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Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 2-1
International Business Environments and Operations,
13/e
Part Two Comparative Environmental
Frameworks
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 2-2
Chapter TwoThe Cultural
Environments Facing Business
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Chapter Objectives• To understand methods for learning about
cultural environments• To analyze the major causes of cultural
difference and change• To discuss behavioral factors influencing
countries’ business practices• To understand cultural guidelines for companies
that operate internationally
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Culture
Learned norms based on values,attitudes, and beliefs of a group of people
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Cultural Diversity
A means of gaining global competitive advantage by bringing together people of diverse backgrounds and experience
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Cultural Collision• Occurs in international business when:
A company implements practices that are less effective
Employees encounter distress because of difficulty in accepting or adjusting to foreign behaviors
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Cultural Factors Affecting International Business Operations
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Cultural Awareness• Problem areas that can hinder managers’
cultural awareness… Subconscious reactions to circumstances The assumption that all societal subgroups
are similar
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The Idea of a “Nation” – Delineating Cultures
The nation is a useful definition of society because:
• Similarity among people is a cause and an effect of national boundaries
• Laws apply primarily along national lines
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The Nation as a Cultural Mediator• A national culture must be flexible enough to
accommodate the diversity of various subcultures, ethnic groups, races, and classes
• Yet every nation boasts certain human, demographic, and behavioral characteristics that constitute its national identity
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Country-By-Country Analysis• Managers find this difficult to implement
because: Subcultures exist within nations Similarities link groups from different countries
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How Cultures Form and Change• Change by Choice
Reaction to social and economic situations• Change by Imposition
Imposed introduction into a culture of certain elements from an alien culture
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Language as Both a Diffuser and Stabilizer of Culture
A common language within a country is a unifying force
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Major Language Groups: Population and Output
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Religion As A Cultural Stabilizer
Centuries of profound religiousinfluence continue to play a major role in shaping cultural values and behavior
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Behavioral Practices Affecting Business• Issues in Social Stratification
Social ranking is determined by:• Factors pertaining to you as an individual• Factors pertaining to your affiliation with
certain groups
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Group Affiliations Can Be:• Ascribed or Acquired
Include those based on gender, family, age, caste, ethnic, racial, or national origin
• A reflection of class and status Include those based on religion, political
affiliation, and professional and other associations
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Social Stratification and Employment Practices
• Performance Orientation• Open and Closed Societies• Gender-Based Groups• Age-Based Groups• Family-Based Groups
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Work Motivation• Materialism and Motivation• Expectation of Success and Reward• Performance and Achievement: The Masculinity-
Femininity Index• Hierarchies of Needs
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Hierarchy of Needs
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Relationship Preferences• Power Distance• Individualism Versus Collectivism
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Risk-Taking Behavior• Uncertainty Avoidance• Trust• Future Orientation• Fatalism
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Information and Task Processing• Perception of Cues• Obtaining Information: Low Context versus High
Context Cultures• Information Processing• Monochronic Versus Polychronic Cultures• Idealism Versus Pragmatism
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Communication• Spoken and Written Language• Silent Language• Distance• Time and Punctuality• Body Language• Prestige
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Body Language Is Not A Universal Language
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Degree of Cultural DifferencesCultural Distance
When a company moves within a cluster of culturally similar countries, it should expect to encounter fewer cultural differences and to face fewer cultural adjustments.
Cultural FrictionA business interaction may be viewed negatively because of possible changes in power relationships and the sovereignty that sets countries apart.
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Company and Management Orientations• Polycentrism
belief that business units in different countries should act like local companies
• Ethnocentrism conviction that one’s own culture is superior to that of
other countries• Geocentrism
requires companies to balance knowledge of their own organizational cultures with both home and host country needs, capabilities, and constraints
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Strategies for Instituting Change• Value Systems• Cost-Benefit Analysis of change• Resistance to too much change• Participation• Reward Sharing• Opinion Leadership• Timing• Learning Abroad
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Future: What will happen to national cultures?
• Scenario 1. New hybrid cultures will develop and personal horizons will
broaden• Scenario 2.
Outward expressions of national culture will continue to become homogeneous while distinct values will remain stable
• Scenario 3. Nationalism will continue to reinforce cultural identity
• Scenario 4. Existing national borders will shift to accommodate ethnic
differences
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 2-30
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in
any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United
States of America.