Unit 3 Flashcards
What is culture?
Culture encompasses the knowledge, experience, beliefs, values, attitudes, religion, arts, symbols, and possessions acquired by a group of people over time.
How is culture acquired?
- Transmitted from one generation to the next through education and example
- Acquired through changes in beliefs and norms, and exposure to new ideas and influences
What are the two scenarios when entering a new country?
- Culture can be similar enough for easy assimilation
- Vastly different culture may lead to forming a subculture
What is the ‘First Rule of International Business’ regarding culture?
We must acknowledge the perceptions of international cultures before attempting to introduce products, services or customs.
What is a subculture?
A cultural group within a larger/predominant culture, distinguished by factors such as class, ethnic background, religion, or lifestyle.
What is a counter-culture?
Countercultures are cultures that have values or lifestyles that oppose mainstream values and attitudes.
What are Hofstede’s 6 Cultural Dimensions used for?
Used to understand and compare cultural differences across nations
- Power Distance (PDI) – Measures how much inequality and hierarchy are accepted within a society.
- Individualism vs. Collectivism (IDV) – Evaluates whether people prioritize personal achievements (individualism) or group loyalty and relationships (collectivism).
- Masculinity vs. Femininity (MAS) – Assesses whether a culture emphasizes competition, ambition, and material success (masculinity) or cooperation, care, and quality of life (femininity).
- Uncertainty Avoidance (UAI) – Indicates how comfortable a society is with uncertainty and ambiguity. High UAI cultures prefer rules and stability, while low UAI cultures are more open to risk and change.
- Long-Term vs. Short-Term Orientation (LTO) – Examines whether a culture values long-term planning, perseverance, and future rewards or prefers tradition and short-term gains.
- Indulgence vs. Restraint (IVR) – Measures how much a society allows for enjoyment, leisure, and gratification versus control through strict social norms.
What is cultural intelligence?
Cultural intelligence refers to the capability to adapt, relate, and work effectively across various cultures.
What factors affect the need for cultural awareness?
- Control for foreign operations
- Extent of foreign operations
- Number of foreign operations
- Degree of difference
- Impact of people of indigenous origin
Why is cultural awareness important?
It fosters effective communication, understanding, and respect, vital for building inclusive communities and successful interactions in diverse environments.
What are the impacts of culture on international businesses?
- Communication Barriers
- Negotiation Difficulties
- Employee Management Issues
What is an economic system?
The way a country organizes its resources and distributes goods/services to its citizens.
What does the Circular Flow Model describe?
It considers economies as consisting solely of individuals and businesses, where businesses provide income to individuals in exchange for labor. Then, that income is spent by
individuals on the goods/services
What is a market economy?
Also known as capitalism or private enterprise, where businesses, consumers, and government act independently. Businesses, consumers, government act independently of one another.
Viewpoint on Private Property: Strong protection of ownership rights.
Viewpoint on Profit: Incentive for innovation and growth.
Viewpoint on Competition: Encouraged, leading to efficiency and innovation.
What is a centrally planned economy?
Also called communism or command economy, where decisions are made centrally by the government.
Viewpoint on Private Property: Limited or none.
Viewpoint on Profit: Not a priority; state redistributes wealth.
Viewpoint on Competition: Minimal, as the government owns industries.
What is a mixed economy?
An economic system that blends features of capitalism with elements of socialism.
Viewpoint on Private Property: Some private ownership, some government control.
Viewpoint on Profit: Allowed but regulated.
Viewpoint on Competition: Exists but with government intervention.
What is a political system?
The type of government by
which a country is run. There are many types of political systems based on factors such as religion, monarchy, and the wealth of rulers.
What is democracy?
A form of government in which state power is vested in the people, characterized by citizen participation and free elections.
What is economic development?
All countries fit into classifications determined by the UN: Developed Economies, Economies in Transition, Developing Economies.
What is the business cycle?
Describes how economies expand and contract over time, consisting of stages such as recession, trough, expansion, and peak.
What are the types of economic indicators?
Leading: Predict future trends (e.g., stock market trends).
Lagging: Confirm past trends (e.g., unemployment rate).
Coincident: Reflect current economic activity (e.g., GDP).
How does government impact international business?
- Through lobbying
- Trade policies, tariffs, regulations.
- Currency controls.
- Taxation and subsidies.
What is monetary policy?
Impacts the money supply, interest rates, and inflation rate.
What is fiscal policy?
The way the government collects and spends money, impacting the business cycle.
What is corporate social responsibility?
The duty of a company’s management to work in the best interests of society and act as a good global citizen.
What are examples of CSR practices?
- Making charitable donations
- Treating employees fairly/ethically
What is stakeholder analysis?
A systematic approach to identify and analyze stakeholders who can influence or be influenced by a project.
What impacts business ethics?
- Laws (domestic and international)
- Codes of Ethics
- Personal Values
- Company values
What is ethical imperialism?
The viewpoint that certain universal truths or values are standard across all cultures.
What is cultural relativism?
The viewpoint that the values of different cultures should be respected.
What are common ethical issues in business?
- Fraud
- Environmental issues
- Sweatshops
- Corporate corruption
What are three types of Economies?
Developed Economy: High income, advanced infrastructure.
Developing Economy: Lower income, growing industries.
Economies in Transition: Moving from planned to market economy.
What is stages of the business cycle?
Peak: Rising GDP, low unemployment.
Expansion: Highest economic activity.
Trough: Slowdown, rising unemployment.
Resession: Lowest economic point before recovery.
What is CSR?
What it is: Businesses acting ethically and benefiting society.
Examples: Sustainable sourcing, fair wages, environmental initiatives.
Benefits: Improves reputation, attracts customers.
Drawbacks: Can be costly, risk of “greenwashing.”
Keys to Success: Genuine efforts, transparency, stakeholder involvement.
What are two ethical concepts?
Ethical Imperialism: Universal moral standards.
Cultural Relativism: Ethics depend on cultural context.
What are common ethical issues?
Bribery, labor rights, environmental impact, misleading advertising.
