INTERNATIONAL BUSINESS

MSc. Trần Thu Thủy

Chapter 3 Differences in
Culture
Learning Objectives
Explain what is meant by the culture of a
01 society

Identify the forces that lead to differences in

02 social culture

Identify the business and economic

03 implications of differences in culture

Recognize how differences in social culture

04 influence values in the workplace and demonstrate
an appreciation for the economic and business
implications of cultural change.
What is 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

What is values?
What is norms?
 Values and Norms
Values
Abstract ideas about what a group believes to be
good, right, and desirable.

Values form the bedrock of a culture

A society’s attitudes about individual freedom,
democracy, truth, justice, honesty, loyalty, social
obligations, collective responsibility, love, sex,…

Norms
Social rules and guidelines prescribe appropriate
behavior in particular situations

Two major categories: folkways and mores.

 Folkways and Mores
Folkways
Routine conventions of everyday life.
Social conventions concerning things such as the
appropriate dress code in a particular situation, good
social manners, eating with the correct utensils,
neighborly behavior.

Violation of folkways is not normally a serious matter.

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

Much greater significance than folkways. Violating

mores can bring serious retribution.
Including factors as indictments against theft,
adultery, incest, and cannibalism.
 A society is a group of people that share a common set
Culture, values and norms; in other way, people who are bound
together by a common culture.
Society, and
the Nation- Nation-state may contain a single culture or several
culture.

state
A culture may exist in many countries. For example:
Islamic culture

Culture is not static. Technological progression and

globalization trend are motivations for culture change.
The Determinants of Culture
Political
Religion
Philosophy

Social Culture Norms Economic

Structure and Value Philosophy
Systems

Language Education
Social Structure
 Social Structure

The degree to which the basic unit of

social organization is the individual, as
opposed to the group.

The basic social

02
organization of a
society including 2
01 dimensions

The degree to which a society is

stratified into classes or castes.
 Individuals and Groups
The Individual
The individual is the basic unit building
block of social organization; emphasize
individual achievement (Ex: USA)
Emphasizing individual efficiency (in several
Western society) brings benefits or not?

The Group
The group is the primary unit of social organization;
emphasizing members of a team, and team
achievements (Ex: Japan)
Emphasizing group efficiency (in several Eastern
society) brings benefits or not?
 Social Stratification

Social Strata
Hierarchical social categories often based on
family background, occupation, and income.

Social Mobility
The extent to which individuals can move out of
the strata into which they are born. Social mobility
varies significantly from society to society.
 Social Stratification

Caste System

A closed system of 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.

Class System
A system of social stratification in which the position a
person has by birth can be changed through his or her
own achievement or luck; social mobility is possible.
 Social Stratification
The Stratification of a society is significant if it affects the operation of business
organizations

• In American society, high degree of social mobility + extreme emphasis on

individualism => limit the impact of class background on business operations.
• In Great Britain, low degree of social mobility + differences between classes =>
emergence of class consciousness.
Class consciousness: a condition where people tend to perceive themselves in
terms of their class background, and this shapes their relationships with members of other
class.
 Traditional hostility between upper-middle-class managers and their working-class
employees
 Lack of cooperation, high level of industrial disputes, high production cost
 More difficult for companies to establish a competitive advantage in the global
economy.
Language
Spoken Language

Language shapes the way people

perceive the world, it also helps define
culture.
Unspoken Language

Refers to nonverbal communication

 Play a key role in
Education a society
(establish and
develop)
Formal education is the medium competitive
through which individuals learn many advantage of a
of language, conceptual, and nation
mathematical skills Ex: Japan

Implications for IB activities

The availability of a pool of skilled

and educated workers seems to be
a major determinant of the likely
economic success of a country.
Religious and Ethical
Systems
 Religion

A system of shared beliefs and rituals

that are concerned with the realm of the
sacred
Ethical Systems

A set of moral principles, or values, that are

used to guide and shape behavior.
 Most widely practiced religion in the world
Christianity
Vast majority live in Europe and the Americas.

Economic implications: emphasize on the

importance of hard work and wealth creation

Combination of hard work and the accumulation of

capital, which could be used to finance investment
and expansion => pave way for the development
capitalism.
 Second largest of the world’s major religions
Islam The central principle: there is but the one true omnipotent
God – requires unconditional acceptance of the
uniqueness, power, and authority of God.
Other major principles: honoring and respecting parents,
respecting the rights of others, being generous but not a
squanderer, avoiding killing except for justifiable causes,
not coming adultery, dealing justly and equitably with
others, being pure heart and mind….

Economic Implications: social justice, criticize who earn

profit through the exploitation of others.
Hinduism Hindus believe in reincarnation, or rebirth into a
different body, after death. Hindus also believe in
karma, the spiritual progression of each person’s
soul.

Economic implications: do not encourage the

kind of entrepreneurial activity in pursuit of
wealth creation; traditional Hindu values
emphasize on individuals’ spiritual achievements.
Buddhism According to Buddhism: suffering originates in people’s
desires for pleasure.

Emphasizing right seeing, thinking, speech, action, living,

effort, mindfulness, and meditation.

Economic Implications: do not emphasis on wealth

creation, entrepreneurial behavior, and caste system,
individuals are free to work, communicate with other
individuals in different class systems.
Confucianism Confucianism was the official ethical system of China
It teaches the importance of attaining personal salvation
through right action
Emphasis: high moral and ethical conduct and loyalty to
others.

Economic Implications: Loyalty, honesty.

Culture and the Workplace
 Hofstede’s cultural dimensions
Individualism vs
Power distance
Collectivism

Hofstede’s Masculinity
Indulgence vs cultural vs
restraint dimensions
Femininity

Long vs short Uncertainty

term orientation avoidance
 POWER DISTANCE

Focusing on how society deals with the fact that people are
unequal in physical and intellectual capacities.

High power distance cultures were found in countries that let

inequalities grow over time into inequalities of power and wealth.

Low power distance cultures were found in societies that tried to

play down such inequalities as much as possible.
 INDIVIDUALISM VERSUS COLLECTIVISM

Individualism vs collectivism: focused on the relationship

between the individual and his or her fellows

=> In individualistic societies: the ties between individuals were

loose, individual achievement and freedom were highly valued.

=> In collectivistic societies: the ties between individuals were

tight
 MASCULINITY VERSUS FEMINITY

Look at the relationship between gender and work roles.

In masculine culture: sex roles were sharply differentiated and

traditional “masculine values”, such as achievement and the
effective exercise of power, determined cultural ideas.

In feminine culture: sex roles were less sharply distinguished, and

little differentiation was made between men and women in the same
job.
 UNCERTAINTY ADVOIDANCE

• Measuring the extent to which different cultures socialized their

members into accepting ambiguous situation and tolerating uncertainty.

• High UA cultures: place a premium on job security, career patterns,

retirement benefits, have a strong need for rules and regulations

• Low UA cultures: greater readiness to take risks and less emotional

resistance to change.
 LONG TERM AND SHORT TERM ORIENTATION
(CONFUCIAN DYNAMISM)

It captures attitudes toward time, persistence, ordering by status,

protection of face, respect for tradition, and reciprocation of gifts and
favors

INDULGENCE VS RESTRAINT

The extent in which members of society try to control their own desire
and impulsiveness
 CULTURE CHANGE

• 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
Thank You!