Académique Documents
Professionnel Documents
Culture Documents
SESSION 2
ENVIRONMENT OF INTERNATIONAL
BUSINESS
Isaac Teye
CULTURE
Definition:
Culture has been defined in many ways: the man
made part of the environment Harris
Hofstede defines culture as the collective
programming of the human mind
Culture is the way people solve problem and
recognize dilemmas Trompenaars and Hampden
Generally, culture is the knowledge, art, law, morals,
customs and other capabilities of one group
distinguishing from other groups
Model of Culture
Trompenaars (1994) suggest that culture comes in
layers like an onion.
To understand it you have to unpeel it layer by layer
On the outer layer are the products of a culture:
Skyscraper in Singapore, private power in USA and
good road in Johannesburg etc.
Values and norms are deeper within the onion and
more difficult to identify
Expressions such as the more the better, leave everything
to God are some examples of values.
Language
Language is one of the defining expressions of culture
It instill basic socialization themes and determines
how values and norms are expressed and
communicated
There are basic differences in the way languages and
dialects are expressed and this gives rise to language
blunders
Differences in grammatical and structural format
produce different types of discourse
Non-verbal language is also used for communications.
Variations in this could lead to embarrassment.
Religion
Religion contains key values and norms that are
reflected in adherents way of life
The impact of religion extends to the everyday
behavior of the population.
Influence of Religion on International Business
Business adopt practices to satisfy religious decrees
Marketing strategies may be modify
Advertising message is altered
Power Distance
Organizational Implications
Low
High
Less centralization
Greater centralization
Uncertainty Avoidance
Low
High
More generalist
More specialist
variability
standardization
Individualism/Collectivism
Low
High
Organization as family
Organization is more
impersonal
Organization defends
employees interests
Masculinity/Femininity
Low
High
Corporate Culture
Corporate culture is the set of shared, taken-for-granted
implicit assumptions of a group and that determines
how it perceives, thinks about and reacts to its
environments.
Characteristics of corporate culture derived from the
definition
Corporate culture is passed on to new employees
through socialization
It influence behavior at work
It operates in two different levels: at more visible level
is the artifacts such as dress code, acronyms etc. At less
visible level, it reflects values and beliefs shared by the
members.
Political Environment
Different countries run different political system
MNE face difficulties in the political environment
than domestic business
MNC must manage; political parties, unions, pressure
groups at both host and home country .etc
Affinity or Animosity between nations reflects how
closely aligned or estranged, nations are based on
both history and political reality.
Political Risk
The probability of disruption to an MNEs
operations from political forces.
Types of political risk
ownership risk (threat of current ownership structure)
operational risk (any change to rules of the game)
transfer risk (impediments to the transfer of production
factors)
Legal Environment
Legal systems in different countries vary in their underlying
principles (common law, Civil Law or Theocratic law) as well
as independency, transparency and enforcement
Legal jurisdiction of operation
International level
Regional Level
National level
Legal issues MNE must consider
- Competition law
- Marketing and Distribution law
- Product laws, treaties and patent law