Chapter 4 International Business

How are individuals and groups different cont?

- In many Asian societies, the group is the primary unit of social organization - discourages job switching between firms - encourages lifetime employment systems - leads to cooperation in solving business problems 2) But, might also suppress individual creativity and initiative

Confucian Dynamism (5th dimension Hofstede)

- captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors - Japan, Hong Kong, and Thailand scored high on this dimension - the U.S. and Canada scored low

Masculinity vs. Femininity

- the relationship between gender and work roles

What Is Social Stratification?

1) All societies are stratified on a hierarchical basis into social categories, or social strata - individuals are born into a particular stratum 2_ Must consider 1.mobility between strata levels 2.the significance placed on social strata in business contexts

Does culture change?

1) Culture evolves over time - changes in value systems can be slow and painful for a society - Social turmoil - an inevitable outcome of cultural change - as countries become economically stronger, cultural change is particularly common - economic progress encourages a shift from collectivism to individualism - globalization also brings cultural change

What is the role od education in culture?

1) Formal education is the medium through which individuals learn many of the language, conceptual, and mathematical skills that are indispensable in a modern society 2) important in determining a nation's competitive advantage 3) Japan's postwar success can be linked to its excellent education system 4) general education levels can be a good index for the kinds of products that might sell in a country - Example: impact of literacy rates

Was Hofstede Right?

1) Hofstede's work has been criticized for several reasons - made the assumption there is a one-to-one relationship between culture and the nation-state - study may have been culturally bound - used IBM as sole source of information - culture is not static - it evolves 2) But, it is a starting point for understanding how cultures differ, and the implications of those differences for managers

What Is The Role Of Language In Culture?

1) Language is one of the defining characteristics of culture - Chinese is the mother tongue of the largest number of people - English is the most widely spoken language in the world - English is also becoming the language of international business - but, knowledge of the local language is still beneficial, and in some cases, critical for business success - failing to understand the nonverbal cues of another culture can lead to communication failure

How Are Culture, Society, And The Nation-State Related?

1) The relationship between a society and a nation state is not strictly one-to-one - Nation-states are political creations - can contain one or more cultures 2) A culture can embrace several nations

How Do Cultural Differences Affect International Business?

1) Understanding and adapting to the local cultural is important international companies - cross-cultural literacy - an understanding of how cultural differences across and within nations can affect the way in which business is practiced - cross-cultural literacy is important for business success 2) A relationship may exist between culture and the costs of doing business in a country or region - MNEs can be agents of cultural change -McDonald's

class consciousness

1) a condition where people tend to perceive themselves in terms of their class background, and this shapes their relationships with others 2) an antagonistic relationship between management and labor raises the cost of production in countries with significant class differences

Ethical Systems

1) a set of moral principles, or values, that are used to guide and shape behavior 2) Religion and ethics are often closely intertwined Example: Christian or Islamic ethics

Religion

1) a system of shared beliefs and rituals that are concerned with the realm of the sacred - Four religions dominate society 1.Christianity 2.Islam 3.Hinduism 4.Buddhism 5.Confucianism is also important in influencing behavior and culture in many parts of Asia

Buddhism

1) has about 350 millions followers 2) stresses spiritual growth and the afterlife, rather than achievement while in this world 3) does not emphasize wealth creation 4) entrepreneurial behavior is not stressed 5) does not support the caste system, individuals do have some mobility and can work with individuals from different classes

Hinduism

1) practiced primarily on the Indian subcontinent 2) focuses on the importance of achieving spiritual growth and development, which may require material and physical self-denial 3) Hindus are valued by their spiritual rather than material achievements 4) promotion and adding new responsibilities may not be important, or may be infeasible due to the employee's caste

Christianity

1) the world's largest religion 2) found throughout Europe, the Americas, and other countries settled by Europeans 3) the Protestant work ethic (Max Weber, 1804) - hard work, wealth creation, and frugality is the driving force of capitalism

Islam

1) the world's second largest religion dating to AD 610 2) there is only one true omnipotent God 3) an all-embracing way of life that governs one's being 4) associated in the Western media with militants, terrorists, and violent upheavals - but, in fact teaches peace, justice, and tolerance 5) fundamentalists have gained political power and blame the West for many social problems 6) people do not own property, but only act as stewards for God 7) supportive of business, but the way business is practiced is prescribed

How does culture impact the workplace?

1)Management processes and practices must be adapted to culturally determined work-related values - Geert Hofstede studied culture using data collected from 1967 to 1973 for 100,000 employees of IBM - Hofstede identified four dimensions that summarized different cultures

Confucianism

1)ideology practiced mainly in China 2) teaches the importance of attaining personal salvation through right action 3) high morals, ethical conduct, and loyalty to others are stressed 4) three key teachings of Confucianism - loyalty, reciprocal obligations, and honesty - may all lead to a lowering of the cost of doing business in Confucian societies

What do cultural differences mean for managers?

1.It is important to develop cross-cultural literacy - companies that are ill informed about the practices of another culture are unlikely to succeed in that culture - To avoid being ill-informed - consider hiring local citizens - transfer executives to foreign locations on a regular basis 2) Managers must also guard against ethnocentrism - a belief in the superiority of one's own culture

power distance

1.how a society deals with the fact that people are unequal in physical and intellectual capabilities

Individualism vs. Collectivism

1.the extent to which different cultures socialize their members into accepting ambiguous situations and tolerating ambiguity

What do cultural differences mean for managers? Cont

2.There is a connection between culture and national competitive advantage - suggests which countries are likely to produce the most viable competitors - has implications for the choice of countries in which to locate production facilities and do business

class system

A social ranking based primarily on economic position in which achieved characteristics can influence social mobility. position a person has by birth can be changed through achievement or luck

How Are Individuals And Groups Different?

In Western societies, there is a focus on the individual - individual achievement is common - dynamism of the U.S. economy - high level of entrepreneurship 2) But, creates a lack of company loyalty and failure to gain company specific knowledge - competition between individuals in a company instead of than team building -less ability to develop a strong network of contacts within a firm

social mobility

Movement of individuals or groups from one position in a society's stratification system to another

What Determines Culture?

The values and norms of a culture evolve over time religion, political philosophy, economic philosophy, education, language, social structure

Society

a group of people who share a common set of values and norms

Caste System

a set of rigid social categories that determined not only a person's occupation and economic potential, but also his or her position in society change is usually not possible during an individual's lifetime

Culture

a system of values and norms that are shared among a group of people and that when taken together constitute a design for living where

Group

an association of two or more people who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other's behavior

Values

are abstract ideas about what a group believes to be good, right, and desirable

individual

are involved in families, work groups, social groups, recreational groups, etc. - Societies place different values on groups

Norms

are the social rules and guidelines that prescribe appropriate behavior in particular situations

Mores

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

language

our spoken, written, or signed words and the ways we combine them to communicate meaning Countries with more than one language often have more than one culture: Belgium, Canada, Spain

Folkways

routine conventions of everyday life

social structure

the patterned interaction of people in social relationships Considers -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

uncertainty avoidance

the relationship between the individual and his or her fellows