CULTURAL ENVIRONMENT

INTERNATIONAL BUSINESS II

BUSINESS FUNCTIONS VS CULTURE

Cultural Problems

Managing Workforce

Marketing Output

Purchasing Supplies

Dealing with

regulators

Securing Funds

CULTURAL ANALYSISUnderstanding the cultures & physical characteristics of groups of people is useful because

• business employs, sells to, buys from, is regulated and is owned by people.

• An international company must consider these differences in order to predict & control its relationships & operations.

• A company first should determine differences in business practices adjustments necessary.

THE NATION AS A DEFINITION OF SOCIETY

• Similarity among people is a cause & effect of national boundaries. (sense of belonging )

• Nations include subcultures, ethnic groups, races, classes. (Challenge Segmentation)

• National Identity (certain characteristics physical, demographic & behavioural norms that may affect a company’s methods of conducting business)

• Nationality is not the only basis on which to group people . Everyone belongs to various other groups based on profession, age, religion, and place of residence.

• Country-by-country analysis has limitations because:– Not everyone in a country is alike.– Variations within some countries are great.– Similarities link groups from different countries– Data bases are scarce- Non-reliable-Outdated.

THE NATION AS A DEFINITION OF SOCIETY

PHYSICAL ATTRIBUTES• Physical differences can affect business decisions such as

whether & how to change a product, how high to place production machinery, & which advertising message to use. (Images-Frequency-Comparative Ads)

• (Ready to serve food, Cleaning, Shampoo, Packing, Sizing, Digital, Fool-Proof, Organic, Friendly Products)

• Physical attributes to take into account:– An individual’s size.– Age distribution.

THE CONCEPT OF CULTURECulture consists of specific learned norms based on attitudes, values & beliefs, all of which exist in every society.

• It can’t be easily isolated from such factors as economic & political conditions & institutions.

• Cultural value systems are set early in life & are difficult to change, but change may come through:– Choice or imposition. – Contact with other cultures.

MAIN CULTURAL DIFFERENCESLanguage: When people from different areas speak the

same language, culture is transmitted more easily. Factors to take into account:(Negotiation-Promoting-Advertising)

◦ Spoken language.◦ Silent language.

Religion: Is a strong moulder of values. When a religion is dominant in an area, it is apt to have great political, legal & economic influence. It is also apt to limit acceptance of products or business practices.

◦ Christian - Hindu – Judaic – Muslim - Buddhist.

EnglishSpanishFrenchChineseMalaysianPortugueseRussianArabicOther

LANGUAGES OF THE WORLD

RELIGIONS OF THE WORLD

BEHAVIORAL PRACTICES AFFECTING BUSINESS• Group Affiliations: Populations are subdivided into

groups.– Ascribed: Determined by birth. Gender, age, family, caste

& ethnic, racial or national origin.– Acquired: Include those based on religion, political

affiliation, profession and other associations. Reflect status, class.

• Role of competence: In some societies, a person’s acceptability for jobs & promotion is based primarily on competence. Prevention of discrimination is important.

• Importance of different group membership: Country by country attitudes vary toward:– Gender based groups Male & female roles.– Age based groups Respect for age.– Family based groups Family ties.

• Importance of Work: Explained by the interrelationship of the cultural & economic environments of the particular country.

The motives for working are different in different places.

BEHAVIORAL PRACTICES AFFECTING BUSINESS

MOTIVATION

• A fulfilled need is no longer a motivator.• Materialism leads to work.• Work leads to productivity and economic growth.

• Importance of Work:Attitudes toward work may change as economic gains are achieved.

– Protestant Ethic Work viewed as a means of salvation.– Belief in success & reward.– Work as a habit Problems with free time.– High need achievement Material or career success. – Lower need achievement Prefer social relations.

The ranking of needs differs among countries.

BEHAVIORAL PRACTICES AFFECTING BUSINESS