UNIT-III: SOCIO-CULTURAL ENVIRONNENT

Population & its Growth Rate Education Levels, Age Distribution and Life Expectancy Rates
Family Size and Structures, Gender Distribution Religion, Nationality and Beliefs and Minorities
Social classes and Lifestyle, Average Disposable Income

POPULATION GROWTH

India and many other third world war countries are now passing through the phase of
population explosion. It is being argued that this situation has arisen because economic
development in these countries has failed to maintain pace with population growth.

According to the demographic theory of transition every country passes through three stages ;

 In first stage both birth rate and death rate is high

 In second stage rapid growth of population because despite substantial reduction in the
morality rate there is no corresponding decline in the birth rate.

 In the third stage the birth rate declines significantly and thus the rate of population
growth remains low

SIZE OF POPULATION;

As far as the size of population is concerned, India ranks second in the world next to china.
India Landscape is just 2.4 % of total world area, whereas its population is nearly 16.85% of the
world population. India accounted for 19.96% of the estimated population of developing
countries in 2001. These facts clearly explain the pressure of population on the land in this
country is very high.

India’s population according to the census of 2001 was 102.9 crore. It is estimated to have
risen to 111.2 crore in 2006. According to the census of 1901, the population of the country was
23.83 crore. Since then, in a period of 100 years, the population of the country is very high and
alarming and also the national income of India is eventually or less than 1.2% of the world
income.
RATE OF POPULATION GROWTH;

Since independence there has been a rapid decline in the mortality rate, particularly due to
control of epidemics and improved medical facilities. The magnitude of fall in the mortality rate
is far greater than what was expected in early 1950s. The planning commission and the census
commissioner had envisaged a continuation of the 1941-51 trends in 1951-61. Therefore when
the actual rate of population growth out to be about 1.96 % in 1951-61, the planners were taken
by surprise. This unexpected development caused great anxiety to the government. The rate of
population growth was 2.22% per annum during 1961-71 which was still higher than that in the
preceding decade.

The census of 2001 has shown that the rate of population growth remained as high as 1.93%
per annum during the 1990s. Hence this country even now remains in the second stage of
demographic transition and is encountering a population explosion. It is both a cause and a
consequence of underdevelopment of the country.

THE POPULATION GROWTH AND ECONOMIC DEVELOPMENT:

India and many other Third World Countries are now passing
through the phase of population explosion. It is being argued that this situation has arisen
because economic development in these countries has failed to maintain pace with population
growth. The thrust of this argument is that since rapid growth of population causes poverty and
proves to be a barrier to development these countries should take care of their population growth
if they seriously wish to solve their poverty problem and put their economy on the path of
economic development.

Three stages of Demographic Transition:

According to the theory of demographic transition, every country

passes through three stages of demographic transition. These stages are empirically verifiable.

 1st stage both birth and death rates are high. Hence the population
remains more or less stable (or)
  In the first stage of demographic transition, high rate in matched by
equally high death rate, and thus population stable over a long
period.
 2nd stage of demographic transition is characterized by rapid
growth of population because despite substantial reduction in the
mortality rate there is no corresponding decline in the birth rate.
 3rd stage of demographic transition the birth rate declines
significantly and thus the rate of population growth remains low.

Size of population:

 As far as the size of population is concerned, India ranks second in

the world next only to china. India’s landscape in just 2.4 per cent
of the total world area, Whereas its population is nearly 16.85
percent of the world population. India accounted for 19.96 percent
of the estimated population of developing countries in 2001.
 These facts clearly indicate that “ the pressure of population on the
land in this country is very high”
 How alarming is the situation in this country can be easily
followed from the fact that the national income of India is
presently even less than 1.2 percent of the total world income.
 “India’s population according to the census of 2001 was 102.90
cr”. It is estimated to have risen to 111.2 cr in 2006.
 According to census 1901 the population of the country was 23.83
cr. Since then, in a period of 100years,the population of the
country increased by 78.87 cr .
 This, if viewed in the context of a relatively slow economic
growth is really an alarming situation. However the population has
not increased in this country at a uniform rate.
Rate of population growth:

 Since independence there has been a rapid decline in the mortality

rate, particularly due to control of epidemics and improved medical
facilities.
 The magnitude of fall in the mortality rate is far greater than what
was expected in the early 1950’s.
 The planning commission and the census commissioner had
envisaged a continuation of the 1941-51 trend in 1951-
61.therefore, when the actual rate of population growth turned out
to be about 1.96 percent in 1951-61, the planner were taken by
surprise.
 This unexpected development caused great anxiety to the
government. the rate population growth was 2.22 percent annum
during 1961-71 which was still higher than that in the preceding
decade.
 The census of 2001 has shown that the rate of population growth
remained as high as 1.93 percent per annum during 1990’s.hence
this country even now remains in the second stage of demographic
transition and is encountering a ‘population explosion’. It is both a
cause and a consequence of underdevelopment of the country.

Birth and Death Rates:

 Population trends are function of not only birth and death rates, but
also of the levels and direction of migration.Since the Indian
migration is not a significant factor, we shall not consider it.
 A mere perusal makes it clear that from 1951 to 2006 there was
only some decline in the birth rate. In the same period the death
rate has however declined significantly.
  In the second decade of the twentieth century, infant mortality rate
was 218 per 1000 live births whereas in 2006,it was 57 per 1000
live births

Causes of the rapid growth of population:

Broadly speaking there are only three possible causes of an increase in the
population of a country.

1. A high birth rate

2. A relatively lower death rate

3. Immigration ( India’s population has not increased much due to

immigration)

 In india the population has rapidly increased leading to population

explosion. Factors leading to steady decline in the death rate while birth
rate remained high.

Causes of decline in the mortality rate:

 The causes of death is not generally accurately reported, and it is thus

difficult to say as to what factors brought down the death rate since
independence.
 Nevertheless from the survey data and the studies of village and urban
areas it is possible to identify at leastsom factors which have contributed
to the decline of mortality during the past few decades.
Elimination of famines:

Recurrence of famines in india under the british was a major cause of high
mortality rate. Since independence the situation has considerably improved. During the 1970s
and 1980s the government capacity to cope with the condition created by drought was put to test
several times. Lately in 2002-03 when the production of foodgrains has declined by about 13.6%
as compared to that in 2001-02 the government faced the cries without food imports as it could
gear up its distribution system to meet challenges.

Control of epidemics and decline in the incidence of malaria and tuberculosis:

1.Cholera and small pox were the two major causes of epidemics before
independence. Now small pox is completely eradicated and cholera is very much under control.
consequently the mortality rate has registered some decline.

2. In the late 1930s when death rate was around 31 per thousand people,
malaria accounted for 16%of total death .Now overall death rate is 8.0 and ”a substantial share of
the decline in mortality since world war II must be attributed to malaria control which saved
millions of lives not only from malaria but also from diseases which afflicted those whose
defences malaria had lowered”.

Other factors:

1.Elimination of famines control of epidemics and reduction in the

incidence of lethal diseases like malaria and tuberculosis do not fully explain the decline in
mortality during past five years decades. But there is no much information about other factors.
Since independence there has been no visible improvement in the nutrition level of the people.

2. poverty is widespread and nearly 35%of the people subsists under sub-
human living condition. however supplies of pure drinking water have improved both urban and
rural areas and they are believed to have made some impact of mortality. Little is known about
sanitation and hygiene in cities or villages but surely efforts in these direction however limited
they may be must have helped in lowering down the mortality rate.
 3. Further spread of education and expanded medical facilities particularly
immunization againt various preventable diseases must have reduced the incidence of various
diseases though no concrete estimates of their impact on the mortality are available. In future
level of mortality in India will probably improved.

Causes of the high birth rate:

The birth rate is still high in India and the expectations that it would
decline significantly as a result of family planning programme have been belied. Excepting in the
state of kerala,tamilnadu and goa, birth rate has not declined significantly in the country during
the last five decades because a number of economic and social factors continue to favour high
fertility.

 Economic factor
 Social factor

Economic Factor:

Economic environment of a country influences human behaviour to a great extent.

Even fertility has its basis in the economic life of the country.these economic factors,viz., the
occupational distribution of the population, the extent of urbanization and the spread of
poverty,have considerable bearing on the birth rate of the country.We shall examine how these
factors have operated in this country and have not allowed any spectacular decline in
fertility.Even as last as 2005 the total fertility rate remained as high as 2.9 .during the three
declades since 1971 fertility per women in India probably declined by nearly 50%.According to
Leela Visaria, ”this is not poor progress”.

 Predominance of Agriculture
 Slow urbanization process and predominance of village
 Poverty
Predominance of Agriculture:

In agrarian societies children have never been considered an economic

burden.In India, where techniques of production in agriculture are generally primitive ”the
rhythm of work corresponds to rhythm of nature and is uneven. Periods if intense work alternate
with periods of low activity. Harvesting, weeding and sowing times-covering over half the year-
are the peaks of productive activity corresponding to an acute need of labour”. It is, in fact in this
period that child labour is required in agriculture.

Slow urbanization process and predominance of village:

The proportion of urban population in india in 2001 was 27.78% as

against 17.62%in 1951. Due to staggering industrialization, the process of urbanization has been
slow in this country, and it has failed to generate social forces which usually bring down the birth
rate.

Robert Cassen had noted this fact in the late 1960s.His observations are
even now relevant as the situation has not changed since then.cassen had remarked,”urbanization
which figures importantly in the theory of demographic transition does not yet appear to be
having much effect on overall birth rate.The urbanization which taken place in India has not been
accomplished by the types of social change which favour lower birth rates. Indeed the social
system and family structure of rural life seem to survive transplantation to the town or city quite
remarkably, according to sociological studies”.

Census data reveal that fertility is somewhat lower in cities than in the
countrysite but it is a consequence of mainly the high male-female ratio in cities. Moreover,
fertility differentials between cities rural areas are not very significant. Further, according to
pravin visaria,”in the context of the need to accelerate decline in fertility, it does not seem a
feasible option to adopt conscious policies to promote urbanization. The processes underlying
urbanization are not easily amenable to state intervention, particularly in view of the severe
resource crunch. At the same time,the experience of SriLanka and Thailand demonstrates that a
low level of urbanization is not,per se, a hindrance to decline in fertility”.
Poverty:

Poverty in underdeveloped countries usually results in high fertility. Mahmood Mamdani

argues,”People are not poor because they have large families. Quite the contrary, they have
large families because they are poor”.Let us now understand the economic rationale behind
high fertility.At a lower income level of the family the benefits having additional child to the
family generally excess the cost of his upbringing.Benefit accuruing to the family from child
taken the form of expected services, income and social security provided by the child.P.C.Joshi
is perhaps right in his assertion that in a “circumstance of economic insecurity the poorer classes
tend to associate economic security not with a reduction but with an increase in the number of
children. The poor have no other economic asset than their own labour and the more the
number of earners in the family,the more the amount of family earning.The lower survival rate
further reinforces the preference for children”.World development report 1984 has also noted,
“There are good reasons why, for poor parents, the economic cost of children are low. The
economic (and other) benefits of children are high and having many children makes
economic sense”.

Social Factors:

Contribution of social factor to the high birth rate is tremendous in this county.
Universality of marriage relatively lower age at the time of marriage religious and social
superstitions,joint family system, lack of education and a very limited use of contraceptives are
only a few important social factor which arrest significant decline in fertility. Let us now
examine these factor in some detail.

 Near Universality of marriage

 Lower age at the time of marriage
 Religious and social superstitions
 Joint family system
 Lack of education.
Near Universality Of Marriage:

Marriage is both a religious and a social necessity in India. The custom of

arranged marriage under which parents feel that marrying daughters is a social obligation result
in near universality of marriage. Presently in india by the age of 50 only 5 out of 1000 Indian
women remain unmarried. It is believed that with the spread of education, attitudes of people
towards marriage would change and an increased proportion ofwomen might then decide not to
marry at all. But in a slow moving society where education is also not spreading fast enough
prospects of this situation appearing soon are not bright.

Lower age at the time of marriage:

The relatively lower age at the time of marriage in the country is also
believed to be responsible for high fertility. N.C.Das on the basis of an empirical study has
claimed that women marrying between 20 and 24 have the same fertility, as those marrying
before 20. Only when the marriage age reaches 25 or over, some reduction in fertility occurs, In
India, since the average age of women at marriage is still around 18 years the fertility is bound to
remain high, particularly when other factor which could bring it down are non-existent.

Religious and social superstitions:

Most Indians on account of their religious and social superstitions desire

to have children having no regard for their economic conditions. Hindus in any case must have a
son, because according to their religion certain rites can be performed only by him and none else.
These irrational attitudes based on wrong social and religious norms laid down by manu and
others get reflected in the ideology in peasant cultures.

Joint Family System:

In India, where social relations in the countryside are still by and large
pre-capitalist, joint family system is very much common as it conforms to the concrete reality of
the time.

In cities however the process of its disintegration has started. The joint family system induces
young couple to have children though they may not be in a position to support them.
Lack of Education:

Illiteracy is widespread in India. According to the 2001 census,65.38% of the

population is literate in this country.the percentage of literacy among women is much lower i.e
54.16 %as compared to 75.85%among men . moreover whatever female literacy we now have in
this country is largely concentrated in urban areas and the incidence of female illiteracy is the
highest in large north Indian states (Uttar Pradesh, Bihar, Rajasthan, and Madhya Pradesh).

SOCIAL CLASS AND LIFESTYLE;

A social class is a large group of people who occupy a similar position in an economic system.
There are several different dimensions of social class, including:

1. Income
2. Wealth
3. Power
4. Occupation
5. Education
6. Race
7. Ethnicity

While defining social classes in the U.S. is difficult, most sociologists recognize four main
categories: upper class, middle class, working class, and the lower class. Let's examine these
concepts further.

DIMENSIONS OF SOCIAL CLASS

Income refers to earnings from work or investments, while wealth refers to all of those
assets an individual owns, such as cash, savings and checking accounts, stocks, bonds, real
estate, etc. minus outstanding debts. Most people make money from work, but for the wealthy,
much of theirs is inherited. As a result, wealth is distributed much more unevenly than income,
because wealth is typically passed down from generation to generation. In the United States,
wealth is an important source of power. The small number of people who control most of the
wealth can more easily shape the agenda of society

Work is considered an important dimension of social class as well. People commonly give
greater respect to those who have more prestigious occupations. In any society, those with high-
prestige occupations often belong to more privileged categories of people. When it comes to
occupational prestige, the highest-ranked occupations, such as physicians, dentists, and
engineers, are typically held by men. Women and people of color often dominate the less
prestigious occupations.

Likewise, education is an important dimension of social class. In fact, education is one of the
strongest predictors of occupation, income, and wealth later in life. Most better-paying white
collar jobs require a college degree, while most blue collar jobs require less schooling, and bring
less income and prestige).

Finally, it is argued that nothing affects social standing as much as being born into a
particular family. The family we are born into has a strong bearing on schooling, occupation, and
income. Likewise, race and ethnicity are links to social class in the United States as well

TYPES OF SOCIAL CLASSES OF PEOPLE

Lower Class;

The lower class is typified by poverty, homelessness, and unemployment. People of this class,
few of whom have finished high school, suffer from lack of medical care, adequate housing and
food, decent clothing, safety, and vocational training. The media often stigmatize the lower class
as “the underclass,” inaccurately characterizing poor people as welfare mothers who abuse the
system by having more and more babies, welfare fathers who are able to work but do not, drug
abusers, criminals, and societal “trash.”

Working class;

The working class are those minimally educated people who engage in “manual labor” with little
or no prestige. Unskilled workers in the class—dishwashers, cashiers, maids, and waitresses—
usually are underpaid and have no opportunity for career advancement. They are often called
the working poor. Skilled workers in this class—carpenters, plumbers, and electricians—are
often called blue collar workers. They may make more money than workers in the middle
class—secretaries, teachers, and computer technicians; however, their jobs are usually more
physically taxing, and in some cases quite dangerous.

Middle class

The middle class are the “sandwich” class. These white collar workershave more money than
those below them on the “social ladder,” but less than those above them. They divide into two
levels according to wealth, education, and prestige. The lower middle class is often made up of
less educated people with lower incomes, such as managers, small business owners, teachers,
and secretaries. The upper middle class is often made up of highly educated business and
professional people with high incomes, such as doctors, lawyers, stockbrokers, and CEOs.

UPPER CLASS

The upper‐upper class includes those aristocratic and “high‐society” families with “old money”
who have been rich for generations. These extremely wealthy people live off the income from
their inherited riches. The upper‐upper class is more prestigious than the lower‐upper class.

Wherever their money comes from, both segments of the upper class are exceptionally rich. Both
groups have more money than they could possibly spend, which leaves them with much leisure
time for cultivating a variety of interests. They live in exclusive neighborhoods, gather at
expensive social clubs, and send their children to the finest schools. As might be expected, they
also exercise a great deal of influence and power both nationally and globally.

AVERAGE DISPOSABLE INCOME;

Disposable income, also known as disposable personal income (DPI), is the amount of money
that households have available for spending and saving after income taxes have been accounted
for.
ATTITUDE TOWARDS PRODUCT QUALITY AND CUSTOMER SERVICE;

CUSTOMER ATTITUDE;

Customer Attitudes are a composite of three elements: cognitive information, affective

information and information concerning a consumer's past behavior and future intentions. In
other words, attitude consists of thoughts or beliefs, feelings, and behaviors or intentions towards
a particular thing, which in this case is usually a good or service. For example, you may have a
very positive view of a particular sports car (for example, you believe it performs better than
most), it makes you feel good, and you intend to buy it.

CUSTOMER LOYALTY AND CUSTOMER PERCEPTION

The consequence for companies is that they have to adapt their ways of competing for
customers. Traditionally, companies have focused their efforts of customer relationship
management on issues like customer satisfaction and targeted marketing activities like event
marketing, direct marketing or advertising. Although doubtless necessary and beneficial, these
activities are not longer enough. They narrow the relationship between company and customer
down to a particular set of contacts in which the company invests its efforts. Most likely this will
produce not more than a satisfied customer who is well aware of the companies offerings and has
a positive attitude towards them. However, a satisfied customer is not necessarily a loyal one

If a customer is satisfied that means that a product of service has met his expectations and that he
was not dissatisfied by it. Customer satisfaction is doubtlessly very important. It is the
precondition for repeat purchases and it prevents the customer from telling others about his
disappointing experiences. A loyal customer, however, is more than a customer who frequently
purchases from a company.

The difference is the emotional bond which links the customer so closely to the company that he
develops a clear preference for these products or brands and is even willing to recommend them
to others. Loyal customers truly prefer a product, brand or company over competitive offerings.
Thus loyalty goes beyond a rational decision for known quality or superior price-performance-
ratio. It is about the customers’ feelings and the customer perception about the brand or product.

When the customer makes his buying decision, he evaluates the benefits he perceives from a
particular product and compares them with the costs. The value a customer perceives when
buying and using a product or service go beyond usability. There is a set of emotional values as
well, such as social status, exclusivity, friendliness and responsiveness or the degree to which
personal expectations and preferences are met. Similarly, the costs perceived by the customer,
normally comprise more than the actual price. They also include costs of usage, the lost
opportunity to use an other offering, potential switching costs etc. Hence, the customer
establishes an equation between perceived benefits and perceived costs of one product and
compares this to similar equations of other products.

Based on this, customer loyalty can be understood as to how customers feel about a product,
service or brand and whether their perceived total investments with a it live up to their
expectations.The important point here is the involvement of feelings, emotions and perceptions.
In today’s competitive marketplace, these perceptions are becoming much more important for
gaining sustainable competitive advantage.

Impact factors on customer perception

Customer perception is influenced by a variety of factors. Besides the actual outcome – i.e. did
the product or service deliver the expected function and did it fulfil the customers need – the
whole process of consumption and all interactions involved are of crucial importance. In today’s
globalised information driven economy this can also comprise issues like

 How other customers or influencing groups perceive the product or brand

 The degree to which the customer feels the actual marketing campaign addresses the
most important issues
 Responsiveness and service quality of any affiliates, e.g. distribution partners
Customer perception is dynamic. First of all, with the developing relationship between customer
and company, his perceptions of the company and its products or services will change.

The more experience the customer accumulates, the more his perceptions will shift from fact-
based judgements to a more general meaning the whole relationship gains for him. Over time, he
puts a stronger focus on the consequence of the product or service consumption.

Moreover, if the customers’ circumstances change, their needs and preferences often change too.
In the external environment, the offerings of competitors, with which a customer compares a
product or service will change, thus altering his perception of the best offer around. Another
point is that the public opinion towards certain issues can change. This effect can reach from
fashion trends to the public expectation of good corporate citizenship. Shells intention to dump
its Brent Spar platform into the ocean significantly altered many customers perception of which
company was worth buying fuel from.

Positive effects of increasing market share on customer perception

 Increasing market share can send out positive signals by acting as an indicator of superior
quality that is recognised by more and more other customers. This effect is particularly
strong for premium priced products. Customers normally assume that a product must be of
exceptional quality if it can gain such an unexpected market success despite its high price.
 Many brands offer positive emotional benefits of using a product that is popular in the
markets.
 The value of a product or service can rise through increasing number of users of the same
product, e.g. number of members of an online community, better availability of software
for popular computer systems.

Negative effects of increasing market share on customer perception

 For premium and luxury products, customers may translate an increasing market share
into a loss of exclusivity and thus perceive it as less valuable.
 The quality of services may suffer if they are consumed by increasing numbers of users.
Diseconomies of scales and congestions can be observed with busy airports and many
 other services so that customers may look out for other providers that promise more timely
service and convenience.

The concept of customer perception does not only relate to individual customers in consumer
markets. It is also valid in business to business situations. For example, a competitor
benchmarking survey of a large industrial supplier revealed that the market leader, although
recognized for excellent quality and service and known to be highly innovative, was perceived as
arrogant in some regions.

If we take into consideration that there are about four other large players with a similar level of
quality and innovative ideas, this perceived arrogance could develop into a serious problem.
Customers here are well aware the main characteristics of all the offerings available at the
market are largely comparable. So they might use the development of a new product generation
of their own to switch to a supplier that can serve them not better or worse, but with more
responsiveness and understanding.

Companies have done a lot to improve customer satisfaction and customer relationships in the
past

Measuring customer perception

Any serious effort to manage customer perceptions starts with a good measurement system.
Companies must be truly willing to look at the whole process of interaction through the
customers eyes. For many companies, this requires a more or less extensive shift in mindset,
since most departments from development to sales will be involved.

Work and leisure

he concept “Leisure Time” has been defined such as: “free time as a result of temporary
exemption from work or duties”, “ freedom or spare time provided by the cessation of activites”,
“a state of mind which ordinarily is characterised by un-obligated time and willing optimism”,
“the condition of having one’s time free from the demands of work or duty”, “a time at one’s
own command that is free of engagements or responsibilities”. As seen in the given definitions,
the core meaning of the concept leisure time is related with the idea of “to be free of work
obligations”. Thus, the very idea related with leisure time is, it is defined only by “work”.
Another important point which should be emphasized is that leisure time is a granted right for a
person who has completed his/her obligation of work. Therefore, leisure time is a conditional
right.

On the other hand, defining “leisure time” as a free time period, is questionable. Hence, many
activites related with leisure time usage, can be associated with consumer culture, such as: going
on a holiday, shopping, watching TV and even hobbies. It means that, individuals who take a
part in the production are led to consumption, which, in turn, is another duty of the individuals to
keep the economic system alive. Hence, the leisure time has gained another implicit meaning
which is far from the traditional definitions: “an obligated time period to consume”. Therefore,
individuals continue to work for the economic system, not only by producing but by consuming
as well.

The purpose of this paper is to argue, by a theoretical analysis, that the concept leisure time is in
need to be redefined. Leisure time may still be defined as “to be free of work obligations”, but it
cannot be defined as “to be out of economic system’s control”.

NATIONALITY AND BELIEF

Culture, in the broadest sense, refers to how and why we think and function. It encompasses all
sorts of things—how we eat, play, dress, work, think, interact, and communicate. Everything we
do, in essence, has been shaped by the cultures in which we are raised. Similarly, a person in
another country is also shaped by his or her cultural influences.

Political, economic, and social philosophies all impact the way people’s values are shaped. Our
cultural base of reference—formed by our education, religion, or social structure—also impacts
business interactions in critical ways. As we study cultures, it is very important to remember that
all cultures are constantly evolving. When we say “cultural,” we don’t always just mean people
from different countries. Every group of people has its own unique culture—that is, its own way
of thinking, values, beliefs, and mind-sets. For our purposes in this chapter, we’ll focus on
national and ethnic cultures, although there are subcultures within a country or ethnic group.

Precisely where a culture begins and ends can be murky. Some cultures fall within geographic
boundaries; others, of course, overlap. Cultures within one border can turn up within other
geographic boundaries looking dramatically different or pretty much the same

Nationalities

A national culture is—as it sounds—defined by its geographic and political boundaries and
includes even regional cultures within a nation as well as among several neighboring countries.
What is important about nations is that boundaries have changed throughout history. These
changes in what territory makes up a country and what the country is named impact the culture
of each country.

In the past century alone, we have seen many changes as new nations emerged from the gradual
dismantling of the British and Dutch empires at the turn of the 1900s. For example, today the
physical territories that constitute the countries of India and Indonesia are far different than they
were a hundred years ago. While it’s easy to forget that the British ran India for two hundred
years and that the Dutch ran Indonesia for more than one hundred and fifty years, what is clearer
is the impact of the British and the Dutch on the respective bureaucracies and business
environments. The British and the Dutch were well known for establishing large government
bureaucracies in the countries they controlled. Unlike the British colonial rulers in India, the
Dutch did little to develop Indonesia’s infrastructure, civil service, or educational system. The
British, on the other hand, tended to hire locals for administrative positions, thereby establishing
a strong and well-educated Indian bureaucracy. Even though many businesspeople today
complain that this Indian bureaucracy is too slow and focused on rules and regulations, the
government infrastructure and English-language education system laid out by the British helped
position India for its emergence as a strong high-tech economy.

Even within a national culture, there are often distinct regional cultures—the United States is a
great example of diverse and distinct cultures all living within the same physical borders. In the
United States, there’s a national culture embodied in the symbolic concept of “all-American”
values and traits, but there are also other cultures based on geographically different regions—the
South, Southwest, West Coast, East Coast, Northeast, Mid-Atlantic, and Midwest.

Subcultures

Many groups are defined by ethnicity, gender, generation, religion, or other characteristics with
cultures that are unique to them. For example, the ethnic Chinese business community has a
distinctive culture even though it may include Chinese businesspeople in several countries. This
is particularly evident throughout Asia, as many people often refer to Chinese businesses as
making up a single business community. The overseas Chinese business community tends to
support one another and forge business bonds whether they are from Indonesia, Malaysia,
Singapore, or other ASEAN (Association of Southeast Asian Nations) countries. This group is
perceived differently than Chinese from mainland China or Taiwan. Their common experience
being a minority ethnic community with strong business interests has led to a shared
understanding of how to quietly operate large businesses in countries. Just as in mainland
China, guanxi, or “connections,” are essential to admission into this overseas Chinese business
network. But once in the network, the Chinese tend to prefer doing business with one another
and offer preferential pricing and other business services.

Organizations

Every organization has its own workplace culture, referred to as the organizational culture. This
defines simple aspects such as how people dress (casual or formal), how they perceive and value
employees, or how they make decisions (as a group or by the manager alone). When we talk
about an entrepreneurial culture in a company, it might imply that the company encourages
people to think creatively and respond to new ideas fairly quickly without a long internal
approval process. One of the issues managers often have to consider when operating with
colleagues, employees, or customers in other countries is how the local country’s culture will
blend or contrast with the company’s culture.
For example, Apple, Google, and Microsoft all have distinct business cultures that are influenced
both by their industries and by the types of technology-savvy employees that they hire, as well as
by the personalities of their founders. When these firms operate in a country, they have to assess
how new employees will fit their respective corporate cultures, which usually emphasize
creativity, innovation, teamwork balanced with individual accomplishment, and a keen sense of
privacy. Their global employees may appear relaxed in casual work clothes, but underneath there
is often a fierce competitiveness.