Global /

International
Trade
Chapter 4

Differences
in Culture
Presented by:
Mark Kevin Gamboa
BSBA - IV
 What Is Culture?
Culture - a system of values and norms that are
shared among a group of people and that when
taken together constitute a design for living
where
values are abstract ideas about what a group believes
to be good, right, and desirable
norms are the social rules and guidelines that
prescribe appropriate behavior in particular situations
Society - a group of people who share a
common set of values and norms

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 How Do Cultural Differences
Affect International Business?

Understanding and adapting to the local cultural

is important international companies
cross-cultural literacy - an understanding of how
cultural differences across and within nations can
affect the way in which business is practiced
cross-cultural literacy is important for business
success
A relationship may exist between culture and the
costs of doing business in a country or region

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 What Are Values And
Norms?
Values provide the context within which a
societys norms are established and
justified and form the bedrock of a culture
Norms include
folkways - the routine conventions of everyday
life
mores - norms that are seen as central to the
functioning of a society and to its social life

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 How Are Culture, Society,
And The Nation-State Related?

The relationship between a society and a

nation state is not strictly one-to-one
Nation-states are political creations
can contain one or more cultures
A culture can embrace several nations

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 What Determines Culture?
The values and norms of a culture evolve
over time
Determinants include
religion
political and economic philosophies
education
language
social structure

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Structural form
Determinants of Culture

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 What Is A Social Structure?
Social structure - a societys basic social
organization

Consider;
the degree to which the basic unit of social
organization is the individual, as opposed to
the group
the degree to which a society is stratified into
classes or castes

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 How Are Individuals
And Groups Different?
A group is an association of two or more
people who have a shared sense of
identity and who interact with each other in
structured ways on the basis of a common
set of expectations about each others
behavior
individuals are involved in families, work
groups, social groups, recreational groups,
etc.
Societies place different values on groups
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 How Are Individuals
And Groups Different?
In Western societies, there is a focus on the
individual
individual achievement is common
dynamism of the U.S. economy
high level of entrepreneurship
But, creates a lack of company loyalty and failure
to gain company specific knowledge
competition between individuals in a company instead
of than team building
less ability to develop a strong network of contacts
within a firm

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 How Are Individuals
And Groups Different?
In many Asian societies, the group is the
primary unit of social organization
discourages job switching between firms
encourages lifetime employment systems
leads to cooperation in solving business
problems
But, might also suppress individual creativity
and initiative

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 What Is Social Stratification?

All societies are stratified on a hierarchical

basis into social categories, or social strata
individuals are born into a particular stratum
Must consider;
1. mobility between strata
2. the significance placed on social strata in
business contexts

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 What Is Social Stratification?
1. Social mobility - the extent to which individuals
can move out of the strata into which they are
born
caste system - closed system of stratification in
which social position is determined by the family
into which a person is born
change is usually not possible during an
individual's lifetime
class system - form of open social stratification
position a person has by birth can be changed
through achievement or luck

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 What Is Social Stratification?

2. The significance attached to social strata

in business contacts
class consciousness - a condition where people
tend to perceive themselves in terms of their
class background, and this shapes their
relationships with others
an antagonistic relationship between
management and labor raises the cost of
production in countries with significant class
differences

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 How Do Religious And
Ethical Systems Differ?
Religion - a system of shared beliefs and
rituals that are concerned with the realm of the
sacred
Four religions dominate society
1. Christianity
2. Islam
3. Hinduism
4. Buddhism
5. Confucianism is also important in influencing
behavior and culture in many parts of Asia

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How Do Religious And
Ethical Systems Differ?
World Religions

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 How Do Religious And
Ethical Systems Differ?
Ethical systems
a set of moral principles, or values, that are
used to guide and shape behavior

Religion and ethics are often closely

intertwined
ex. Christian or Islamic ethics

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 What Is Christianity?
Christianity
the worlds largest religion
found throughout Europe, the Americas, and
other countries settled by Europeans
the Protestant work ethic (Max Weber, 1804)
hard work, wealth creation, and frugality is the
driving force of capitalism

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 What Is Islam?
Islam
the worlds second largest religion dating to AD 610
there is only one true omnipotent God
an all-embracing way of life that governs one's being
associated in the Western media with militants,
terrorists, and violent upheavals
but, in fact teaches peace, justice, and tolerance
fundamentalists have gained political power and blame
the West for many social problems
people do not own property, but only act as stewards
for God
supportive of business, but the way business is
practiced is prescribed

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 What Is Hinduism?
Hinduism
practiced primarily on the Indian sub-continent
focuses on the importance of achieving
spiritual growth and development, which may
require material and physical self-denial
Hindus are valued by their spiritual rather than
material achievements
promotion and adding new responsibilities
may not be important, or may be infeasible
due to the employee's caste

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 What Is Buddhism?
Buddhism
has about 350 millions followers
stresses spiritual growth and the afterlife,
rather than achievement while in this world
does not emphasize wealth creation
entrepreneurial behavior is not stressed
does not support the caste system, individuals
do have some mobility and can work with
individuals from different classes

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 What Is Confucianism?
Confucianism
ideology practiced mainly in China
teaches the importance of attaining personal
salvation through right action
high morals, ethical conduct, and loyalty to
others are stressed
three key teachings of Confucianism - loyalty,
reciprocal obligations, and honesty - may all
lead to a lowering of the cost of doing
business in Confucian societies

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 What Is The Role
Of Language In Culture?
Language
- the spoken and unspoken (nonverbal
communication such as facial expressions,
personal space, and hand gestures ) means
of communication
countries with more than one language often
have more than one culture
Canada, Belgium, Spain

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 What Is The Role
Of Language In Culture?
Language is one of the defining characteristics
of culture
Chinese is the mother tongue of the largest number of
people
English is the most widely spoken language in the
world
English is also becoming the language of international
business
but, knowledge of the local language is still beneficial,
and in some cases, critical for business success
failing to understand the nonverbal cues of another
culture can lead to communication failure

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 What Is The Role
Of Education In Culture?
Formal education is the medium through which
individuals learn many of the language,
conceptual, and mathematical skills that are
indispensable in a modern society
important in determining a nations competitive
advantage
Japans postwar success can be linked to its
excellent education system
general education levels can be a good index for the
kinds of products that might sell in a country
ex. impact of literacy rates

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 How Does Culture
Impact The Workplace?
Management processes and practices
must be adapted to culturally-determined
work-related values

Geert Hofstede studied culture using

data collected from 1967 to 1973 for
100,000 employees of IBM
Hofstede identified four dimensions that
summarized different cultures

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 How Does Culture
Impact The Workplace?
Hofstedes dimensions of culture:

1.Power distance - how a society deals with the fact that

people are unequal in physical and intellectual capabilities
2.Uncertainty avoidance - the relationship between the
individual and his fellows
3.Individualism versus collectivism - the extent to which
different cultures socialize their members into accepting
ambiguous situations and tolerating ambiguity
4.Masculinity versus femininity -the relationship between
gender and work roles

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 How Does Culture
Impact The Workplace?
Work-Related Values for 20 Countries

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 How Does Culture
Impact The Workplace?
Hofstede later expanded added a fifth
dimension called Confucian dynamism or
long-term orientation
captures attitudes toward time, persistence,
ordering by status, protection of face, respect
for tradition, and reciprocation of gifts and
favors
Japan, Hong Kong, and Thailand scored high on
this dimension
the U.S. and Canada scored low

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Hofstedes work has been criticized for
several reasons
made the assumption there is a one-to-one
relationship between culture and the nation-state
study may have been culturally bound
used IBM as sole source of information
culture is not static it evolves
But, it is a starting point for understanding how
cultures differ, and the implications of those
differences for managers

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 What Do Cultural Differences
Mean For Managers?
1. It is important to develop cross-cultural literacy
companies that are ill informed about the practices
of another culture are unlikely to succeed in that
culture
To avoid being ill-informed
consider hiring local citizens
transfer executives to foreign locations on a regular
basis
Managers must also guard against
ethnocentrism
a belief in the superiority of one's own culture

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 What Do Cultural Differences
Mean For Managers?
2. There is a connection between culture
and national competitive advantage
suggests which countries are likely to
produce the most viable competitors
has implications for the choice of countries
in which to locate production facilities and do
business

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 Does Culture Change?
Culture evolves over time
changes in value systems can be slow and
painful for a society
Social turmoil - an inevitable outcome of
cultural change
as countries become economically stronger,
cultural change is particularly common
economic progress encourages a shift from
collectivism to individualism
globalization also brings cultural change

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