Differences in Cultures

Doing Business in Saudi Arabia A situational Review

What is Culture
Culture is a system of values and norms that are shared among a group of people and that when taken together constitute a design for living.

What is Culture

Values

Values may include a societys attitude towards such concepts as Individual freedom - Democracy Truth - Justice Honesty - Loyalty Social obligations - Collective responsibility Role of Women - Marriages etc Value for the foundation of culture

What is Culture

Norms

Norms are social rules that govern peoples actions towards one another. Types of Norms

Folkways
Attitude Towards Time Rituals and symbolic behavior

Customs, Traditions
Central to the functioning of society and includes: Indictment against theft Adultery Certain Customs have been made law

Culture, Society and Nation

Cultures may embrace many nations

Islamic Culture
Canada - Anglo-culture, French speaking cultures and Native American culture

A nation may contain several Cultures

The Determinants of Culture

Religion

Social Structure

Culture Norms & Value System

Political Philosophy

Language Education

Economic Philosophy

The Determinants of Culture

Social Structure

Social structure refers to its basis social organization Two relatively more important dimensions of social structure:

Degree of Individual vs. group as basic unit of social organization Degree of social stratification

The Determinants of Culture

Social Structure Individuals

Individualism is more than an abstract political philosophy Emphasis on individual performance Difficult to build teams High mobililty of managers Create dynamism Adverse impact on managerial stability and cooperation USA Vs. Japan

The Determinants of Culture

Social Structure Groups

Social status of an individual is determined as much by the standing of the group to which he or she belongs as by his or her individual performance. Group has frequently come to be associated with the work team or business organization to which an individual belongs In traditional Japanese society, group was the family or village to which individual belonged. Results into wide-spread self-managing teams. Cooperation is driven by the need to improve the performance of the group. Lifetime employment is a norm in such environments.

The Determinants of Culture

Social Stratification

Societies are stratified on a heirarchical basis into social categories i.e. into social strata Social Strata are defined on the basis of characteristics such as

Family background Occupation Income Better life chances Standard of living Work opportunities

The Determinants of Culture

Social Stratification

Caste System like cobblers, butchers etc. Class System less rigid than caste system

Upper class Middle Class Lower Class

Social Stratification Two dimensions

Degree of Mobility

USA and Japan Britain and India

Significance for business Labor and Management relations

The Determinants of Culture

Religious & Ethical Systems Types of Major Religions/Philosophies

Christianity 1.5 billion Islam 1 billion Hinduism 750 million Buddhism 300 million Confucianism200 million

The Determinants of Culture

Major Religions/Philosophies Economic Implications

Christianity Catholic Protestants

Importance of hard work Wealth creation (for glory of God) Abstinence from worldly pleasures The Spirit of capitalism as argued by Max Weber , a German socialogist.

The Determinants of Culture

Major Religions/Philosophies Economic Implications

Islam

Explicit economic principles which are pro-free enterprise Protection to right of property is embedded Holders of property are trustees rather owners Entitle to earn profits but to use for righteous and socially beneficial manners No deception, No breach of contract

The Determinants of Culture

Major Religions/Philosophies Economic Implications

Hinduism

Individuals should not be judged by their material achievements but by their spiritual achievements. Hinduism do not encourage the kind of entrepreneurship as protestantism. Caste and class system

The Determinants of Culture

Major Religions/Philosophies Economic Implications

Buddhism

Founded in India in sixth century BC by Siddhartha Gautama, an Indian prince According to Buddhism, suffering originates in peoples desires for pleasure. No historical cultural stress on entrepreneurial behavior. Absence of caste and class system however offer better business environment.

The Determinants of Culture

Major Religions/Philosophies Economic Implications

Confucianism- An ethical system

Founded in fifth century BC by Kung-Fu-tzu, generally known as Confucius Three values are central;
Loyalty Reciprocal obligations Honesty China, Japan, Taiwan and Korea

The Determinants of Culture

Language Spoken and Unspoken Language

Spoken Language

Language does more than communication The nature of language structures the way we perceive the world Define the culture English is the largest speaking language, followed by French, Spanish & Chinese Local Language is an advantage Chevrolet Nova in Puerto Rican

The Determinants of Culture

Unspoken Language

Nonverbal communication like

Gestures Cues Personal Space

A failure to understand non-verbal cues can cause failure in international business

The Determinants of Culture

Education

Formal education plays a key role in society Cultural norms like respect for others, obedience, being on time, honesty are all part of hidden curriculum of schools. Grading system teaches children the value of personal achievement and competition. Education is determinant of national competitive advantage- WIPRO Skilled and educated workers seems to be major determinant of economic advantage-Egypt Location of business is also influenced by education The general education level is also a good index of the kind of four Ps to be used for a society.

Culture & Workplace

A societys culture affect the values found at workplace. Management process and practice need to vary according to culturally determined work values. Geert Hofsted Study A psychologist at IBM

Power Distance Individualism vs. Collectivism Uncertainty avoidance Masculinity vs. femininity

Culture & Workplace

Power distance

How does a society deals with the fact that people are unequal in physical and intellectual capabilities Inequalities in wealth and power led to high power distance
In individualistic societies, the ties between individuals were loose and individual freedom and accomplishment are valued. In collective societies, individuals were born into collectives such as extended families and they take care of each other for collective interests.

Individualism vs. collectivism

Culture & Workplace

Uncertainty avoidance

Measures the societies in terms of accepting ambiguous situations and tolerating uncertainty.

Masculinity vs. femininity

The relationship between gender and work roles. In masculine societies sex roles are sharply differentiated In feminine societies, sex roles are less differentiated.

Culture & Competitive business

The value system and norms affect the cost of doing business in a country The cost of doing business establishes firms ability to compete in the global business Japan could be one example of competitive advantage Japans cultural values like loyalty, reciprocal obligation, honesty and education all boost the competitiveness of Japanese companies. This tend to foster an ethic of hard work and cooperation between labor and management for the good of the company The connection of culture and competitive advantage has important implications for marketing and outsourcing.