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SEMESTER ASSIGNMENT-01
Name Roll No. Learning Center Code Course/Programme SEMESTER Subject code Date of submission Marks awarded : P L SUBHASHINI : 511033149 : 02851 : BBA :6 : BB0027 : _____________________

_____________ Signature of Center Head

_____________ Signature of Evaluator

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BB0027 CROSS CULTURAL ASPECTS OF BUSINESS


Assignment Set- 1 (60 Marks)
1. What is culture? Discuss the characteristics of culture. Answer: Meaning of Culture The concept of Culture is about as old as civilization. The word culture is derived from the Latin word cultura which relates to cult or worship. In its broadest sense the term refers to the result of human interaction. It comprises the entire set of social norms and responses that condition peoples behaviour; it is acquired and inculcated, a set of rules and behaviour patterns that an individual learns but does not inherit at birth. It enables people to make sense of their world. It is the complex whole that includes knowledge, belief, art, morals, law, custom and other capabilities acquired by a person as a member of society. In common parlance, culture is the acquired knowledge that people use to interpret experience and to generate social behaviour. Their knowledge forms values, creates attitudes, and influences behaviour. The knowledge of Concept of Culture is imperative for understanding human behaviour throughout the world including ones own country. Box 1.1 will give a brief account of different cultures with different meanings. Box 1.1 Different Cultures, Different Meanings

Never touch the head of a Thai or pass an object over it, as the head is considered sacred in Thailand. Likewise, never point the bottoms of the feet in the direction of another person in Thailand or cross your legs while sitting, especially in the presence of an elderly person. Avoid using triangular shapes in Hong Kong, Korea or Taiwan, as a triangle is considered a negative shape in those countries. Remember that the number 7 is considered bad luck in Kenya, good luck in Czechoslovakia (now Czech Republic and Slovakia Republic). Red is a positive colour in Denmark but represents witchcraft and death in many African countries. A nod means no in Bulgaria, and shaking the head side-to-side means yes Source: Excerpted from M. Katharine Glover, Dos and Taboos: Cultural Aspects of International Business, Business America (August 13, 1990): 2

Definition of Culture Scholars have never been able to agree on a simple definition of culture. The task of understanding culture is complicated by a over abundance of definitions. Anthropologists and sociologists define culture as ways of living built-up by a group of human beings which are transmitted from one generation to another. A culture acts out its ways of living in the context of social institutions, including family, educational, religious, governmental and business institutions. Ralph Linton (1945:2) provides a Timeless definition of culture as the configuration of learned behaviour and results of behaviour whose component elements are shared and transmitted by the members of a particular society. Or perhaps more appropriately ; the way we do

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things around here. So defined China has a culture a commonality of beliefs, experiences, values and expectations that sets it apart from Egypt, India, Poland or Mexico. In an international business, culture refers to acquired knowledge that people use to interpret, experience and generate social behaviour. This knowledge forms values, creates attitudes, and influences behaviour. Edward Taylor in his Origins of Culture hundred years ago defined culture as that complex whole which includes knowledge belief, art, morals, law, custom and other capabilities acquired by man as a member of society. Culture then develops through recurrent social relationships that form patterns that are eventually internalised by members of entire group. In other words the culture of the group or society is a set of values (shared beliefs), history, tradition, norms, mores and artifacts that the group hold in common. Culture can also be defined as a continuously changing totality of learned values and shared meanings, rituals, norms and traditions among the members of an organisation or society. By values we mean abstract ideas about what a group believes to be good, right, and desirable. Put differently, values are shared assumption about how things ought to be. Values form the bedrock of a culture. They provide the context within which a societys norms are established and justified. They may include a societys attitude toward such concepts as individual freedom, democracy, truth, justice, honesty, loyalty, social obligation, collective responsibility, the role of women, love, sex, marriage and so on. Values are not just abstract concepts; they are invested with considerable emotional significance. People argue, fight, and even die over values such as freedom. Values also often are reflected in the political and economic systems of a society. By norms we mean the social rules and guidelines that prescribes appropriate behaviour in particular situations. Norms are the social rules that govern peoples action toward one another. Norms can be sub-divided further into folkways and mores. Folkways are the routine conventions of everyday life. Generally, folkways are actions of little moral significance. Rather folkways are social conventions concerning things such as the appropriate dress code in a particular situation, good social manners, eating with the correct utensils neighborly behaviour, and the life. While folkways define the way people are expected to behave if violated they are not usually considered to be evil or bad. Foreigners may initially be excused for violating folkways. On the other hand, mores are norms that are seen as central to the functioning of a society and to its social life. They have much greater significance than folkways. Accordingly, violating mores can bring serious retribution. However, there are many differences between culture as to what is perceived as mores. In America for example drinking Alcohol is widely accepted whereas in Saudi Arabia the consumption of Alcohol is viewed as violating important social modes and punishable by imprisonment. The term society refers to a group of people who share a common set of values and norms. While society may be equivalent to a country, some countries harbor several societies (i.e. they support multiple culture) and some societies embrace more than

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one country. Geert Hofstede, an expert on cross-cultural differences and management, defined culture as the collective programming of the mind which distinguishes the members of one human group from another. Culture, in this sense includes systems of values and values are among the building blocks of culture. The Sociologists Zvi Namenwirth and Robert Weber considers culture as a system of ideas and argue that these ideas constitute design for living. Taking both the definitions together culture can be understood as a system of values and norms that are shared among a group of people and that when taken together constitute a design for living. 1. To sum up, culture consists of the following components :2. Basic beliefs; strongly held attitudes about important ideas (values); 3. Accepted standards of behaviour (norms); 4. The historical or traditional way of doing and thinking about things (history and tradition); 5. Customs or rituals that the society/organisation believes in and following (mores); 6. Common stories or folklores passed from one generation to another and 7. Art, symbols, weapons, pottery and so on that are physical representations of the culture (art and artifacts). Characteristics of Culture Although there are many definitions of culture, the experts seem to agree on anumber of characteristics of culture : (1) Culture is learnt : Culture is not inherited. It is learnt through experience. People over time transmit the culture of their group from generation to generation. (2) Culture is shared : The tenets of the culture are accepted by most members of the group. Culture is not specific to single individuals, but is shared by people who are members of particular groups, organisations and societies. (3) Culture is transgenerational : Culture is passed on, in a cumulative process from one generation to the next. It is always passed on from one generation to another. (4) Culture is inter-related : One part of the culture is deeply connected with another part, such as religion with marriage or business with social status. (5) Culture is symoblic : It depends on individuals human capacity to symbolize or to use one thing to represent another. (6) Culture is patterned : Culture possess structure and is integrated. Change in one aspect of culture causes changes in another. (7) Culture is adoptive :

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Culture depends on the human capacity to adopt to change. (8) Culture is descriptive : Culture defines the boundaries of different groups.

2. Discuss Universalism Vs Particularism Answer: This is one of the 5 relationship orientations that addresses the ways in which people deal with each other. This can also be considered as cultural dimensions. This is the contribution of Trompenaars. Universalism is the belief that ideas and practices can be applied universally without any modification. In simple words, application of ideas and practices every where without any alternation is Universalism. This approach applies rules and systems objectively, without consideration for individual circumstances. Particularism is the belief that circumstances dictate how ideas and practices should be applied and something can not be done the same everywhere. It is more common in Asia and Spain. In cultures with high universalism, the emphasis is placed more on formal rules than on relationships, business contacts are adhered to very closely, and people believe that a deal is a deal. In culture with high particularism the focus is more on relationships and trust than on formal rules. In particularist legal contracts are often modified as the relationship plays a vital rule. Looking at Trompenaars dimension of universalism vs particularism, we find that the universalistic approach applies rules and systems objectively without consideration for individual circumstances, whereas particularistic approach more common in Asia and in Spain, for example put the first obligation on relationships and is more subjective. Trompenaars found that people in particularistic societies are more likely to pass on insider information to a friend than those in universalistic societies. In his early research, Trompenaars found that in countries such as the United States, Australia, Germany, Sweden and U.K., there was high universalism while countries such as Venezuela, former Soviet Union, Indonesia and China were high on particularism as shown in the following continuum Universalism Particularism

USA AUS GER SWE UK NL CZH ITL BEL BRZ FRA JAP ARG. MEX HK CHI IDO CIS VEN

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Universalism Vs Particularism: In follow-up research, Trompenaars and Hampden Turner uncovered additional insights regarding national orientations on this universalism particularism continuum. They did this by presenting the respondents with a dilemma and asking them to make a decision. Here is one of these dilemmas along with the national scores of respondents. Box 2.1

You are riding in a car driven by a close friend. He hits a pedestrian. You know he was going at least 35 miles per hour in an area of the city where the maximum allowed speed is 20 miles per hour. There are no witness. His lawyer says that if you testify under oath that he was driving 20 miles per hour it may save him from serious consequences. What right has your friend to expect you to protect him ? (a) My friend has a definite right as a friend to expect me to testify to the lower figure. (b) He has some right as a friend to expect me to testify to the lower figure. (c) He has no right as a friend to expect me to testify to the lower figure.

With a high score indicating strong universalism (Choice c) and a low score indicating strong particularism (Choice a), here is how the different nations scored : Table 2.2 Universalism (no right) Canada U.S. Germany U.K. Netherlands France Japan Singapore Thailand HongKong Particularism (Some or definite right) China South Korea 48 26 96 ... 95 ... 90 ... 90 ... 88 ... 68 ... 67 ... 67 ... 53 ... 56

As noted earlier respondents from universalism cultures (e.g., North America and Western Europe) felt that rules applied regardless of the situation, while respondents from particularism cultures were much more willing to bend the rules and help their friend 3. Explain the Organizational characteristics of MNCs Answer: Although MNCs have similar organisational structures, they do not all operate in the same way. A variety of factors have been identified that help to explain the differences. These

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include overall strategy, employee attitudes, and local conditions. The points of particular significance are (a) Organisational structure (b) Characteristics of formalisation (c) Specialisation and (d) Centralisation. Formalisation : Formalisation is the use of defined structures and systems in decision making, communicating and controlling. Some countries make greater use of formalisation than others, in turn, this affects the day-to-day organizational functioning. Ex : One large research study revealed that Koreans respond very favourably to formalisation than employees in U.S. Korean firms tend to be quite formal, but this may not hold throughout Asia. For Ex.: A study that investigated whether Japanese organisations are more formalized than U.S. organisations found that although Japanese firms tend to use more labour intensive approaches to areas such as book-keeping and office related work than their U.S. counterparts, no statistical data support the contention that Japanese firms are more formalised. Another study of U.S. and Japanese Firm in Taiwan divided formalisation into 2 categories :(1) Objective (2) Subjective Objective formalisation was measured by things such as the number of documents given to the employees, booklets, operating instructions, written job description, procedures manual, written policies and programmes. Subjective formalisation was measured by the extent to which goals were vague and unspecified, use of informal controls and use culturally induced values in getting things done. The study also found that US MNCs tend to rely heavily on budgets, financial data and other formalised tools in controlling their subsidiary operation. This contrast with Japanese MNCs, in which wider use is made of face to face informal controls. Specialisation : It is an organisational characteristic that assigns individuals to specific, welldefined tasks. Specialization in an internal context can be classified into horizontal and vertical specialization. Horizontal specialization assigns job so that individuals are given a particular function to perform and people tend to stay within the confines of this area. Ex : Jobs in the area of customer service, sales, recruiting, training, purchasing and marketing research, when there is a great deal of H.S., personnel will develop functional expertise in one particular area. Vertical specialization assigns work to groups or departments where individuals are collectively responsible for performance. Japanese rely more on vertical specialization. They have taken organisation structure in contrast to flatter designs of their U.S. counterparts.

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Centralisation :

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Is a management system in which important decisions are made at the top. In an international context, the value of centralization will vary according to the local environment and the goals of the organisation. Many U.S. firms tend toward decentralization, pushing decision making down the line and getting the lower level personnel involved. German MNC centralise strategic headquarter specific decisions independent of the host country and decentralize operative decisions in accordance with the local situation in the host country. MNCs tend to organize their international operations in a manner similar to that used at home. If the MNC tend to have high formalisation, specialization and centralisation at its home based head-quarters, these organizational characteristics probably will occur in the firms international subsidiaries. Ex : About 80% of Japanese and 80% U.S. firms operating in Taiwan for more than 10 years maintained their distinct cultural origins.

4. What is the importance of different group membership Answer: There are countless ways of defining group membership. (a) Gender Based Group There are strong country specific differences in attitude towards males and females vast difference in the types and roles of women. Ex : Limited role in China & India Ex : Afghan 1996 take over by religious fundamentalists limited the role of women to attend schools and to work. Ex : Saudi Arabia separate schools, women are legally prohibited from driving cars. Only 10% of women work outside. That too jobs with little male contacts. In U.S. more than 40% of administrative and mgl. Position are filled by women and in Japan it is less than 10%. Ex : Molex US manufacturing company in Japan invited Japanese workers and their spouses to a company, dinner in evening. Surprisingly neither wives nor female workers appeared. To comply with Japanese standards, the company now has A Family Day which women feel comfortable attending. (b) Age based groups : - Seniority based - Barriers to employment US young below 30 (c) Family based groups : familys social status or respectability societies with strong family ties family run companies.

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5. Given below is some information about the communication pattern followed in MultiMoney a financial Corporation. The Information is transmitted from Manager to subordinate. It is mostly for operational purposes. Identify the nature of communication and make suggestions for improving such communication Answer: That is the communication is Downward Communication. Our suggestion is for improving downward communication. That details followed are: Downward Communication Downward Communication is the transmission of information from manager to subordinate. The primary purpose of the manager-initiated communication flow is to convey orders and information. Managers use this channel to let their people know what is to be done and how well they are doing. The channel facilitates the flow of information to those who need it for operational purposes. In Asian countries, as noted earlier, downward communication is less direct than in the United States. Orders tend to be implicit in nature. Conversely, in some European countries, downward communication is not only direct but extends beyond business matters. U.S. managers basically used downward communication for work-related matters. Harris and Moran have noted that when communicating downward with nonnative speakers, it is extremely important to use language that is easy to understand and allows the other person to ask questions. Here are 10 of the suggestions that not only apply for downward, but for all types of communication: 1. Use the most common words with their most common meanings. 2. Select words that have few alternative meanings. 3. Strictly follow the basic rules of grammar more so than would be the case with native speakers. 4. Speak with clear breaks between the words so that it is easier for the person to follow. 5. Avoid using words that are esoteric or culturally biased such as he struck out or the whole idea is Mickey Mouse because these cliches often have no meaning for the listener. 6. Avoid the use of slang. 7. Do not use words or expressions that require the other person to create a mental image such as we were knee deep in the Big Muddy. 8. Mimic the cultural flavor of the nonnative speakers language, for example, by using more flowery communication with Spanish-speaking listeners than with Germans. 9. Continually paraphrase and repeat the basic ideas. 10. At the end, test how well the other person understands by asking the individual to paraphrase what has been said.

6. Mr. Thomas works for a UK based software company. The company decides to expand its business in India. What all aspects Mr Thomas needs to consider for going

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business in India. Answer:

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Mr. Thomas needs to consider for do business in India following decisions. Doing Business In India : In recent years, a growing number of MNCs have been attracted in India. The Government continues to play an important role in this process, although recently many of the bureaucratic restrictions have been lifted as India works to attract foreign investment and raise its economic growth rate. In addition, although most Indian businesspeople speak English, many of their values and beliefs are markedly different from those in the West. Thus understanding Indian culture is critical to successfully doing business in India. When doing business in India, one will find a number of other customs useful to know. Some of the most useful include : 1) It is important to be on time for meetings. 2) Personal questions should not be asked unless the other individual is a friend or close associate. 3) Titles are important, so people who are doctors or professors should be addressed accordingly. 4) Public displays of affection are considered to be inappropriate, so one should refrain from backslapping or touching others. 5) Beckoning is done with the palm turned down, while pointing often is done with the chin. 6) When eating or accepting things, use the right hand, because the left is considered to be unclean. 7) The namaste gesture can be used to greet people; it also is used to convey other messages, including a signal that one has had enough food. 8) Bargaining for goods and services is common; this contrasts with Western traditions, where bargaining might be considered rude or abrasive.

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