Environmental differences Flashcards
Culture
shared values attitudes and beliefs
What can culture be based on
nationality, ethnicity, gender, religion, political ideology, education, work organization, profession, age, income level, etc.
Culture is an integral part of a nation’s
operating environment
Bringing together people of diverse backgrounds and experience
can give companies a deeper knowledge about products and services and ways in which to produce and deliver them
Cultural collision
when a company implements practices that are less effective or when employees encounter distress because of difficulty in accepting or adjusting to foreign behaviors
Problem areas that can hinder managers’ cultural awareness:
- the assumption that all societal subgroups are similar
- difficulty in accepting that one’s culture is not superior to others
How to Access the Risk of Cultural Diversity / Collision
Social stratification ;
Work motivation;
Relationship preference;
Risk-taking behavior;
Information and task processing
nation vs state
A nation is a group of people with a common language, history, culture, and (usually) geographic territory.
A state is an association of people characterized by formal institutions of government, including laws; permanent territorial boundaries; and sovereignty (political independence).
Systemic Risk
risks that impact all firms that operate in a particular political system
Procedural risk
the risk evolving from the daily movement of people, products, and funds from point to point in the global market. Each move creates a procedural transaction between the units involved, whether units of a company or units of a country. Political actions sometimes create frictions that interfere with these transactions
Distributive risk
is a result of the profits generated by foreign companies in the local economy. If the host country questions the distributive justice of the rewards of operating in its market, it may wonder whether, as the business grows more successful, it is receiving its “fair” share of the growing profits
catastrophic risk
includes random political developments that adversely affect the operations of every company in a country. Typically, it arises from specific dramatic events, such as ethnic unrest, illegal regime change, civil disorder, or insurrection. It disrupts the business environment in a way that affects every firm in the country. If such disruptions spiral out of control, they devastate companies and nations
Individualism
Under an individualistic paradigm, political officials and agencies play a limited role in society
collectivism
Under a collectivist paradigm, the government defines economic needs and priorities, and it partners with business in major ways
Rule of Man
ultimate power in the hands of one person and is the cornerstone of totalitarian governments
