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Griffin and Pustay Third Edition

INTERNATIONAL
BUSINESS
A MANAGERIAL PERSPECTIVE

Chapter 4
The Role of Culture
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Prentice
Prentice
Hall ©Hall
2002©International
2002 International
Business
Business
3e 3e
Chapter Objectives
After studying this chapter you should be able to:

• Discuss the primary characteristics of culture.


• Describe the various elements of culture and
provide examples of how they influence
international business.
• Identify the means by which members of a
culture communicate with each other.
• Discuss how religious and other values affect
the domestic environments in which
international businesses operate.
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Chapter Objectives (cont.)
After studying this chapter you should be able to:

• Describe the major cultural clusters and


their usefulness for international
managers.
• Explain Hofstede’s primary findings
about differences in cultural values.
• Explain how ethical conflicts may arise
in international business.

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E-Culture

• The rise of the Internet is altering the world’s


business cultures. It is affecting attitudes
toward risk taking, decision making,
organizational hierarchy, compensation, and
education.
• Many European and Asian firms have
structures that may not serve them well in the
Internet economy. Conversely, the culture of
many U.S. companies seems better adapted
to the Internet’s quick pace.

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Culture

Culture is the collection of


values, beliefs, behaviors,
customs, and attitudes that
distinguish one society from
another.

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Characteristics of Culture

• Culture reflects learned behavior that is


transmitted from one member of society to
another.
• The elements of culture are interrelated.
• Because culture is learned behavior, it is
adaptive; that is, the culture changes in
response to external forces that affect the
society.
• Culture is shared by members of the society and
indeed defines the membership of the society.

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Elements of Culture

The basic elements of culture are:

• Social structure
• Language
• Communication
• Religion
• Values and attitudes
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Social Structure

• Individuals, families and groups


– In all human societies, there are individuals living in family
units and working with each other in groups. Societies
differ, however, in the way they define family and in the
relative importance they place on the individual’s role
within groups.
• Social stratification
– All societies categorize people to some extent on the
basis of their birth, occupation, educational achievements,
and/or other attributes. But the importance of these
categories in defining how individuals interact with each
other within and between these groups varies by society.

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Social Structure (cont.)

• Social mobility
– Social mobility tends to be higher in less
stratified societies. Social mobility (or lack
thereof) often affects individuals’ attitudes
and behaviors toward such factors as labor
relations, human capital formation, risk
taking, and entrepreneurship.

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Language

• Language organizes the way members of a


society think about the world. It filters
observations and perceptions, and thus affects
unpredictably the messages that are sent when
those individuals try to communicate.
• The presence of more than one language
group is an important signal about the diversity
of a country’s population and suggests that
there may also be differences in income, work
ethic, and/or educational achievement.

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World Languages

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Africa’s Colonial Heritage

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Language (cont.)

• Language as a competitive weapon


– Linguistic ties often create important competitive
advantages because the ability to communicate is
so important in conducting business transactions.
• Lingua franca
– As a result of British economic and military
dominance in the nineteenth century and U.S.
dominance since World War II, English has
emerged as the predominant common language,
or lingua franca, of international business.

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Language (conc.)

• Translation
– Some linguistic differences may be overcome
through translation. Translators must be sensitive to
subtleties in the connotations of words and focus on
the translating of ideas, not the words themselves.
• Saying no
– In contract negotiations, Japanese businesspeople
often use yes to mean “Yes, I understand what is
being said.” Misunderstandings can be
compounded because directly uttering no is
considered very impolite in Japan.

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Communication

• Nonverbal communication
– Members of a society communicate with each
other using more than words. In fact, some
researchers believe 80 to 90 percent of all
information is transmitted among members of a
culture by means other than language.
• Gift giving and hospitality
– Gift giving and hospitality are important means
of communication in many business cultures.

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Religion

• Often religions impose constraints on the roles of


individuals in society. The caste system of
Hinduism traditionally has restricted the jobs
individuals may perform, thereby affecting the
labor market and foreclosing business
opportunities.
• The impact of religion on international businesses
varies from country to country depending on the
country’s legal system, its homogeneity of
religious beliefs, and its toleration of other
religious viewpoints.

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Major World Religions

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Values and Attitudes

• Culture also affects and reflects the secular values


and attitudes of members of a society. Values are
the principles and standards accepted by
members of a society; attitudes encompass the
actions, feelings, and thoughts that result from
those values.
• Time
– In Anglo-Saxon cultures, the prevailing attitude
is “time is money.” This contrasts sharply with
attitudes in Latin American cultures, for
example.

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Values and Attitudes (cont.)

• Age
– Youthfulness is considered a virtue in the
United States. However, in Asian and Arab
cultures, age is respected and a manager’s
stature is correlated with age.
• Education
– A country’s formal system of public and
private education is an important transmitter
and reflection of the cultural values of its
society.
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Values and Attitudes (conc.)

• Status
– In some societies, status is inherited as a
result of the wealth or rank of one’s
ancestors. In others, it is earned by the
individual through personal
accomplishments or professional
achievements.

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Hall’s Low Context-High
Context Approach

• A low-context culture is one in which the


words used by the speaker explicitly convey
the speaker’s message to the listener.
• A high-context culture is one in which the
context in which a conversation occurs is just
as important as the words that are actually
spoken, and cultural clues are important in
understanding what is being communicated.

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The Cultural Cluster Approach

• The cultural cluster approach is another


technique for classifying and making
sense of national cultures. A cultural
cluster comprises countries that share
many cultural similarities. Many clusters
are based on language similarities.

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A Synthesis of Country Clusters

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Hofstede’s Five Dimensions

• Social orientation
• Power orientation
• Uncertainty orientation
• Goal orientation
• Time orientation

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Social Orientation

• Social orientation is a person’s beliefs


about the relative importance of the
individual and the groups to which that
person belongs.
• The two extremes of social orientation
are individualism and collectivism.

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Power Orientation

• Power orientation refers to the beliefs


that people in a culture hold about the
appropriateness of power and authority
differences in hierarchies such as
business organizations.
• The extremes of the dimension of power
are power respect, and power
tolerance.
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Uncertainty Orientation

• Uncertainty orientation is the feeling


people have regarding uncertain and
ambiguous situations.
• The extremes of the uncertainty
dimension are uncertainty acceptance,
and uncertainty avoidance.

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Goal Orientation

• Goal orientation is the manner in which


people are motivated to work toward
different kinds of goals.
• The extremes of the goal dimension are
aggressive goal behavior, and passive
goal behavior.

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Time Orientation

• Time orientation is the extent to which members


of a culture adopt a long-term versus a short-term
outlook on work, life, and other aspects of
society.
• Some cultures, such as those of Japan and
Taiwan, have a long-term, future orientation that
values dedication and perseverance. Other
cultures, such as Pakistan and West Africa, tend
to focus on the past and present, emphasizing
respect for traditions and fulfillment of social
obligation.

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Acculturation

Acculturation is the process


by which a person not only
understands a foreign
culture but also modifies and
adapts his/her behavior to
make it compatible with that
culture.
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Cultural Differences and Ethics

• Cultural differences often create


ethical problems. Acceptable
behavior in one culture may be
viewed as immoral in another.

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Chapter Review

• Understanding cultural differences is critical to


the success of firms engaging in international
business.
• A society’s culture also reflects its values,
beliefs, behaviors, customs, and attitudes.
• A society’s culture comprises numerous
elements.
• Language is an important cultural element, for
it allows members of the society to
communicate with each other.
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Chapter Review (cont.)

• Religion influences attitudes toward work,


investment, consumption, and responsibility
for one’s behavior. Religion may also
influence the formulation of a country’s laws.
• A society’s culture reflects and shapes its
values and attitudes, including those toward
time, age, status, and education.
• Researchers have grouped countries
according to common cultural characteristics.
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Chapter Review (conc.)

• Hofstede has identified five basic


cultural dimensions along which people
may differ: social orientation, power
orientation, uncertainty orientation, goal
orientation, and time orientation.
• Cultural differences often create ethical
dilemmas for international
businesspeople.
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