D270 Unit 2

Interdependence creates

Opportunities for firms and managers

Why is IB more complex than domestic business

There is a general environment with more external factors to consider

Why is understanding people’s behavior abroad so important

Business gets done through people

Asian cultural video

In China, if you clean your plate, they will continue to feed you. In Britian, if you don’t finish what you’re eating, it’s disrespectful. This is a cultural clash that can cause misconceptions

KNOW the norms of the people you are dealing with, do not embrace ethnocentrism and assume your way is the right way

Culture

Shared values, attitudes, and beliefs of a group

Subcultures

Literally just cultures within cultures

The 6 determinants of culture

1. Religion

2. Political Philosophy

3. Economic Philosophy

4. Education

5. Language

6. Social Structure

National culture is acquired (learned)

You don’t inherit it, you learn it through your cultural environment

National Culture is Gradual

It gets slowly shaped over time

National culture is ethnocentric

Members of a national culture are expected to view things from their lens and not others

National culture is shared

Those within it see the world similarly

National culture is hard to change

It becomes habit, and people can be stubborn

National culture is relative

There is no right or wrong

Cultural Formation by choice

People can adopt elements of other cultures by choice

Change by imposition

When a culture is essentially forced onto another group

Cultural Diffusion

When cultures spread elements between each other (think music, food, fashion)

Creolization

Fusion, when two cultures blend into a hybrid

Social Stratification

The way people are “ranked”; this can affect how business works

Behavioral practices affecting business

Affiliations (what people feel loyal to affects how they think and what they do)

Race and Ethnicity, male and female roles, and family ties can affect how people think and act

Materialism

Work-centered motivation (work is life)

Long hours

Performance based rewards

Leisure

Work life balance as motivation

predictable hours

Respect of personal time

High masculinity index

Competitive

Performance

Winning

High femineity index

Cooperation

Care

Balance

Power distance

How comfortable a culture is with hierarchy and authority

(Is there a top-down communication style, or open and informal communication style)

Individualism

Prioritize individual over group

Independence and personal goals

Collectvism

Prioritize the group

Loyalty and Group Success on sum teamwork type shi

Uncertainty Avoidance

Whether a culture is comfortable with ambiguity

• High uncertainty avoidance means they want rigid rules, structure, and clarity

• Low uncertainty avoidance means they want flexible rules, experimentation, and improvisation

Trust

How quickly a culture might rely on others

• High trust cultures will close deals quickly and form partnerships easily

• Low trust cultures will take their time developing relationships and avoid unknown partners 

Vatican

The US recognizes the Vatican as a country because of significant catholic population

Religion can affect interdependence and relationships

Apple failed in India

Most Indian consumers don’t have credit cards

Culture and Words

Humor differs globally

Words can mean different things and change overtime (dope means cool, drugs, and stupid among three generations of America)

Internet Design and Culture

Eastern Asia likes to have cluttered websites because of holistic thinking

Westerners are analytic and think about singular attributes and components, so they need organized websites

Amazon and Alibaba

Amazon did poorly in Asia because it was so organized

Alibaba did poorly in US because it was not organized

Polycentrism

When you adapt to different country’s cultures

Ethnocentrism

Home culture is the best

Geocentrism

Blending cultures and practices is the best

Low Context Communication

Assume that you have a low level of shared reference points and make explicit statements

Like the US

High context cultures

Communication is indirect and layered

Unwilling to give opinion here

Asia is like ts

Norms

These are like rules of how to communicate and act

Behavior

Observable ways people act (often shaped by norms)

CQ in Saudi

• Saudi has significant economic growth but strong cultural heritage and religious influence

• Must integrate religious practices with business practices

• Saudi changes by choice because they need to move past reliance on oil

• Saudi changes by contact, as the youth become globally connected, they have to navigate traditional norms and international trends

• Saudi changes by force as social expectations create tensions (women being able to drive)

• Basically, if you’re in Saudi you need to know how to adapt to social shifts

Norms in Saudi

Religious practices such as daily prayers and Ramadan need to align with work schedules

Social dynamics need to be respected and adapted to

Evolving Cultural Landscape of Saudi Arabia

Social movements and reforms need to be closely followed. Amazon adapted policies in Saudi to support gender diversity

CQ and Digital Education

• VR and AR let you experience other countries in ways you typically can’t

• Expanding digital media gives you more options to access different cultural perspectives

• AR is used to provide contextual awareness

• VR is used for simulations

• AI crafts personalized learning

• Real time translation promotes cultural exchange

China

• For a long period, China was closed off from trade because of the CCP

• Eventually, passed the Law on Join Ventures Using Chinese and Foreign Investment

• China has benefitted the most from globalization

China’s political and legal systems are complicated

• CCP controls everything and business need to adapt to being used for political objectives

• Arbitrary rules play a large role in business

• Locals, however, also have their own politics and can be stronger than national law

• Learn to navigate both

Ambiguous Guidelines of China

China operates under rule of man

• CCP can operate above any written laws

• For them to keep this power they must maintain economic fairness

China and Illegal stuff

Intellectual property isn’t very protected in China

Counterfeit goods are common and companies lose lots of money because of that

China and Regulations

China needs to amend codes because its legal environment is unattractive

China agreed to global trade rules (WTO) but that did not solve the problem

When Covid happened, the world learned the consequences of heavily relying on one country

What governance is China switching to?

China is switching to moral governance through Confucianism

Globalization and IP Theft

Globalization has caused IP theft to become a big business

• Ends up costing brands consumer confidence, lower tax revenue, and higher expenses for enforcing legitimacy

Most Counterfeits are?

Literally everyday items, not just luxury goods. From food to medicine to toys to car parts

Corporations fight counterfeiting

• They use lawyers and hunt for illegal sellers

• Some companies are using chips and software systems

• AI is also employed, using image recognition and predictive analysis

Governments and IP Theft

World Intellectual Property Organization uses treaties to prevent IP theft

Despite all the polciies about coutnerfeiting

It is still expanding