Module 2: Culture & Global Business

Culture

Shared beliefs, values, and assumptions of a group.

Beliefs

Ideas about people or things.

Values

Ideals considered important.

Assumptions

Ideas accepted as true without question.

Subculture

Smaller group within a larger culture.

Cultural Baggage

Beliefs and values people carry with them.

Nuclear Family

Parents and children living together.

Extended Family

Includes relatives beyond parents and children.

Class System

Social ranking based on income, education, status.

Mobility

Willingness to relocate for work.

Language

System of communication through words.

Low-Context Culture

Direct communication (e.g., Germany, United States).

High-Context Culture

Indirect communication (e.g., Japan, Iraq).

Nonverbal Communication

Communication without words (body language, gestures).

Individualism

Focus on personal independence.

Collectivism

Focus on group harmony and consensus.

Technology Orientation

Cultural attitude toward technological change.

Leadership/Authority

How power is distributed in society.

Religion

System of beliefs influencing behavior.

Time Orientation

Cultural view of time (strict vs flexible).

Cultural Adjustment

Adapting to a new culture.

Ethnocentrism

Belief that one’s culture is superior.

Culture Shock

Adjustment stress in a new culture.

Reverse Culture Shock

Difficulty readjusting to home culture.

Political System

System for making rules in society.

Democracy

People have voting rights and freedoms.

Totalitarianism

One ruler or small group controls the country.

Military Dictatorship

Military controls government.

Monarchy

Rule by hereditary king/queen.

Single-Party System

Only one political party allowed.

Mixed Political System

Combination of democracy and totalitarian features.

Host Country

Country where a multinational operates.

Home Country

Country where multinational is headquartered.

Social Responsibility

Acting ethically toward society.

Protectionism

Policy protecting local industries from foreign competition.

Expropriation

Government takeover of foreign-owned property.

Political Risk

Risk of political instability affecting business.

Customs Duty

Tax on imports.

VAT (Value-Added Tax)

Tax added at each production stage.

Excise Tax

Tax on specific goods (e.g., alcohol).

Income Tax

Tax on earnings.

Payroll Tax

Tax on employee wages.

Free-Trade Zone

Area where goods are imported duty-free.

Most-Favored-Nation (MFN)

Country given lowest tariff rates.

Free-Trade Agreement

Agreement removing trade barriers between countries.

Common Market

Group of countries allowing free trade and movement.