IB - Chapter 4: Cultural Environment

Religions with the largest following:

- Christianity (2.20 billion adherents) - Islam (1.60 billion adherents) - Hinduism (1.10 billion adherents) - Buddhism (535 million adherents) - Confucianism (shapes culture in Asia and elsewhere)

Cross-Cultural Risk Management

- Communication across cultures usually only identifies 'sameness' such as appearance, manners, customs and etiquette. - Much of what defines cultures as different is unseen and includes world views, beliefs, ethics, and morals.

Unspoken Language Nonverbal Cues

- Critically important for communication - Many nonverbal cues are culturally bound - May be interpreted differently

What is Culture?

- Culture can be defined as an evolving set of collective beliefs, values, norms, mores, attitudes and behavior characteristic of a particular social group. -Culture is a key component in business and has an impact on the strategic direction of business management, it includes all functions of business - The principles, norms, and standards of business practice differ to some degree in different cultures around the globe. - Research studies have found that some notions—such as fairness, honesty, and reciprocity—are universal norms.

Manners & Customs

- Manners and customs refer to ways of behaving and conducting oneself in public and business situations. - Customs during work and at social occasions, holidays (e.g., handshaking, bowing, drinking and toasting, gift-giving).

Language as a Key Dimension of Culture

- The "mirror" or expression of culture; essential for communications; provides insights into culture. - Linguistic proficiency is a great asset in international business. - Language has both verbal and nonverbal (unspoken, facial expressions and gestures). - There are nearly 7,000 active languages, including over 2,000 in each of Africa and Asia.

Cross-Cultural Literacy

- involves an understanding of how cultural differences across and within nations can affect the way in which business is practiced - is important to IB 1. There is a need for managers to develop cross-cultural literacy - Firms that are ill-informed about the practices of another culture are unlikely to succeed in that culture - Individuals must also beware of ethnocentric behavior (belief in the superiority of one's own culture) 2. There is a connection between culture and national competitive advantage 3. There is a connection between culture and ethics in decision making 4. Acquire factual and interpretive knowledge about the other culture (e.g., try to speak their language). 5. Avoid cultural bias. 6. Develop cross-cultural skills, such as perceptiveness, interpersonal skills, adaptability.

Acculturation

- is the process of adjusting and adapting to a culture other than one's own - commonly experienced by expatriate workers

Socialization

- is the process of learning the rules and behavioral patterns appropriate to one's society

Social Stratification

- societies are stratified on a hierarchical basis into social categories, or social strata - usually defined by characteristics such as family background, occupation, and income - societies differ in terms of the degree of mobility between social strata - the significance attache to social strata in a business context

Values

-provides the context within which a society's norms are established and justified -represent a person's judgments about what is good or bad, acceptable or unacceptable, important or unimportant, and normal or abnormal. -Our values guide the development of our attitudes and preferences -Ex: values common to Japan, North America, and Northern Europe include hard work, punctuality, and wealth acquisition

Elements of Culture

1. Cross-Cultural Risks 2. Dimensions 3. Language 4. Religion 5. Models & Explanation 6. Managerial Implications

Cultural Change

1. Culture evolves over time, although changes in value systems can be slow and painful for a society 2. Social turmoil is an inevitable outcome of cultural change 3. Cultural change is particularly common as countries become economically stronger 4. As countries get richer, there is a shift from "traditional values" to "secular rational" values and from "survival values" to "well-being values"

4 Basic Principles of Social Stratification

1. it is a trait of society, not reflection of individual differences 2. It carries over a generation to the next generation 3. It is generally universal, but variable 4. It involves not just inequality but also beliefs

Examples of Nonverbal Communications

1. ways of talking (volume, inflection) 2. Sounds (quietness) 3. Closeness (body proximity) 4. Body Contact (shaking hands) 5. Posture and Stance (slouching) 6. Head Movements (nodding) 7. Eye Movements (direction of gaze) 8. Facial Expression (smiling) 9. Hand Movement (waving) 10. Appearance (tidiness)

Polychronic Time

A flexible, non-linear orientation to time in which the individual takes a long-term perspective Time is elastic, long delays are tolerated before taking action. Punctuality is relatively unimportant. Relationships are valued. Ex: Africa, Latin America, Asia.

Folkways

A good example of folkways concerns attitudes toward time in different countries. People are keenly aware of the passage of time in the United States and northern European cultures such as Germany, Netherlands, and the Scandinavian countries.

Polycentric Orientation

A mindset in which the manager develops a greater affinity for the country in which he or she works than for the home country

Monochronic Time

A rigid orientation to time in which the individual is focused on schedules, punctuality, time as a resource, time is linear, "time is money". Ex: people in the US can be hurried and impatient.

Education

Formal Education: medium through which individuals learn communication skills, conceptual skills, and technical skills -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 Best Country: China Worst Country: Afganistan

Cultural Dimensions

Geert Hofstede isolated five dimensions that summarized different cultures 1.Power distance 2.Individualism versus collectivism 3.Uncertainty avoidance 4.Masculinity versus femininity 5.Long-term versus short-term orientation 6.A move to add a sixth dimension: indulgence versus restraint

Individuals & Groups (Social Structure)

Group: individuals who have a shared sense of identity and who interact with each other on the basis of a common set of expectations Individual: emphasis on personal achievement, encourages competition between individuals rather than team building

Islamic Banks

Islamic banks function differently than conventional banks in the world, as the Islamic banks cannot pay or charge interest

High and Low Context Cultures

Low-context cultures: rely on explicit explanations, with emphasis on spoken words. -Such cultures emphasize clear, efficient, logical delivery of verbal messages. Communication is direct. Agreements are concluded with specific, legal contracts. High-context cultures: emphasize nonverbal or indirect language. -Communication aims to promote smooth, harmonious relationships. - Such cultures prefer a polite, "face-saving" style that emphasizes a mutual sense of care and respect for others. Care is taken not to embarrass or offend others.

Mores

Norms that are seen as central to the functioning of a society and to its social life

Religious & Ethical Systems

Religious and ethical systems influence culture, and therefore business and consumer behavior. -Ethical system: a set of moral principles, or values, that are used to guide and shape behavior -Religion: involves common beliefs associated with moral values, what is sacred

Perceptions of Time

Time dictates expectations about planning, scheduling, profit streams, and what constitutes tardiness in arriving for work and meetings Types: 1. Monochronic 2. Polychronic

Geocentric Orientation

a global mind-set in which the manager is able to understand a business or market without regard to country boundaries **Managers should strive for a geocentric orientation

Idioms

an expression whose symbolic meaning differs from its literal meaning IB managers can study idioms and colloquialisms to better understand local culture

Material Productions

are artifacts, objects, and technological systems that people construct to function within their environment

Prejudices

are rigidly held attitudes. usually unfavorable and usually aimed at particular groups of people

Attitudes

are similar to opinions but are often unconsciously held and may not have a rational basis

Conceptual Skills

are the basis for acquiring the ability to control certain aspects of life, such as understanding abstract ideas, problem solving, understanding relations and the ways in which organized systems function.

Technical Skills

are the knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as well as other specific tasks relating to technology.

Symbols

can be letters, figures, colors, or other characters that communicate a meaning EX: flags, anthems, seals, monuments, and even historical myths

Power Distance

describes how a society deals with inequalities in power that exist among people High power distance societies exhibit big gaps between the weak and powerful -in firms, top management tends to be autocratic, giving little autonomy to lower-level employees. - Examples: Guatemala, Malaysia, Philippines, and several Middle East countries. Low-power distance societies have small gaps between the weak and powerful. -Firms tend toward flat organizational structures, with relatively equal relations between managers and workers. -For example, Scandinavian countries instituted various systems to ensure socioeconomic equality.

Long-Term vs. Short-Term Orientation

describes the degree to which people and organizations defer gratification to achieve long-term success. Long-term orientation: emphasizes the long view in planning and living, focusing on years and decades. -Examples: Traditional Asian cultures, such as China, Japan, and Singapore, which base these values on the teachings of the Chinese philosopher Confucius (500 B.C.), who espoused long-term orientation, discipline, hard work, education, and emotional maturity. Short-term orientation: is typical in the United States and most other Western countries.

Indulgence vs. Restraint

describes the degree to which people in a society attempt to control their impulses and desires. Indulgent Societies: allow relatively free gratification of their basic and natural human desires related to having fun and generally enjoying life. - Ex: Denmark, Mexico, and the US Restrained Societies: believe that such gratification should be curbed and regulated by strict norms. - EX: China, Iraq, and South Korea

Communication Skills

include receptive and expressive language, and non-verbal communication

Social Structure

is the basic organization of society, including the pattern of social arrangements and organized relationships that characterize it Types: 1. Individuals or groups 2. Social stratification and mobility

Language

is the method of human communication, either spoken/unspoken and/or written, consisting of the use of words in a structured and conventional way It is the system of communication used by a particular community or country, and is one of the defining characteristics of culture. - Countries with more than one spoken language have a rich culture - Chinese is the language of the largest number of people in the world - English is the most widely spoken language in the world, and a fundamental language of IB

Masculinity vs. Femininity

refers to a society's orientation based on traditional male and female values. Masculine Cultures: value competitiveness, ambition, assertiveness, and the accumulation of wealth. -Both men and women are assertive, focused on career and earning money. - Examples: Australia, Japan. Feminine Cultures: emphasize nurturing roles, interdependence among people, and caring for less fortunate people - for both men and women. - Examples: Scandinavian countries, where welfare systems are highly developed, and education is subsidized.

Uncertainty Avoidance

refers to the extent to which people can tolerate risk and uncertainty in their lives. High Uncertainty Avoidance: societies create institutions to minimize risk and ensure security. -Firms emphasize stable careers and regulate worker actions. -Decisions are made slowly. -Examples: Belgium, France, Japan Low Uncertainty Avoidance: societies managers are relatively entrepreneurial and comfortable with risk. - Firms make decisions quickly. - People are comfortable changing jobs. - Examples: Ireland, Jamaica, U.S.

Individualism v. Collectivism

refers to whether a person primarily functions as an individual or within a group. Individualistic Societies: each person emphasizes his or her own self-interest - Competition for resources is the norm; individuals who compete best are rewarded. - Examples: Australia, Britain, Canada, and the U.S. Collectivist Societies: ties among individuals are important - Business is conducted in a group context; life is a fundamentally cooperative experience - Conformity and compromise help maintain harmony. - Examples: China, Panama, Japan, South Korea.

Perception of Space

reflects each culture's orientation about personal space and conversational distance.

Social Max Weber

suggested that it was the Protestant work ethic (focus on hard work, wealth creation, and frugality) that was the driving force of capitalism.

Norms

the social rules that govern the actions of people toward on another

Ethnocentric Orientation

using our own culture as the standard for judging other cultures