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3: Differences in culture (Culture is not constant,it evolves over time)




abstract ideas about what a group believes to be good, right and desirable

values can affect attitudes toward political and economic system

Values provide the context to establish a societys norms

the social rules and guidelines



Violations of folkways are not a serious matter

Routine conventions of everyday life like dress codes, social manners, and neighborly behavior

In many societies, MORES may be enacted to become LAWS

Much greater significant than folkways

central to the functioning of a society

Determinants of Culture
Political Philosophy Democracy or Totalitarian political system

Economic Philosophy

Market, command ,mixed economic system

individual and group

Social Structure Social Stratification CLASS SYSTEM CHRISTIANITY HINDUISM Determinants of Culture Religion CASTE SYSTEM

CONFUCIANISM BUDDHISM Language blunder SPOKEN LANGUAGE Most widely spoken language 1.English 2. French 3. Spanish 4. Chinese UNPOKEN LANGUAGE attract foreign direct investment (FDI)



More education

Generate nationals competitive advantage

More skilled workers => More productivity => Economic growth

Hofetede Framework study cultural differences along five dimensions

HIGH 1. Power distance LOW greater equality inequality in power and wealth &High distance between supervisors and subordinates

Hard work, foster innovation individualism Ties between people are loose Individual achievement and freedom 2. Individualism vs Collectivism collective goal Collectivism Hofetede Framework feel strong association to group Ties between people are tight value job security, retirement benefits and strong need for rules and regulations Great readiness to take risk and changecreate Innovation & entrepreneurship Masculinity 4. Masculinity versus Femininity Femininity Sex roles are sharp, differentiated & Masculine values Little differentiation between men and women in a same job & Relaxed lifestyles Strong LONG-TERM business relationship Focus on present only

3. Uncertainty avoidance


5. Long-term orientation (Confucian Dynamism)



Criticism on Hoftsteds Research 1. Assumes there is a one-to-one correspondence between culture and nation-state 2. Research team was composed of Europeans and American only 3. Informants worked only within single industry (computer), and one company (IBM company) 4. Now beginning to outdated because cultures have changed Cultural Change

Cultural Change

1. Economic Advancement

2. Globalization

1. As countries get richer, a shift occur away from traditional value linked to religion, family and national pride toward secular rational values 2. Advances in transportation and communication technologies are merging the culture and Multinational enterprise (MNEs) can contribute to cultural change

Implication for International Business (Difference in culture imply that)

Cross-Cultural Literacy Need for mangers to develop cross-cultural literacy Ethnocentricity Implication for International Business SHOULD AVOID

an understanding of how cultural differences across and within nations can affect the way in which business is practiced

Belief that ones own culture is superior to that of others

Individualist Connection between CULTURE and national COMPETITIVE ADVANTAGE Collectivist

lack of cooperation so cost of doing business increase

Cooperation increase so cost of doing business decrease

-should be DEVELOPED Ethnocentricity

-Belief that ones own culture is superior to that of others -Often result in disregard or contempt for the culture of other countries -Should be AVOIDED 2. Connection between CULTURE and national COMPETITIVE ADVANTAGE -The value system and norms of a country influence cost of doing business in that country Individualist Collectivist -TWO important effect 1. Suggests which countries are likely to produce the most viable competitors 2. Importance for choice of countries in which to locate production facilities and doing business 3. Connection between CULTURE and ETHICS in decision making =>lack of cooperation =>Cooperation increase =>cost of doing business increase =>cost of doing business decrease