Chapter 4: Differences in Culture

How does differences in culture affect International Businesses?

• Understanding culture norms and values of any country is essential

• Cross cultural literacy is the knowledge of how cultural differences impact international businesses.

• There is a strong relationship costs of doing business in a country and culture.

What is Culture?

• Culture can be described as a system of various values and norms that are shared by a group of people or a society.

• Values can be defined as a standard for a culture that decides what acts are right or wrong. For example, Alcohol is considered an offense in Muslim countries like Saudi Arabia or Pakistan.

• Norms can be defined as rules and guidelines that prescribe what is the right kind of behavior in specific situations. For example, wearing extremely bright clothes at someone’s funeral is regarded as an inappropriate behavior.

How are Culture, Society and The Nation related?

• Nation, states- are able to have more than one culture.

• A culture can contain several nations.

What is a Social Structure?

• A social structure is a basic structure of the society.

• A group can be defined as a bunch of people who share similar characteristics. They interact with each other and have common expectation with one another. For example, social groups, families and work groups etc.

What is Social Stratification?

• All societies are put into categories or social strata.

1. Social Mobility: this is the system from which individuals can grow out of. This includes the caste system and the class system.

2. The importance of social strata in business situations, like class consciousness.

How does Culture Impact the workplace?

Hofstede’s dimensions of culture:

• Power Distance: This tells how people relate to each other through a hierarchical setup.

• Uncertainty Avoidance: How various cultures and people react to uncertain situations.

• Individualism VS Collectivism: How various cultures are open in tolerating ambiguous situations.

• Masculinity VS Femineity: The relationship between gender roles.

• Long term orientation: This shows the relationship of culture with time, status, saving face, gratification, respect for traditions etc.

What does Cultural Change mean for Managers?

• Essential for organizations to study the culture of the country that are planning to establish in.

• Poor knowledge about the country culture would not allow the business to flourish.

• There is a strong competitive advantage in learning about the culture of the country the firm want to situate in.