Culture Basics

8/9/2019 Culture Basics

1/18

CHAPTER 3 : Culture Environment

Learning Objectives:

Understand how culture impacts international business

Concept and elements of culture

Cross-culture comparisons

Bribery and ethics in international business

Social responsibility of MNCs

Cross cultural training in preparing for international assignment

Understand the principles of business negotiations abroad

Business practices in host country


2/18

There are more than 160 definitions of culture

Communicable knowledge, learned behavior passed on from

generation to generation

An Integrated system of learned behavior patterns that are

distinguishing characteristic of the members of a given

society

The collective programming of the mind which distinguishes

the members of one group or category from those of another


3/18

Element of Culture

A. Language

Spoken Language

Written Language

Official Language

Body Language

International LanguageB. Religion

Beliefs and Norms

Sacred Objects

Philosophical Systems Prayer/ Rituals

Leading Religious of the World


4/18

C. Values and Attitudes

Toward

Time (Monochronic (V.S) Polychronic) Achievement

Work

Change

RiskTaking

D. Education

Literacy Level

Formal Education

Vocational Training Human Resource Planning

Primary / Secondary / High education


5/18

E. Social Organization

Social Institutions

Authority Structure Interest Groups

Status Systems

Social Mobility

F. Technology and Material Culture Science

Invention

Energy Systems

Communications Tools and Objects

Urbanization


6/18

G. Politics

Nationalism

National Interests Power

Ideologies

Political Risks

Sovereignty

H. Law

Common Law

Code Law

Foreign law Home / Host Country Law

Regulation / Antitrust Policy

International Law


7/18

Cross-Culture Comparisons

A. Edward Halls High-Context (V.S) Low-Context Cultures

B. Hofstedes Classification Scheme

Individualism (V.S) Collectivism

Power Distance

Uncertainty Avoidance Masculinity

Long-Termism

C. Deal-Oriented (V.S) Relationship Oriented Cultures

Deal Oriented Cultures

Relationship Oriented Cultures


8/18

Cultural Factors

Never touch the head of a Thai or pass an object over it.

The head is considered sacred in Thailand Avoid using triangular shapes in Hong Kong, Korea and

Taiwan. It is considered a negative shape.

The number 7 is considered bad luck in Kenya, good luck in

Czech Republic and has magical connotation in Benin, Africa The number 10 is bad luck in Korea

The number 4 is means Death in Japan

Red represents witchcraft and death in many African countries


9/18

Cultural Difference between Japanese and American Individual

lifestyles

American

A Culture of self-expression

Japanese

A Culture of Self restrain

Cultural

Background

Clear expression of Joy

and sorrow

Ambiguous of joy

and sorrowReticence

Unequivocal expression

of Yes/No.

Equivocal expression

of Yes/No.

Modesty

Strong self-assertion Weak self-assertion Reserve

Strong Personality Weak Personality Punctiliousness

Excellent Negotiating skill Poor Negotiating skill Politeness

Priority of self-interest Priority of harmony

with others Obligation


10/18

Cultural Difference between Japanese and American

Social Life

American Society Japanese SocietyDignity of Individuals In the same boat concept

Dignity of individuals Human relation oriented

Individuals work ethic Dependence on the group

Great individuals freedom Lack of individuals freedom

Respect for rules Low regard for rules

A open and transparent

society

A close society, lacking in

transparency

Multi-cultural society Mono-cultural societyA society excelling in creativity

and versatility

An orderly and uniform

society

Individual decisions over consensus Dependence on consensus

A society which pursue that ideal A society which pursue harmonywith reality


11/18

Cultural Differences between Japanese and American

Business

American Business

Game concept: Business is a game in

pursuit of profits under the rules of laws

and contracts

Efficiency-oriented and approximate

accuracy simplicity, clarity, and quickness

Quantity-oriented

Short-term performance evaluation

Easy layoffs, dismissals of employees, and

selling of businesses

Japanese Business

Mutual trust-oriented business:

business is based on trusting relationship

among people rather than the rules of game

Highly precision-oriented and

perfectionism-high dependency on human

awareness

Quality-oriented

Mid-to-long term evaluations

Job security

SOURCE : Norihiko Shimizu, Todays Taboos may be

gone tomorrow, Tokyo Business, February 1995, p.51.


12/18

Cultural Differences between Japanese and American

Business

American Business Japanese Business

Top down management

Low mutual dependence between employers

and employees

Control of business by stockholders and the

management

Management by force

Heavy dependence on machinery and

technology, vs. Light dependence on human

resources

Excellent software-based technology

development

Heavy dependence on human resources bottom-

up management and teamwork

High mutual dependence between employers and

employees

Joint management of business by Employees and

Employees

Management by motivation

Heavy dependence on human resources

Inadequate software development ability

Strong loyalty and fewer incentives

Limited loyalty and incentive-oriented work

ethics

SOURCE : Norihiko Shimizu, T

odaysT

aboos may be gonetomorrow, Tokyo Business, February 1995, p.51.


13/18

Corruption Perception Index* (Selected Countries 1997&1996)

Country CPI 1997 CPI 1998 Country CPI 1997 CPI 1998

Denmark (1) 9.94 9.33 Italy (30) 5.03 3.42

Finland ((2) 9.48 9.05 S. Korea (34) 4.29 2.96Norway (7) 8.92 8.87 Brazil (36) 3.56 2.96

Singapore (9) 8.66 8.8 China (41) 2.88 2.43

Switzerland (11) 8.61 8.76 India (45) 2.75 2.63

USA (16) 7.61 7.66 Mexico (47) 2.66 5.5

France (20) 6.66 6.96 Russia (49) 2.27 2.58Czech Rep. (27) 5.2 5.37 Nigeria (52) 1.76 0.69

The ranking is based on 52 countries studied

The maximum 10 would be corrupt free country

Bribery

Extortion

Subornation

Lubrication


14/18

Three Ethical Principles

Principle Question

Utilitarian Ethics Does the action optimize the

common good or beneficial of all

constituencies?

Rights of parties Does the action respect the rights of

the individuals involved?

Justice of fairnessDoes the action respect the canonsof justice or fairness to all parties

involved?


15/18

Ethical and social responsibility issues in multinational

business decisions

Does the decision efficiently optimize the common good and

benefits of :

The business firm (Stockholders, Profit, Growth, etc)

Society (T

he good of life, Culture, Order, Justice, etc) The economy (Economic growth, Production and Distribution

of goods/services) The individual (Freedom, Health and Welfare, Opportunity,

Human dignity


16/18

Cross-Culture Training Methods (Ascending Order)

Area Briefing

Books Sensitivity Training

Field Trips

Experiential

Field Experience

Impact of Globalization

Globally competent employees

Ability to work with diverse cultures

Overcoming the self-reference criterion (SRC)


17/18

Cross- Cultural Negotiations

Non-Task sounding

Task-Related Information Exchange

Persuasion

Concessions and agreement

T

ry to access 3 videos produced by Big world UW-W library

Cross-cultural communicating

Cross-cultural understanding

Cross-cultural negotiating


18/18

Selected Reference on Culture and Business Practices

Around the World

Video series from Big world : Cross-cultural understanding*

Cross-cultural communicating*Cross-cultural negotiating*

Dos and taboos around the world by Roger Axtell , Wiley** Culturgrams Vol. I & II, Brigham Young University Press, 1999**

International Business Etiquette by Ann Marie Sabath, Career

Press Latin America ** Europe **Asia **

World Trade Press

Doing Business in Series* Cross-Cultural business behavior by R.R. Gesteland ,

Copenhagen Business School Press**

Richard Hill : We Europeans. Europublications **

: Euromanagers and Matians. Europublications **

* Available at UW-W Library ** Available at GBRC (C2018)

Culture Basics

Documents

Transcript of Culture Basics