Irwin International Business, 14 Percentage of GNP spent on education Map 3. 2 Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

15 Adult literacy rates Map 3. 3 Mc. Graw-Hill/Irwin International Business, 5/e © 2005 15 Adult literacy rates Map 3. 3 Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

16 Culture and the workplace n Study on the relationship between culture and the 16 Culture and the workplace n Study on the relationship between culture and the workplace by Geert Hofstede 1967 -73 n n 40 countries 100, 000 individuals Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

17 Hofstede’s cultural dimensions n Four dimensions of culture n n Power distance Individualism 17 Hofstede’s cultural dimensions n Four dimensions of culture n n Power distance Individualism versus collectivism Uncertainty avoidance Masculinity versus femininity Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

18 Power distance n Cultures are ranked high or low on this dimensions based 18 Power distance n Cultures are ranked high or low on this dimensions based on the particular society’s ability to deal with inequalities Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

19 Individualism versus collectivism n n This dimension focuses on the relationship between the 19 Individualism versus collectivism n n This dimension focuses on the relationship between the individual and his/her fellows within a culture n Individualistic societies: n loose ties n individual achievement and freedom highly valued Collectivist societiesn tight ties n tend to be more relationship oriented Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

20 Uncertainty avoidance n This dimension measures the extent to which a culture socializes 20 Uncertainty avoidance n This dimension measures the extent to which a culture socializes its members into accepting ambiguous situations and tolerating uncertainty Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

21 Masculinity versus femininity n This dimension looks at the relationship between gender and 21 Masculinity versus femininity n This dimension looks at the relationship between gender and work roles Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

22 Work related values for twenty countries Mc. Graw-Hill/Irwin International Business, 5/e © 2005 22 Work related values for twenty countries Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

23 Problems with Hofstede’s findings n n n Assumes one-to-one relationship between culture and 23 Problems with Hofstede’s findings n n n Assumes one-to-one relationship between culture and the nation-state His research may have been culturally bound. Survey respondents were from a single industry (computer) and a single company (IBM) Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

24 Cultural change n n Culture is not a constant; it evolves over time 24 Cultural change n n Culture is not a constant; it evolves over time Since 1960 s American values toward the role of women are changing. Japan moves toward greater individualism in the workplace Effects of globalization Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

25 Changing values Fig: 3. 3 Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The 25 Changing values Fig: 3. 3 Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.

26 Managerial implications n n n Cross cultural literacy Culture and competitive advantage Culture 26 Managerial implications n n n Cross cultural literacy Culture and competitive advantage Culture and business ethics Mc. Graw-Hill/Irwin International Business, 5/e © 2005 The Mc. Graw-Hill Companies, Inc. , All Rights Reserved.