Culture in Global Business

CultureCulture refers to learned norms

based on the values, attitudes and beliefs of a group of people.

Or the acquired knowledge that people use to interpret experience and to generate social behavior. Culture is learned through education & experience and is passed from one generation to another generation.

Why managers need to study culture?To be successful in IB, managers

must understand the cultures of other countries and learn how to adapt to them.

To meet the challenge, managers need to broaden their perspective and make decision that reflect the needs & desire of those cultures.

MANAGERS Vs ETHNOCENTRISM : The belief that one’s way of

doing business or things is superior to that of others is Ethnocentrism & the managers need to fight against that. E.g NOKIA & TOYOTA.

Not adapting a product to a particular market’s special needs.

Filling the key positions in overseas with national managers.

Cultural factors:

Cultural awareness.Identification & dynamics of

Cultures.Behavioral practices affecting

business.Strategies for dealing with

cultural differences.

Culture Awareness :Since culture cannot be isolated

from such factors as economic & political condition, we have to accept that every national culture differ from country to country.

Every society has its own routines & rules, and even within given cultures towards the professional & organizational cultures.

Problem hinder Manager:Subconscious reactions to

circumstances.Assumption that all societal

subgroups are similar.

Solution: Can improve awareness & sensitivity of foreign soil by research on another culture & direct interaction with the people.

Identification & dynamics :

The Nation as a point of reference.

The nation is a useful definition because similarity among people is a cause & effect of national boundaries. Law also apply primarily along national line.

Manager find country-by-country analysis difficult because of subcultures and similarities link groups from different countries.

Culture Value system are set early in life but may change through

• Choice or imposition- Eg. Rural people choose for factory jobs and accordingly change some basic customs like regular working hours don’t allow the sort of social interaction.

Change by imposition or cultural imperialism involves the imposed introduction like forced change in law by an occupying country.

• Contact with other cultures

• Language as both a diffuser or stabilizer of culture

A common language within countries is a unifying force. The people of the world speak thousand of different languages, but only a few of them remain important in the dissemination of cultures. A significant portion of the world eg. speak English, French & Spanish. In those countries labeled ‘Regional’ the predominant language is not dominant where Japanese is dominant only in Japan. But China is the only place where people speak Mandarin because its important in IB since China comprises a lot of people.

• Religion as a cultural stabilizer

Most countries are home to people of various religious beliefs, but a nation’s culture is typically influenced most heavily by a dominant religion 7 shape customary practices in legal & business affairs. Eg. Southern Buddhism (Lamaism), Chinese (Confucianism, Taoism & Buddhism), Islam (Sunni & Shiah), Hinduism, Judaism, Christianity (Roman Catholic, Eastern Churches & Protestantism), Tribal & Traditional Religions.

Regional has two classification-

1. Countries in which the dominant language is not dominant anywhere e.g. Japan.

2. Countries in which several different languages are spoken e.g. India.

Behavioral practices affecting business :Issues in Social Stratification

(Ranking factor)The business practice entail

valuing member of managerial groups more highly than member of production groups. Eg. Promotion, Compensation & Staff Reduction, Individual characteristics (education & social connections) affects employment practices.

Group affiliation

Ascribed or AcquiredA reflection of class & statusPerformance orientationGender- Based GroupsAge-Based GroupsFamily-Based GroupsOccupation

Work MotivationNot surprisingly, motivated employees are more productive than those who are not. Eg. Latin America of strong work ethic. How & why people motivated to work

The desire for material wealth.The productivity/ Leisure Trade off

(Japan)Success & Reward across BorderAssertiveness (Masculinity-femininity)

IndexHierarchies of needs.

Relationship References

There are national variations in the preference for autocratic or consultative management. The work & ways of motivation are influenced by different cultural norms. E.g

Power distance (Superior & Subordinate)\

Individualism Vs CollectivismSituational Difference- The family

(China & Mexico, vertically and horizontally family)

Risk Taking Behavior

people in various cultures differ in their willingness to accept things the way they are & in their feelings about their control over their destinies. Behavior like

• Uncertainty Avoidance• Trust• Future Orientation• Fatalism

Communication

Cross-Border communications do not always translate as intended. Like

Spoken & Written languageSilent languageDistanceTime & PunctualityBody Language

Dealing with cultural differences Host cultures do not always

expect foreigners to adjust to them. For that the degree of successful adjustments like

1. Extent of acceptability2. Key cultural differences are

small or great3. Individual ability to adjust4. Business general management

orientation.