IV. Differences in culture

Def. of culture

System of values and norms that are shared among a group of people and that when taken together constitute a design for living

Shapes local attitude towards business

Def of society

Group of people who share a common set of values and norms

Def of values

Ideas about what a society believes to be good, right, and desirable

Def of norms

Social rules and guidelines that prescribe appropriate behavior in particular situations

Relation between nation and culture

Even if many people associate one culture with one nation, it is not always the rule

You can find differences within a country and similarities between countries

Determinants of culture

Political and economical philosophers

Education

Religion, language, and social structure

Definition of social structure

basic organization of society; how a society is organized in terms of its values, norms, and the relationships that are part of the society’s fabric

Two dimensions of a social structure

Individuals and groups

Social stratification

Def of groups

2 or more individuals that have a shared identity: families, villages, regional companies.

General considerations of individuals and groups

All societies have groups and individuals but the difference between countries is the emphasis on these groups (i.e. in Western countries the role of individuals is more emphasised)

Countries where group is more important: advantage in allocating phases of production that require collaboration

Countries where individuals is more important: advantage in allocating phases of production that require individual participation

Def of social stratification

Hierarchical basis into social categories/ social strata.

Defined on the basis of socioeconomic characteristics such as family background, occupation, and income

Those at the top aspire to higher quality of life, opportunities, and education

Def. of social mobility

Extent to which individuals can move out of the strata into which they are born

Varies significantly from society to society

Nowadays there is more mobility

Implications of social stratification when organizing a company

Difficult to manage people that come from different background if social stratification is really present

Def of religion

System of shared beliefs and values among people

General considerations regarding religion

Affects the ethical system of a country

Difficult to establish direct links between religion and economic development

Products can vary depending on a country religion

General considerations regarding language

Much easier to do business in a country that you know the language

There’s more economic activity between countries that have a common language (trade and investment flow)

Consider that there are countries with different languages within - adaptation

Ignoring differences in language may conduct to fails in global branding

General considerations regarding education

Educated workforce tend to be more productive/skilled

Correlation between the level of literacy and marketing campaigns

People and their behavior is correlated with education

5 dimensions used to characterize the culture of a country (Hofstede)

Power distance

Individualism vs collectivism

Masculinity vs feminity

Uncertainty avoidance

Long term orientation

Def of power distance

How a society deals with the fact that people are unequal in physical and intellectual capabilities.

High: countries that let inequalities grow

Low: societies that tried to play down such inequalities

Def. of individualism (vs collectivism)

Relationship between the individual and his or her fellows

Individualism: individual achievement and freedom were highly valued

Collectivism: everyone is supposed to look after the interest of his or her collective

Def. of masculinity (vs femininity)

Relationship between gender and work roles

High: important differences on gender disparity

Low: few differences on gender disparity

Def. of uncertainty avoidance

Extent to which different cultures accepting ambiguous situations and tolerating uncertainty

High: appreciate job security, career patterns, retirement benefits, etc...

Low: readiness to take risks and less emotional resistance to change

Def. of long term orientation

Long term goals as opposed to short term goals

Limits of the dimensions presented by Hostfede

Too simplistic - need for more dimension

Based on the data of one company

Changes in culture over time (7)

Gender equality → More women have leadership positions than in the past

Shift toward more individualism

Decline of traditional values: secularism

Islamic fundamentalism: deeply held religious values that are firmly rooted in their faith (opposes to the general trend of decline of traditional values)
Cultural convergence: same movies, books, films, english languag

Separatist movements

Nationalist movements increase

Implications of culture for business practice

There is a need to develop cross-cultural literacy (understanding cultural differences and its implications)

Connection between culture and competitive advantage (the value systems and norms of a country influence the costs of doing business in that country)

Important implication of culture for decision making and ethics