Chapter 2- The Cultural Environments Facing Business

Front 1

Culture;

Back 1

learned norms based on values, attitudes, and beliefs of a group of people

Front 2

- Companies become international to create value for their organizations

Back 2

o They acquire foreign assets (ex: knowledge-based resources), and foster cultural diversity to gain global competitive advantage

- By bringing together people of diverse backgrounds, perspectives, and experience, companies often gain a deeper knowledge of products and services and how to create/deliver them

Front 3

Cultural collision;

Back 3

occurs when divergent cultures come in contact

Front 4

This arises in 2 conditions:

Back 4

1. When a company implements practices that are less effective than intended
2. When a company’s employees encounter distress because of difficulty in accepting or adjusting to foreign behavior’s

Front 5

Cultural Awareness:

Back 5

most cultural variables- daily routines and rules, language are universal. The forms of these variables, however, differ among cultures, and not everyone responds to them in the same way.

- Too often we can’t explain some differences, so we tend to attribute it to culture without trying to understand it

Front 6

The nation is a useful definition of a society because:

Back 6

1. Similarity among people is a cause and an effect of national boundaries
2. Laws apply largely along national lines

Front 7

Managers find country-by-country analysis difficult because:

Back 7

1. Subcultures exist within nations
2. Similarities link groups from different countries

Front 8

Cultural value systems are set early in life but may change through:

Back 8

1. Choice of imposition
2. Contact with other cultures

Front 9

How Cultures Form and Chance

Back 9

1. Change by choice
2. Change by imposition

Front 10

1. Change by choice;

Back 10

occur as a reaction to social and economic situations that present people with new alternatives

Front 11

2. Change by imposition (cultural imperialism);

Back 11

imposing elements from an alien culture, such as a forced change in laws by an occupying country that becomes part of the subject culture

Front 12

Contact among countries brings change (culture diffusion)

Back 12

o When the change results in mixing cultural elements, we have creolization.

Front 13

Language as a Diffuser and Stabilizer of Culture

Back 13

- Language limits people’s contact with other cultures
o Culture spreads more quickly when people speak the same culture – this explains the culture homogeneity

- When people understand only 1 language that has few users, they tend to cling to their culture because they have little contact with others.

- English (2nd most popular language) travels so well because the U.S. media are so influential and because the U.S. originates a healthy % of new products
o EX: When a new product enters a foreign market, its vocabulary usually enters the language as well- sometimes in a strange form

Front 14

Religion as a Culture Stabilizer

Back 14

- Many religions- Buddhism, Christianity, Hinduism, Islam, and Judaism influence specific beliefs that may affect business, such as inhibiting the sale of certain products or the performance of work at certain times

EX: Mcd’s serves nor pork or beef in India to offend neither its Hindu nor Muslim populations.

Front 15

Behavioral Practices Affecting Business

Back 15

Culture affects every business function- attitudes and values constitute cultural variables

Front 16

1. Issues in Social Stratification;

Back 16

every culture ranks some people more highly than others. Such social stratification dictates a person’s class, status, and financial rewards within that culture

Front 17

Social stratification is determined by:

Back 17

1. Individual’s achievements and qualifications;
2. Individual’s affiliations with or membership in
certain groups

Front 18

1. Individual’s achievements and qualifications;

Back 18

companies look for individual qualifications for choosing spokesperson or they match spokespersons with the audience with which they wish to react

o Societies look at these group affiliations differently, thus causing certain business functions to be carried out differently
o Egalitarian societies place more weight on acquired group memberships

Front 19

2. Individual’s affiliations with or membership in certain groups

Back 19

a) Ethnic and Racial groups; in less open societies, laws maybe designed to reinforce or undermine rigid stratification

b) Gender-based groups; country-specific differences in attitudes toward gender are sometimes quite pronounces

c) Age-based groups; countries treat age groups differently, and each country expresses its attitude toward age in different ways

d) Family-based groups; in some cultures, the most important group membership is family. A person’s position in society depends heavily on the family’s social status or “respectability” rather than on individual achievement. Because family ties are so strong, there may also be a tendency to cooperate more closely within the family unit than in other relationships

Front 20

Group affiliations can be:

Back 20

1. Ascribed or acquired
2. A reflection of class and status

- Those determined by birth as known as ascribed group memberships and include those based on gender, family, age, caste, and ethnic, racial, or national origin

- Acquired group memberships include those based on religion, political affiliation, and professional and other associations

Front 21

2. Work motivation;

Back 21

motivated employees are more productive

Front 22

Why are people motivated to work?

Back 22

1. Materialism and motivation;
2. Expectation of success and reward;
3. Performance and achievement;
4. Hierarchy of needs;

Front 23

1. Materialism and motivation;

Back 23

the individual desire for material wealth is a prime incentive to perform the kind of work that leads to community-wide economic development

a. The productivity/leisure trade off; some cultures place less value on leisure time than others. Their people work longer hours, take fewer holidays and vacations, and spend less time and money on leisure.

Front 24

2. Expectation of success and reward;

Back 24

motivation toward work is influenced by the perceived likelihood of success and its rewards versus failure.

People have less enthusiasm for effort when the likelihood of success is too easy or too difficult. People are more eager to work if: rewards for success are high, and there is some uncertainty of success.

Front 25

3. Performance and achievement;

Back 25

employees who have a high “masculinity score” admired successful work achievers, harbored little sympathy for the unfortunate, and preferred to be better than others rather than on a par with them.

Front 26

Hierarchy of needs;

Back 26

people try to fulfill lower-level needs before moving on to higher-level ones. Different cultures not only attach different degrees of importance to various needs, they also rank higher-order needs differently. The theory can help in distinguishing among the reward preferences of employees in different parts of the world. This is important because of differences in workforce composition.

Front 27

3. Relationship preferences

Back 27

a) Power distance;
b) Individualism vs. collectivism;

Front 28

a) Power distance;

Back 28

from country to country, employee preferences tend to differ in terms of interacting with bosses, and peers. People tend to perform better when the nature of their interactions fits their preferences. That’s why companies align management styles with superior-subordinate interaction preferences (power distance)

a. In high power distance, people prefer little consultation between the two tiers and one of two management styles: autocratic *ruling with unlimited authority) or paternalistic (regulating conduct by supply needs)

b. With low power distance, they prefer consultative styles.

c. Managers who prefer an autocratic style of superior-subordinate relationship are willing to delegate and accept decision making by a majority of subordinates.

Front 29

b) Individualism vs. collectivism;

Back 29

high individualism describes an employee’s preference to fulfill leisure time and improve skills outside the organization, receive direct monetary compensation, engaged in personal decision making and challenges

a. High collectivism typifies an employee’s penchant for dependence on the organization thorough training, satisfactory workplace conditions, and good benefits

Front 30

Situational differences among families:

Back 30

1. Individualists may be less motivated to receive material rewards from their work because of dividing the rewards among more family members

2. Because relocation means that family members must find new jobs, a worker’s geographic mobility is limited. Even when extended families don’t live together, mobility can be reduced because people prefer to remain near relatives.

3. Interrelated familial roles may complicate purchasing decisions.

4. Security and social needs may be met more effectively at home than in the workplace.

Front 31

4. Risk-taking behavior; 4 types of risk-taking behavior where nationalities differ

Back 31

a) Uncertainty avoidance;
b) Trust;
c) Future orientation;
d) Fatalism;

Front 32

a) Uncertainty avoidance;

Back 32

when U.A is high, most employees prefer to follow set rules even if breaking them may be in the company’s best interest. They tend to stay with current employers for a long time. Supervisors tend to be precise in their directions. Few consumers are prepared to risk being early product adopters.

Front 33

b) Trust;

Back 33

when trust is high, the cost of doing business tends to be lower because managers don’t spend much time fussing over every detail

Front 34

c) Future orientation;

Back 34

cultures differ in their perceptions of the risks from delaying gratification

Front 35

d) Fatalism

Back 35

if people believe strongly in self determination, they may be willing to work hard to achieve goals and take responsibility for performance

Front 36

5. Information and task processing; cultures perceive, obtain, and process information differently

Back 36

a) Perception of cues
b) Obtaining information
c) Information processing
d) Monochromic vs polychromic cultures
e) Idealism vs pragmatic

Front 37

a) Perception of cues;

Back 37

cues people rely on are partly physiological, and evolution and genetics play a role in how different groups perceive

a. Cultural differences, especially language, also reflect differences in perception of cues. The richness of a descriptive vocabulary allows its speakers to note and express very subtle differences that exist from place to place

Front 38

b) Obtaining information:

Back 38

low context vs. high context;

Front 39

1b. Low context cultures;

Back 39

people generally regard as relevant only firsthand information that bears directly on the subject at hand

Front 40

2b. High-context;

Back 40

people end to regard seemingly peripheral information as pertinent and to infer meanings from things said either indirectly or casually

c. When people from 2 cultures have to deal with each other, low context people may perceive high context as inefficient in their use of time, while the other may perceive them as overly aggressive

Front 41

c) Information processing;

Back 41

every culture has its own systems for ordering and classifying information

Front 42

d) Monochromic vs polychromic cultures:

Back 42

a. Monochromic: people prefer to work sequentially, such as finishing transactions with one customer before dealing with another

b. Polychromic: working simultaneously on a variety of tasks

Front 43

e) Idealism vs pragmatic;

Back 43

a. Idealism; some cultures prefer to establish overall principles before they try to resolve small issues

b. Pragmatic; some cultures focus more on details than on abstract principles

Front 44

Communications;

Back 44

problems occur not only when you shift from one language to another, but when you communicate with someone from another country with the same official language

Front 45

Problems in communications:

Back 45

1. Spoken and written language;
2. Silent language

Front 46

1a. Spoken and written language;

Back 46

some words don’t have a direct translations

a. Grammar is also complex, and can substantially change the meaning

Front 47

2a. Silent language

Back 47

a. Colors; colors invoke distinct associations in different countries, such as being lucky or unlucky or being associated with specific business

EX: Black can be for mourning death in western countries, while in Africa, it’s white.

b. Distance; the accustomed distance people
maintain during conversations
c. Time and punctuality
d. Body language
e. Prestige; a person’s status

Front 48

Dealing with Cultural Differences

Back 48

1. The extent to which a culture is willing to accept the introduction of anything foreign

2. Whether key cultural differences are small or great

3. The ability of individuals to adjust to what they find in foreign cultures

4. The general management orientation of these issues in some depth

Front 49

1. The extent to which a culture is willing to accept the introduction of anything foreign

Back 49

a. Host cultures do not always expect foreigners to adjust to them

Front 50

2. Whether key cultural differences are small or great

Back 50

a. When doing business in a similar culture, companies usually have to make fewer adjustments, and may overlook subtle differences.

Front 51

3. The ability of individuals to adjust to what they find in foreign cultures

Back 51

a. Some people get frustrated when entering another culture

Front 52

4. The general management orientation of these issues in some depth

Back 52

a. Polycentrism;
b. Ethnocentrism;
c. Geocentrism;

Front 53

a. Polycentrism;

Back 53

a polycentric group or individual tends to believe that their business units abroad should act like local companies

i. Polycentric management may be so overwhelmed by national differences that it won’t introduce workable changes

Front 54

b. Ethnocentrism;

Back 54

refers the conviction that one’s own culture is superior to that of other countries

i. Ethnocentrism management overlooks national differences and:
1. Ignores important factors, believes home country objectives should prevail, and thinks acceptance by other cultures is easy

Front 55

c. Geocentrism;

Back 55

integrates company and host-country practices as well as some entirely new ones

i. Geocentric management often uses business practices that are hybrids of home and foreign norms. Because people do not necessarily accept change readily, the management of change is important

Front 56

Strategies for Instituting Change:

Back 56

1. Value systems; the more something contradicts
our value system, the harder it is to accept
2. Cost benefit analysis of change; companies’
introduction of desired practices abroad may be
costly or inexpensive. Some result in improved
performance, whereas others improve
performance only marginally
3. Resistance to too much change
4. Participation; can be extremely important even in
countries where education levels are low and
power distance and uncertainty avoidance is
high
5. Reward sharing
6. Opinion leadership; a firm may be able to
facilitate the acceptance of change
7. Timing
8. Learning abroad