International Business

Chapter Two
The Cultural Environments
Facing Business

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2004 Prentice Hall, Inc
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2004 Prentice Hall, Inc
Chapter Objectives
Understand cultural environments
Explain major causes of cultural
difference and change
Examine behavioral factors
influencing countries business
practices
Examine cultural guidelines for
companies that operate
internationally
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Major Cultural Issues
Problems arise in international business
when:
Employees have subconscious reactions
Employees assume all societal groups are
similar
A company implements practices of work less
well than intended
Employees encounter distress because of an
inability to accept or adjust to foreign cultural
behaviors
Companies/employees are insensitive to
foreign consumer preferences
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Cultural Factors at Play
Cultural awareness
Attire
Religion
Language
Identification and dynamics of
cultures
Behavior practices affecting
business
Timeliness
Ethics
Strategies for dealing with
cultural differences
Education
Research
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Identification of Cultures
Cultures are derived with people with
shared attitudes, values, and beliefs
People also belong to national, ethnic,
professional, and organizational cultures
Points of reference:
National
Geographic
Language
Religion
International business often changes
cultures
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World Output by Language Group
33% Other
2% Hindi
3% Arabic
5% French
7% German
7% Spanish
10% Mandarin
33% English
% OF WORLD OUTPUT LANGUAGE
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Major Religions of the World
14 Judaic
23 Sikh
360,000 Buddhist
384,000 Chinese folk
811,000 Hindu
1,188,000 Muslim
2,000,000 Christian
NUMBER OF ADHERENTS
(in millions)
RELIGION
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Behavioral Practices
Social Stratification Systems
Individuals status with the culture
Managerial groups may be highly valued
Employees may be valued less
Ascribed group memberships
Gender, family, age, caste, and ethnic,
racial or national origin
Acquired group memberships
Religion, political affiliations, and
professional and other associations
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United States Values
COMPETENCE!
Intolerance for discrimination based upon:
Gender
Race
Age
Religion
Although equality is not applied perfectly, in
many other cultures, this competence is of
secondary importance
Since our values may seem radical to foreigners
it is of extreme importance that international
businesses spend the resources to determine
what foreign cultures they can ethically and
effectively conduct business in
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Characteristic-Based Groups
Gender-based groups
China
India
Afghanistan
Saudi Arabia
Age-based groups (United States)
Family-based groups
Occupation (United Kingdom)
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Motivation
Cultural difference in:
Work ethic
Materialism
Leisure
Japan vs. United States
Europe vs. United States
Protestant work ethic
Expectation of success and
reward
Assertiveness and
Masculinity index
Japan vs. Sweden
Need Hierarchy
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Relationship Preferences
Power distance:
relationship between
superiors and subordinates
Individualism vs.
collectivism
United States is clearly
different from Japan
China is clearly different from
Mexico
Risk-taking behavior
Uncertainty avoidance
Trust
Future orientation
Fatalism

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Differences in Information and Task
Processing
We perceive and reach conclusions
differently
Perception of cues; Arabic has more than
6,000 words for camels
Obtaining information
Low-context cultures (United States)
High-context cultures (Saudi Arabia)
Information Processing
Sequentially or simultaneously
Focused or broad
Handling principles or small issues first

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Dealing With Cultural Differences
Be tolerant of differing perceptions of time
Understand the message sent by body
language
Be sensitive to accurate translations
Spoken
Written
France: Please leave your values at the desk
Mexico: The manager has personally passed all the
water served here
Norway: Ladies are requested not to have children
in the bar
Greece: We will execute customers in strict rotation
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Cultural Influences
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Language Strategies
Get references for translators
Ensure the translator is familiar with
technical vocabulary for the business
Do a back translation
Use simple words
Avoid slang
Repeat words and ask questions
Expect the extra time communication will
take
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Language Groups
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Cultural Orientations
International businesses adopt an attitude
towards foreign cultures
Polycentrism: control is decentralized so
regional managers can conduct business in a
local manner
Ethnocentrism: belief that ones own culture is
superior and ignores important factors
Geocentrism: a hybrid of polycentrism and
ethnocentrism, the middle ground
Companies MUST evaluate their practices
to ensure they account for national
cultural norms
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Hierarchy Comparisons
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Chapter Review
Understand cultural environments
Explain major causes of cultural
difference and change
Examine behavioral factors
influencing countries business
practices
Examine cultural guidelines for
companies that operate
internationally
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