Lecture 3 Flashcards
Cultural and Ethical Risks
What are Values?
Provide the context within which a society’s norms are established and justified and form the bedrock of a culture.
What are Norms?
‘Folkways’: the routines of everyday life (dress code, social etiquette)
‘Mores’: norms that are seen as central to the functioning of a society and to its social life. (Taken more seriously than folkways, rules that must be obeyed or will cause serious offence, may relate to law, religion, attitude to women)
What is a society?
A group of people who share a common set values and norms
What is a culture?
A system of values and norms that are shared among a group of people and that when taken together constitute a design for living.
(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 behaviour in particular situations)
What is cross-cultural literacy?
An understanding of how cultural differences across and within nations can affect the way in which business is practiced.
Important for business success
What is Culture?
The whole set of values and norms which conditions the behaviour of a group of people. It makes one social environment different from another.
May be sub-national, national or supra-national.
What is the difference between national, sub-national, and supra-national?
National- the differences between, for example, british and japenese cultures
Sub-national- the Canada with an Anglo culture, a french-speaking “Quebecois” culture, and a native american culture
Supra-national- Islamic culture which transcends individual countries
What are the determinants of culture?
Political Philosophy
Economic Philosophy
Social structure
Religion
Education
Language
Social structure has two main determinants, what are they?
Individualism vs collectivism
Stratification vs Mobility
What is individualism vs collectivism?
Reflects decisions as to whether societies operate on the basis of catering for individual aspirations or meeting group goals
What is stratification vs mobility?
Reflects decisions as to whether societies permit individuals to move upward within social hierarchy, or are forced to remain in a particular social grouping
What are the common cultural contrasts and explain
Deal Orientated: North America, Northern Europe, Australia/NZ
Relatively open to business with strangers
Relationship Orientated: Middle East, Asia, Latin America, most of Africa
Prefer to do business with people they know and trust, therefore issues with making initial contact
Common cultural contrasts formal vs informal
Formal: asia, most of europe, middle east
Need to reflect differences in status, thus problems of age/status differences
Informal: North America, Australia/NZ
More familiarity between different levels
Rigid time vs Fluid time
Rigid: nordic and germanic europe, go exactly according to schedule (not arriving late, missing deadlines, meetings running late)
Fluid: middle east, latin america, (interpersonal relations are more important than time)
What are the four dimensions of national/regional culture
Power distance
Uncertainty Avoidance
Individualism
Masculinity
What is Power distance?
- Degree to which society accepts that power and privilege are not distributed equally
What does high power distance and low power distance mean?
- High Power Distance: Authority to be obeyed; Respect for age and position; Inequalities accepted by all parties; Management will be; hierarchical structures, paternalistic/autocratic
- Low Power Distance: Authority can be questioned; Opportunities for ability and youth; Equality of opportunity and rights; Management will be; flat structures, devolved responsibility, consultative
What is uncertainty avoidance?
- Extent to which people feel threatened by ambiguous situations and set up procedures and systems to minimise ‘risks’
What does high and low uncertainty avoidance mean?
- High Uncertainty Avoidance: Emphasis on rules and regulations; procedures/committees; standards certain; and acceptable behaviour clearly set out
- Low Uncertainty Avoidance: Emphasis on entrepreneurship and risk-taking; encouragement of initiative; tolerance of deviance in ideas, behaviour and dress
What is Masculinity/Femininity?
- The degree to which the dominant values of society are ‘success, money, possessions’ – masculine, or ‘caring for others, quality of life’ – feminine
What is long-term vs short-term orientation?
- Hofstede later expanded added a fifth dimension called Confucian dynamism or long-term orientation
– captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors
What is Hofstede’s critique
- Hofstede’s work has been criticised for several reasons:
Ø Assumed there is a one-to-one relationship between culture and the nation-state (no sub-culture?)
Ø study may have been culturally bound (EU and America)
Ø used IBM as sole source of information
Ø culture is not static – it evolves (is Hofstede still accurate?)
What are ethics?
- Ethics - accepted principles of right or wrong that govern
– the conduct of a person
– the members of a profession
– the actions of an organization
What are business ethics?
accepted principles of right or wrong governing the conducting of business people
what is Ethical strategy
a strategy, or course of action, that does not violate these accepted principles
Potential examples of unethical behaviour abroad
- Falsify or misrepresent contracts or official documents
- Pay or accept bribes, kickbacks, or inappropriate gifts
- Tolerate sweatshop conditions or abuse employees
- Use false advertising or other deceptive marketing
- Engage in deceptive or discriminatory pricing
- Deceive or abuse intermediaries in the channel
- Undertake activities that harm the natural environment
Roots of unethical behaviour
- Personal ethics- the principles of right and wrong that govern the conduct of individuals
- Decision-making processes - the values and norms that are shared among employees of an organization
- Organizational culture - organizational culture can legitimize unethical behavior or reinforce the need for ethical behavior
- Unrealistic performance expectations - encourage managers to cut corners or act in an unethical manner
- Leadership - helps establish the culture of an organization, and set the examples that others follow
- Societal culture – firms headquartered in cultures where individualism and uncertainty avoidance are strong are more likely to stress ethical behavior than firms headquartered in cultures where masculinity and power distance rank high
What is relativism?
the belief that ethical truths are not absolute but differ from group to group. According to this perspective, a good rule is “when in Rome, do as the Romans do.”
what is Normativism?
is a belief that ethical behavioral standards are universal, and firms and individuals should seek to uphold them consistently around the world.
