International Business

Nation-states v. Culture

(3) -Nation-states are political creations and can contain one or more cultures. -A culture can embrace several nations.

Determinants of Culture

(3) -Religion -Social Structure -Language -Education -Economic Philosophy -Political Philosophy

What do cultural differences mean for managers?

(3) 1. It is important to develop cross-cultural literacy 2. There is a connection between culture and national competitive advantage.

Caste System

(3) A closed system of social stratification in which social position is determined by the family into which a person is born, and change in that position is usually not possible during an individual's lifetime.

Religion

(3) A system of shared beliefs and rituals concerned with the sacred. -Christianity -Islam -Hinduism -Buddhism -Confucianism

Class Consciousness

(3) A tendency for individuals to perceive themselves in terms of their class background. -Shapes their relationship with others.

Values

(3) Abstract ideas about what a society (group) believes to be good, right, and desirable. -provide the context within which a society's norms are established and justified and form the bedrock of a culture.

Group

(3) An association of two or more individuals who have 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.

Class System

(3) An open system of social stratification in which social status is determined by the family into which a person is born and by subsequent socioeconomic achievements. -Movement between classes is possible.

Ethnocentrism

(3) Belief in the superiority of one's own ethnic group or culture.

Ethical Systems

(3) Cultural beliefs about what is proper behavior and conduct. -Set of moral principles, or values, that are used to guide and shape behavior.

Uncertainty Avoidance

(3) Enter to which cultures socialize members to accept ambiguous situations and to tolerate uncertainty. -Relationship between the individual and his fellows.

Society

(3) Group of people who share a common set of values and norms.

Social Strata

(3) Hierarchical social categories.

Mores

(3) Norms seen as central to the functioning of a society and to its social life.

Folkways

(3) Routine conventions of everyday life.

Norms

(3) Social rules and guidelines that prescribe appropriate behavior in particular situations.

Social Structure

(3) The basic social organization of a society. -Consider the degree to which the basic unit of social organization is the individual, as opposed to the group and the degree to which a society is stratified into classes or castes.

Culture

(3) The complex whole that includes knowledge, belief, art, morals, law, custom, and other capabilities acquired by a person as a member of society. -a system of values and norms that are shared among a group of people and that when taken together constitute a design for living.

Social Mobility

(3) The extent to which individuals can move out of the social strata into which they are born.

Education

(3) The medium through which individuals learn many of the language, conceptual, and mathematical skills. -Important in determining a nation's competitive advantage. -General education levels can be good index of the kinds of products that might sell in a country.

Language

(3) The spoken and unspoken means of communications. -Countries with more than one language often have more than one culture. -English is the most widely spoken language. -Chinese is the mother tongue of the largest number of people. -English is becoming the language of international business.

Individualism vs. Collectivism

(3) Theory focusing on the relationship between individual and his or her fellows. -Extent to which different cultures socialize their members into accepting ambiguous situations and tolerating ambiguity. -Individualistic societies: ties between individuals are loose, individual achievement is highly valued. -Collective societies: ties between individuals are tight, people are born into collectives (extended families) and everyone is supposed to look after the interests of his or her collective.

Power Distance

(3) Theory of how a society deals with the fact that people are unequal in physical and intellectual capabilities. -High power distance cultures: inequalities grow over time into inequalities of power and wealth. -Low power distance cultures: Try to play down such inequalities as much as possible.

Masculinity vs. Femininity

(3) Theory of the relationship between gender and work roles. -Masculine cultures: sex roles are sharply differentiated and traditional masculine values such as achievement and the effective exercise of power determine ideals. -Feminine Cultures: sex roles are less sharply defined, and little differentiation is made between men and women in the same job.

Confucian Dynamism

(3) Theory that Confucian teachings affect attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors.

Cross-Cultural Literacy

(3) Understanding how the culture of a country affects the way business is practiced. -A relationship may exist between culture and the cost of doing business.

Social Turmoil

(3) an inevitable outcome of cultural change. -As countries become economically stronger, cultural change is particularly common.

Group Cultures

(3)-Group is the primary unit of social organization -Discourages job switching between firms -Encourages lifetime employment systems -Leads to cooperation in solving business problems. -Might suppress individual creativity and initiative.

Western Societies

(3)-Individual achievement is common -Dynamism of the U.S. economy -High level of entrepreneurship -Creates lack of company loyalty

Confucianism

(3)-Practiced mainly in China -Teaches the importance of attaining personal salvation through right action. -High morals, ethical conduct, and loyalty to others are stressed. -3 key teachings: loyalty, reciprocal obligations, and honesty -May lead to lowering the costs of doing business in Confucian societies.

Hinduism

(3)-Practiced primarily on the Indian sub-continent. -Focuses on the importance of achieving spiritual growth and development (may require material and physical self denial) -Valued by their spiritual rather than material achievements.

Christianity

(3)-World's largest religion -Found throughout Europe, the Americas, and other countries settles by Europeans -Protestant Work Ethic (Max Weber 1804): hard work, wealth creation, and frugality is the driving force of capitalism.

Common Ethical Issues

(4) -Employment practices -Human rights -Environmental regulations -Corruption -Moral obligations of MNE's

Determinants of Ethical Behavior

(4) -Personal Ethics -Organization Culture -Unrealistic Performance Goals -Leadership -Decision-Making Processes

Straw Men Approaches

(4) 1. Friedman Doctrine 2. Cultural Relativism 3. Righteous Moralist 4. Naive Immoralist

To encourage ethical decision making, firms should:

(4) 1. Hire and promote people with a well grounded sense of personal ethics. 2. Build an organizational culture that places a high value on ethical behavior. 3. Make sure leaders within the business articulate the rhetoric of ethical behavior and act in a manner consistent with that rhetoric. 4. Develop moral courage. 5. Put decision making processes in place that require people to consider the ethical dimensions of business decisions.

How can managers make ethical decisions?

(4) 1. Identify which stakeholders a decision would affect and in what ways. 2. Determine whether a proposed decision would violate the fundamental rights of any stakeholders. 3. Establish moral intent. 4. Engage in ethical behavior. 5. Audit decisions and review them to make sure that they are consistent with ethical principles.

Ethical Strategy

(4) A course of action that does not violate business ethics.

Code of Ethics

(4) A formal statement of the ethical priorities of a business or organization.

Ethics

(4) Accepted principles of right or wrong that govern the conduct of a person, the members of a profession, and the actions of an organization.

External Stakeholders

(4) All other individuals and groups, other than internal stakeholders, that have some claim on business.

Universal Declaration of Human Rights

(4) An agreement that establishes basic principles that should be adheres to irrespective of the culture.

Naive Immoralist

(4) Approach that accepts ignoring ethical norms if others do so too.

Righteous Moralist

(4) Approach that one's own ethics are appropriate in all cultures. -Standards of ethics of the home country should be followed in foreign countries.

Cultural Relativism

(4) Belief that ethics are culturally determined, and a firm should adopt the ethics of the culture in which it is operating.

Kantian Ethics

(4) Belief that people should be treated as ends and never purely as means to the ends of others. (Immanuel Kant)

Social Responsibility

(4) Concept that businesspeople should consider the social consequences of economic actions when making business decisions.

Ethics Officers

(4) Ensure that: -All employees are trained in ethics -Ethics is considered in decision-making process -The company's code of conduct is followed

Utilitarian Approach

(4) Ethical approach that holds that the moral worth of actions is determined by their consequences. -Actions are desirable if they lead to the best possible balance of good consequences over bad. -Fails to consider justice.

Right Theories

(4) Ethical approaches that recognize that humans have fundamental rights that transcend national boundaries.

Veil of Ignorance

(4) Everyone is imagines to be ignorant of all his or her particular characteristics.

Justice Theories

(4) Focus on the attainment of just distribution of economic good and services. -Just Distributions: One that is considered fair and equitable.

Noblesse Oblige

(4) Honorable and benevolent behavior that is the responsibility of successful companies.

Stakeholders

(4) Individuals or groups that have an interest, claim, or stake in the company, in what it does, and in how well it performs.

Internal Stakeholders

(4) Individuals or groups who work for or own the business.

Organization Culture

(4) Norms and values shared by employees.

Convention on Combating Bribery of Foreign Public Officials in International Business Transactions

(4) OCED agreement to make the bribery of foreign public officials a criminal offense.

Tragedy of the Commons

(4) Occurs when a resource is held in common by all, but owned by no one, is overused by individuals, resulting in its degradation.

Moral Intent

(4) Place moral concerns ahead of other concerns in cases where either the fundamental rights of stakeholder or key moral principles have been violated.

Ethical Dilemmas

(4) Situation in which no available alternative seems ethically acceptable.

Business Ethics

(4) The accepted principles of right or wrong governing the conduct of businesspeople.

Friedman Doctrine

(4) The only social responsibility of business is to increase profits, so long as they company stays within rules of law.

Foreign Corrupt Practices Act

(4) U.S. law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions.

The most widely spoken language in the world is:

(RQ3) English

Which religion promotes the notion that a moral force in society requires the acceptance of certain responsibilities called dharma?

(RQ3) Hinduism

The group is the primary unit of social organization in:

(RQ3) Japan

Individual achievement, low managerial mobility, low company loyalty, entrepreneurial behavior. Which of the following is not characteristic of individualism?

(RQ3) Low managerial mobility

______ focuses on how society deals with the fact that people are unequal in physical and intellectual capabilities.

(RQ3) Power Distance

The basic social organization of a society is its:

(RQ3) Social Structure

Abstract ideas about what a group believes to be good, right, and desirable are called:

(RQ3) Values

What is a company's formal statement of ethical priorities called?

(RQ4) Code of ethics

Decision-making processes, leadership, personal ethics, national culture. All of the following expect _____ contribute to unethical behavior by international managers.

(RQ4) National Culture

According to _____, a company's home country standards of ethics are the appropriate ones to follow in foreign countries.

(RQ4) Righteous Moralist

______ recognizes that human beings have fundamental rights and privileges which transcend national boundaries and cultures.

(RQ4) Rights Theories

Human rights, trade regulations, environmental regulations, corruption Which is not an area where multinational firms are concerned about ethics?

(RQ4) Trade regulations

The _____ suggests that everyone is imagined to be ignorant of all his or her particular characteristics.

(RQ4) Veil of ignorance

Buddhism

-350 million followers -Stresses growth and the afterlife, rather than achievement in this world. -Does not support caste system -Does not emphasize wealth creation and entrepreneurial behavior

Islam

-World's second largest religion -Extends the underlying roots of Christianity to an all embracing way of life that governs one's being. -Associated with militants, terrorists, and violent upheavals, but really teaches peace, justice, and tolerance. -People do not own property, but only act as stewards for God. -Supportive of business, but business is practiced as prescribed.