Unit3

Power Distance

The degree to which a society accepts and expects unequal distribution of authority and status.

Workplace behavior in a high Power Distance culture

Employees strictly respect organizational hierarchy, wait for managerial approvals, and rarely question leadership.

Advertising strategy in an Individualist culture

Highlights personal achievement, autonomy, self-reliance, and individual consumer benefits.

Advertising strategy in a Collectivist culture

Emphasizes community well-being, family values, group harmony, and shared social responsibility.

Reason high Uncertainty Avoidance (High UAI) cultures require formal contracts and clear rules

To minimize ambiguity and risk by providing structured, predictable, and legally secure working relationships.

Monochronic vs. Polychronic time orientation

Monochronic treats time linearly with strict schedules and one task at a time; Polychronic treats time flexibly, prioritizing interpersonal relationships and multitasking.

Dominant time orientation used in Canada

Monochronic time.

High-Context vs. Low-Context communication

High-Context relies on indirect messaging, tone, body language, and shared background; Low-Context relies on direct, explicit wording and detailed written records.

Political Risk

Threats to business operations arising from government decisions, laws, or political instability (e.g., expropriation).

Economic Risk

Threats to business operations caused by macroeconomic volatility or financial system shifts (e.g., sudden currency devaluation or high inflation).

Currency Convertibility

The ease with which a host country's domestic money can be legally exchanged for foreign currency.

Primary danger of operating in a low currency convertibility environment

The inability to exchange local profits into home currency and repatriate earnings.

Developed Market vs. Emerging Market

Developed markets have high per-capita wealth, mature infrastructure, and steady growth; emerging markets exhibit rapid growth and export focus alongside developing infrastructure.

Expropriation

The seizure of privately owned foreign business assets or property by a host government.

Government type posing the highest risk of expropriation

Totalitarian or authoritarian regimes.

Consequences of imposing home-country practices on an international market

Cultural friction, reduced employee morale, customer alienation, and commercial failure.