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International Business : The Challenge of Global Competition, 8/e
Donald Ball
Wendell H. McCulloch, California State University Long Beach
Paul L. Frantz, California State University Long Beach
Michael Geringer, California Polytechnic State University
Michael S. Minor, University of Texas Pan American
Sociocultural Forces

E Learning Session

  1. What is culture? PowerPoint (31.0K)
    1. Culture is the sum total of beliefs, rules, techniques, institution, and artifacts that characterize human populations
    2. Anthropologists suggest the culture Concept Check Concept Check: Anthropologists suggest that culture is all of the following except (a) Learned (b) Universal (c) Composed of various interrelated aspects (d) Shared (e) A definition of boundaries of different groups
      • Is learned
      • Various aspects are interrelated
      • Is shared
      • Defines boundaries of different groups
    3. Society is comprised of people and their culture
    4. Because of the interrelationship between society and culture the term "sociocultural" is often used
    5. "Ethonocentricity " refers to a myopic concentration on a single culture
    6. Hall's suggestions to understand diverse cultures
      • Live in a country for a lifetime
      • Undergo an extensive, highly sophisticated training program that covers the main characteristics of a culture, including language
    7. Culture affects all business functions
      • Marketing
        1. Wide diversity in attitudes and values prevents firms from
        2. using the same marketing mix in all markets
        3. Example is Proctor and Gamble's effort to enter Japanese markets with consumer products
        4. Only after considerable study and research into the daily lifestyle of Japanese people could P&G market products successfully based on preferences and desires
      • Human resource management
        1. National culture is also a determinant of how many businesses set policy and practice
        2. Example is England where observations suggests that employee evaluation may be on the basis of the "old school" or personal networks, rather than aptitude and accomplishment
      • Production and Finance
        1. Problems in a firm may result from cultural attitudes toward authority
        2. Example is Latin American view of manager as "patron" causing an American manager used to participative management style to be viewed as weak because of a less than authoritarian demeanor
        3. Cultural attitudes toward change may lead to unsuccessful introduction of new production methods
  2. Sociocultural components
    1. International business people should be students of foreign cultures
    2. Culture is so broad that is must be divided into discrete categories so that it can be studied efficiently
    3. Aesthetics
      • Pertains to a culture's sense of beauty and good taste
      • Art
        1. The symbolic meanings of art, color and form a culture sensitive
        2. Colors are associated with events or concepts that may differ in different cultures
          1. Black is the color of mourning in the US and Mexico, while black and white allude to the same meaning in the Far East as does purple in Brazil
        3. Building form is similarly interpreted for meaning
          1. A US style glass building in Japan would be a constant reminder of the foreign invasion to the Japanese people
      • Music and Folklore
        1. What music means is culture specific
    4. Attitudes and beliefs
      • Attitudes toward time
        1. Time is an important concept in American culture but must less so in other cultures
        2. To Latin American or Middle Eastern executive, it may be more important to finish small details to ensure that a meeting is uninterrupted than it is to implement the meeting "on the dot."
        3. Long-run/short-run focus is a major difference among the world's business people
        4. Some culture, especially Latin American, have developed a "mañana" attitude, or the concept of never being is a rush about anything., that is perplexing to many managers from developed countries
        5. The afternoon "siesta," a three to four-hour break from work in mid afternoon, is disappearing from many Latin American and Mediterranean cultures, but it is still evident in some
        6. American pride in directness and drive is interpreted by some cultures as brash and rude with preference for time-honored traditions
        7. The American desire to meet deadlines is often used against American business people in foreign competition
      • Attitudes toward achievement and work
        1. Some cultures see work as a way to acquire basic necessities that once gained mean no motivation for work remains
        2. The demonstration effect, observation of others with desirable goods, creates and increasing preference in a culture
        3. Cultural perception of job prestige varies widely and can have a great impact of job distribution or available workers
      • Attitudes toward change
        1. Americans are used to rapid change
        2. Europeans favor traditions
        3. International firms are agents of change for many different aspects of culture
        4. New ideas are more readily acceptable in many cultures the more closely they are tied to traditional ideas
    5. Religion
      • Work ethic PowerPoint (30.0K)
        1. America was founded with a religious influence that contributed the Protestant Work Ethic as a fundamental drive in the lifestyle
        2. Other countries have similar influences such as China's Confucian Work Ethic or Japan's Shinto ethic
        3. These work ethics tend to evolve as other cultural pressures build
          1. Increased productivity leads to increase in leisure time, which leads to an erosion of the work ethic as workers discover there are other things they want to do with their time
      • Asian Religions
        1. The concepts of God, people and reality diverge dramatically in Asian Religions from those that are professed by the Judeo-Christian tradition of Western civilization
        2. For example, in India, the world is perceived to be an illusion because nothing in the world is permanent
        3. Karma is a powerful influence on behavior of Asians
        4. Hinduism
          1. A conglomerate of religions without a single founder or central administration
          2. Most believe in a process of death and rebirth
          3. Goal is to reach a state of bliss (Nirvana) though religious application
          4. Manifests itself in a caste system of society
        5. Buddhism
          1. Began in India as a reform movement of Hinduism
          2. Buddhist monks involve themselves in political and social fabrics of their societies, they exert influence on everything related to doing business
          3. Buddhism teaches that if people have no desires they will not suffer disappointment, resulting in a diminished drive for achievement
        6. Jainism
          1. Founded by Mahavira, a contemporary of Buddha
          2. Teaches that no creator, no god, no absolute principles exist
          3. By following the faith, living the right conduct, could achieve Nirvana
          4. Another influence in India
        7. Sikhism
          1. The religion of an Indian ethnic group, the military brotherhood
          2. Founded by Nanek who sought a bridge between Hinduism and Islam
        8. Confucianism
          1. Founded by Confucius and is integral to Chinese culture
          2. Teaches that each person has a principle of unselfish love for others
          3. A second principle suggests that people live by a gentle decorum based on gentleness, politeness, and polite gestures
        9. Taoism
          1. Mystical philosophy founded by Lao-tzu
          2. Means philosophy of the way
          3. Each person mirrors the same forces, yin and yang, that govern the cosmos
        10. Feng Shui
          1. Ancient custom with roots in Taoism
          2. Objects placed in harmony with nature bring good fortune
        11. Shintoism
          1. The indigenous religion of Japan
          2. Provides that the Japanese emperor is divine
          3. Shinto shrines have no organized scheduled services except for special commemorations
          4. Worshipers go to the shires when the spirit moves them
        12. Islam
          1. Largest of the world's faiths after Christianity
          2. Based on the words revealed to Muhammad by Allah (God)
          3. Muslim societies have no separation between church and state
          4. Muslims profess the five pillars of faith
            • Accepting the confession of faith
            • Making five daily prayers facing Mecca
            • Giving charity
            • Fasting during daylight hours of Ramadan
            • Making pilgrimage to Mecca at least once in a lifetime
            • Some Muslims adhere to a sixth, Jihad, which refers to a striving for the faith including an inner struggle for purification
          5. Divided into sects based on emphasis of beliefs
            • Sunnis are one of two main divisions
            • Shiites are the other
        13. Animism
          1. Religion found in Africa and Latin America that includes magic and witchcraft
        14. Any international business must account for religious dogma and practices in the countries in which they operate
    6. Material culture PowerPoint (32.0K)
      • Refers to human-made objects and is concerned with how people make things and who makes what and why
      • Technology
        1. Technology is the mix of usable knowledge that society apples toward the attainment of cultural and economic objectives
        2. Technological superiority is generally important to firms but it is even more critical to international business
          1. It enables a firm to be competitive
          2. It can be sold
          3. It can give a firm confidence to enter new markets
          4. It can enable a firm to acquire better conditions for a foreign market investment
          5. It can enable a firm with a minority holding in a joint venture to control the joint venture
          6. It can change the international division of labor
          7. It causes formation of competitive alliances where research and development costs are shared
        3. Cultural aspects of technology
          1. Technology also includes skill in marketing, finance and management
          2. Concerns include the possible differences between an international firm's technology and the local culture
          3. New technology of product or process usually requires a major change where the technologies are newly introduced
      • High GNP-High level of technology
        1. Technological duelism is the side-by-side presence of advanced and primitive technologies
          1. Prominent in many developing countries
          2. Usually results from government action to attract new industry
        2. Appropriate technology is that which most closely fits with the society using it PowerPoint (29.0K)
        3. The boomerang effect is when technology sold to a country is used to produce goods that compete with the initial seller
        4. Government controls may be imposed on technology transfer or they may subsidize technology acquisition
      • Information technology era
        1. Change is rapid
        2. The spread of the Internet may be accelerating change even more
      • Economics
        1. Home firm must make decisions regarding the appropriate technology to us in host country operations as well as consider government constraints and incentives
    7. Education
      • Education yardsticks
        1. Analysis of education level in a country relies on usual yardsticks such as literacy rates, kinds of schools, quality of schools, and, possibly, amount spent per capita on schools
        2. UNESCO defines a literate person as "one who can both read and write a short, simple statement on his or her daily life." Concept Check Concept Check: According to UNESCO, to be literate you must be able to (a) Read and write a short, simple statement on your daily life (b) Write an analytical essay (c) Read a short paragraph and answer questions based on the passage (d) Read and write your name (e) Comprehend a college business textbook
        3. As with most data in analysis, trends should be studied
      • Educational Mix
        1. Growing trend, especially in Europe, for American style educational programs
        2. Trend is slower in developing countries although it is occurring
      • Brain drain
        1. Developing countries believe that economic development is impossible without development of human resources
        2. Concern is that investment in human capital, supporting students to higher education, has created a pool exceeding the local demand resulting in loss of trained people to other countries, a Brain Drain
        3. Governments now recognize the need to expand available jobs to absorb trained personnel to stop the Brain Drain
      • Reverse Brain Drain
        1. A developing economics expand, many highly trained professionals are now being lured back to their home countries
      • Women's education
        1. An important trend is the reduction of the illiteracy rate among women
        2. A correlation exists been the literacy rate of women and the literacy rate of their children
    8. Language
      • Spoken language
        1. Language is a key to culture
          1. Merely learning the language is not enough, the nuances, slang, and double meaning of words are important
        2. Languages delineate cultures PowerPoint (31.0K)
          1. Spoken languages separates one culture from another
          2. When two languages exist in a country, two cultures will be present (Belgium)
          3. Swiss who speak German and those that speak French are good examples of the divergent of coexisting cultures within a small country
        3. Foreign languages
          1. When many languages exist within a country (India and China) one foreign language may become the common language of lingua franca
        4. English, the language of business
          1. English is currently serve a role as a common language of business.
          2. A Swede and a Japanese may find themselves communicating in English
          3. English acceptance as a lingua franca has spread so rapidly that by 1996 more than half of European adults spoke some English Concept Check Concept Check: What language is currently serving the role of a common language (a) Japanese (b) French (c) Spanish (d) English (e) Chinese)
        5. Must speak the local language
          1. Even with the spread of English business people should acquire the local language of the culture
          2. Helps to understand the characteristics of culture
          3. Provides a competitive advantage in business
          4. Helps avoid troubles resulting from not having local language skill
        6. Translation
          1. The spread of English or the acquisition of local language does not eliminate the need for translators
          2. Technical language is not common and sometime needs a specialist to translate effectively
        7. Back translations
          1. Once a translation is made, another party should make a translation into the original language and compared to the original to ensure that concepts are understandable
        8. Technical words
          1. Some new technical words created in one language will not have a translation into another language
          2. In some instances the local language may acquire the foreign term to be incorporated into the local language
          3. The words "hot dog" and "OK" from English have filtered into many languages around the world
        9. French Crackdown on English
          1. In 1997 France passed a law prohibiting the introduction of English worlds into general usage as French language components
          2. Similar attempts to safe guard the home country can be found in Canada, who has a heritage minister designated to preserve Canadian heritage
          3. France has initiated a movement to halt the spread of English as a primary language of computing
          4. The spread of language skill may contribute to preferences developed for foreign products
        10. No unpleasantness
          1. Some cultures are reluctant to say anything that sounds unpleasant
          2. This makes the word "no" rarely used in Japanese language
          3. A nod and a "yes" in Japanese may mean the person hears you, not that he agrees with you
        11. Unspoken language
          1. Nonverbal communication such as gestures and body language
            • The language of gestures varies from one region to another
            • Meaning associated with a gesture in one country has a different, and perhaps contradictory, meaning in another country
        12. Closed doors
          1. A nonverbal symbol interpreted differently in different cultures
        13. Office size
          1. Where a person's office is located and its size says different things in different cultures about the business person
        14. Conversational distance
          1. The distance we reserve for categories of people with whom we communicate
          2. Distances vary by culture
      • The language of gift giving
        1. Gift giving is an important aspect of international business
        2. The language and practices of gift giving vary by culture
        3. Acceptable gifts
          1. Whether on not a gift is wrapped is interpreted differently
          2. Research customs including those required in visiting associates' homes
        4. Gifts or Bribes
          1. The cultural requirement of gifts is sometime confused with the concepts of bribes
          2. Bribes are gifts or payments to induce the receiver to do something illegal for the giver
          3. Extortion is a payment to prevent the payee from doing harm to the payer
          4. Tips are payments to induce service
        5. Questionable payments
          1. Payments to government officials to get them to do their jobs
          2. Securities and Exchange Commission monitors in the US through the Foreign Corrupt Practices Act requiring American companies to do business anywhere in the world in the same way they would in the US
          3. Transparency International is an international organization dedicated to ending world-wide corruption
    9. Societal organization
      • Patterned structure or organization of relationships among people
      • Generally studied in terms of kinship and free association of individuals
      • Kinship
        1. Family is basic unit of kinship
          1. Extended family defines relationship among family members to include those remotely kin such as cousins of second cousins
          2. Member's responsibility
            • Although large, extended family exhibits strong bond
            • Responsibility to family takes precedence over many other aspects of life including work
        2. Pedro Diaz Martin
          1. In Latin countries where extended family is prevalent, both the mother's name and the fathers are used by children
      • Associations
        1. Age
          1. Age groups as a predictor of buying behavior differs among cultures
        2. Gender
          1. More women enter work force as country industrializes
          2. Even in cultures where women have little active role in public life, they still exert considerable influence in family decisions
        3. Free Association
          1. Groups of people joined together by a common bond of interest
          2. These groups exert considerable influence over individual behavior and preferences
      • Entrepreneurial spirit
        1. Varies among cultures
        2. But, in general, almost every culture has a high number of people who desire to be their own bosses
  3. Understanding national cultures
    1. Hofstede has researched cultural differences for four value dimensions PowerPoint (30.0K)Concept Check Concept Check: Hofstede's "cultural difference value dimensions" include all of the following except (a) Strong versus weak uncertainty avoidance (b) Masculinity versus femininity (c) Individualism versus collectivism (d) Large versus small power distance (e) Generosity versus selfishness
      • Individualism versus collectivism
      • Large versus small power distance
      • Strong versus weak uncertainty avoidance
      • Masculinity versus femininity
    2. Individualism versus collectivism
      • Collectivists belong to groups who take care of each other
      • Collectivists cultures are more open to group decision making
    3. Large versus small power distance
      • Degree to which society accepts unequal distribution of power among individuals
      • In large distance societies workers believe their bosses are right, even when they are not
    4. Strong versus weak uncertainty avoidance
      • Degree to which society members feel threatened by ambiguity and are reluctant to take risks
      • High avoidance societies will see workers stay with an organization for a long time
    5. Masculinity versus femininity
      • Degree to which dominant values emphasize assertiveness, acquisition of money and status and achievement of visible and symbolic rewards
      • Degree to which society values relationships among people, concern for others, and overall quality of life
    6. Scores of four dimensions
      • Text Table 9.3 shows scores for several countries on all four dimensions
    7. Plot of dimensions and management implications
      • Figure 9.10 and 9.11 plot the dimensions for selected countries
      • Latin countries score high on individualism and power distance
      • Analysis of these plot provides managers with insight to the influences of culture on work place behavior




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