To change customs is a difficult thing.

—LEBANESE PROVERB

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INTRODUCTION

Culture is an integral part of the businesses operating

environment.
 Successful international managers need cross-cultural literacy
- an understanding of how cultural differences across and within
nations can affect the way in which business is practiced
 A relationship may exist between culture and the costs of
doing business in a country or region

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WHAT IS CULTURE?

Culture is 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
-values are abstract ideas about what a group believes to
be good, right, and desirable
-norms are the social rules and guidelines that prescribe
appropriate behavior in particular situations
Society refers to a group of people who share a common
set of values and norms

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WHAT IS CULTURE?
Culture reflects learned behavior that is transmitted from one member
of a society to another.
Some elements of culture are transmitted intergenerationally, as when
parents teach their children table manners. Other elements are
transmitted intergenerationally, as when seniors educate incoming
freshmen about a school’s traditions. The elements of culture are
interrelated.
◦ For example, Japan’s group-oriented, hierarchical society stresses harmony
and loyalty, which has historically translated into lifetime employment and
minimal job switching. Because culture is learned behavior, it is adaptive;
that is, the culture changes in response to external forces that affect the
society.
Culture is shared by members of the society and defines the
membership of the society. Individuals who share a culture are
members of a society; those who do not are outside the
boundaries of the society.

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CULTURAL ORIENTATIONS
International businesses adopt an attitude towards foreign
cultures
◦ Polycentrism: control is decentralized so regional managers
can conduct business in a local manner.
◦ Ethnocentrism: belief that ones own culture is superior and
ignores important factors.
◦ Geo-centrism: a hybrid of polycentrism and ethnocentrism,
the middle ground.

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CROSS CULTURAL BLUNDERS

 When PepsiCo advertised Pepsi in Taiwan with the ad “

Come Alive with Pepsi” they had no idea that it would be
translated into Chinese as “‘ Pepsi Brings your Ancestors
Back from the Dead”.

 American Motors tried to market its new car, the Matador,

based on the image of courage and strength. However, in
Puerto Rico the name means "killer" and was not popular
on the hazardous roads in the country.

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 CULTURAL AWARENESS
Cultural awareness involves continually developing one’s awareness
of one’s own and others' cultures to assist in the performance of
professional duties.

Cultural awareness can be improved

◦ Research descriptions of specific cultures
◦ Observe behavior
◦ Study foreign market directly
◦ Learning about traditional beliefs
◦ Meanings Of Words, phrases, gestures, customs,
◦ Significant Days Or Holidays or activities and rituals.

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DETERMINANTS OF CULTURE

People belong to national, ethnic, professional, and

organizational cultures.

◦ Points of reference:
◦ National
◦ Geographic
◦ Language
◦ Religion

International business often changes cultures

2-5
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CULTURE -SOCIETY - NATION STATE
◦ Each nation has certain human, demographic, and behavioral Characteristics
that give it a national identity.
◦ There is not a strict one-to-one relationship between a society and a nation
state
◦ Nation-states are political creations that can contain one or more cultures
◦ Similarly, a culture can embrace several nations

◦ Thus , National boundaries act as proxy for culture.

 People share values, language, and race
 Laws governing business apply along national lines.

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CULTURE -SOCIETY - NATION
STATE
Problems using a country-by-country approach
Not everyone in a country shares the same culture: subculture
Certain cultural attributes may link groups from different nations more
closely than certain groups within nations: occupational culture

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Language

 Language – A systematic means of communicating

– Spoken language
– Unspoken language

 When people from different areas speak the same language,

culture spreads more easily.

 A common language within countries is a unifying force.

 Among nations that share a same language, commerce is
easier.

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THE WORLD’S MOST WIDELY SPOKEN LANGUAGES

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Language

Language organizes the way members of a society think about

the world. It filters observations and perceptions and thus affects
unpredictably the messages that are sent when two individuals
try to communicate.
Countries with more than one language often have more than
one culture
 The most widely spoken language in the world, but Chinese is
the mother tongue of the largest number of people
 English is also becoming the language of international
business, but knowledge of the local language is beneficial, and
in some cases, critical for business success

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 Spoken Language Problems
Translation problem: poor or too literal translation are often
causes problem
KFC’s Finger Lickin’ Good
Eat your fingers off (China)
Pillsbury’s Jolly Green Giant
Intimidating green ogre (Saudi Arabia)
Words mean different in different context: “Old Friend”->
Chinese -> former
Same official language can also create barrier:
USA: turnover, sales-> UK: redundancy, turnover

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Language Strategies

Get references for translators

Ensure the translator is familiar with technical vocabulary
for the business
Do a back translation
Use simple words
Avoid slang
Repeat words and ask questions
Expect the extra time communication will take

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Unspoken/Silent Language

 Color Associations : White-> Death

-> Bridal Dress
 Perception of time and punctuality:
Be tolerant of differing perceptions of time
 Body language and gestures:
Pragmatics – the cultural interpretations of words, gestures
etc.
 Conversational Distance:
Proxemics – or the distance between people during
conversation.
 The language of material goods (to signal status and
power)

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Proxemics
Personal Customary
Business distance
18” discussion for
Intimate distance business
18” to 4’ discussion
Personal distance
Social distance 4’ to 8’
Public 8’ to 10’
distance

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How Do Religious And Ethical Systems Differ?
 Religion - shared beliefs and rituals that are
concerned with the realm of the sacred
1. Christianity
2. Islam
3. Hinduism
4. Buddhism
5. Confucianism influences behavior and culture
 Ethical systems - a set of moral principles, or
values, that are used to guide and shape
behavior

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How Do Religious And Ethical Systems Differ?
World Religions

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SOCIAL STRUCTURE?

 Social structure - a society’s basic social

organization
 A group is 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
individuals are involved in families, work groups, social
groups, recreational groups, etc.

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WHAT IS SOCIAL
STRATIFICATION?

All societies are stratified on a hierarchical basis into social

categories, or social strata
1. Social mobility - the extent to which individuals can move
out of the strata into which they are born
◦ caste system
◦ class system
2. The significance attached to social strata in business
contacts
◦ class consciousness

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Social Stratification
Individuals status with the culture
 Managerial groups may be highly valued
 Employees may be valued less
Ascribed group memberships
 Gender, family, age, caste, and ethnic, racial or national
origin
Acquired group memberships
 Religion, political affiliations, and professional and other
associations

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WHAT IS THE ROLE OF EDUCATION IN
CULTURE?

Formal education is the medium through which individuals

learn many of the language, conceptual, and mathematical
skills that are indispensable in a modern society
◦ important in determining a nation’s competitive advantage
◦ Japan’s postwar success can be linked to its excellent
education system
◦ general education levels can be a good index for the kinds
of products that might sell in a country
◦ ex. impact of literacy rates

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 CULTURE & WORKPLACE
 Different countries have different work related values.
 Management process and practices, motivation factors, information
processing processes all of these usually varies across culture.
Hofstede’s Theory of Culture
 He conducted the research during 1967-1973 as an IBM Psychologist and
included 100,000 employees of IBM in 40 countries.
 The purpose of the research was to identify difference of employees’
values and attitudes.
 The theory helped to compare and contrast between the nations. This is
the benchmark for other cultural theories.

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FOUR DIMENSIONS

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Power Distance
Describes how a society deals with inequalities in
power that exist among people.
In the cultures which score highly on power distance ,
managers tend to have superiority over their subordinates,
and exercise of this power is accepted.
Examples
•Poorer nations are characterized by high power distance
combined with collectivism.
•While richer Western countries which are individualist
and low on power distance.

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Power Distance

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Uncertainty Avoidance

Refers to the extent to which people can tolerate risk

and uncertainty in their lives.
In Hofstede's model, Greece tops the UAI scale with 100,
while Singapore scores the lowest with eight.
Therefore, during a meeting in Greece, you might be keen
to generate discussion, because you recognize that there's
a cultural tendency for team members to make the safest,
most conservative decisions, despite any emotional
outbursts. Your aim is to encourage them to become more
open to different ideas and approaches, but it may be
helpful to provide a relatively limited, structured set of
options or solutions.
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Uncertainty Avoidance

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Individualism – Collectivism
This refers to the strength of the ties that people have to others within
their community.
A high IDV score indicates weak interpersonal connection among those
who are not part of a core "family." Here, people take less responsibility
for others' actions and outcomes. Members of an individualist society
enjoy the challenge of hard work but demand alongside this the right to
a private life. (North America, Western Europe)
In a collectivist society, however, people are supposed to be loyal to the
group to which they belong, and, in exchange, the group will defend
their interests. The group itself is normally larger, and people take
responsibility for one another's well-being. The collective societies
emphasize the right of everybody to share access to good training and
remuneration. (Latin America Africa)

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Individualism – Collectivism

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Masculinity versus Femininity
This refers to the distribution of roles between men and
women. In masculine societies, the roles of men and
women overlap less, and men are expected to behave
assertively. Demonstrating your success, and being
strong and fast, are seen as positive characteristics.
In feminine societies, however, there is a great deal of
overlap between male and female roles, and modesty is
perceived as a virtue. Greater importance is placed on
good relationships with your direct supervisors, or
working with people who cooperate well with one
another.

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Masculinity versus Femininity

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Masculinity versus Femininity

Japan has the highest MAS score of 95, whereas Sweden has the
lowest measured value of five. Therefore, if you open an office
in Japan, you should recognize you are operating in a hierarchical,
deferential and traditionally patriarchal society. Long hours are the
norm, and this, in turn, can make it harder for female team
members to gain advancement, due to family commitments.

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 The Fifth Dimension

Hofstede added a fifth dimension -- Long-Term vs. Short-Term orientation

This dimension describes the degree to which people and organizations defer
gratification to achieve long-term success.
Long-term orientation tends to take the long view to planning and living,
focusing on years and decades.
 Examples- traditional Asian cultures-China, Japan, and Singapore, which partly
base these values on the teachings of the Chinese philosopher Confucius.
 Short-term orientation - the U.S. and most other Western countries. The U.S.
has a short-term orientation. This is reflected in the importance of short-term
gains and quick results (profit and loss statements are quarterly, for example). It
is also reflected in the country's strong sense of nationalism and social standards.

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 Long-Term Vs. Short-term
Orientation

Long-term orientation and culture Source: Adapted from Hofstede (2001, pp. 360-7).
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Long-term orientation and culture Source: Adapted from Hofstede (2001, pp. 360-7).
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Obtaining Information

 In High-context Cultures (e.g. Asian cultures), much

information is conveyed nonverbally, often through
shared understanding. In business dealings, personal
relations are important in high-context cultures; an
example is guanxi in China.

 In Low-context Cultures (e.g. the US), Culture which relies

on written or spoken words for communication. Written
contracts and formal terms are more important.

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 Cultural Change

Culture evolves over time, although changes in value

systems can be slow and painful for a society

Social turmoil is an inevitable outcome of cultural change

As countries become economically stronger, cultural change

is particularly common

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 Implications For Managers
Societies differ because their cultures vary
Cultures vary because of profound differences in social
structure, religion, language, education, economic philosophy,
and political philosophy

There are three important implications that flow from these

differences:
1. There is a need to develop cross-cultural literacy
2. There is a connection between culture and national
competitive advantage
3. There is a connection between culture and ethics in decision
making
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