Culture and International Business Flashcards
What are norms?
- Folkways
- The routine conventions of everyday life
- Violators seen as eccentric or ill-mannered
- Mores
- Norms that are seen as central to the functioning of a society and to it social life
- Much more significance, violating mores can bring retribution
What is culture?
- A system of values, beliefs and practices that are shared among a group of people, which give a sense of belonging and uniqueness
- Constantly changing
What are Shein’s levels of culture?
- Artefact level - outward displays
- Value level - norms about what ought to be
- Underlying set of assumptions - unspoken and unseen norms
How can culture be divided?
- Tip of the Iceberg Culture
* Bottom of the Iceberg Culture
What are tip of the iceberg culture elements?
- Language
- Food
- Population
- Music
- Clothing
- Pace of life
- Emotional display
- Gestures
What are bottom of the iceberg culture elements?
- Notions of time
- How the individual fits into society
- Beliefs about human nature
- Importance of work
- Motivations for achievement
- Rules about relationships
- Tolerance for change
- Imporantce of face, harmony
- Preference for leadership systems
- Communication styles
- Men/womens rolse
- Preference for thinking style - linear or systemic
What are the most important cultural dimensions for business?
- Identity
- Hirearchy
What are the determinants of culture?
- Relglion
- Poltical philosophy
- Economic philopshy
- Education
- Language
- Social structure
- Social Stratification
What are the IB implications of Christianity?
- Protestantism is thought to have the most economic implications
- Protestant ethics may emphasie the importance of hard work and wealth creation and frugality - some would argue this was necessary for the development of capitalism
- Whereas the Catholic promise of salvation in the next world did not foster the same kind of work ethic
What are the IB implications of Islam?
- The Koran speaks approvingly of free enterprise and earning legitimate profit
- The protection of the right to private property is also embedded within Islam
- Prohibits the payment of interest
- Mudarabah
- Profit sharing
- Marabaha
- Equivalent to interest, bank buys desired capital and sells to customer with mark up
What are the IB implications of Hinduism?
- Does not encourage entrepreneural pursuits
- Traditionally has supported India’s caste system - concept of mobility makes no sense to traditional hindus, mobility is only in a spiritual sense
- Buddhism
- Does not support the caste system
What are the IB implications of Confucianism?
- Loyalty
- Especially to one’s superiors
- Recipricol obligations
- Honesty in dealing with others = potentially less hesitance
- Confucian dynamism
- Attitudes toward time, persistence, ordering by status,
protection of face, respect for tradition and reciprocation of gifts and favours
- Attitudes toward time, persistence, ordering by status,
What is a social structure?
A socity’s basic social organisation
What is the important aspect of social structure?
Group vs Individual focus
How is the group focus in Asian countries important for IB?
- Discourages job switching between firms
- Encourages lifetime employment systems
- Leads to cooperation in solving business problems
- This is changing though
What is social stratification and what is the important aspect of it?
- All cultures are stratified on a hierarchal basis into social strata
- Defined on the basis of characterisesics such as family background, occupation and income
- Social mobility
What is social mobility and what kinds are there?
- The extent to which individuals can move out of the strata into which they are born
- Caste system
- A closed system of stratification in which change in position is usually not possible during an individuals lifetime
- Class system
- Less rigid form of social stratification in which mobility is
possible
- Less rigid form of social stratification in which mobility is
What is the significance of social mobility to IB?
- Class consciousness
- Refers to a condition by which people tend to perceive themselves in terms of their class background, and this shapes their relationships with members of other classes
- Can lead to antagonism in business settings
What is cultural intelligence?
Ability to engage in a set of behaviours that rely on skills and qualities that are tuned appropriately to the culture-based values and attitudes of the people with whom on interacts
What are Hofstede’s Cultural Dimensions?
- Power distance
- Individualism vs collectivism
- Masculinity vs femininity
- Uncertaintiy avoidance
- Long term vs short term normative orientation
- Indulgence vs restraint
What is power distance?
Acceptance of unequal power distribution
What is individualism vs collectivism?
Degree to which individuals are expected to confirm to social expectations
What is masculinity vs femininity?
Competitive vs Consensus orientation
What is Long term vs short term normative orientation aka?
Confucian dynamism
What is the dimension of importance to Intercultural Communication Preferences?
- High and Low context cultures
- How individuals and society seek information and convert messages to each other
What are high context cultures?
- Personal networks are important source of information
- Well informed about facts before making a decision or arranging a deal
- Rely on implicit and non-verbal behaviours to communicate
- Japan, China, Italians, Arabs
What are low context cultures?
- Explicit verbal messages are important for determining meaning
- People state their intentions clearly
- German, Swiss, Australian, American
What are monochronic cultures?
- Act in a focused manner, one thing at a time
- Time is money
- Germans, Finns, some North Americans
What are polychronic cultures?
- Flexible, unconstrained by concerns about time
- Do many things concurrently, often unplanned or opportunistically
- Not interested in time schedules or punctuality
- Indians, Polynesians, Latin Americans, Arabs
What are high trust cultures?
- Organise work on more flexible, group oriented basis, more responsibility delegated
- Cultures with strong, associational life
- US, Japan
What are low trust cultures?
- Have strong sense of family, tribe or clans, but low levels of trust with others
- Strong correlation of hierarchy and absence of trust, must be coerces by rules and sanctions
- Italy, Spain
What are the important cultural dimensions?
- High and Low context cultures
- Monochonic and Polyphonic clutures
- High and Low Trust Cultures
Why do managers find country to country analysis difficult?
- Subcultures exist within nations
- Similarities link groups from different countries
What are the company and management orientations to culture?
- Polycentrism
- Belief that business units in difference 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
organisational cultures with both home and host country needs, capabilities and constraints
- Requires companies to balance knowledge of their own
What is important to businesses about cultural change?
- Evidence that economic progress is accompanied by a shift in values away from collectivism towards individualism
- As countries get richer, a shift away from traditional values linked to religion, family and country, and toward secular rational values
